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Presented by UnitedHealth Group: Playbook is POLITICO's must-read briefing on what's driving the day Dec 24, 2018 View in browser
By Anna Palmer, Jake Sherman and Daniel Lippman

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DRIVING THE DAY
BULLETIN ... NETANYAHU CALLS EARLY ELECTIONS ... AP'S ARON HELLER in Jerusalem: "Israeli Prime Minister Benjamin Netanyahu's government agreed Wednesday to hold early elections on April 9 after the ruling coalition appeared to come up short on votes needed to pass a contentious piece of court-ordered legislation, Israel media reported.

"Netanyahu's religious, nationalistic coalition has been roiled by internal divisions for months. Avigdor Lieberman resigned as defense minister last month to protest what he perceived to be the government's weak response to rocket attacks from Hamas-ruled Gaza. ...

"The latest polls appear to predict another solid victory for Netanyahu, one that would assure his place in history as Israel's longest-serving leader and allow him to solidify his close alliance with President Donald Trump. Another term would also allow Netanyahu to push forward with his nationalistic agenda and worldwide campaign to thwart Iran's nuclear ambitions." AP

GOVERNMENT SHUTDOWN: Day 3. Merry Christmas Eve. There has been practically no movement in resolving the standoff over the funding of a big chunk of the government. The Capitol was completely empty yesterday. We hardly saw anyone. This is among the strangest shutdowns ever.

JOHN BRESNAHAN and JAKE SHERMAN: "The 'all-I-want-for-Christmas-is-$5-billion-for-the-wall' shutdown"

EVERYTHING WAS EERILY QUIET BUT ...

YESTERDAY, at around 5 p.m., Treasury sent out an email with this subject line: "Secretary Mnuchin convened individual calls with the CEOs of the nation's six largest banks."

-- TREASURY SAID: "Secretary Mnuchin conducted a series of calls today with the CEOs of the nation's six largest banks: Brian Moynihan, Bank of America; Michael Corbat, Citi; David Solomon, Goldman Sachs; Jamie Dimon, JP Morgan Chase, James Gorman, Morgan Stanley; Tim Sloan, Wells Fargo. The CEOs confirmed that they have ample liquidity available for lending to consumer, business markets, and all other market operations. He also confirmed that they have not experienced any clearance or margin issues and that the markets continue to function properly."

HUH!?!?? We got emails from several Wall Streeters wondering what was going on. No one thought bank liquidity was an issue. Mnuchin is in Cabo San Lucas, Mexico, by the way.

-- FT'S KATE ALLEN in LONDON: "A ripple of unease has spread through financial markets after U.S. Treasury Secretary Steven Mnuchin's highly unusual effort to reassure investors about Wall Street banks' liquidity.

"The statement appeared to be an attempt by the administration to calm nerves after a volatile week for traders and media reports that President Donald Trump was contemplating firing Federal Reserve chairman Jay Powell.

"Win Thin, global head of currency strategy at Brown Brothers Harriman, warned that among traders, 'sentiment is so negative right now that markets will assume the worst' about any suggestion that Mr Trump could seek to remove Mr. Powell. 'Until this weekend, markets were not that concerned about liquidity or clearance issues,' Mr. Thin said. 'At best, Mnuchin made a rookie policy mistake in trying to reassure markets; at worst, Mnuchin knows something that the markets don't.'

"Quiet European markets have caught a sense of the uncertainty - the FTSE 100 is down 0.8 percent in thin pre-Christmas trading on Monday, with the pan-European Stoxx 50 down 0.4 percent. French and Italian indices have also been hit, with the CAC 40 falling 0.6 percent and the FTSE MIB down 1 per cent." FT

-- WAPO'S DAMIAN PALETTA and JOSH DAWSEY: "Treasury Secretary Steven Mnuchin startled financial analysts, bankers and economists on Sunday by issuing an unusual statement declaring that the nation's six largest banks had ample credit to extend to American businesses and households.

"Mnuchin made the statement on Twitter after calling the leaders of the six banks, seeking to address an issue that had attracted little concern ahead of the treasury secretary's tweet.

