Trump’s Stormy Situation: Back on January 12, 2018, The Wall Street Journal broke headlines after a report outlined how Trump’s attorney, Michael Cohen, paid $130,000 to Stephanie Clifford (also known as “Stormy Daniels”) in order to keep an alleged affair from coming to light in October of 2016. Since the breaking of this story, more controversy has ensued after Cohen confirmed that he had paid Ms. Clifford the $130,000 out of his own pocket and after Rudy Giuliani told Sean Hannity on May 2nd that Trump was aware of the arrangement between Cohen and Ms. Clifford, despite Trump denying such knowledge aboard Air Force One on April 5, 2018.
Our Takeaways: While such extramarital affairs are nothing new for the White House by any means, the details surrounding the manner and timing in which the pay-off took place is a glaring series of issues that Special Counsel Robert Mueller and his team will surely pick apart, especially after Cohen’s office was raided the morning of April 9, 2018, by the U.S. Attorney for the Southern District of New York (SDNY) following a tip from Mueller’s team. The fact that the SDNY was able to obtain a warrant at all to search the office of Trump’s personal attorney is ominous sign for what may be on the horizon since raiding an attorney’s office is an extraordinarily rare move to obtain evidence that takes multiple levels of authorization from the Department of Justice. Anything that comes to light following that raid of Cohen’s office is fair game for Mueller’s team, whether it relates to the President or not.
Big Data & Tech Talk: Between April 10th and 11th, Mark Zuckerberg appeared before Congress for a series of hearings following the news that Cambridge Analytica, a British political consulting and data mining firm connected to the Trump campaign, took advantage of Facebook’s user data to psychologically profile voters. During the hearings, Senators questioned Zuckerberg on the proliferation of “fake news” on Facebook, political bias towards conservative media, Russian interference, racial targeting, the company’s own privacy policies, and the company’s own ability to self-regulate.
Our Takeaways: Even though it is true that Facebook could have done more to protect user data and could have done a better job at alerting users of how their data was being used, the only thing that was made abundantly clear from these hearings is that members of Congress have an extraordinarily limited understanding of how Facebook (and/or the internet) works and that this issue is likely to persist with not only Facebook but also other social media related companies too. As long as people are willing to provide information about themselves on the internet, there will always be a risk of that data being used improperly for other unintended means. On the other hand, Zuckerberg’s handling of the hearings was impressive in the eyes of investors considering that Facebook’s stock gained over 5% between those two days. From how the hearings concluded, tech companies are likely to face additional regulatory measures in the coming years. What that will look like and when we can expect that is anyone’s guess, but by the time Congress gets around to it, the landscape will already have likely shifted to include new, unforeseen threats.
Clinton Comeback in Question: In the months following Hillary’s ill-fated bid for the presidency, the Clinton family has made limited appearances within the national spotlight. However, on April 30, Hillary led the first meeting in New York of her “Onward Together” political group where donors and partner groups are preparing for a 2018 midterms upset. Additionally, the Clinton Foundation is hosting a cocktail party and dinner for donors on May 24 with Bill, Hillary, and Chelsea in attendance.
Our Takeaways: Given that the Clinton Family has been a formidable political dynasty for the past few decades, the idea that it may have ended on the morning of November 9, 2016, is entirely absurd. Bill won’t/can’t run for the presidency since he already served the two term (January 20, 1993 to January 20, 2001) limit as outlined in the Constitution. Hillary can still run, yet it is unclear if she will in 2020 since she has claimed that she has no intention of running again (perhaps for dramatic affect) and the potential of another political upset would be devastating to the family (but probably still recoverable as a Clinton). And then there’s 38 year- old Chelsea. Although she might not yet have the political experience and acumen to launch her own campaign, let alone effectively govern, it would appear that the family is laying the ground work for Chelsea to achieve what Hillary did not. We expect that there will be a “comeback” for the Clintons, but that will be limited to fundraisers, book deals, and speaking out against the current administration for the time being.
U.S. & North Korean Relations – Follow Up: As mentioned in our previous letter, the highly anticipated meeting between Donald Trump and Kim Jong-un is expected to take place in Singapore. However, instead of taking place in May, the meeting will take place next month on June 12th. Furthermore, the main purpose of this summit is to discuss the denuclearization of North Korea in exchange for the lifting of severe sanctions. This, of course, all comes after the historic meeting along the Demilitarized Zone (DMZ) on April 26th between Kim Jong-un and South Korea’s President Moon Jae-in where they briefly invited each other to cross the demarcation line, held peace talks, planted a tree, and had dinner.
