Week in Review

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Week in Review

04/13/2024

For the week 4/8-4/12

[Posted 4:30 PM ET, Friday]

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Edition 1,304

Last week, posting late Friday afternoon, I opened by quoting Hezbollah leader Sayyed Hassan Nasrallah, who said that Iran’s response to Israel’s strike on the Iranian consulate in Damascus of about ten days ago was coming.

“Be certain, be sure, that the Iranian response...is definitely coming against Israel,” Nasrallah said.

All last weekend various warnings were issued, including from the United States, that an Iranian attack, directly or through its proxies, against Israeli interests was indeed coming, and the Wall Street Journal said early today it would be in the next two days.

The fear has always been that Tehran will use Hezbollah, which has an estimated 100,000 rockets/missiles supplied by Iran, to launch a significant percentage of them simultaneously to overwhelm Israel’s Iron Dome and other air defenses.  But this would mean the death of Lebanon.

And Iran doesn’t want the United States to get involved.  At least not at this time.

Israeli Prime Minister Benjamin Netanyahu met with his war cabinet this afternoon, and the U.S. has a top general in Israel, Gen. Michael Kurilla who heads up U.S. Central Command (CENTCOM), advising military leadership there and possibly helping to coordinate any response.

Around 3:00 p.m. ET, President Biden, speaking to reporters, said he expected Iran to attack Israel “sooner, rather than later,” and that his message to Iran is “don’t.”  Biden also said: “We are devoted to the defense of Israel.  We will support Israel.  We will help defend Israel and Iran will not succeed.”

This is where we still stand as I post today.

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Rep. Michael R. Turner (R-Ohio), who chairs the House Permanent Select Committee on Intelligence, said Sunday that it was “absolutely true” that some Republican members of Congress were repeating Russian propaganda about the invasion of Ukraine instigated by Vladimir Putin.

Turner did not specify which members he was referring to, but said he agreed with House Foreign Affairs Committee Chair Michael McCaul (R-Tex.), who said in an interview with Puck News last week that Russian propaganda had “infected a good chunk of my party’s base” and suggested that conservative media was to blame.

“We see directly coming from Russia attempts to mask communications that are anti-Ukraine and pro-Russia messages – some of which we even hear uttered on the House Floor,” Turner said on CNN’s “State of the Union.”

The pro-Russian messaging, Turner said, has made it harder for Ukraine’s supporters in the GOP to frame the conflict as “an authoritarian-versus-democracy battle.”

“Ukraine needs our help and assistance now, and this is a very critical time for the U.S. Congress to step up and provide that aid,” Turner added.

But badly needed military funding has been stalled in Congress for months, with the likes of Marjorie Taylor Greene (R-Ga.) proposing a “peace treaty with Russia” in lieu of supporting Ukraine, vowing to remove House Speaker Mike Johnson (R-La.) if he moved forward with a vote on an aid package.

Last December, when President Zelensky was in Washington to try to secure a breakthrough for aid, Greene wrote on X: “Why doesn’t anyone in Washington talk about a peace treaty with Russia?? A deal with Putin promising he will not continue any further invasions. Answer: Washington wants war, not peace.”

So we’ve been waiting to see what Speaker Johnson would do when Congress returned from recess this week.  Johnson has pledged to bring up Ukraine aid for a vote, but he has resisted calls from defense hawks to simply bring the Senate bill, which passed in February with more than 70 votes, and has signaled an intent to introduce alternative legislation as soon as this month but has not said when it could be put to a vote.

Johnson on Wednesday described House discussions on Ukraine aid as “a very complicated matter at a very complicated time...but what’s required is that you reach consensus on it, and that’s what we’re working on,” he said.

“Nearly all the money we’re spending to arm Ukraine doesn’t leave this country,” the top Republican on the House Armed Service Committee, Mike Rogers of Alabama, said in his opening statement Wednesday.  “It goes directly to U.S. companies and American workers to produce more weapons at a faster pace.”

This debate is infuriating and killing Ukraine.

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FBI Director Christopher Wray, in testimony to a House Appropriations subcommittee Thursday, warned lawmakers again that there was a growing fear among law enforcement officials of a “coordinated attack” inside the U.S.

“Our most immediate concern has been that individuals or small groups will draw twisted inspiration from the events in the Middle East to carry out attacks here at home,” Wray said in his prepared remarks.

“But now, increasingly concerning is the potential for a coordinated attack here in the homeland, akin to the ISIS-K attack we saw at the Russia concert hall a couple weeks ago.”

“Looking back over my career in lawn enforcement, I’d be hard-pressed to think of a time where so many threats to our public safety and national security were so elevated all at once.

“But that is the case as I sit here today.  This is not a point when we can let up.”

Wray was on Capitol Hill, pressing for increased funding for the FBI and the renewal of Section 702 of the Foreign Intelligence Surveillance Act (FISA), which is set to expire on April 19.

But former President Trump derailed passage of the critical but controversial national-security spying law.

A procedural vote to renew Section 702 failed Wednesday with 193 in favor and 228 opposed.

Democratic and Republican administrations have said the Section 702 program is vital to protecting Americans from terrorists, hackers and other foreign threats.  But the law has critics on both the left and right for how it allows the collection of some American communications without a warrant.

Speaker Johnson urged passage of the legislation, saying that changes to the law would prevent certain abuses, but the morning of the vote, Trump weighed in.

“KILL FISA, IT WAS ILLEGALLY USED AGAINST ME, AND MANY OTHERS. THEY SPIED ON MY CAMPAIGN!!!” he posted on Truth Social.

There is no evidence Section 702 was used to spy on Trump or any of his campaigns.  Trump signed an extension of Section 702 into law in 2018.  [There was a different section of the law that was carelessly used against 2016 Trump campaign staffer Carter Page.]

But on Friday, out of nowhere, the House passed a two-year reauthorization of the surveillance law – after narrowly rejecting a bipartisan effort to restrict searches of Americans’ messages swept up by the program.

Speaker Johnson, in winnowing the reauthorization period from five years to two, argued that far-right members can make the changes they want to the surveillance provision when Trump is reelected, and House Republicans keep the majority – which isn’t guaranteed.

The bill now heads to the Senate ahead of the scheduled April 19 expiration of the law.

[I will comment next week, if necessary, on Speaker Johnson’s meeting late today in Mar-a-Lago with Donald Trump, the topic “election integrity.”  Yup, perpetuate the narrative about 2020 and plant seeds of doubt for 2024.  Oh brother.]

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Israel and Hamas....

--Last week the White House said that President Biden, in a call with Israeli Prime Minister Benjamin Netanyahu, threatened to make conditional U.S. support for Israel’s offensive on it taking concrete steps to protect aid workers and civilians. That call followed an Israeli air strike that killed seven staff of the aid group World Central Kitchen.

--Saturday and Sunday, thousands of protesters rallied in Jerusalem demanding the release of around 130 hostages still held in Gaza after six months of Israel’s war against Hamas.

--Israeli troops withdrew Sunday from Khan Younis, a city in southern Gaza, ending a key phase of the war.  But defense officials said they’re regrouping ahead of a push into Rafah.  Palestinians who visited Khan Younis on Monday said the city is now unlivable, offering them little immediate chance to return.  Many have been sheltering in Rafah.

At first, reports over the weekend made it sound like the withdrawal of Israeli troops from southern Gaza was a significant change in policy, but we quickly learned it was essentially just a troop rotation to allow those who have been in the theater for months an opportunity to rest and prepare for future operations.

Defense Minister Yoav Gallant said: “The forces are exiting and preparing for their next mission...(including) their coming mission in the Rafah area.”

--Also Sunday, the Israeli military said it had completed another stage in preparing for possible war on its northern front with Lebanon and Syria.

“Over the past days, another phase of the Northern Command’s readiness for war was completed, centering on operational emergency storages for a broad mobilization of IDF troops when required,” the military said in a statement titled: “Readiness for the Transition from Defense to Offense.”

Defense Minister Gallant said Israel is ready to handle any scenario that may arise with Iran, after Tehran threatened to retaliate for the killing of Iranian generals on April 1 in Damascus. 