"The statement came hours before Asian markets were set to open and following a sharp sell-off that made last week the worst for U.S. markets in a decade. President Trump has been furious at the sell-off, and efforts by Mnuchin to inspire confidence in the market have so far failed. Several analysts said Sunday night that his outreach to the banks and subsequent statement were likely to backfire and drive even more concern." WaPo

-- AND FOR GOOD MEASURE ... REUTERS: "The Treasury said Mnuchin will convene a call on Monday with the president's Working Group on Financial Markets, which includes Washington's main stewards of the U.S. financial system and is sometimes referred to as the 'Plunge Protection Team.' The group, which was also convened in 2009 during the latter stage of the financial crisis, includes officials from the Federal Reserve as well as the Securities and Exchange Commission." Reuters

THE DOW was down more than 100 points shortly after the open.

NYT'S BINYAMIN APPELBAUM: "In conversations with friends and advisers, Mr. Trump has acknowledged responsibility for the selection of [Jerome] Powell. He told Stephen Moore, an economist at the Heritage Foundation, that it was 'one of the worst choices I've ever made,' according to Mr. Moore." NYT

BLOOMBERG: "China Cuts Tariffs on More Than 700 Goods Amid Open-Trade Drive"

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ON MATTIS ...

-- NYT, A1, HELENE COOPER and KATIE ROGERS: "Trump, Angry Over Mattis's Rebuke, Removes Him 2 Months Early": "Mr. Mattis had wanted to stay through a NATO defense ministers meeting scheduled for February, hoping to enshrine recent moves by the alliance to bulk up its security compact as a bulwark against Russia. But Mr. Mattis's resignation letter did him no favors on that count: It had become hard to envision how he could continue for two months to represent a president whose own views toward Russia are far more benign.

"As it became clear that the two men's ideas of how to treat both friends and adversaries were so publicly at odds, the White House decided that there would be no reason for Mr. Mattis to stay on during what two officials called his 'lame duck' period." NYT

-- WAPO'S PHIL RUCKER, DAN LAMOTHE and JOSH DAWSEY: "Trump decided hastily to remove Mattis in reaction to negative news coverage, according to senior administration officials, one of whom said the president was eager to retaliate against Mattis and show up the widely respected former general.

"Another official said Trump and other advisers suspected Mattis of being part of a campaign to stoke negative coverage about the president. After canceling his Christmas trip to Florida in view of the government shutdown, Trump was marooned this weekend at the White House watching hours of cable television news shows.

"Advisers said he stewed over commentary hailing Mattis as heroic - a human guardrail against the president's impulses. Trump was so angry with Mattis that on Sunday morning he directed Secretary of State Mike Pompeo to inform the defense secretary that he was being pulled from office two months early, according to a senior administration official." WaPo

-- KNOWING PAT SHANAHAN: "Meet Trump's acting Pentagon chief," by Connor O'Brien and David Brown: "Job one will be repairing the relationship between the White House and the top ranks, where Mattis, who is leaving after a stunning public break with the commander-in-chief, is still revered. Gordon Adams, a former Democratic White House budget official specializing in defense, called Shanahan 'a perfectly competent manager.' 'It is not clear how his competence will mesh with a president who is not,' he added." POLITICO

-- WAPO'S DAN LAMOTHE: "Shanahan, 56, will take the helm after a 30-year career at Boeing in which he became a senior vice president. Like Mattis, he is a Washington state native who has touted the national defense strategy the Pentagon adopted last year, which focuses heavily on preparing the military for a fight against a 'near-peer competitor' like China or Russia. Unlike Mattis, he has no military experience, no previous government experience and little experience with foreign policy." WaPo


THE NEW CONGRESS ... BRYAN BENDER and GREGORY HELLMAN: "Democrats vow new scrub of post-9/11 war powers": "Key House Democrats plan to use their newfound power to force a debate about the war-making authority that Congress approved after 9/11 - after years of being stifled by the chamber's Republican leaders.

"Democrats will still face a tough fight to impose greater oversight on the U.S. military deployments that have mushroomed during the past 17 years. But prospects will be much brighter for the lawmakers who have spent years pushing Congress to weigh in on the use of American forces in countries such as Afghanistan, Iraq, Syria, Libya, Somalia and most recently Yemen.

