NYT : Bolton Says Trump Impeachment Inquiry Missed Other Troubling Episodes

Bolton Says Trump Impeachment Inquiry Missed Other Troubling Episodes
In his new book, John R. Bolton, the former national security adviser, describes instances when the president sought to halt criminal inquiries. He also says President Trump’s loyalists mocked him behind his back.

John R. Bolton, the former national security adviser, says in his new book that the House in its impeachment inquiry should have investigated President Trump not just for pressuring Ukraine but for a variety of instances when he sought to use trade negotiations and criminal investigations to further his political interests.

Mr. Bolton describes several episodes where the president expressed a willingness to halt criminal investigations “to, in effect, give personal favors to dictators he liked,” citing cases involving major firms in China and Turkey. “The pattern looked like obstruction of justice as a way of life, which we couldn’t accept,” Mr. Bolton writes, saying that he reported his concerns to Attorney General William P. Barr.

Mr. Bolton also adds a striking new accusation by describing how Mr. Trump overtly linked tariff talks with China to his own political fortunes by asking President Xi Jinping to buy American agricultural products to help him win farm states in this year’s election. Mr. Trump, he writes, was “pleading with Xi to ensure he’d win.” Mr. Bolton said that Mr. Trump “stressed the importance of farmers, and increased Chinese purchases of soybeans and wheat in the electoral outcome.”

The book, “The Room Where It Happened,” was obtained by The New York Times in advance of its scheduled publication next Tuesday and has already become a political lightning rod in the thick of an election campaign and a No. 1 best seller on Amazon.com even before it hits the bookstores. The Justice Department went to court on Wednesday for the second time this week seeking to stop publication even as Mr. Trump’s critics complained that Mr. Bolton should have come forward during impeachment proceedings rather than save his account for a $2 million book contract.

While other books by journalists, lower-level former aides and even an anonymous senior official have revealed much about the Trump White House, Mr. Bolton’s volume is the first tell-all memoir by such a high-ranking official who participated in major foreign policy events and has a lifetime of conservative credentials. It is a withering portrait of a president ignorant of even basic facts about the world, susceptible to transparent flattery by authoritarian leaders manipulating him and prone to false statements, foul-mouthed eruptions and snap decisions that aides try to manage or reverse.

Mr. Trump did not seem to know, for example, that Britain was a nuclear power and asked if Finland was a part of Russia, Mr. Bolton writes. The president never tired of assailing allied leaders and came closer to withdrawing the United States from NATO than previously known. He said it would be “cool” to invade Venezuela.

At times, Mr. Trump seemed to almost mimic the authoritarian leaders he appeared to admire. “These people should be executed,” Mr. Trump once said of journalists. “They are scumbags.” When Mr. Xi explained why he was building concentration camps in China, the book says, Mr. Trump “said that Xi should go ahead with building the camps, which he thought was exactly the right thing to do.” He repeatedly badgered Mr. Barr to prosecute former Secretary of State John F. Kerry for talking with Iran in what he insisted was a violation of the Logan Act.

In the face of such behavior, even top advisers who position themselves as unswervingly loyal mock Mr. Trump behind his back. During the president’s 2018 meeting with North Korea’s leader, according to the book, Secretary of State Mike Pompeo slipped Mr. Bolton a note disparaging the president, saying, “He is so full of shit.” A month later, Mr. Bolton writes, Mr. Pompeo dismissed the president’s North Korea diplomacy, declaring that there was “zero probability of success.”

The State Department had no comment, but Mr. Trump fired back on Twitter just after midnight. “Wacko John Bolton’s ‘exceedingly tedious’(New York Times) book is made up of lies & fake stories,” he wrote early Thursday morning, adding: “A disgruntled boring fool who only wanted to go to war. Never had a clue, was ostracized & happily dumped. What a dope!”
Intelligence briefings with the president were a waste of time, Mr. Bolton writes, “since much of the time was spent listening to Trump, rather than Trump listening to the briefers.” Mr. Trump likes pitting staff members against one another, at one point telling Mr. Bolton that former Secretary of State Rex W. Tillerson had once referred to Nikki R. Haley, then the ambassador to the United Nations, by a sexist obscenity — an assertion Mr. Bolton seemed to doubt but found telling that the president would make it.

Mr. Trump said so many things that were wrong or false that Mr. Bolton in the book regularly includes phrases like “(the opposite of the truth)” after some quote from the president. And Mr. Trump in this telling has no overarching philosophy of governance or foreign policy, but rather a series of gut-driven instincts that sometimes mirrored Mr. Bolton’s but other times were, in his view, dangerous and reckless.

“His thinking was like an archipelago of dots (like individual real estate deals), leaving the rest of us to discern — or create — policy,” Mr. Bolton writes. “That had its pros and cons.”

Mr. Bolton is a complicated, controversial figure. An official under Presidents Ronald Reagan and George Bush and George W. Bush’s United Nations ambassador, Mr. Bolton has been one of Washington’s most vocal advocates for a hard-line foreign policy, a supporter of the Iraq war who has favored possible military action against rogue states like North Korea and Iran.

Like Mr. Tillerson and other officials who went to work for Mr. Trump believing they could manage him, Mr. Bolton agreed to become the president’s third national security adviser in 2018 thinking he understood the risks and limits.

But unlike some of the so-called axis of adults, as he calls Mr. Tillerson and former Defense Secretary Jim Mattis, who tried to minimize what they saw as the damage of the president’s tenure, Mr. Bolton used his 17 months in the White House to accomplish policy goals that were important to him, like withdrawing the United States from a host of international agreements he considers flawed, like the Iran nuclear accord, the Intermediate-Range Nuclear Forces Treaty and others.

Mr. Bolton thought Mr. Trump’s diplomatic flirtation with the likes of North Korea’s leader, Kim Jong-un, and President Vladimir V. Putin of Russia were ill advised and even “foolish” and spent much of his tenure trying to stop the president from making what he deemed bad deals. He eventually resigned last September — Mr. Trump claimed he fired him — after they clashed over Iran, North Korea, Ukraine and a peace deal with the Taliban in Afghanistan.

Mr. Bolton did not agree to testify during the House impeachment inquiry last fall, saying he would wait to see if a judge would rule that former aides like him should do so over White House objections. But after the House impeached Mr. Trump for abuse of power for withholding security aid while pressuring Ukraine to publicly announce investigations into Democrats, including former Vice President Joseph R. Biden Jr., Mr. Bolton offered to testify in the Senate trial if subpoenaed.

Senate Republicans blocked calling Mr. Bolton as a witness even after The Times reported in January that his then-unpublished book confirmed that Mr. Trump linked the suspended security aid to his insistence that Ukraine investigate his political rivals. The Senate went on to acquit Mr. Trump almost entirely along party lines. But Mr. Bolton greatly angered critics of the president for waiting to make his account public until now.

The book confirms House testimony that Mr. Bolton was wary all along of the president’s actions with regard to Ukraine and provides firsthand evidence of his own that Mr. Trump explicitly linked the security aid to investigations involving Mr. Biden and Hillary Clinton.

On Aug. 20, Mr. Bolton writes, Mr. Trump “said he wasn’t in favor of sending them anything until all the Russia-investigation materials related to Clinton and Biden had been turned over.” Mr. Bolton writes that he, Mr. Pompeo and Defense Secretary Mark T. Esper tried eight to 10 times to get Mr. Trump to release the aid.