An Iranian official said earlier that Israeli embassies were not safe, and a semi-official news agency published a graphic showing weapons it said would be capable of striking Israel.

Israeli Chief of General Staff Herzi Halevi said Israel “knows how to deal with Iran – offensively and defensively.”

“We know how to act forcefully against Iran in both near and distant places.  We are operating in cooperation with the USA and strategic partners in the region,” he said in televised remarks.

A senior adviser to Iran’s Supreme Leader, Yahya Rahim Safavi, said on Sunday that none of Israel’s embassies were safe anymore and that Tehran viewed confrontation with Israel as a “legitimate and legal right.”

Mohammad Jamshidi, the Iranian president’s deputy chief of staff for political affairs, in a written message to Washington, “warned the U.S. not to get dragged into Netanyahu’s trap.”  The U.S. should “step aside so that you don’t get hit.”

The U.S. is on high alert and preparing for a possible attack by Iran targeting Israeli or American assets in the region.

--Monday, Netanyahu escalated his pledge to invade the southern city of Rafah, which is filled with around 1.4 million Palestinians, most of whom are displaced from other parts of the Gaza Strip.

“It will happen. There is a date,” Netanyahu said in a video statement Monday, without elaborating.

The prime minister spoke as Israeli negotiators were in Cairo discussing international efforts to broker a cease-fire deal with Hamas.

Monday, a Hamas official said that no progress was made at the talks with delegations from Israel, Qatar and the United States. CIA director William Burns has been heading up the U.S. delegation and has received praise from key Republicans for his efforts. 

Netanyahu, at the start of his weekly cabinet meeting had said any deal must include the release of hostages, and that Hamas’ unreasonable demands were the obstacle.

--Tuesday, Netanyahu said Israel will complete the elimination of Hamas’ brigades, including in Rafah, and nothing will prevent this, the prime minister said.

“There is no force in the world that will stop us. There are many forces that are trying to do so, but it will not help, since this enemy, after what it did, will never do it again.”

--Tuesday, President Biden said Netanyahu’s approach to the Gaza war is a “mistake.”

“I think what he’s doing is a mistake. I don’t agree with his approach,” Biden said in an interview with Univision, offering further criticism of Israel’s handling of the conflict.

“What I’m calling for is for the Israelis to just call for a ceasefire, allow for the next six, eight weeks, total access to all food and medicine going into the country,” Biden said.

He has also previously called Israel’s bombing in Gaza “indiscriminate” and its military actions “over the top.”

--Wednesday, three sons of Hamas leader Ismail Haniyeh were killed in an airstrike in Gaza.  There were widespread denials that Netanyahu, Gallant and war cabinet minister Benny Gantz knew about the attack.

That might not be true, but the trio could have decided afterwards that the cost of the attack to the hostage negotiations was too high.

All three sons were part of Hamas’ so-called military wing, Izzadin al-Qassam Brigades.

--Haniyeh said the deaths of his three sons wouldn’t impact Hamas’ negotiating stance, but Israeli officials don’t know how many of the remaining hostages are alive.

So far, Hamas has failed to provide negotiators with a list, raising fears that the group has lost track of them – or worse, that it might not want to reveal how many have been killed.

Israel says that 133 hostages are still in captivity, ranging from toddlers to the eldersly, and that 36 of those hostages are confirmed dead.

But the fates of the other roughly 100 – including Israelis, foreign nationals, peace activists and soldiers, mothers and grandfathers – are still unclear, six months after the start of the war.  The uncertainty is not only complicating negotiations but also leaving the hostages’ families in anguish.

--Wednesday, President Biden warned that Iran is threatening a “significant attack” against Israel.  American officials reportedly think Iran may be prepared to strike itself, rather than via one of its regional proxies, in the next few days.  Biden said American support for Israel was “ironclad,” despite recent tensions between the two countries.

--Remember President Biden’s plan to install a floating pier off the Gaza coast for processing food deliveries and desperately needed humanitarian aid to Gaza?

American military personnel are finally arriving in the eastern Mediterranean, but the pier, announced in Biden’s State of the Union address, may not be necessary if other aid routes become available and Tuesday, the reopened crossing at Erez did see hundreds of trucks enter Gaza.

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This Week in Ukraine....

--On Sunday, Ukrainian President Volodymyr Zelensky said the world must finally hear the pain inflicted on Kharkiv and other cities by Russian attacks and renewed a call for “political will” to ensure Ukraine secures the air defense systems it needs.

“It is quite obvious that our existing air defense capabilities in Ukraine are not sufficient and it is obvious to our partners,” Zelensky said in his nightly video address.  “And the world must finally hear the pain that Russian territories are causing to Kharkiv....”

Zelensky said there were “defense systems in the world that can help. All we need is the political will to transfer these systems to Ukraine.”

At least eight people were killed in drone attacks on Kharkiv, Ukraine’s second-largest city, on Saturday.

Mayor Ihor Terekhov said six people were killed with Iranian-made Shahed drones that hit several buildings, including apartment blocks. 

Zelensky said Ukraine had enough air defense stockpiles to cope for the moment, but added that it was already having to make difficult choices about what to protect.

He singled out in particular the need for Patriot missiles, which have been vital during Russian attacks with ballistic and hypersonic missiles, and 25 systems would be needed to cover the country fully, he said.

The president also said Ukraine does not have enough ammunition for a counter-offensive against Russia but has started receiving some from partners to defend itself.

“We don’t have shells for counter-offensive actions. As for the defense – there are several initiatives, and we’re receiving weapons,” he said.

Zelensky said his country would agree to a U.S. aid package in the form of a loan.  “We will agree to any options,” he said, adding that the key thing was that the aid arrived “the sooner, the better.”

Editorial / Wall Street Journal

“The Ukrainians are short of ammunition and air defense. Absent an infusion of U.S. weapons, Ukraine will have to make harrowing choices about which ground to relinquish.

“In other words, two years of U.S. support and valiant Ukrainian resistance could still result in a victory for Vladimir Putin. The U.S. would look like a feckless friend, and Europe would be the most unstable since Stalin was on the march.  America’s friends and foes in Asia and the Middle East will recalculate their strategic risks and opportunities....

“The particulars of the (House) bill will be forgotten within weeks. What America’s allies – and adversaries – will remember is whether the U.S. cuts and runs on its friends in a fight.”

--An explosion caused by an alleged drone attack at Europe’s largest nuclear plant in Ukraine on Tuesday posed no direct threat to its safety but underscored the “extremely serious situation” at the facility that repeatedly has been caught in the war’s crosshairs, the International Atomic Energy Agency said.

The UN’s atomic watchdog said its team was aware of an explosion at a training center next to the Zaporizhzhia Nuclear Power Plant. It said it was informed the blast was from a drone attack but gave no further details.

The agency’s information, though, presumably came from Russians who have occupied and run the plant since the war’s early stages.

The Zaporizhzhia facility is one of the 10 biggest nuclear plants in the world.  Fighting in the southern part of Ukraine where it is located has constantly raised the specter of a potential nuclear disaster like the one at Chernobyl in 1986, where a reactor exploded and blew deadly radiation across a vast area.

Russia and Ukraine have frequently traded accusations over the plant.  On Monday, Moscow alleged Ukraine was behind drone attacks on the facility a day before, and Kyiv accused Russia of disinformation tactics.

Russia said Ukraine struck the plant three times on Sunday and demanded the West respond.

A Ukrainian intelligence official said Kyiv had nothing to do with any strikes on the station, and suggested they were the work of Russians themselves.

Russian Foreign Ministry spokeswoman Mariz Zakharova urged world leaders to condemn the act of “nuclear terrorism.”

“How many more times must the Ukrainian military target the Zaporizhzhia plant in order for the West and that monster Zelensky, nurtured by them, to stop repeating this deadly act of their bloody circus?” she wrote on Telegram.

Oh puh-leeze.