"If they succeed, the result could be legislation restricting President Donald Trump's ability to send combat troops to new countries, or at least setting a time limit for the executive branch to seek new authorization. That would at least guarantee more frequent public debate about where American troops are engaged and why. ...

"'One of the things that I'm most concerned with is this blank check any president has based on the 2001 AUMF,' Rep. Eliot Engel, the New York Democrat in line to chair the House Foreign Affairs Committee, said in an interview. 'I voted for it, it was necessary at the time, but I never would've imagined that any president could use it as sort of a get-out-of-jail-free card. A card to do whatever you want to do.'" POLITICO

SPORTS BLINK - "Huawei Had a Deal to Give Washington Redskins' Fans Free Wi-Fi, Until the Government Stepped In," by WSJ's Stu Woo and Andrew Beaton: "Two years after a congressional report labeled Huawei Technologies Co. a national-security threat, the Chinese firm unexpectedly scored a big-name ally in Washington. It was the Redskins, the capital's National Football League franchise. Huawei reached an agreement in 2014 to beam Wi-Fi through the suites at the team's FedEx Field, in exchange for advertising in the stadium and during broadcasts.

"It was a marketing coup for a company hankering to beef up its meager U.S. business and boost its image inside the Beltway. But the deal didn't last long. A government adviser read about the partnership. He knew the FedEx Field suites were a frequent haunt for lawmakers and senior officials across many agencies. So he triggered an unofficial federal complaint to the Redskins, who quietly tore up the deal." WSJ
PLAYBOOK READS


PHOTO DU JOUR: Residents of Mexico use phones by the U.S. border fence to speak with relatives on the other side of the fence in San Diego, as seen from Tijuana, Mexico, on Sunday. | Daniel Ochoa de Olza/AP Photo

VALLEY TALK - "Facebook's Lonely Conservative Takes on a Power Position," by WSJ's Deepa Seetharaman: Joel "Kaplan is Facebook's longtime global policy chief but his remit has expanded considerably in the last two years. He has often been the decisive word internally on hot-button political issues and has wielded his influence to postpone or kill projects that risk upsetting conservatives, said the people familiar with the decisions.

"Mr. Kaplan now has a say in whether certain news-feed products get launched, an area that has long been the purview of Facebook's engineers and product teams. ... When Facebook hired him in 2011, he was hailed by Republicans and Democrats alike as an informed and rigorous policy maker. The Harvard-trained lawyer-who was close friends with and briefly dated [Sheryl] Sandberg in college -was also part of a broader Facebook push to hire U.S. policy executives across the political spectrum." WSJ

MEDIAWATCH -- "Der Spiegel to Press Charges Against Reporter Who Made Up Articles," by NYT's Christopher F. Schuetze in Hanover, Germany: "On Saturday night, the magazine announced in one of the many articles documenting [Claas] Relotius's misdeeds that the editors would be filing a criminal complaint against him after it emerged that he had set up a private donation drive ostensibly to help two Syrian orphans that he had profiled.

"According to Der Spiegel, only one of the two orphans exists, and the aid money went to the reporter's private bank account. Mr. Relotius has not been available for comment since the scandal broke, but according to the newsmagazine's editors, last week he explained the fraud this way: 'It wasn't about the next big thing. It was the fear of failure.' He also said, 'The pressure not to fail grew as I became more successful.'" NYT ... U.S. Ambassador Ric Grenell's letter to the chief editor of Der Spiegel


BONUS GREAT HOLIDAY WEEKEND READS, curated by Daniel Lippman:

-- "Syria's once-teeming prison cells being emptied by mass murder," by WaPo's Louisa Loveluck in Beirut and Zakaria Zakaria in Istanbul: "Assad's government is doubling down on the killing of political prisoners as the civil war heads toward its conclusion." WaPo