Mr. Bolton, however, had nothing but scorn for the House Democrats who impeached Mr. Trump, saying they committed “impeachment malpractice” by limiting their inquiry to the Ukraine matter and moving too quickly for their own political reasons. Instead, he says they should have also looked at how Mr. Trump was willing to intervene in investigations into companies like Turkey’s Halkbank to curry favor with President Recep Tayyip Erdogan of Turkey or China’s ZTE to favor Mr. Xi.

Mr. Bolton writes that he raised concerns about both cases with Mr. Barr, who shared them. “Barr said he was very worried about the appearances Trump was creating,” Mr. Bolton writes. Similarly, he recalls, Pat A. Cipollone, the White House counsel, “was plainly stunned at Trump’s approach to law enforcement, or lack thereof.”

Just as Mr. Trump sought Ukraine’s help against his domestic rivals, he similarly married his own political interests with policy during a meeting with Mr. Xi on the sidelines of the Group of 20 summit meeting last summer in Osaka, Japan, according to the book. Mr. Xi told Mr. Trump that unnamed political figures in the United States were trying to start a new cold war with China.

“Trump immediately assumed Xi meant the Democrats,” Mr. Bolton writes. “Trump said approvingly that there was great hostility among the Democrats. He then, stunningly, turned the conversation to the coming U.S. presidential election, alluding to China’s economic capability to affect the ongoing campaigns, pleading with Xi to ensure he’d win.” (Mr. Bolton says he would have printed Mr. Trump’s exact words, “but the government’s prepublication review process has decided otherwise.”)

Robert Lighthizer, the president’s trade representative, denied on Wednesday that Mr. Trump sought election help from China during that meeting. “Absolutely untrue,” he said when asked during a Senate hearing. “Never happened. I was there. I have no recollection of that ever happening. I don’t believe it’s true.”

Mr. Barr, for his part, denied Mr. Bolton’s version of their conversations. “There was no discussion of ‘personal favors’ or ‘undue influence’ on investigations, nor did Attorney General Barr state that the president’s conversations with foreign leaders was improper,” said Kerri Kupec, a Justice Department spokeswoman.

Mr. Bolton does not say these were necessarily impeachable offenses and adds that he does not know everything that happened with regard to all of these episodes, but he reported at least some of them to Mr. Barr and Mr. Cipollone. They should have been investigated by the House, Mr. Bolton says, and at the very least they constituted abuses of a president’s duty to put the nation’s interests ahead of his own.

“A president may not misuse the national government’s legitimate powers by defining his own personal interest as synonymous with the national interest, or by inventing pretexts to mask the pursuit of personal interest under the guise of national interest,” Mr. Bolton writes. “Had the House not focused solely on the Ukraine aspects of Trump’s confusion of his personal interests,” he adds, then “there might have been a greater chance to persuade others that ‘high crimes and misdemeanors’ had been perpetrated.”

Wash. Post : Trump asked China’s Xi to help him win reelection, according to Bol

Trump asked China’s Xi to help him win reelection, according to Bolton book

President Trump asked Chinese President Xi Jinping to help him win the 2020 U.S. election, telling Xi during a summit dinner last year that increased agricultural purchases by Beijing from American farmers would aid his electoral prospects, according to a damning new account of life inside the Trump administration by former national security adviser John Bolton.

During a one-on-one meeting at the June 2019 Group of 20 summit in Japan, Xi complained to Trump about China critics in the United States. But Bolton writes in a book scheduled to be released next week that “Trump immediately assumed Xi meant the Democrats. Trump said approvingly that there was great hostility among the Democrats.

“He then, stunningly, turned the conversation to the coming U.S. presidential election, alluding to China’s economic capability to affect the ongoing campaigns, pleading with Xi to ensure he’d win,” Bolton writes. “He stressed the importance of farmers, and increased Chinese purchases of soybeans and wheat in the electoral outcome. I would print Trump’s exact words but the government’s prepublication review process has decided otherwise.”

At the same meeting, Xi also defended China’s construction of camps housing as many as 1 million Uighur Muslims in Xinjiang — and Trump signaled his approval. “According to our interpreter,” Bolton writes, “Trump said that Xi should go ahead with building the camps, which Trump thought was exactly the right thing to do.”

The episode described by Bolton in his book, “The Room Where It Happened: A White House Memoir,” bears striking similarities to the actions that resulted in Trump’s impeachment after he sought to pressure the Ukrainian president to help dig up dirt on Democratic rival Joe Biden in exchange for military assistance. The China allegation also comes amid ongoing warnings from U.S. intelligence agencies about foreign interference in the November presidential election, as Russia did to favor Trump in 2016.

And on the Ukraine scandal itself, Bolton cites personal conversations with Trump confirming a “quid pro quo” that Trump had long denied, including an August meeting in which Trump allegedly made the bargain explicit. “He said he wasn’t in favor of sending them anything until all Russia-investigation material related to [Hillary] Clinton and Biden had been turned over,” Bolton writes.

The 592-page memoir, obtained by The Washington Post, is the most substantive, critical dissection of the president from an administration insider so far, coming from a conservative who has worked in Republican administrations for decades and was a longtime contributor to Fox News. It portrays Trump as an “erratic” and “stunningly uninformed” commander in chief and lays out a long series of jarring and troubling encounters between the president, his top advisers and foreign leaders.

Escalating legal battle
The book is the subject of an escalating legal battle between the longtime conservative foreign policy hand and the Justice Department, which filed a lawsuit Tuesday seeking to block its publication by alleging that it contains classified material. Bolton’s attorney has said the book does not contain classified material and that it underwent an arduous review process. Late Wednesday, the Justice Department sought an emergency order from a judge to block the book’s publication.

Trump and allies have strategized for several days on how to block or attack the book. Kayleigh McEnany, the White House press secretary, said on Wednesday that the book still contained classified information.

Bolton describes the book as being based on both contemporaneous accounts and his own notes, and it includes numerous details of internal meetings and direct quotations attributed to Trump and others.

The request for electoral assistance from Xi is one of many instances described by Bolton in which Trump seeks favors or approval from authoritarian leaders. Many of those same leaders were also happy to take advantage of the U.S. president and attempt to manipulate him, Bolton writes, often through simplistic appeals to his various obsessions.

In one May 2019 phone call, for example, Russian President Vladimir Putin compared Venezuelan opposition leader Juan Guaidó to 2016 Democratic presidential nominee Clinton, part of what Bolton terms a “brilliant display of Soviet style propaganda” to shore up support for Venezuelan leader Nicolás Maduro. Putin’s claims, Bolton writes, “largely persuaded Trump.”

In May 2018, Bolton says, Turkish President Recep Tayyip Erdogan handed Trump a memo claiming innocence for a Turkish firm under investigation by the U.S. attorney for the Southern District of New York for violating Iranian sanctions.

“Trump then told Erdogan he would take care of things, explaining that the Southern District prosecutors were not his people, but were Obama people, a problem that would be fixed when they were replaced by his people,” Bolton writes.

Bolton says he was so alarmed by Trump’s determination to do favors for autocrats such as Erdogan and Xi that he scheduled a meeting with Attorney General William P. Barr in 2019 to discuss the president’s behavior. Bolton writes that Barr agreed he also was worried about the appearances created by Trump’s behavior.

A Justice Department spokeswoman referred The Post to a January statement she made about the upcoming release of the book. In that statement, the department said Barr did not state that the president’s behavior was improper and did not agree with Bolton’s views.