Andriy Usov, spokesperson for Ukraine’s HUR Main Intelligence Directorate, denied any involvement.  “Russian strikes, including imitation ones, on the territory of the Ukrainian nuclear power plant...have long been a well-known criminal practice of the invaders,” he wrote on Telegram.

The IAEA, which does have a few experts at the site, said on Telegram that nuclear safety had not been compromised but that it was “a serious incident w/potential to undermine integrity of the reactor’s containment system.”

Last Friday, Russia fired five missiles on the city of Zaporizhzhia, killing at least four people and injuring 20, the regional governor said.

--Ukrainian forces shelled the village of Klimovo in Russia’s Bryansk region, killing two on Tuesday, the Russian governor said.

--Russia attacked Ukraine with more than 40 missiles and 40 drones overnight Wednesday, President Zelensky said.  Ukraine’s air defense systems destroyed 18 missiles and 39 drones, a Ukrainian air force commander said on Thursday.  The western region of Lviv was the main target.

A Russian strike on Kharkiv killed three people, including a 14-year-old girl on Wednesday.

Russian missiles killed four people, including a 10-year-old girl, in southern Odesa region, the governor, Oleg Kiper, said on Telegram.

Two people were also killed in Ukraine’s southern city of Mykolaiv on Thursday in a Russian missile attack.

But the missiles and drones also destroyed a large electricity plant near Kyiv and hit power facilities in several regions.

The Trypilska coal-powered thermal power plant near the capital was completely destroyed, a senior official at the company that runs the facility told Reuters. Unconfirmed footage showed a raging fire at the large Soviet-era facility.

As a result of strikes on Kharkiv’s infrastructure, electricity was cut for 200,000 people, presidential aide Oleksiy Kuleba said.

“We need air defense and other defense support, not eye-closing and long discussions,” President Zelensky said on Telegram, condemning the attacks as “terror.”

The Russian Defense Ministry said the strikes on fuel and energy facilities were in response to Ukraine’s drone attacks on Russia’s oil, gas and energy facilities, it said.

“Ukraine remains the only country in the world facing ballistic strikes.  There is currently no other place for ‘Patriots’ to be,” Foreign Minister Dmytro Kuleba wrote on X.

Kuleba also lamented the inaction of House Republicans, led by Speaker Mike Johnson, who won’t advance an aid bill the Senate passed more than two months ago.

“I just don’t understand why it’s not happening,” he told the Washington Post.  “The feeling that extraordinary decisions are needed on a regular basis to end this war with a victory for Ukraine is gone,” he said.

--In Russia, a Ukrainian drone attack on Wednesday killed three people, in the Kursk border region, the local governor said.

--The top U.S. general in Europe, Gen. Christopher Cavoli, said, “The Russians fire five times as many artillery shells at the Ukrainians than the Ukrainians are able to fire back.  That will immediately go to 10 to one in a matter of weeks.”

“The severity of this moment cannot be overstated,” Gen. Cavoli said while testifying before the House Armed Service Committee.  “The side that can’t shoot back loses. The stakes are very high.”

--In a speech to a joint session of Congress, the first by a Japanese leader in nine years, Prime Minister Fumio Kishida urged Americans not to doubt its “indispensable” role in world affairs, and said Tokyo was undertaking historic military upgrades to support its ally.

“I want to address those Americans who feel the loneliness and exhaustion of being the country that has upheld the international order,” Kishida said.  “The leadership of the United States is indispensable.  Without U.S. support, how long before the hopes of Ukraine would collapse under the onslaught from Moscow?  Without the presence of the United States, how long before the Indo-Pacific would face even harsher realities?”

Kishida said the world was at a “historic turning point,” with freedom and democracy under threat, emerging countries holding more economic power and climate change and rapid advances in artificial intelligence disrupting peoples’ lives.

He also warned about North Korea’s nuclear program and exports of missiles supporting Russia’s war in Ukraine.  But the biggest challenge the world faces comes from China, he said.

“China’s current external stance and military actions present an unprecedented and the greatest strategic challenge, not only to the peace and security of Japan but to the peace and stability of the international community at large,” he said. “Ukraine of today may be East Asia of tomorrow.”

China’s state-run Global Times newspaper said in an editorial this week that Japan and the U.S. were taking a leading role in efforts to “contain and suppress China.”

--Russia’s Federal Security Service (FSB) alleged on Thursday that Britain’s Special Boat Service had been operating in Ukraine and helping Ukrainian forces carry out attempted operations against Russian forces.

The FSB, the main successor to the Soviet-era KGB, said it had foiled a plan by British special forces to land Ukrainian sabotage soldiers on the Tendrov Split, a sandbar in the Black Sea.  It said it had captured a senior Ukrainian naval special forces soldier, and gave his name and date of birth.  The FSB said the Ukrainian special forces unit was “supervised by a unit of the Special Boat Service (SBS) which indicates the direct involvement of Britain in the conflict.”

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--Isaac Arnsdorf, Josh Dawsey and Michael Birnbaum / Washington Post

“Former president Donald Trump has privately said he could end Russia’s war in Ukraine by pressuring Ukraine to give up some territory, according to people familiar with the plan.  Some foreign policy experts said Trump’s idea would reward Russian President Vladimir Putin and condone the violation of internationally recognized borders by force.

“Trump’s proposal consists of pushing Ukraine to cede Crimea and the Donbas border region to Russia, according to people who discussed it with Trump or his advisers and spoke on the condition of anonymity, because those conversations were confidential.  That approach, which has not been previously reported, would dramatically reverse President Biden’s policy, which has emphasized curtailing Russian aggression and providing military aid to Ukraine.

“As he seeks a return to power, the presumptive Republican nominee has frequently boasted that he could negotiate a peace deal between Russia and Ukraine within 24 hours if elected, even before taking office.  But he has repeatedly declined to specify publicly how he would quickly settle a war that has raged for more than two years and killed tens of thousands of soldiers and civilians....

“Privately, Trump has said that he thinks both Russia and Ukraine ‘want to save face, they want a way out,’ and that people in parts of Ukraine would be okay with being part of Russia, according to a person who has discussed the matter directly with Trump.

“Accepting Russian control over parts of Ukraine would expand the reach of Putin’s dictatorship after what has been the biggest land war in Europe since World War II. Some of Trump’s supporters have been trying to persuade him against such an outcome.

“ ‘I’ve been spending 100 percent of my time talking to Trump about Ukraine,’ said Sen. Lindsey Graham (R-S.C.), a onetime Trump critic turned ally.  ‘He has to pay a price. He can’t win at the end of this,’ Graham added, speaking of Putin.”

President Zelensky has long said he would not accept surrendering any territory.

WP:

“Exchanging territory for a cease-fire would put Ukraine in a worse position without assurances that Russia would not rearm and resume hostilities, as it has in the past, said Emma Ashford, a senior fellow at the Stimson Center, a nonpartisan think tank.  ‘That is a terrible deal,’ she said of Trump’s proposal.”

--Flood waters were rising in two cities in Russia’s Ural mountains on Sunday after Europe’s third longest river burst through a dam, flooding at least 6,000 homes and forcing thousands of people to flee with just their pets and a few belongings.

Some of the worst floods in decades have hit a string of Russian regions in the Urals and Siberia, alongside parts of neighboring Kazakhstan in recent days.

The Ural River, which rises in the Ural Mountains and flows into the Caspian Sea, swelled several meters in just hours on Friday due to melt water, bursting through a dam embankment in the city of Orsk, 1,100 miles east of Moscow.

Flooding has been recorded along the entire course of the 1,500-mile Ural River.  A large oil refinery in Orsk had to suspend operations.

By Tuesday, Russia and Kazakhstan had ordered more than 100,000 people to evacuate, in what is now described as the worst flooding in more than 70 years.

--Populist Peter Pellegrini was elected president of Slovakia, succeeding the liberal Zuzana Caputova.  Pellegrini, 48, defeated the pro-Western Ivan Korcok, a former diplomat, with 53% of the vote.

A former prime minister, he is an ally of Prime Minister Robert Fico, and shares the PM’s dovish attitude towards Russia.