-- "How Banks Unwittingly Finance Mass Shootings," by NYT's Andrew Ross Sorkin: "Over the last several months, I have spoken to senior executives at the country's largest banks and credit card companies who were taken aback when I presented them with the list of shootings that involved their cards ... While some executives expressed grief and were open to discussing possible solutions, virtually none were willing to speak about them on the record for fear of upsetting gun-rights advocates and politicians invoking the Second Amendment." NYT

-- "How the Golden State Became the Intellectual Capital of Trump's GOP," by Jason Willick and James Hitchcock in the American Interest in Oct. 2016: "California's late 20th-century political history helps explain its outsized role in the pro-Trump intellectual right." American Interest

-- "The Mad Scramble to Claim the World's Most Coveted Meteorite," by Joshua Bearman and Allison Keeley in Wired - per Longform.org's description: "On space rocks and the people who chase them." Wired

-- "Powerless," by the Charleston Gazette-Mail's Ken Ward Jr. and ProPublica's Al Shaw and Mayeta Clark: "What it looks and sounds like when a gas driller overruns your land." ProPublica
PLAYBOOKERS
SPOTTED: Michael Cohen having brunch yesterday at Three Guys on Madison Avenue in New York.

TRANSITION -- Matt Kaplan is now heading up public policy at Instacart after a stint on Lyft's public policy team in the U.S. and Canada. Kaplan is an alum of the Clinton '16 and Obama presidential campaigns, and Sen. Sherrod Brown's staff.

BIRTHDAY OF THE DAY: Marsha Catron, partner of Swann Street Strategies and former Obama DHS spokesperson, is 4-0. How she got her start in politics: "In 2002 Bill Richardson, who was the governor of New Mexico at the time, gave me my first job in politics after I volunteered in his office for months. ... Richardson loved to tease his staff but was extremely loyal to them. Even though he called me by the wrong name most days, told me that my memos were chicken s***, and told me I was fired (an accomplishment in those days), he still checks on me to this day." Playbook Plus Q&A

BIRTHDAYS: former Attorney General Jeff Sessions is 72. He's celebrating with his kids and grandkids after services in the afternoon (Santa cap tip: Sarah Isgur Flores) ... Dan Pfeiffer, co-host of Pod Save America and a CNN contributor, is 43 ... Brian Marriott ... Dennis Cheng, former finance director for Hillary for America ... Dr. Anthony Fauci is 77 ... former Afghan president Hamid Karzai is 61 ... Mike Curb is 74 ... Walter Pincus is 86 ... CNBC's Ylan Q. Mui ... former Rep. Randy Neugebauer (R-Texas) is 69 ... Harvard prof Jonathan Zittrain ... Richard Schlackman ... Atif Harden ... Ellen Ochs (Santa cap tips: Jon Haber) ... Reagan alum Lou Gerig ... Grace Franceschelli ... Charlie
Liebschutz, VP at SRCPmedia, is 35 ... Mark Prentice, comms director for Seattle Mayor Jenny Durkan, is 34 ... former Labour leader Ed Miliband is 49 ... Azerbaijan president Ilham Aliyev ... GM CEO Mary Barra is 57 ... Philippe Etienne is 63 ...

... Gene Sperling is 6-0 ... Kathy Kiely, professor at Mizzou J school and a USA Today and Bloomberg alum ... CBS News' Anna Sugg (Santa cap tip: Rob Gifford) ... Michael Shoaff, celebrating in Arizona, is 7-0 ... DNC's Sabrina Singh (Santa cap tip: Adrienne Watson) ... Barb Nelson ... Damon Marx is 29 ... Bloomberg's Nizar Manek ... APCO's Jordan Valdés ... Alix Montes ... William Ward Wyatt ... Dorinda Moss Verhoff ... Lindsay McGarity ... Mark Kornblau, SVP of comms for NBCUniversal News Group (h/t Ben Chang) ... Nathan Carleton, director of global comms at Walmart ... Corry Schiermeyer ... NYT's Brian Zittel is 46 ... Jeremy Broggi ... Sarah Penny Smith ... Sharon Williams ...
Jodi Ochstein ... Kelly Collis ... James White ... Mary Higgins Clark ... Grace O'Meara ... Ken Biberaj ... AJ Sugarman ... Roger Lempke ... Kim Caldwell ... Adam Wood.

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