In his account, Bolton broadly confirms the outline of the impeachment case laid out by Democratic lawmakers and witnesses in House proceedings earlier this year, writing that Trump was fixated on a bogus claim that Ukraine tried to hurt him and was in thrall to unfounded conspiracy theories pushed by presidential lawyer Rudolph W. Giuliani and others.

Trump was impeached in January by the Democratic-controlled House of abuse of power and obstruction of Congress before being acquitted by the GOP-controlled Senate the next month. Bolton resisted Democratic calls to testify without a subpoena.

Bolton is silent on the question of whether he thinks that Trump’s actions related to Ukraine were impeachable and is deeply critical of how House Democrats managed the process. But he writes that he found Trump’s decision to hold up military assistance to pressure newly elected Ukrainian President Volodymyr Zelensky “deeply disturbing,” and that he tried to work internally to counter it, reporting concerns to Barr and the White House Counsel’s Office.

“I thought the whole affair was bad policy, questionable legally and unacceptable as presidential behavior,” he writes.

In the memoir, Bolton describes the president’s advisers as frequently flummoxed by Trump and said a variety of officials — including Chief of Staff John F. Kelly, Secretary of State Mike Pompeo and Bolton himself — all considered resigning in disgust or frustration. Even some of the president’s most loyal advisers hold a dim view of him in private, he writes.

“What if we have a real crisis like 9/11 with the way he makes decisions?” Kelly is quoted as asking at one point as he considers resigning.

“He second-guessed people’s motives, saw conspiracies behind rocks, and remained stunningly uninformed on how to run the White House, let alone the huge federal government,” Bolton writes, always looking to “personal instinct” and opportunities for “reality TV showmanship.”

Given Bolton’s expertise and his White House role from 2018 to 2019, the book is heavily focused on foreign policy episodes and decisions, from Ukraine and Venezuela to North Korea and Iran.

Bolton recounts numerous private conversations Trump had with other leaders that revealed the limits of his knowledge. He recalls Trump asking Kelly if Finland is part of Russia. In a meeting with then-British Prime Minister Theresa May in 2018, a British official referred to the United Kingdom as a “nuclear power,” and Trump interjects: “Oh, are you a nuclear power?” Bolton adds that he could tell the question about Britain, which has long maintained a nuclear arsenal, “was not intended as a joke.”

Trump holds a joint news conference with then-British Prime Minister Theresa May in January 2017. (Melina Mara/The Washington Post)
Bolton’s commentary ranges from expressions of disgust with the president’s actions to relief that advisers were able to prevent catastrophe. During a NATO summit in the summer of 2018, Bolton recounts a moment when Trump had decided to inform U.S. allies that the United States was going to withdraw from NATO if allies didn’t substantially increase defense spending by January.

“We will walk out, and not defend those who have not [paid],” read a message Trump dictated to Bolton.

Bolton tried to stop Trump from delivering the threat, and became even more alarmed when Trump told him, “Do you want to do something historic?”

During one trade meeting, Trump grew irate when advisers began discussing Japan and the alliance, and began railing about Pearl Harbor, Bolton writes.

Criticism from top advisers
Bolton’s book is also filled with examples of Trump’s closest advisers sharply criticizing the president behind his back, including Pompeo.

After Trump completed a phone call with South Korea’s president ahead of the 2018 Singapore summit with North Korea, Pompeo and Bolton shared their disdain for the president’s handling of the conversation, he writes. Pompeo, having listened in on the call from the Middle East, told Bolton he was “having a cardiac arrest in Saudi Arabia.” Bolton shared his similar disappointment with the call, describing it as a “near death experience.”

Bolton attributes a litany of shocking statements to the president. Trump said invading Venezuela would be “cool” and that the South American nation was “really part of the United States.” Bolton says Trump kept confusing the current and former presidents of Afghanistan, while asking Japanese Prime Minister Shinzo Abe to help him strike a deal with Iran. And Trump told Xi that Americans were clamoring for him to change constitutional rules to serve more than two terms, according to the book.

He also describes a summer 2019 meeting in New Jersey where Trump says journalists should be jailed so they have to divulge their sources: “These people should be executed. They are scumbags,” Trump said, according to Bolton’s account.

Bolton describes in depth the feuding and backbiting among Trump’s cadre of advisers, as well as referring dismissively to Trump son-in-law Jared Kushner’s efforts to get involved in domestic and foreign policy issues. Almost every adviser — including Pompeo, Treasury Secretary Steven Mnuchin, former defense secretary Jim Mattis and former U.N. ambassador Nikki Haley — comes under the scalpel. By contrast, Bolton seems to hold himself in high regard and admits few mistakes of his own.

Bolton describes Trump as callously unconcerned about human rights violations. He writes that during an opening dinner of the G-20 meeting in Osaka in 2019 attended only by interpreters, Xi explained to Trump “why he was basically building concentration camps” in a northwest Chinese province where the government has been interning Uighurs, an ethnic minority.

According to Bolton, the U.S. interpreter said that Trump spoke approvingly of the camps. Bolton writes that he was told by Matt Pottinger, a National Security Council official who is hawkish on China, that Trump had said something similar during a 2017 trip to China.

“In my government experience, it was the most irrational thing I ever witnessed any president do,” he said.

“This is really dangerous,” Pompeo said, according to Bolton’s book, as both men fumed about the president.

For Trump, Bolton writes, one singular goal loomed above all: securing a second term.

“I am hard pressed to identify any significant Trump decision during my tenure that wasn’t driven by reelection calculations,” Bolton writes.

Bolton says Trump said he wanted out of Afghanistan during his second year instead of his third year so he could blame his predecessor for the war. Screaming about the border wall in a meeting with top advisers in 2018, Trump described why illegal immigration had to go down and the wall had to go up, according to Bolton’s book.

“I got elected on this issue and now I’m going to get unelected,” Trump said, startling those around him.

For all his public bluster, Bolton describes Trump as frequently uncertain, fretful and wobbly during difficult policy choices.

For instance, driven by a desire to please Florida Republicans, Trump talked tough about his desire to oust Maduro throughout much of 2018. But Bolton portrays Trump as inconsistent and worry-worn when presented with the opportunity to support Guaidó, who declared himself Venezuela’s president in January 2019. Though Trump approved of a proposal from Bolton to publicly declare the United States recognized Guaidó rather than Maduro, within 30 hours Trump was already worrying that Guaidó appeared weak — a “kid” compared to “tough” Maduro — and considering changing course. “You couldn’t make this up,” Bolton writes.

In describing his White House experience on Russia-related issues, Bolton presents a picture of a president who is impulsive, churlish and consistently opposed to U.S. policy designed to discourage Russian aggression and to sanction Putin’s malign behavior.

Bolton spends little effort trying to explain Trump’s sympathetic approach to Putin. But the book makes the case that there is a disturbing and undeniable pattern of presidential reluctance to embrace policies designed to inhibit Russian aggression. He describes in detail the events leading up to the widely panned Helsinki summit in July 2018, when Trump sided with Putin against U.S. intelligence agencies over Moscow’s interference in the 2016 presidential election.

“This was hardly the way to do relations with Russia, and Putin had to be laughing uproariously at what he had gotten away with in Helsinki,” Bolton writes.

Soon after he arrived at the White House, Bolton said Kelly gave him a warning. “You can’t imagine how desperate I am to get out of here,” Kelly said, according to Bolton’s book. “This is a bad place to work, as you will find out.”

“Has there ever been a presidency like this?” Kelly asks Bolton at one point, after telling Trump that his moves to remove security clearances from political foes such as John Brennan are “Nixonian” and “unpresidential.”