Our Takeaways: These summits are certainly a great move in the right direction as compared to hurling threats of nuclear war at each other, but we need more substance and follow-through rather than pleasantries and pageantry. Unfortunately, though, such progress towards sustained peace and a unified Korea seems to be unlikely since we have already seen this scenario playout several times to no avail. What do we mean by this? Well, over the past several decades following the Korean War, we have witnessed a relentless cycle of crisis, stalemate, and concession. Whenever Kim Il-sung and Kim Jong-il (and now Kim Jong-un) needed to revitalize their power or reduce debilitating sanctions, they threatened military action that grasped news headlines around the globe for months at a time. Then, at the pinnacle of that heightened aggression when the world was in fear of an all-out nuclear war, a potential olive branch was extended and tough peace negotiations would ensue. From there, concessions were made – nuclear development ceased (officially), missile testing was halted (temporarily), the given North Korean leader was hailed a hero at home, and whomever was in office at the time here declares the whole thing a diplomatic success. Wait a few more years when that power needs a boost or the well is running dry, and we are back to a global thermonuclear crisis. Why would North Korea do this? Because the strategy works. No other world power is going to provoke a war with the North Korean regime when the nuclear option on the table and no civilian is going to successfully spark an effective revolution within the regime when the population can barely feed itself.
Trump’s Turbulent Administration – Follow Up:
The Latest Exits:
New Exit – Michael Anton (February 8, 2017 to April 8, 2018): Anton served as the Deputy Assistant to the President for Strategic Communications. Forced out by the new National Security Adviser, John Bolton.
New Exit – Thomas Bossert (January 20, 2017 to April 10, 2018): Bossert served as the Homeland Security Advisor. Forced out by the new National Security Adviser, John Bolton.
New Exit – Major General Ricky Waddell (May 19, 2017 to April 12, 2018): Waddell served as the Deputy National Security Adviser. His resignation was announced April 12, 2018, and was related to the new appoint of National Security Adviser, John Bolton.
New Exit – Nadia Schadlow (January 21, 2018 to April 27, 2018): Schadlow served as the Deputy National Security Adviser for Strategy after taking over the position from Dina Powell in January. She announced her resignation April 11, 2018, and was related to the new appoint of National Security Adviser, John Bolton.
New Exit – Ty Cobb (July 31, 2017 to May 2, 2018): Cobb served as a member of the White House internal legal team, and reported directly to Trump. While he may have had tumultuous relationship with other members of the legal team (White House Counsel Don McGahn in particular), he was said to be highly effective at keeping the President calm during a number of public/private tirades.
The Latest Entrances:
New Entrance – Lawrence Kudlow (April 2, 2018 to Present): Kudlow is now serving as the Director of the National Economic Council. Despite being known mainly for his time as the host of The Kudlow Report and Kudlow & Cramer, Kudlow worked as a staff economist at the Federal Reserve Bank of New York, was the associate director for economics and planning in the Office of Management and Budget under Regan’s first term, and was the Chief Economist and Senior Managing Director at Bear Sterns in the late 80s.
New Entrance – John Bolton (April 9, 2018 to Present): Bolton is now serving as the National Security Advisor. Prior to his current role, Bolton had held several administrative positions under Ronald Regan, George H. W. Bush, and George W. Bush, and served as the U.S. Ambassador to the United Nations. However, Bolton is known to many as a “war hawk” due to his lengthy history of advocating for more aggressive action within foreign policy dealings.
New Entrance – Rudy Giuliani (April 19, 2018 to Present): Giuliani is now serving as a member of the White House internal legal team. Although Giuliani has been the Associate Attorney General, the U.S. Attorney for the Southern District of New York, and the Mayor of New York City, and an adviser to the President, his place within Trump’s legal team has quickly come into question after he told Sean Hannity on television that Trump was aware of the general arrangement behind Cohen’s payment to Stormy Daniels.
New Entrance – Emmet Flood (May 2, 2018 to Present): Flood is now serving as a member of the White House internal legal team and is the likely candidate to replace White House Counsel Don McGahn. As for Flood’s experience, he advised President Bill Clinton throughout his impeachment process, represented Dick Cheney through the Wilson v. Cheney case, and defended Cameron International after the Deepwater Horizon oil spill.
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