Mr. Fico and his allies now control Slovakia’s parliament, government and soon the president’s office.

Slovakia had been one of Ukraine’s staunchest allies before Fico came to power in October on a pledge to halt supplies of Slovak Army military stocks to Kyiv.

Fico actually said recently that Vladimir Putin had been “unfairly demonized” and argued admitting Ukraine to NATO would mark the beginning of a third world war.

This sucks. I’m very disappointed in a country where I have roots...the Slovak side of my family, specifically the cities of Kosice and Bratislava.

--Before he died, Aleksei Navalny was secretly writing a memoir about his life and work as a pro-democracy activist.

Titled “Patriot,” the memoir will be published in the United States by Knopf on Oct. 22, with a first printing of half a million copies, and a simultaneous release in multiple countries.

This is a final show of defiance and it could have a galvanizing effect on his followers, his widow, Yulia Navalnaya, said in a statement on Thursday.

“This book is a testament not only to Aleksei’s life, but to his unwavering commitment to the fight against dictatorship – a fight he gave everything for, including his life,” Navalnaya said.  “Through its pages, readers will come to know the man I loved deeply – a man of profound integrity and unyielding courage.  Sharing his story will not only honor his memory but also inspire others to stand up for what is right and to never lose sight of the values that truly matter.”

Navalny wrote the entire memoir himself, dictating some parts, and Yulia is working with the publisher to edit and finalize the manuscript, according to Knopf.  A Russian-language edition of the book will be available, the publisher said.

Imagine the luggage checks at airports in Russia for this book.  All border crossings for that matter.

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Wall Street and the Economy

Equity and bond markets were awaiting Wednesday’s March consumer price index report and it was another bad one, above expectations, 0.4%, ditto ex-food and energy (core), when 0.3% was expected on both.  The year-over-year figure on core was also higher-than-expected, 3.8%, 3.5% on headline.  But it’s the 3.8% number that the Fed will focus on, the same as February’s reading.  That’s not close to their 2% target.

Shelter costs continue to rise, up 5.7% year-over-year, including rent.  Motor vehicle insurance also continues to spike, now up 22.2% Y/Y.  This is not an insignificant item in someone’s budget, as I’ve pointed out in my own case the last few months.

Thursday, we then had producer prices, and, unlike the CPI data, the figures were in line with expectations; 0.2% in March over February, ditto ex-food and energy, and 2.1% on headline year-over-year, which was lower than forecast but still up from 1.6% prior, and 2.4% on core, which was a tick higher than consensus and up from 2.0% in February.

Federal Reserve Bank of New York President John Williams said after in a speech in New York that while the central bank has made considerable progress in lowering inflation, it does not yet need to move to an easier monetary policy setting amid recently uneven movements in price pressures.

Monetary policy is currently in a “good place,” and “there’s no clear need to adjust monetary policy in the very near term” given where the economy now stands.

That’s the bottom line.  The labor market is strong, the economy is solid, but inflation is sticky, and at higher levels than the target rate.

Williams, a permanent voting member of the FOMC, noted “I will remain focused on the data, the economic outlook, and the risks as we evaluate the appropriate path for monetary policy to best achieve our goals.”

The Atlanta Fed’s GDPNow barometer for first-quarter growth is at 2.4%.

Freddie Mac’s 30-year fixed-rate mortgage is 6.88%, likely topping 7.00% next week, unless we have a further flight to quality in Treasuries as a result of increased tensions in the Middle East.

Editorial / Wall Street Journal

“So much for the triumph over inflation. The consumer-price index came in hot for the third straight month in March, confirming what most Americans understand even if Washington and the press prefer to obsess over abortion law in Arizona.

“The CPI rose 0.4% in March for the second month in a row after a 0.3% increase in January. Three months is more than a blip in the data, and the price index for the last 12 months has now climbed back to 3.5%.  Shelter and gasoline contributed more than half of the increase in March, which causes some analysts to dismiss the CPI rebound.  But rent increases and gas prices are costs that consumers feel acutely.

“There was also no relief in the ‘core’ CPI, sans food and energy, which rose 0.4% in March for the third consecutive month.  Core inflation for the last 12 months was 3.8%... still well above the Federal Reserve’s 2% inflation target.

“Yes, we know.  A separate inflation measure favored by the Fed – ‘core’ personal consumption expenditures – has been coming in lower than the CPI at 2.8% recently.  But the Fed can’t ignore that the CPI numbers suggest its inflation fight is far from over.

“Fed Chairman Jerome Powell has warned repeatedly that the central bank doesn’t want to make the same mistake it did in the 1970s and let inflation rebound in a way that would require even tighter monetary policy to defeat.  That’s the right instinct....

“Markets no longer expect the Fed to cut interest rates in June, and Mr. Powell would be wise at his next press conference on May 1 to signal caution about future rate cuts.  The Fed’s inflation-fighting credibility is on the line as it works to recover from its pandemic-era mistake of dismissing inflation as ‘transitory.’....

“ ‘Fighting inflation remains my top economic priority,’ Mr. Biden declared. Who is he kidding?  His real priority is to keep the government and consumer spending spigot wide open with subsidies galore for electronic vehicles, student-loan write-offs* and social welfare.  His other main priority is using regulation to put government in control of more of the economy.  None of this restrains prices.

“Mr. Biden also took his usual turn blaming inflation on companies for raising prices, as if they don’t have to cover their own rising costs to stay in business.  And he blamed Republicans in Congress for wanting to ‘slash taxes,’ as if that has anything to do with the price increases of the last four years.

“The White House has persuaded some in the media to buy its line that the only problem in the economy is consumer psychology.  Like reverse George Costanzas from ‘Seinfeld,’ they write that the problem isn’t the result of White House policies, it’s you.

“But if voters are downbeat about the economy, persistent inflation is a good reason.  Price increases across the Biden Presidency are unlike anything Americans have seen in recent decades. They have been a particular shock for low-income and younger workers who haven’t accumulated a wealth cushion in the stock market or housing values.

“Mr. Biden is the main architect of his inflation problem – and ours.”

*President Biden on Friday erased another $7.4 billion in student loans, bringing the total loan forgiveness approved by the president to $153 billion for nearly 4.3 million people, the administration says. [Washington Post]

Meanwhile, Republicans correctly point out the administration should be more focused on cleaning up the disastrous rollout of the new Free Application for Federal Student Aid than student debt relief.

I’ve long been in charge of a local charity organization’s efforts to award scholarships to graduating New Providence High School students, and the guidance department warned me about what a mess the financial aid process was this year, with so many high school seniors not knowing the status of their aid requests this late in the year.  Many are simply not going to be able to attend the school of their choice come this fall even though they were accepted to the college.

Separately, in his annual shareholder letter, JPMorgan Chase CEO Jamie Dimon talked of his expectation that the U.S. economy will continue to be resilient and grow this year, but he worries geopolitical events, as well as political polarization in the U.S., might be creating an environment that “may very well be creating risks that could eclipse anything since World War II.”

“America’s global leadership role is being challenged outside by other nations and inside by our polarized electorate,” Dimon said.  “We need to find ways to put aside our differences and work in partnership with other Western nations in the name of democracy.   During this time of great crises, uniting to protect our essential freedoms, including free enterprise, is paramount.”

Dimon had particular concerns with continued large amounts of deficit spending by the U.S. government and other countries, as well as the need for countries such as the U.S. to remilitarize and continue to build out green infrastructure, all of which will probably keep inflation higher than investors expect.

So while he expects the economy to grow this year, he is less optimistic we will see a “soft landing.”

Dimon also warned of the possibility the Fed’s funds rate, currently 5.25% to 5.50%, could rise to 8% or higher.  As in, forget rate cuts. Think the opposite down the road.

On the issue of the federal budget deficit, Editorial / Wall Street Journal:

“For the record, the Congressional Budget Office reported Monday that the federal budget deficit for the first six months of fiscal 2024, ending in March, was $1.064 trillion.  Enjoy it, because you’ll eventually pay for it in higher taxes.