Throughout the book, he describes Trump and top advisers repeatedly slashing each other, lying to each other and maneuvering to gain advantage.

At one point, Bolton says he learned that Kushner was going to be calling the finance minister of Turkey because he was also Erdogan’s son-in-law.

“I briefed Pompeo and Mnuchin on this new ‘son-in-law channel’ and they both exploded. Pompeo was furious, Bolton writes, “because this was one more example of Kushner’s doing international negotiations he shouldn’t have been doing (along with the never quite ready Middle East peace plan).”

For extended periods of time, Trump kept telling different advisers they were in charge of border policy, according to Bolton’s book. One day in 2018 in the Oval Office, Kelly purportedly learned that Kushner was calling Mexican authorities when he barged into the Oval Office and said so.

“Why is Jared calling Mexicans?” Kelly asked loudly, according to the book. “Because I asked him to. How else are we going to stop the caravans?” Trump responded.

Diverting attention
In November 2018, Trump came under fire for writing an unfettered defense of Saudi Crown Prince Mohammed bin Salman, littered with exclamation points, over the killing of Post columnist Jamal Khashoggi. But according to Bolton’s book, the main goal of the missive was to take away attention from a story about Ivanka Trump using her personal email for government business.

“This will divert from Ivanka,” Trump said, according to Bolton’s book. “If I read the statement in person, that will take over the Ivanka thing.”

He repeatedly describes Trump lashing out at military leaders, demanding to withdraw troops from the Middle East and from Africa and Europe, too. “I want to get out of everything,” Trump said during a meeting at his Bedminster, N.J., golf club, according to Bolton, as military leaders pressed him to take more nuanced positions.

At another point, arguing in 2018 with Mattis, Trump told him that Russia should take care of the Islamic State.

“We’re seven thousand miles away but we’re still the target,” Trump said, according to the account. “They’ll come to our shores. That’s what they all say. It’s a horror show. At some point we’ve got to get out.”

Describing the conflict in Afghanistan, Trump said: “This was done by a stupid person named George Bush.”

Trump repeatedly told Mattis that the defense official had been given a chance but had failed.

“I gave you what you asked for: Unlimited authority, no holds barred. You’re losing. You’re getting your ass kicked. You failed,” Trump says.

Determined to make friends with North Korean leader Kim Jong Un, Trump decided that he wanted to give Kim some American gifts — gifts that violated U.S. sanctions that eventually had to be waived, per Bolton’s book.

When Bolton recounts the Trump-Kim meeting in Singapore, the first summit of U.S. and North Korean leaders in history, Bolton castigates Trump’s diplomatic efforts, saying the president cared little for the details of the denuclearization effort and saw it merely as a “an exercise in publicity.”

He describes it extensively — including what Kim and his advisers say, and what Trump and his advisers say in return, giving a fly-on-the-wall account of a historic event.

“Trump told . . . me he was prepared to sign a substance-free communique, have his press conference to declare victory and then get out of town,” Bolton wrote.

In the months following the summit, Bolton described Trump’s inordinate interest in Pompeo delivering an autographed copy of Elton John’s “Rocket Man” on CD to Kim during Pompeo’s follow-on visit to North Korea. Trump had used the term “Little Rocket Man” to criticize the North Korean leader but subsequently tried to convince Kim that it was a term of affection.

“Trump didn’t seem to realize Pompeo hadn’t actually seen Kim Jong Un [during the trip], asking if Pompeo had handed” the CD, wrote Bolton. “Pompeo had not. Getting this CD to Kim remained a high priority for several months.”

WSJ : Trump Put Re-Election Prospects Ahead of National Interest, Bolton Alleges

Trump Put Re-Election Prospects Ahead of National Interest, Bolton Alleges
Former national security adviser says in new book that president withheld Ukraine aid for political favors, asked Chinese president to help him win 2020 race

WASHINGTON—President Trump’s decision-making consistently prioritized his re-election and his family’s well-being ahead of the national interest, according to a new book from his former national security adviser, John Bolton, who describes “obstruction of justice as a way of life” inside the Trump White House and denounces what he says is the president’s penchant to “give personal favors to dictators he liked.”

In a scathing account of his 17 months working for the president, Mr. Bolton describes Mr. Trump as “stunningly uninformed,” easily swayed by authoritarian leaders and often the subject of scorn among his own advisers. Among the episodes he recounts are June 2019 meetings with Chinese President Xi Jinping in which he says Mr. Trump pleaded with his counterpart to help him win re-election by purchasing agricultural products from the U.S. and gave China his blessing to continue building camps for Uighur Muslims, which Mr. Bolton likened to concentration camps.

Mr. Trump broadly defended his handling of foreign policy issues in an interview, including his decision to reverse penalties on Chinese companies as part of his trade negotiations. He denied giving Mr. Xi approval for Uighur camps in China and sharply criticized Mr. Bolton.

“He is a liar,” Mr. Trump told The Wall Street Journal, adding that “everybody in the White House hated John Bolton.”

Mr. Bolton echoes allegations that were at the center of the president’s impeachment trial, writing that Mr. Trump repeatedly ordered White House officials to withhold military assistance from Ukraine as retribution for perceived slights during the 2016 election and as leverage to pressure the country to investigate Joe Biden, then a potential and now his presumed election opponent this year. Mr. Bolton describes the objective as a fantasy based on conspiracy theories pushed by Rudy Giuliani, the president’s personal attorney.

“Ukraine tried to take me down. I’m not f—ing interested in helping them,” Mr. Trump is quoted in the book as saying during a White House meeting in May 2019. Mr. Trump and some GOP allies have advanced an unfounded theory that Ukraine, and not Russia, interfered in the 2016 election and that a hacked Democratic National Committee computer server had ended up in Ukraine.

“I want the f—ing DNC server,” Mr. Trump is quoted as saying.

Mr. Bolton says he discussed with Secretary of State Mike Pompeo and Defense Secretary Mark Esper how to persuade the president to release the aid to Ukraine. “We could have confronted Trump directly, trying to refute the Giuliani theories and arguing that it was impermissible to leverage U.S. government authorities for personal political gain,” he writes. “We almost certainly would have failed.”

The former adviser defends his decision not to participate in the House’s impeachment inquiry, and said if Democratic leaders had widened their probe beyond the Ukraine matter, there might have been a higher likelihood of persuading Republicans that the president had committed “high crimes and misdemeanors.

The GOP-led Senate acquitted Mr. Trump of both impeachment articles approved by the House, in a largely party-line vote in February.

Even for an administration that has seen no shortage of critical tell-alls, “The Room Where It Happened” is a remarkable rebuke of a sitting president by one of his own former senior advisers and, as Mr. Bolton describes it, a warning to conservatives ahead of the 2020 election. The U.S. on Tuesday sued Mr. Bolton for breach of contract, seeking to block the June 23 publication of the 577-page book, a copy of which was obtained by The Wall Street Journal. The lawsuit also asks a court to establish a constructive trust, which would require Mr. Bolton to turn over his book advance and royalties to the government.

The Journal published an excerpt from the book on Wednesday.

The Justice Department escalated its case against Mr. Bolton late Wednesday, filing an emergency request for the court to issue a temporary restraining order and injunction to block publication of Mr. Bolton’s book and prohibit his publisher from disseminating it.

The filing included affidavits from multiple senior intelligence officials alleging the current manuscript including classified information, including the top U.S. counterintelligence official, William Evanina, and National Security Agency director Paul Nakasone, who said that disclosure of some of the classified information contained in the manuscript “could result in the permanent loss of a valuable” intelligence source and cause “irreparable damage” to the U.S. signals intelligence system.

