As the Dow flirts with Trumpian heights of 20,000 on Wall Street, the Shanghai Composite in China has been drifting down for seven consecutive weeks.

It is hard to construct a case that reconciles this split, given the tightly intertwined nature of the world's financial system and the trans-Pacific symbiosis that we call Chimerica. One of these two markets must reverse.

If you are waiting for the next Chinese boom, you have already missed it. The latest 18-month mini-cycle has peaked. The authorities are being forced to tighten. China's $9 trillion bond market is seizing up.

Forty companies have had to cancel or postpone bond issuance this month. Nomura says 24 large firms are in default negotiations, ranging from steel and construction to shipbuilding, chemicals, textiles, and solar.

Beijing let it rip earlier this year with a fiscal deficit of 4% of GDP - a one-off loosening of two to three percentage points that you would expect only in an emergency - and it deliberately stoked a housing bubble in the cities of the Eastern seaboard.

The stimulus was comparable in scale China's post-Lehman blitz, but the effects have been far less because the efficiency of credit has collapsed.  It now takes four yuan of loans to generate one yuan of growth. Since there has been almost no underlying reform, this has merely bought time at the cost of greater imbalances.

Jerusalem. Israeli officials are thrilled with the national security team that US President-elect Donald Trump is assembling. And they are right to be. The question now is how Israel should respond to the opportunity they present us with.

The one issue that brings together all of the top officials Trump has named so far to his national security team is Iran.

During his video address before the Saban Forum (12/04), Prime Minister Binyamin Netanyahu said that he looks forward to discussing Obama’s nuclear deal with the Iranian regime with Trump after his inauguration next month.

Given that Netanyahu views Iran’s nuclear program — which the nuclear deal guaranteed would be operational in 14 years at most — as the most serious strategic threat facing Israel, it makes sense that he wishes to discuss the issue first.

But Netanyahu may be better advised to first address the conventional threat Iran poses to Israel, the US and the rest of the region in the aftermath of the nuclear deal.

There are two reasons to start with Iran’s conventional threat, rather than its nuclear program.

On Fox News Sunday (12/11), with a single incendiary comment on Taiwanese independence, US president-elect Donald Trump has abrogated a central tenet of US foreign policy for the last 37 years and seems to have picked a deliberate fight with China.

Mr. Trump’s language ereyesterday was explicit: “I fully understand the ‘One China policy, but don’t know why we have to be bound by a One China policy unless we make a deal with China having to do with other things, including trade.”  This is a bombshell.

The world’s two superpowers are now heading for a showdown on a neuralgic strategic issue, greatly raising the risk of a trade war and a fundamental breakdown of the global commercial system.

However…there is little that Beijing can do to damage the US without hurting itself far more.  China’s financial options are limited. Veiled threats to detonate a US debt crisis by selling Beijing’s $1.157 trillion of US Treasury bonds, to take just one example, are mere bluster.

So what can China do regarding the wily presidential deal-maker?

The 10-minute telephone conversation between Taiwanese President Tsai Ing-wen and U.S. president-elect Donald J. Trump on December 2  was the first such conversation between a sitting president in Taiwan and a U.S. president or president-elect since Washington broke official diplomatic relations with Taipei in 1979.

The reactions ranged worldwide, from consternation at Trump’s breaking with longstanding policy to hopes for deeper relations between the United States and the democratic island nation.

Most analysis of the call overlooks a crucial component: Tsai’s own calculations and the domestic reaction on Taiwan.  That’s what we’ll discuss here.

As is often the case, little effort was made to analyze why Taiwan’s first female president, in office since May 20 and brought to power in January via democratic election, was willing to place a call that, if Trump picked up at the other end of the line, was certain to spark some controversy.

Even less was said about reactions in Taiwan, particularly its 23 million citizens, who far too often in the rare instances of international attention are denied a voice of their own – as if all of them were little more than insentient subjects to the implacable waves of history or the dictates of decision makers in Washington and Beijing.

What can Republicans learn from Trump’s victory? The biggest lesson is that the old way of politics is dead. McCain and Romney showed that twice. Now Trump has shown how Republicans can actually win.  Here are five ways.

1. Find Your Natural Base

The GOP is ashamed of its base. It doesn’t like being associated with the very voters who made 2016 happen. Its autopsy last time around searched for ways to leave the white working class behind.

There’s a party that did that. Their symbol is a jackass. They just lost big because they ran out of working class white voters.

The Democrats have tried to manufacture their base using immigration, victimhood politics and identity politics. The GOP has wasted far too much time trying to compete on the same playing field while neglecting its base.

Trump won by doing what the GOP could have done all along if its leadership hadn’t been too ashamed to talk to people it considered low class because they shop at WalMart.

In the US and around the world, people are anxiously awaiting US President-elect Donald Trump’s announcement of his choice to serve as secretary of state. There is no doubt that Trump’s choice for the position will tell us a great deal about the direction his foreign policy is likely to take.

But the fact is that we already have sufficient information to understand what his greatest focus will be.

Trump’s announcement last week that he has selected Marine General James Mattis to serve as his defense secretary is a key piece of the puzzle.

Mattis has a sterling reputation as a brilliant strategist and a sober-minded leader.  Yet, in 2013, Obama summarily removed Mattis from his command as head of the US Military’s Central Command  -- because of his opposition to Obama’s strategy of embracing Iran.

That opposition is part of why he’ll be Trump’s SecDef.  Trump is interested in ending the war that the forces of radical Islam started with the US not on September 11, 2001, but on November 4, 1979, with the seizure of the US embassy in Tehran.

Italy's Matteo Renzi thought the "silent majority" would save him, if only he could chivvy enough of them to polls. The prime minister misjudged disastrously.

The voters certainly turned out. They smashed through the 60% threshold that Mr. Renzi thought would secure him victory in the constitutional referendum, but only to register their silent anger  - with him, with his government, with Brussels, and with an Italo-European establishment that has run the Italian economy into the ground.

"I didn't realize they hated me so much," he confessed before his resignation, the wunderkind of European politics no more. 

The referendum was no ordinary vote and it may prove much harder this time to shrug off the volcanic effects. "The whole world was against us. They threw every piece of [expletive] at us. Our achievement is a miracle," said Beppe Grillo, the flamboyant comedian behind the triumphant Five Star Movement.

A narrow 'No' had been discounted. Almost nobody expected a landslide rejection by 59% to 41%, with reaching 71% in Sicily in what amounts to a primordial scream by the pauperized Mezzogiorno.