“The problem isn’t a shortage of tax revenue, which rose 7% from a year earlier to $2.19 trillion.  Individual income-tax and payroll-tax revenue both rose 6%, while corporate income taxes rose 35%.  Is a 7% increase what President Biden would call a ‘fair share’ increase?  Probably not, because he wants to raise taxes even higher if he’s re-elected.

“The deficit is a spending problem, as ever.  Total outlays for the six months rose 6% to $3.25 trillion, and $73 billion more if not for some year-over-year timing differences.  The usual suspects are behind it – namely, Medicare payments, which climbed 10%, and Social Security benefits, which rose 9%.  As everyone but the politicians admit, entitlements spending drives deficits and debt.

“The spending increase would have been much larger if not for the decline in pandemic-related refundable tax credits and food stamps....

“All of those savings were swamped, however, by the $133 billion increase in net interest on federal debt held by the public – a 43% increase.  The six-month interest payments of $440* billion exceed the $412 billion in outlays for defense.  As CBO has documented in other places, interest payments are expected to keep climbing as interest rates return to a more normal historical pattern.

“None of this will come as a surprise to our readers.  But it’s still useful to be reminded of the ugly facts, given how hard the political class tries to hide and ignore them.”

*The Journal didn’t wait for Wednesday’s release of the official Treasury Department data on the budget deficit, which was indeed $1.064/5 trillion for the first six months, but interest expense was actually $522 billion, second only to Social Security in individual line-item expenses.  For March alone, debt-servicing costs were $89 billion, up 14% from a year earlier.

Europe and Asia

No important economic data this week for the eurozone, but we did have meeting of the European Central Bank, which as expected held borrowing costs at a record high but signaled it may soon cut interest rates, even as investors increasingly questioned whether the U.S. Federal Reserve will follow along.

The ECB has kept interest rates steady since September but has long signaled that cuts were coming into view, with policymakers awaiting a few more comforting wage indicators to accompany benign inflation figures before pulling the trigger.

“If the Governing Council’s updated assessment of the inflation outlook, the dynamics of underlying inflation and the strength of monetary policy transmission were to further increase its confidence that inflation is converging to the target in a sustained manner, it would be appropriate to reduce the current level of monetary policy restriction,” the ECB said.

ECB President Christine Lagarde said the central bank would remain data dependent and isn’t “pre-committing to a particular rate path,” again signaling the prospect of a move in two months’ time.

“In April we get some information and some data,” she said, adding that a “few” Governing Council members are already sufficiently confident on inflation.  “But in June, we know that we will get a lot more data and a lot more information,” including a new quarterly economic outlook.

The currency bloc is now in its sixth straight quarter of economic stagnation and the labor market is starting to soften.

Turning to China, the government reported that March inflation was up just 0.1% year-over-year, lower than the 0.4% that was expected.  Producer prices in the month fell 2.8% Y/Y...so renewed deflation talk.

March exports came in worse than forecast, -7.5% from a year earlier when a decline of 3% was expected.  This is a blow to hopes that booming sales abroad will offset weak demand at home and drive growth.

For the first quarter, exports to the U.S. fell 1.3% and were down 5.7% to the European Union from a year ago. [General Administration of Customs]

Imports fell 1.9% Y/Y.

March vehicle sales rose 9.9% year-on-year to 2.69 million units, following a 19.9% slump the month before, as consumption recovered following the Lunar New Year and many carmakers slashed prices, according to data from the China Association of Automobile Manufacturers.  During the first quarter of the year, vehicle sales advanced by 10.6%, and electric vehicle sales were up by 31.8%.

Japan reported that producer prices rose 0.8% year-over-year in March.  February industrial production declined 3.9% Y/Y.

Street Bytes

--Stocks fell a second straight week on the inflation news and geopolitical fears; the Dow Jones losing 2.4% to 37983, the S&P 500 1.6% and Nasdaq 0.5%.

Earnings season starts up in earnest next week, highlighted by Netflix.

--U.S. Treasury Yields

6-mo. 5.34%  2-yr. 4.89%  10-yr. 4.51%  30-yr. 4.61%

The yield on the 10-year, which closed last Friday at 4.39%, had fallen to 4.34% just prior to release of Wednesday’s CPI numbers, after which the yield soared to 4.57% before Thursday’s PPI data.  After that, it became more about a flight to quality on prospects for an Iranian strike on Israel or its interests around the world and we ended the week at 4.51%.

The 2-year yield actually hit 5.00% early Thursday before backing off, but still up from last Friday’s 4.74% to finish today at 4.89%.

--Crude oil finished the week at $86.08, actually down a bit from last week’s close of $86.75, but still elevated, awaiting developments between Israel and Iran.

The above-mentioned Jamie Dimon, in his annual shareholder letter, also said U.S. delays of liquefied natural gas projects were done for political reasons to pacify those who believe oil and gas projects should simply be stopped – a position he calls “wrong” and “enormously naïve.”

Dimon touted replacing coal with natural gas as one of the best ways to reduce carbon dioxide emissions for the next few decades.  Dimon also called LNG exports a “great economic boon” for the U.S. as well as a “realpolitik goal.”

“Our allied nations that need secure and affordable energy resources, including critical nations like Japan, Korea and most of our European allies, would like to be able to depend on the United States for energy,” Dimon said.

The CEO’s staunch support of U.S. LNG exports comes in the wake of President Biden’s permitting freeze imposed in January, which prevents any new approvals for pending projects until the Energy Department can further study the economic and environmental impacts of increased LNG exports.  [As in yet another pathetic appeal to the ‘base’ ahead of November.]

--We had our first big bank earnings of the season today, Friday.

JPMorgan Chase forecast full-year income from interest payments below analysts’ expectations as the industry prepares for widely expected rate cuts later in the year.

The biggest U.S. bank said it expects full-year net interest income (the difference between what it earns on loans and pays out for deposits), excluding trading, of $89 billion, less than expected.    The bank’s executives had warned for months that its surging NII was not sustainable.  The shares fell 6% in response.

CEO Jamie Dimon stuck to his cautious tone, saying in a statement: “Many economic indicators continue to be favorable.  However, looking ahead, we remain alert to a number of significant uncertain forces.”  Those include “unsettling” global conflicts, persistent inflationary pressure and quantitative tightening, he said.

Profit in the first quarter, however, rose 6% to $13.42 billion or $4.44 per share, compared with $12.62 billion, or $4.10 per share, a year earlier.  Net interest income rose 11% to $23.2 billion, up 5% excluding First Republic Bank, the failing bank acquired by JPMorgan in May last year. 

In contrast to peers that are trimming staff, JPM added about 2,000 employees to its workforce of 311,921. 

It set aside $1.88 billion as provisions for credit losses, compared with $2.28 billion last year.  Trading revenue declined 5% to $8 billion, with revenue from fixed income, currency and commodities dropping 7% and equities flat.  Investment banking revenue gained 27% to $2 billion.  Overall revenue rose 9% to $41.93 billion.

--Wells Fargo’s profit fell more than 7% as it earned less from customer interest payments in the first quarter.  Net income declined to $4.62 billion, or $1.20 per share, for the three months ended March 31.  That compared with $4.99 billion, or $1.23 per share, a year earlier.    Wells Fargo’s net interest income fell 8% to $12.23 billion.  The bank also paid $284 million into a Federal Deposit Insurance Corp. fund that was drained last year after three regional lenders failed.

Wells is still operating under a $1.95 trillion asset cap that prevents it from growing until regulators deem it has fixed problems from a fake accounts scandal, but eventually the bank will get out from under the remaining consent orders it’s operating under.

--Citigroup’s profit fell in the first quarter as it spent more on severance payments for laid-off employees and set aside money to refill a government deposit insurance fund.  Net income fell to $3.4 billion, or $1.58 per share.  That compares with $4.6 billion, or $2.19 per share, a year earlier.

“Last month marked the end to the organizational simplification we announced in September. The result is a cleaner, simpler management structure that fully aligns to and facilitates our strategy,” CEO Jane Fraser said in a statement.