The government asked for a court hearing on Friday, in advance of the book’s June 23 publication date.

The Justice Department, which alleged in its Tuesday lawsuit that Mr. Bolton had provided classified information to people not authorized to receive it when he shared his manuscript with others, is also investigating whether Mr. Bolton’s actions amounted to a crime, according to a person familiar with the matter. The Justice Department declined to comment.

Simon & Schuster, the publisher of Mr. Bolton’s book, said in a statement: “Tonight’s filing by the government is a frivolous, politically motivated exercise in futility” because the book has already been distributed. “The injunction as requested by the government would accomplish nothing.”

Democrats had previously criticized Mr. Bolton for not voluntarily testifying during the impeachment inquiry and renewed that complaint Wednesday. House Intelligence Committee Chairman Adam Schiff (D., Calif.) noted that some of Mr. Bolton’s aides had chosen to testify.

“When Bolton was asked, he refused, and said he’d sue if subpoenaed. Instead, he saved it for a book,” Mr. Schiff said on Twitter. “Bolton may be an author, but he’s no patriot.”

Mr. Biden on Wednesday said what the book describes as the president’s behavior was disgraceful.

“If these accounts are true, it’s not only morally repugnant, it’s a violation of Donald Trump’s sacred duty to the American people to protect America’s interests and defend our values,” he said.

China trade negotiations
The book details what Mr. Bolton says were repeated instances of Mr. Trump prioritizing a potential trade deal with China and his own political interests over other issues, including enforcement of U.S. sanctions and human-rights concerns.

During a meeting with China’s Mr. Xi in Osaka, Japan, Mr. Bolton writes, Mr. Trump turned the conversation to this year’s U.S. presidential election, pleading with Mr. Xi to help him win, stressing the importance of farmers and increased Chinese purchases of soybeans and wheat to the electoral outcome.

At the opening of that Group of 20 summit, when only interpreters were present, Mr. Bolton says the U.S. president gave Mr. Xi his blessing for Beijing to continue building camps for Uighur Muslims in China. “Trump said that Xi should go ahead with building the camps, which Trump thought was exactly the right thing to do,” he writes.

At the time, the Trump administration was considering sanctions on China for its treatment of Uighurs, more than a million of whom have been detained without trial in the past three years, according to academic researchers.

Mr. Trump opposed sanctions over the ethnic minority issues in China because of the trade negotiations, according to the book. “We could cross repression of the Uighurs off our list of possible reasons to sanction China, at least as long as trade negotiations continued,” Mr. Bolton writes.

Shortly after the news media began publishing details of the Bolton book, the White House confirmed the president had signed the Uighur Human Rights Policy Act, which condemns human rights abuses in China’s Xinjiang Uighur Autonomous region.

U.S. Trade Representative Robert Lighthizer, who attended the Osaka meeting between the two leaders, said Wednesday that no such conversation occurred in his presence. “Absolutely untrue. Never happened. I was there,” he said.

West Wing decision-making
Mr. Bolton, whose 17 months as Mr. Trump’s national security adviser ended in September 2019, writes that one of the few guardrails on the president has been his re-election and predicts that Mr. Trump would be “far less constrained” in a second term. “I am hard-pressed to identify any significant Trump decision during my tenure that wasn’t driven by reelection calculations,” Mr. Bolton writes.

The president also often put his own family’s interests ahead of the country’s, Mr. Bolton writes. Mr. Trump in 2018 issued a vociferous, exclamation-point-riddled defense of Saudi Arabia in which he dismissed U.S. intelligence conclusions that the Saudi crown prince had ordered the killing of a dissident journalist—a statement that Mr. Bolton says was intended to distract from news stories about Ivanka Trump’s use of her personal email account for government business.

“This will divert from Ivanka,” Mr. Bolton quotes the president as saying about his daughter and senior adviser.

Outside the Oval Office, the president is surrounded by advisers who criticize him behind his back, Mr. Bolton says. He describes a meeting in which he says Mr. Pompeo passed him a note referring to the president that said, “He is so full of shit.”

Mr. Bolton characterizes the atmosphere of the West Wing as chaotic and closer to that of a college dormitory. Senior officials, including Mr. Pompeo, former chief of staff John Kelly and Mr. Bolton himself considered resigning on multiple occasions, he writes.

Dealings with foreign leaders
Mr. Bolton, who has served in the past four Republican presidential administrations, says that Mr. Trump was motivated by conspiracy theories and uninformed about matters ranging from White House management to global affairs.

Mr. Trump expressed surprise during a June 2018 meeting with then-U.K. Prime Minister Theresa May that her country possessed nuclear weapons, Mr. Bolton says. In an August 2018 meeting at the White House, Mr. Trump asserted that Venezuela was “really part of the United States” and requested military options to invade the South American country, according to the book.

The president is described as erratic, childlike and foolish. Mr. Bolton writes that the president “saw conspiracies behind rocks” and was easily manipulated by White House aides and foreign leaders. In one example, according to the book, Russian President Vladimir Putin deployed “a brilliant display of Soviet-style propaganda” on a May 2019 call with the U.S. president that “largely persuaded Trump” and led to a later decision to go easy on additional Venezuela sanctions.

Mr. Trump told Turkish President Recep Tayyip Erdogan that Halkbank, a Turkish lender facing charges of evading U.S. sanctions on Iran, was “totally innocent,” Mr. Bolton writes. The president’s pronouncement, made during a meeting at the 2018 Group of 20 summit in Buenos Aires, came after Mr. Trump flipped through a memo prepared by the bank’s attorneys that Mr. Erdogan had handed him, according to the book.

Mr. Erdogan wanted a case dropped against Halkbank official Mehmet Atilla because of allegations the Turkish president and his family used the bank for personal purposes and frequently asked Mr. Trump about it, Mr. Bolton says.

After declaring the bank guilt-free, Mr. Trump asked his national security adviser to call Matthew Whitaker, then the acting attorney general—a request Mr. Bolton says he sidestepped as the two leaders continued talking. Mr. Trump assured Mr. Erdogan he would “take care of things,” according to the book, saying he would replace the U.S. prosecutors who had brought the case in the Southern District of New York.

Mr. Bolton says the president’s promise was “all nonsense” since the prosecutors were career Justice Department employees and not political appointees. “It was as though Trump was trying to show he had as much arbitrary authority as Erdogan,” he writes.

Telecom talks with Beijing
The president was also convinced to reverse U.S. law-enforcement actions during a phone call with Mr. Xi in June 2019 in which the Chinese president warned the two countries’ relationship was at risk over the Trump administration’s handling of Huawei Technologies Co., Mr. Bolton writes. The Chinese smartphone and wireless company had been banned from doing business with U.S. companies over sanctions violations. Mr. Trump told Mr. Xi that the company could be part of the trade deal he was seeking, according to the book.

During their G-20 meeting two weeks later, Mr. Xi continued pushing on Huawei, “sensing weakness” in Mr. Trump, Mr. Bolton writes. When Mr. Xi agreed to include Huawei in the trade talks, Mr. Trump agreed to lift the then-month-old ban, he says.

Mr. Bolton says that at his and others’ urging, Mr. Trump later balked at the reversal. But using Huawei as a bargaining chip in the trade negotiations was “ignoring both the significance of the criminal case and also the far larger threat Huawei posed to the security” of 5G telecom systems world-wide,” he writes.

Mr. Trump also sought favor with Mr. Xi during trade negotiations, according to Mr. Bolton, by removing crippling financial penalties on ZTE Corp., the Chinese telecom giant that had been prosecuted for violating U.S. sanctions on Iran and North Korea, and moving to do the same with Huawei.

During a phone call with Mr. Xi in May 2018, a few weeks after the penalties had been announced, Mr. Trump told his Chinese counterpart that he viewed his administration’s punishment of ZTE as harsh and that he had ordered Commerce Secretary Wilbur Ross to “work something out for China,” according to the book.

Mr. Xi thanked Mr. Trump and said he would owe the U.S. president a favor, Mr. Bolton writes. Mr. Trump replied that he was doing this because of Mr. Xi’s request. “I was stunned by the unreciprocated nature of this concession,” Mr. Bolton writes. “This was policy by personal whim and impulse.”

Mr. Bolton said he raised concerns about the president’s handling of Halkbank, ZTE and Huawei with Attorney General William Barr, White House counsel Pat Cipollone and John Eisenberg, the chief White House national security attorney.

Mr. Bolton says Mr. Barr told him that he was “very worried about the appearances Trump was creating, especially his remarks on Halkbank to Erdogan in Buenos Aires.” Mr. Cipollone “was plainly stunned at Trump’s approach to law enforcement, or lack thereof,” Mr. Bolton writes.

Senior White House leaders
Mr. Bolton is critical of many members of Mr. Trump’s senior staff: Nikki Haley, then the U.S. ambassador to the United Nations, operated like a “free electron” who “was motivated by her desire not to get hammered in the press.” Mr. Pompeo’s overriding philosophy in managing the State Department was “conflict avoidance.” Treasury Secretary Steven Mnuchin forcefully weighed in on foreign policy decisions even when “he manifestly had no idea what he was talking about.” Former Defense Secretary Jim Mattis “knew how to flatter with the best of them” but “was no debater.”

Senior White House adviser and Mr. Trump’s son-in-law Jared Kushner, according to the book, was involved in “international negotiations he shouldn’t have been doing”—a view Mr. Bolton says was shared by other foreign leaders, including Israeli Prime Minister Benjamin Netanyahu. Mr. Netanyahu was “dubious” about Mr. Kushner taking on Middle East peace and “wondered why Kushner thought he would succeed where the likes of Kissinger had failed,” Mr. Bolton writes.

The former national security adviser said Mr. Trump showed little loyalty despite prizing it above all else. Mr. Bolton says the president discussed with him a proposal to replace Vice President Mike Pence—seen as among the most loyal officials in the administration—from the ticket in 2020 to appeal to a wider spectrum of voters.

While Mr. Bolton describes himself as registering alarm at the president’s actions as early as the transition, he details few instances in which he directly confronted Mr. Trump, instead mostly preferring to remain silent or brief other officials on his concerns.

He says the president’s Ukraine dealings were ultimately a factor in his resignation, which came nearly three months after Mr. Bolton first learned that Mr. Trump was considering withholding aid to Ukraine.

Mr. Bolton does describe at least one matter on which he says the two men were in agreement: “Much was made of his purported dislike of my mustache,” Mr. Bolton wrote of the president. “For what it’s worth, he told me it was never a factor, noting that his father also had one.”

>>> US After Hours Summary: ABM +8.2% rises after earnings; CBIO -

After Hours Summary: ABM +8.2% rises after earnings; CBIO -7.8%, KTOS -6.1% decline on stock offerings

After Hours Gainers:

Companies trading higher in after hours in reaction to earnings/guidance: ABM +8.2% (also announced resignation of CFO D. Anthony Scaglione)

Companies trading higher in after hours in reaction to news: ORN +54% (announced contract awards totaling approx. $17 mln), ELOX +47.5% (reopened enrollment in Phase 2 cystic fibrosis trial in Israel and Europe), BBX +36.4% (to spin off non-Bluegreen business and investments), IBTX +11.4% (appointed to join the S&P SmallCap 600), DADA +8.6% (Walmart [WMT] disclosed a 10.7% stake), QIWI +5.6% (to sell its SOVEST consumer lending business), NDLS +3.7% (lightly traded; reported improving comparable sales trends), LPI +2.9% (appointed Bryan Lemmerman as CFO), TMUS +1.6% (promoted Peter Osvaldik to CFO), BHC +1.4% (silicone hydrogel contact lens product receives approval in China), DDOG +1.1% (announced integration with Amazon Elastic File System for AWS Lambda), SPOT +1% (reached podcast deal with Kim Kardashian West, per WSJ)

After Hours Losers:

Companies trading lower in after hours in reaction to earnings/guidance: N/A

Companies trading lower in after hours in reaction to news: CBIO -7.8% (commenced public stock offering), KTOS -6.1% (announced $200.0 mln public stock offering), ISEE -5.9% (commenced $50.0 mln public offering of common stock), IVR -4.8% (declared Q2 dividend of $0.02/share), X -4.8% (commenced public offering of 50.0 mln common shares), KIDS -3.1% (commenced public offering of common stock), FOXF -3% (announced public offering of 2.0 mln common shares), WPC -2.1% (announced 4.75 mln share offering)

>>> US Close -0.65% S&P -0.36% Nasdaq +0.15% Russell -1.77%

Closing Stock Market Summary

The S&P 500 declined 0.4% on Wednesday, falling for the first time in four sessions amid lingering angst about a U.S. recovery and equity valuations. The Dow Jones Industrial Average lost 0.7%, and the Russell 2000 lost 1.8%. The Nasdaq Composite, however, increased 0.2%. 

It was a relatively benign decline for the benchmark index considering that eight of the 11 S&P 500 sectors finished in negative territory. The energy (-3.3%) and financials (-1.4%) sectors declined noticeably, while the communication services (+0.1%), consumer discretionary (+0.1%), and information technology (+0.03%) sectors barely finished higher. 

The market's recovery optimism was kept in check after several states (and Beijing) continued to report an uptick in COVID-19 cases, Oracle (ORCL 51.52, -3.07, -5.6%) disclosed that customers within some of its hardest hit verticals postponed some orders, and Norwegian Cruise Line (NCLH 19.20, -1.76, -8.4%) extended its suspension of cruise voyages through Sept. 30.

The S&P 500 was trading higher in the afternoon despite any growth concerns but notably slipped to session lows (-0.5%) shortly after Jeremy Grantham, a closely-followed market pundit, told CNBC that the goal number for equity exposure in the U.S. is zero due to the market's bubble-like characteristics.

It's one man's view, but one that some investors wouldn't disagree with given the grim economic environment. Domestically-oriented small-caps underperformed amid the recovery angst, but losses were mitigated by the recognition that the Fed will continue to aggressively support financial conditions. Investors siding with Mr. Grantham will likely have to bet against the Fed. 

On a related note, Fed Chair Powell concluded his semiannual monetary policy testimony on Wednesday. Mr. Powell reminded lawmakers of their spending powers, reiterating that Congress should do more to support the economy. Market reaction was muted. 

U.S. Treasuries ended the session slightly higher after trading in a narrow range. The 2-yr yield declined two basis points to 0.19%, and the 10-yr yield declined two basis points to 0.73%. The U.S. Dollar Index increased 0.2% to 97.13. WTI crude declined 0.9% to $37.93/bbl amid an unexpected increase in weekly crude inventories.