Citi said in its investor presentation that it expects a headcount reduction of 7,000 and $1.5 billion in annualized savings from reorganization.  Fraser began a sweeping reorganization in September to simplify the bank and improve performance.

Revenue fell 2% on a reported basis to $21.1 billion in the first quarter, but adjusted for one-off items such as the sales of businesses last year, it was higher.  A resurgence in capital markets and investment banking fees fueled a 49% surge in banking revenue to $1.7 billion.  But trading revenue fell 7% to $5.4 billion. Wealth management revenue shrank 4% to $1.7 billion.

--BlackRock reported record assets under management (AUM) of about $10.5 trillion in the first quarter and posted a 36% jump in profit on Friday as a rebound in global equity markets boosted its investment advisory and administrative fees.  Global equity markets rallied in the first quarter as expectations grew that the world’s major central banks were done with monetary policy tightening and would pivot to rate cuts.

The company’s AUM jumped 15% in the first quarter from a year earlier.  However, total net inflows fell to $57 billion from $110 billion a year earlier.

Total revenue jumped 11% to $4.73 billion in the quarter.  Net income rose to $1.57 billion, or $10.48 per share, in the three months ended March 31, from $1.16 billion, or $7.64 per share, a year earlier.

--The Securities and Exchange Commission, the Office of the Comptroller of the Currency and other Treasury Department offices are probing Morgan Stanley over how it vets clients who are at risk of laundering money through the bank’s sprawling wealth-management division.  The Federal Reserve has told the investment bank that supervisory action is under consideration.

Regulators are focused on whether MS has been sufficiently investigating the identities of prospective clients and where their wealth comes from, as well as how it monitors its clients’ financial activity.  Some of the probes are focused on the bank’s international clients.

--Delta Air Lines reported first-quarter results above market estimates buoyed by robust travel demand, which the carrier is continuing to see in the ongoing three-month period.

Adjusted earnings came in at $0.45 a share for the March quarter, up from $0.25 a year earlier, topping consensus of $0.37.  Operating revenue rose 7.7% to $13.75 billion, also surpassing the Street’s view for $12.86 billion.

Total passenger revenue was up 7% to $11.13 billion, with domestic rising 5% to $7.98 billion.

The airline reiterated its full-year 2024 adjusted earnings guidance range of $6 to $7 per share, while analysts are estimated normalized EPS of $6.46.

--Spirit Airlines said on Monday it has reached a deal with Airbus to delay all aircraft deliveries scheduled from the second quarter of 2025 through 2026 and intends to furlough about 260 pilots, as the U.S. carrier looks to save cash.

The low-cost airline said it would defer the scheduled deliveries to 2030-31.  As a result of the deferrals, along with quality issues with engines made by supplier Pratt & Whitney, Spirit is furloughing pilots effective Sept. 1.

--Boeing is facing new pressure after a whistleblower reported safety concerns over the manufacturing of some of its planes to U.S. regulators.

Engineer Sam Salehpour accused Boeing of taking shortcuts in the construction of its 787 and 777 jets.

He claimed he was “threatened with termination” after raising concerns with bosses.

But Boeing said the claims were “inaccurate” and added it was confident its planes were safe.

“The issues raised have been subject to rigorous engineering examination under [Federal Aviation Administration] oversight," the company said.

"This analysis has validated that these issues do not present any safety concerns and the aircraft will maintain its service life over several decades."

The FAA said it was investigating the claims.

Boeing also reported it delivered just 83 planes to customers in the first three months of the year – the smallest number since 2021.

--TSA checkpoint numbers vs. 2023

4/11...108 percent of 2023 levels
4/10...107
4/9...103
4/8...98
4/7...112
4/6...111
4/5...108
4/4...103

--U.S. Steel said Friday its shareholders voted at a special meeting to approve the $14.1 billion takeover offer by Nippon Steel.

But the takeover must pass a review by the Committee on Foreign Investment in the United States, or CFIUS, and the review is unlikely to conclude until late this year and may extend into 2025. Both President Biden and former President Trump oppose the merger, against all common sense, as they seek the ‘union’ vote.

--Taiwan Semiconductor Manufacturing Co.’s quarterly revenue grew at its fastest pace in more than a year, shoring up expectations that a global boom in AI development is fueling demand for high-end chips and servers.

The main chipmaker to Nvidia and Apple reported a better-than-expected 16% rise in March-quarter sales to about $18.5 billion, well above consensus.

That outperformance lends weight to expectations that the mammoth chipmaker will return to solid growth this year after weathering a post-Covid cratering of smartphone and computer sales.  TSMC is budgeting capital expenditures of $28 billion to $32 billion and expects revenue to grow at least 20% this year, reversing 2023’s slight decline.

TSMC in January said its AI revenue is growing at 50% annually.  The company is building plants in the U.S., Japan and Germany as it races to fabricate the AI chips used in data centers operated by internet powerhouses including Amazon.com and Microsoft.

Last week Asian rival Samsung Electronics said its profit rebounded sharply in the first quarter.

So back to TSMC’s capital spending plans, the U.S. government announced it will dole out $11.6 billion in CHIPS Act funds to the company in order to get it to boost its production of the critical technology in Arizona, the Commerce Department said Monday.

TSMC agreed to build a third factory in Phoenix as part of a $65 billion investment at the production hub, officials said.

TSMC’s first two factories are under construction and expected to begin chip production in 2025 and 2028.

It is the largest foreign direct investment in a brand-new development project in U.S. history, according to the Commerce Department.

“These are the chips that underpin all artificial intelligence, and they are the chips that are necessary components for the technologies that we need to underpin our economy, but frankly, a 21st century military and national security apparatus,” Commerce Secretary Gina Raimondo said in a statement.

The $11.6 billion includes $6.6 billion in federal grants and up to $5 billion in low-cost loans.

Back to Samsung, they are preparing to take the wraps off a $44 billion investment in the U.S. as soon as next week.

The world’s biggest memory-chip maker plans to outline the project in Taylor, Texas, alongside Commerce Secretary Raimondo, according to Bloomberg.  Samsung has secured more than $6 billion in government grants for an investment outlay that’s expanded significantly to a total of $44 billion over multiple years, sources said.

--Apple plans to lay off more than 600 workers in California, weeks after scrapping its electric car and smartwatch display projects.  These are Apple’s first significant layoffs since the pandemic.  The workers, based across eight offices in Santa Clara, were told on March 28 and the layoffs are effective from May 27, according to state filings.

The closure of both its secretive car project and next-generation screen development is a blow to Apple and makes the success of its next big idea even more crucial – particularly as it looks to develop its artificial-intelligence credentials.  Apple needs an AI innovation to turn its mediocre stock performance around.

--In a letter to shareholders on Thursday, Amazon CEO Andy Jassy said he is committed to cutting costs while the company boosts investment in artificial intelligence.

“While we’re building a substantial number of GenAI applications ourselves, the vast majority will ultimately be built by other companies,” Jassy said.  He added that he is optimistic that “much of the world-changing AI will be built on top of AWS (Amazon Web Services).”

--Norfolk Southern has agreed to pay $600 million in a class-action lawsuit settlement related to a fiery train derailment in February 2023 in East Palestine, Ohio, with some cars transporting hazardous materials.  About 40% of the town’s 4,800 residents had to be evacuated.

The company said the agreement, if approved by the court, will resolve all class action claims within a 20-mile radius from the derailment and, for those residents who choose to participate, personal injury claims within a 10-mile radius from the derailment.

Norfolk Southern said Tuesday that individuals and businesses will be able to use compensation from the settlement in any manner they see fit to address potential adverse impacts from the derailment, which could include health care needs, property restoration and compensation for any net business loss.  Individuals within 10-miles of the derailment may, at their discretion, choose to receive additional compensation for any past, current, or future personal injury from the derailment.

Norfolk Southern has already spent more than $1.1 billion on its response to the derailment, including more than $104 million in direct aid to East Palestine and its residents.  The railroad has promised to create a fund to help pay for the long-term health needs of the community, but that hasn’t happened yet.