Reviewing Wednesday's economic data:

  • Total housing starts increased 4.3% m/m in May to a seasonally adjusted annual rate of 974,000 units. That was well below the consensus estimate of 1.170 million and down 23.2% yr/yr. Total building permits increased 14.4% m/m to a seasonally adjusted annual rate of 1.220 million, which was just shy of the consensus estimate of 1.260 million.
    • The key takeaway from the report is that permits, which are a leading indicator, increased a solid 11.9% m/m for single-unit dwellings. Single-unit permits increased in all regions, too.
  • The weekly MBA Mortgage Applications Index rose 8.0% following a 9.3% spike in the prior week.

Looking ahead, investors will receive the weekly Initial and Continuing Claims report and the Philadelphia Fed Index for June on Thursday.

  • Nasdaq Composite +10.5% YTD
  • S&P 500 -3.6% YTD
  • Dow Jones Industrial Average -8.5% YTD
  • Russell 2000 -14.5% YTD

Reuters : Who's in charge at Nissan? COO's allies push to give him shared CEO ro

Who's in charge at Nissan? COO's allies push to give him shared CEO role – sources - Reuters News
17-Jun-2020 16:00:00

By Norihiko Shirouzu

June 17 (Reuters) - Nissan's chief operating officer Ashwani Gupta helped engineer the troubled automaker's latest turnaround plan. Now his allies are pressing the board to promote him to co-CEO to drive the new strategy, said four people with direct knowledge.

Thus far, Nissan Motor Co's 7201.T 12-member board has no plan to change the roles of Chief Executive Makoto Uchida or his No. 2 Gupta, the sources told Reuters. But the behind-the-scenes campaign, involving at least half a dozen current and former executives, points to continued tensions at the top of the Japanese automaker, which has had four CEOs in four years.

The sources, all of whom have ties to Nissan's leadership team, declined to be identified because they aren't authorised to speak to reporters and because of the sensitivity of the topic.

Nissan responded in a statement to Reuters there are "no plans or consideration for any change in the management structure at Nissan, and no change to the close collaborative working relationship between Mr. Uchida and Mr. Gupta in their current roles." Speculation to the contrary is baseless and misleading, the statement went on.

Lobbying to promote Gupta, 49, has intensified, the sources said, since Nissan unveiled a four-year recovery plan on May 28 to slash costs and strengthen its global alliance with Renault RENA.PA and Mitsubishi 7211.T. Indian-born Gupta, an industry veteran, was instrumental in drawing up the plan. His allies now want him to implement it.

According to the people with knowledge of the matter, Gupta's supporters are proposing that he either share the CEO role with Uchida, or replace his boss, with Uchida becoming chairman. One of the sources, a Nissan executive, told Reuters: "We're clear enough in telling the board what our expectations are. But we don't want to push the issue too hard. We want this to happen in a natural way."

The uncertainty threatens to increase instability at Nissan that stretches back to late 2018, when long-time leader Carlos Ghosn was arrested and fired because of alleged financial misconduct, which he denies. Ghosn was Nissan's CEO through April 2017, when he stepped aside, remaining as chairman. Since Ghosn, Nissan has had three CEOs. The discussion about Gupta's role is also a distraction as Nissan wrestles with an array of problems, from its own financial woes to the industry-wide impact of the COVID-19 pandemic that is hurting sales.

The sources said Gupta's allies have become emboldened in recent weeks because of growing doubts among rank-and-file employees about Uchida's ability to lead Nissan back from its first annual loss in 11 years.

Two of the sources cited Uchida's performance during a news conference on May 28 at which he presented the plan to cut Nissan's production capacity and model range, and put new emphasis on sharing costs and investment with Nissan partners Renault and Mitsubishi Motors. Uchida emphasized that "the main focus of the plan is not restructuring." Its purpose, he said, is "to build a financial foundation that will lead to sustained future growth. For that future growth, we plan to continue to invest in (product and technology) development."

The sources said Uchida's comments displayed a lack of urgency at a critical moment.

"The Nissan plan is a restructuring plan, no matter how you slice it," said Tokyo-based SBI Securities analyst Koji Endo. "But Uchida fell short of clearly defining this as a restructuring plan. I think it would've served him better if Uchida had said honestly what this is, in order to instill the urgency of the plan and to stress people need to scramble."



LEADERSHIP

Gupta is already taking on much of the leadership of Nissan, said the four people with direct knowledge. Uchida, they said, is less engaged. Another source, a mid-ranking global product distribution strategy manager, said Gupta has hosted all recent meetings attended by this manager and his colleagues at head office in Yokohama to discuss recovery in key markets like China and the United States.

"He's doing all the heavy lifting in formulating the plan, and we are not getting any guidance from Uchida," the manager said.

Nissan said in its statement to Reuters that the management is "focused and united on the delivery of the transformation program, led by chief executive officer Makoto Uchida. Ashwani Gupta, as chief operating officer, is working intensively in partnership with Mr. Uchida on executing the program."

Nissan's recovery plan draws on ideas previously employed by Gupta to reinvigorate the commercial vehicle businesses of Renault and Nissan. After joining Renault in India in 2006, Gupta became vice president in charge of Renault's global commercial vehicle business, a job he held until April 2019, when he was named COO of Mitsubishi.

In drawing up Nissan's latest turnaround strategy, Gupta worked closely with Renault's chairman, Jean-Dominique Senard. As a consequence, Gupta and Senard, who sits on the Nissan board, have developed a close relationship, the sources said.

According to two of the sources, this might persuade Senard to support making Gupta co-CEO. If Gupta were to be promoted, the sources said, it would be positive for the Nissan-Renault alliance because Uchida and Senard have yet to develop a solid relationship.

A spokesperson for Renault said the company wouldn't comment on speculation, adding that the relationship between the current leaders of Renault, Nissan and Mitsubishi is "excellent." Mitsubishi declined to comment for this article.

WSJ : Investors Are Sitting on the Biggest Pile of Cash Ever

Investors Are Sitting on the Biggest Pile of Cash Ever
Amid head-spinning economic uncertainty and stock-market volatility, many investors have rushed into money-market funds

Investors have rarely been this flush with cash.

Grappling with the most economic uncertainty in decades and a head-spinning stretch of volatility in the U.S. stock market, many investors have rushed into money-market funds. Assets in the funds recently swelled to about $4.6 trillion, the highest level on record, according to data from Refinitiv Lipper going back to 1992.

It is a “pantry-loading and survival” mentality, said Peter Crane, founder of Crane Data, which tracks the industry. “It’s blown the lid off the previous record high.”

Assets in money-market funds are one, but not the only, measure of cash holdings, and investors have socked away cash in other places, too. Other measures, like bank deposits, are also at a high.

Analysts attribute the flight to cash to the coronavirus pandemic, which spurred a rush out of stocks, bonds and commodities. Meanwhile, stimulus checks sent to millions of Americans as part of the economic rescue package helped add to the heap.

It is the latest perplexing signal in markets, coming as many investors are already struggling to reconcile the economic downturn stemming from the coronavirus pandemic with the simultaneous, staggering rally that has pulled major U.S. stock indexes up more than 35% off their lows of late March.

Few can agree on what the giant pile of cash means for markets. Many investors, nervous about the economic downturn, are questioning if stocks have soared too far, too fast, and have chosen the safety of cash over investing in the market. Others are keeping cash on the sidelines, ready to deploy when they spot an attractive buying opportunity.

Anxiety surrounding the market’s run-up has been on display recently, with the S&P 500 plunging 5.9% on Thursday—its biggest drop since March—before swinging wildly on Friday and Monday. The index has surged 40% since late March and is off just 3.3% for the year.