--Jersey Mike’s is a popular sandwich shop that was founded by CEO Peter Cancro in Pt. Pleasant, N.J., back in 1956, with Cancro, then 17-years-old, acquiring it in 1975.  He began to build a national chain of submarine sandwich shops in 1987 and has created quite an empire since.

In December 2023, the chain reportedly had 2,734 sandwich shops nationwide with plans to soon open another 297.  Jersey Mike’s posted nearly $2.7 billion in 2023 annuals sales revenue.

And now investment bank Blackstone is in discussions to buy Jersey Mike’s at a reported $8 billion or thereabouts, Cancro now 65.

Separately, Blackstone agreed to acquire an owner of upscale apartment buildings for about $10 billion, signaling that one of the world’s largest real-estate investors is ramping up investments again after a period of moving more cautiously.

Blackstone is taking private Apartment Income REIT, known as AIR Communities, which owns 76 rental housing communities that are primarily in coastal markets, including Miami, Los Angeles, and Boston, the companies confirmed Monday.  Blackstone plans to invest another $500 million to improve the properties, the firm said.

The acquisition is Blackstone’s largest transaction in the multifamily market and reflects the firm’s bullishness on rental housing and its belief that commercial real estate overall is bottoming and the time is now to step up investments.

--Shares in Trump Media & Technology Group, which hit $79 on March 26, giving Donald Trump’s stake a value of about $6 billion, have plummeted to $32.

Foreign Affairs, Part II

China: Wednesday, President Xi held talks with former Taiwanese president Ma Ying-jeou in Beijing, marking the first time that a serving or former leader of the self-governed island has met the top leadership of the mainland.

Ma was in office when the pair last met in Singapore in November 2015, a meeting hailed by Xi as ‘a new chapter in history.’

The highlight of that meeting was an 80-second handshake ahead of their closed-door talks.

Wednesday’s talks came as Ma wrapped up an 11-day “journey of peace” to the mainland.  In opening remarks made in the presence of the press, both Xi and Ma sought to strike a conciliatory tone despite the prolonged cross-strait tensions.

Referring to his guest as “Mister Ma,” Xi said: “Foreign interference cannot stop the historic trend of reunification. And there’s no problem that cannot be resolved.”

Ma responded with a message of peace, addressing the mainland leader as “general secretary Xi” – in a reference to his title as leader of the ruling Communist Party.

This is highly disturbing.  Another trap.  And there is Xi, saying up front, “foreign interference cannot stop the historic trend of reunification.”

Incoming Taiwan president William Lai gets it.  But Xi’s talks with Ma represent another effort to divide the Taiwanese people.

Understand, also this week, Xi met with Russian Foreign Minister Sergei Lavrov in Beijing on Tuesday, in a session seen as laying the groundwork for an expected visit to China by Vladimir Putin and pushing back against mounting pressure from the U.S. and its allies.

Lavrov’s visit came after Treasury Secretary Janet Yellen warned of “significant consequences” if Chinese companies provided material support for Russia’s war in Ukraine.  It also took place as President Biden was set to host the leaders of Japan and the Philippines on Wednesday to boost economic and security ties to counter China’s growing assertiveness in Asia.

Earlier, Lavrov met with his Chinese counterpart, Wang Yi, and said the two sides had talked about deepening security ties to resist the West’s “anti-Chinese” and “anti-Russian orientation.”  In a gin of the Kremlin’s continued deference to China, Lavrov reaffirmed Russia’s rejection of any “outside interference” over Beijing’s claims to the de facto independent island of Taiwan.

“There is no place for dictatorships, hegemony, neocolonial and colonial practices, which are now being widely used by the United States and the rest of the ‘collective West,’” Lavrov said. [South China Morning Post]

--The aforementioned Treasury Secretary Yellen told Chinese Premier Li Qiang on Sunday that the ability to have difficult conversations has put the two economic superpowers on “a more stable footing” over the past year.  As they began a meeting in Beijing, Li responded that the two countries needed to respect each other and should be partners, not adversaries, adding that “constructive progress” had been made during Yellen’s trip.

Yellen stressed again she is concerned about China’s excess factory capacity.  The secretary has made the threat of China’s excess production of electric vehicles, solar panels and other clean energy products to producers in the U.S. and other countries a focus of her second visit to China in nine months.

Chinese state media has pushed back against Yellen’s message on excess capacity during her visit, calling it a pretext for protectionist policies to shield American companies.

Yellen also warned China’s banks and exporters: If you help bolster Russia’s military capacity, you “will face significant consequences if they do,” she said.

--In an annual survey carried out by the Yomiuri newspaper in February and March, China was seen as a security threat by over 90% of Japanese. Some 88% also said North Korea was a cause for concern, while 89% identified Russia as a danger.

In 2020, before the invasion of Ukraine, just 57% of those surveyed said Russia was a national security threat.

None of these figures are a surprise given the ongoing threat environment in the region.

North Korea: Kim Jong Un said unstable geopolitical situations surrounding his country mean now is the time to be more prepared for war than ever, as he inspected the country’s main military university, KCNA news agency said on Thursday.

Affirming that if the enemy opts for military confrontation with the DPRK, “the DPRK will deal a deathblow to the enemy without hesitation by mobilizing all means in its possession,” KCNA quoted Kim as telling the university staff and students.

Editorial / Washington Post

“For the past 14 years, a panel of United Nations experts has regularly reported on North Korea’s expanding nuclear and missile programs and its efforts to defy UN Security Council sanctions.  Their latest report, on March 7, offers 615 pages on North Korea’s activities, including 58 suspected cyberattacks on cryptocurrency-related companies between 2017 and 2023, netting about $3 billion to fund development of weapons of mass destruction. But now these eyes and ears have been removed.

“In a UN Security Council vote on March 28, Russia vetoed an extension of the panel’s work, which it had previously supported. China abstained, and 13 other members voted for it. As a result, the panel that has monitored the sanctions against North Korea is to expire at the end of this month, and the rest of the world will know even less than it does now about North Korea’s quest.

“This was a gift from Russian President Vladimir Putin to North Korean leader Kim Jong Un, undermining sanctions that the United Nations has imposed in recent years.  More than that, it suggests yet another setback – again, perpetrated by Russia – to the post-Cold War struggle to curtail the spread of weapons of mass destruction.

“Mr. Putin is paying back North Korea for sending an estimated 10,000 containers of weapons and ammunition to Russia for use in the full-scale invasion of Ukraine, filling three major storage depots near the front lines of the war, amounting to more than 3 million rounds.  South Korea’s defense minister has said North Korea’s weapons factories are working around-the-clock to manufacture artillery shells for Russia.  North Korean ballistic missiles have been fired by Russia at Ukrainian cities.  The Financial Times, examining satellite photographs, reported that Russian vessels are delivering oil to North Korea in defiance of the sanctions, including at least five tankers in March, the first since the UN imposed a strict cap on oil transfers in 2017.  Mr. Putin’s foreign intelligence chief, Sergei Naryshkin, visited Pyongyang March 25 through 27 in a bid to deepen cooperation, his agency announced.  A visit by Mr. Putin is expected this year....

“Russia has thrown (Kim Jong Un) a lifeline.  But what if he wants more than just oil and a helpful veto at the United Nations?  There is a worrisome possibility that he could seek assistance with nuclear weapons and missile technology from Russia....

“The loss of the monitoring panel can be repaired, perhaps by establishing a new one supported by the Group of Seven.  But the larger challenge is to come up with a new and effective strategy to deal with North Korea.  U.S. policy has wavered between drift, incentives, Mr. Trump’s failed summitry and back to drift. As always in the atomic age, the danger is of disastrous miscalculation and misperception in a confrontation.  Containing the danger is now even harder, as Mr. Putin – with a permanent Security Council seat – transforms Russia from a global actor that exercised at least a basic level of responsibility on some issues into a rogue state that makes common cause with the world’s worst regimes.”

South Korea: President Yoon Suk Yeol and his People Power Party suffered a crushing defeat in parliamentary elections, with the liberal opposition Democratic Party (DPK) and smaller opposition parties jointly winning 192 of 300 seats in the National Assembly.