Yet despite the advance, overall stock positioning among investors remains among the lowest levels of the past decade, according to data from Deutsche Bank. New individual investors jumped into the stock market during the recent selloff, while bigger institutional investors only recently started adding to stock positions, a team of Deutsche Bank strategists led by Parag Thatte said in a June 5 research note.

John Cunnison, chief investment officer at investment firm Baker Boyer, said he moved some of his portfolio into cash earlier this year when volatility first started creeping into markets—marking the first time in at least a decade that he hasn’t been fully invested in stocks or other assets.

He isn’t alone. Assets in money-market funds have grown by about $1 trillion this year, pushing assets in these funds above the prior high of roughly $3.8 trillion reached during the last financial crisis.

Like many other investors, Mr. Cunnison has been struggling to reconcile the divergences between the deteriorating economy and the improving stock market.

“It does justify some higher level of caution and resilience in portfolios than you otherwise would have,” Mr. Cunnison said. “We’re still comfortable with a slightly higher level of cash.”

Jeremy Grantham of GMO LLC, who earned acclaim with his calls ahead of Wall Street busts in 2000 and 2008, wrote in a quarterly letter that stock-market valuations are among the highest they have been historically, while the U.S. economy is about as abysmal as it has been.

“Everyone can see and feel that this is different and can sense the bizarre nature of the market response: we are in the top 10% of historical price earnings ratio for the S&P on prior earnings and simultaneously are in the worst 10% of economic situations,” Mr. Grantham wrote in his letter to investors.

The U.S. officially entered a recession in February, putting an end to the historic 128-month expansion. Meanwhile, the S&P 500 is trading at 21.9 times its expected earnings, putting its forward price-to-earnings ratio near levels seen during the dot-com bubble.

Mr. Cunnison said he put some money back into the market in mid-May and would like to gradually wade back into stocks, especially if share prices drop further. Some market watchers interpret the cautious positioning by investors like Mr. Cunnison as a positive sign that the stock market has room to run.

“If this rally continues…this is something to fuel a continued rise in U.S. equities,” said Stephen Suttmeier, chief equity technical strategist at Bank of America, of the positioning.

Other positioning data shows traders have been pessimistic about the recent rally. As stocks rebounded, leveraged funds like hedge funds have accumulated the most bearish position on S&P 500 futures since 2016, according to Commodity Futures Trading Commission data.

Some investors are also sitting on the sidelines of the bond market.

Chris Zaccarelli, chief investment officer of wealth-management firm Independent Advisor Alliance, said he has held more of his portfolio in cash than usual. When scanning the market for high-yield and investment-grade corporate bonds, he says, he hasn’t spotted enough appealing opportunities to invest. Keeping money in cash has benefited him, shielding him from the gyrations in the bond market.

“It actually protected us” this year, Mr. Zaccarelli said.

WSJ : The Car Industry’s $1.1 Trillion Debt Problem

The Car Industry’s $1.1 Trillion Debt Problem
Pandemic shutdowns have hit auto makers and their suppliers at a point when balance sheets were already under pressure

The acute phase of the coronavirus crisis has passed for automakers. The chronic phase may be just beginning.

No auto maker has gone bust in this recession. None seems likely to either, given the ready availability of cash. The combination of ample central-bank liquidity and a functioning financial system have forestalled the kind of existential drama that rocked the industry in 2009.

But this is only good news up to a point. More cash now means more debt later—debt that manufacturers can ill afford, given the mounting cost of new technologies.

As of June 16, car manufacturers and their suppliers had raised $21.7 billion in extra long-term debt as a result of the Covid shutdowns, according to calculations by consulting firm AlixPartners. That further increases the total industry debt load to at least $1.1 trillion or 3.4 times earnings before interest, taxes, depreciation and amortization. At the end of last year the leverage multiple stood at 3.0 times.

“This downturn has been unusual because markets were open and liquid. That lowers bankruptcy risk but has implications later on,” says Mark Wakefield, co-leader of the automotive and industrial practice at AlixPartners.

This year’s shutdowns have severely aggravated an existing trend. Leverage in the car industry rose steadily in 2018 and 2019 as returns on capital fell. Massive investments in new technologies, notably electric vehicles, were the main reason—though stagnant or falling sales in the big three markets of China, the U.S. and Europe didn’t help.

The bill for EVs isn’t yet close to being paid. Before the pandemic, auto makers and suppliers had committed a total of $234 billion to electrification projects for the five-year period starting in 2020, according to Alix’s research, equivalent to roughly an entire year’s capital spending for the industry. Some projects will probably be pushed out. With Tesla shares hitting new highs and no letup in Europe’s strict emissions regime, though, rolling out EVs will remain a top priority.

The problem with EVs isn’t just the cost of investing in new platforms and products. As Tesla’s finances demonstrate, each unit sold will also be less profitable than its gas-engined equivalent, because of the still-high cost of batteries. That means earnings will likely come under more pressure—and leverage ratios will increase further—as EVs take a more meaningful share of industry sales. In Europe plug-ins accounted for 6.8% of first-quarter sales, up from 2.5% in the same period last year.

Many auto makers, such as General Motors, BMW and Daimler, have launched big restructuring programs in the past couple of years to recoup some of the cash flows being absorbed by new technologies. Many have also turned to unprecedented levels of collaboration, including Ford and Volkswagen, BMW and Daimler, GM and Honda and, less happily, Renault, Nissan and Mitsubishi. The recent sales collapse injects fresh urgency into these cost-cutting efforts, which will play out over years.

Ford is the most widely held stock on the Robinhood stock-trading platform. Those betting on a V-shaped auto recovery have done nicely so far, but they shouldn’t confuse 2020 with 2009. Back then the industry, purged by bankruptcy, had a fresh start. This time, even the best-case scenario for sales will leave it with a lasting leverage problem. Investors need to know when to get out.

>>> US Gapping down

Gapping down
In reaction to disappointing earnings/guidance:

  • ORCL -3.3%, GAN -3.1%

Other news:

  • CEMI -60.6% (disclosed that the FDA was revoking the Emergency Use Authorization granted in April 2020 with respect to DPP COVID-19 System)
  • AVEO -12.6% (prices offering of 8,500,000 shares of its common stock at $5.25 per share)
  • IFRX -8.2% (announces interim results from the first 30 patients treated in the adaptive randomized Phase II/III trial in patients with severe COVID-19 pneumonia)
  • NCLH -7.7% (extends suspension of certain voyages through Sep 30)
  • DKNG -5.1% (files for 14 mln share offering plus 19 mln share offering by selling shareholders)
  • PRVB -4.8% (commences public offering of 5.5 mln shares)
  • FCEL -4.6% (entered into $75 mln open market sale agreement with Jefferies pursuant to shelf registration statement)
  • RCL -4% (down in sympathy with NCLH)
  • BKI -3.9% (prices offering is for 6,200,000 shares of its common stock for gross proceeds of $435.55 mln)
  • CCL -3.1% (down in sympathy with NCLH)
  • IR -2.8% (offering of 12.1 mln shares by selling stockholder)
  • CUK -2.4% (down in sympathy with NCLH)
  • NSTG -1.2% (announces new products to be used for COVID-19 research)
  • CNST -1.1% (prices offering of 5,500,000 shares of its common stock at $35.00 per share)

Analyst comments:

  • NDSN -1.3% (downgraded to Sector Weight from Overweight at KeyBanc Capital Markets)