The vote was seen as a referendum on Yoon, who has three years left in office. His party leader resigned and prime minister offered to as well.

So Yoon won’t be able to achieve his legislative agenda.  The DPK, on the other hand, can fast-track and push legislation through parliament.

Iraq and Syria: In its war against ISIS, U.S. forces in the Middle East averaged more than a mission per day from January to the end of March, defense officials from Central Command announced last weekend in a quarterly update.  Most of the operations (66 of 94) occurred in Iraq and led to 11 alleged terrorists killed and three dozen detained. The remaining 28 operations took place in Syria and led to seven killed and 27 militants detained.

U.S. intelligence officials estimate that some 2,500 ISIS fighters remain across Iraq and Syria.  There are another 9,000 fighters detained in Syria; and more than 45,000 individuals and families of militants are still quarantined at the Al Hol and Al Roj camps, CENTCOM said.

Iraqi Prime Minister Mohammed Shia al-Sudani is heading to the White House Monday for a state visit.  Sudani has talked of rebooting his country’s relationship with the U.S., he explained in Foreign Affairs this week, a “new phase,” by which he means moving beyond the war on ISIS.

For example, “My government is aware of its sensitive position and the delicate balance that it must maintain between the United States and groups that sometimes enter into direct conflict with American forces.”

As one analyst put, Michael Knights of the Washington Institute, put it, Sudani needs to “prove that he is more than then ‘general manager’ for a cabal of terrorists running today’s Iraq.”  [Defense One]

Random Musings

--Presidential approval ratings....

Gallup:  40% approve of President Biden’s job performance, 55% disapprove; 34% of independents approve (Mar. 1-20).

Rasmussen: 42% approve, 56% disapprove (April 12).

--The latest Reuters/Ipsos national poll of registered votes had President Biden at 41% and 37% for Donald Trump.  Some 22% of voters in the poll said they had not picked a candidate, were leaning toward third-party options or might not vote at all.  The April poll did not break out support for Robert F. Kennedy Jr., but in a March survey, he garnered 16%.

Of course it’s still all about the seven or so states that will decide it all and Trump is leading in virtually all of them.

--A Wall Street Journal poll of seven swing states found that support among Black Americans for President Biden is falling, as more Black men said they plan to back Donald Trump this fall.

While 57% say they support Biden, 30% said they definitely or probably are going to vote for the former Republican president.  This compares to an 87-12 split for Biden among Black men nationwide in 2020.

The difference in the WSJ poll for Black women is not as great, as 11% said they were definitely or probably going to vote for Trump, compared with 6% of Black women nationwide in 2020.

--Biden raised more than $90 million for his reelection campaign and the Democratic Party in March, the campaign with a war chest of $192 million cash on hand.

Donald Trump and the Republican National Committee ended March with a combined $65.6 million fundraising haul and $93.1 million cash on hand, though this was prior to the event described below.

--Trump raised a record $50.5 million at a fundraiser Saturday at the home of hedge fund operator John Paulson in Palm Beach, Fla.  Campaign finance reports encompassing the date of the event won’t be available for months. [The haul doubles the then-record $25 million+ raised by Biden’s star-studded event at Radio City Music Hall last month, featuring former presidents Clinton and Obama.]

Trump boasted on Truth Social: “Biggest night in Fund Raising of ALL TIME!!!”

“We will double up the Biden number of last week at Radio City.  People are desperate for change.  They want to MAKE AMERICA GREAT AGAIN!”

Trump gave a roughly 45-minute presentation to the crowd of wealthy donors that was heavily focused on immigration.

--Donald Trump on Monday said he still believed abortion laws should be determined by the states and did not address the issue of a national ban on abortion.

In a video posted on Truth Social, the former president said he supported exceptions for rape, incest and to protect the life of the mother. He also reiterated that he supports the availability of in-vitro fertilization.

He did not say that he would seek a national ban on abortion if he returns to the White House, which is likely to galvanize many voters.

Trump said he was responsible for the 2022 Supreme Court decision ending Roe v. Wade and a federal right to the procedure, alluding to his conservative picks for the high court.

“My view is now that we have abortion where everybody wanted it from a legal standpoint, the states will determine by vote or legislature or perhaps both,” Trump said in the video.  “And whatever they decide must be the law of the land.  In this case, the law of the state.”

“Many states will be different, many will have a different number of weeks, or some will have more conservative than others, and that’s what they will be,” Trump said.

“At the end of the day, it’s all about will of the people,” he added, falsely claiming that “all legal scholars, both sides, wanted and in fact demanded” that Roe should be ended.  “That’s where we are right now and that’s what we want – the will of the people.”

Trump did not specify a week at which he would support a ban on abortion.  As recently as February, Trump had told advisers he liked the idea of a 16-week national abortion ban with the exceptions in cases of rape or incest, or to save the life of the mother.  At the time, he was trying to fend off Nikki Haley in South Carolina.

As Maggie Haberman of the New York Times notes: “Mr. Trump, who has approached abortion transactionally – and spoken about it clumsily – since beginning his political career in 2015, told aides he liked the idea of a 16-week federal ban on abortion because it was a round number.

“ ‘Know what I like about 16?’ Mr. Trump told one of these people, who was given anonymity to describe a private conversation.  ‘It’s even.  It’s four months.’”

At the time, Trump’s campaign called the reporting on 16 weeks “fake news,” but then Trump publicly said he was considering support for a 15-week ban.

Since launching his campaign in late 2022, Trump has largely shied away from the topic, while the Republican Party has struggled with its messaging to beat back the political fallout from the decision overturning Roe, which Trump is responsible for with his judicial appointments.

The voter backlash certainly curbed Republican gains in the 2022 congressional midterm elections and propelling Democrats to victories in some state elections last year.

With his statement that abortion should be left to the states, Democrats can tag him with some of the strictest abortion laws in the country, including a six-week ban in Florida that Trump had said was a “terrible mistake.”

Trump lashed out at Sen. Lindsey Graham (R-S.C.) after Graham expressed disappointment with Trump’s latest statement on his abortion position.

“I blame myself for Lindsey Graham, because the only reason he won in the Great State of South Carolina is because I Endorsed him!” Trump said on Truth Social 

Sen. Graham has sponsored a bill that would ban abortions after 15 weeks.  He said after Trump’s conclusions about abortion policy that he “respectfully” disagreed with Trump.

“The states’ rights only rationale today runs contrary to an American consensus that would limit late-term abortions and will age about as well as the Dred Scott decision,” Graham said.  “The science is clear – a child at fifteen weeks is well-developed and is capable of feeling pain.”

Trump then issued other posts.  In one, he said Graham was “doing a great disservice to the Republican Party, and to our country” by opposing his views on abortion policy and said the senator should spend more time working on securing the border.  Trump suggested Graham’s criticism was playing into the hands of Democrats.

“The Democrats are thrilled with Lindsey, because they want this issue to simmer for as along a period of time as possible,” Trump said.

This was all Monday.  Tuesday, the narrative changed all over again, as the Arizona Supreme Court ruled that the state can enforce its long-dormant law criminalizing all abortions except when a mother’s life is at stake.

The case examined whether the state is still subject to a law that predates Arizona’s statehood.

The 1864 law provides no exceptions for rape or incest, but allows abortions if a mother’s life is in danger.

The state’s high court ruling reviewed a 2022 decision by the state Court of Appeals that said doctors couldn’t be charged for performing the procedure in the first 15 weeks of pregnancy.

An older court decision blocked enforcing the 1864 law shortly after the U.S. Supreme Court issued the 1973 Roe v. Wade decision guaranteeing a constitutional right to an abortion.

After Roe was overturned then state Attorney General Mark Brnovich, a Republican, persuaded a state judge in Tucson to lift the block on enforcing the 1864 law.

Brnovich’s Democratic successor, Attorney General Kris Mayes, had urged the state’s high court to side with the Court of Appeals and hold the 1864 law in abeyance.

“Today’s decision to reimpose a law from a time when Arizona wasn’t a state, the Civil War was raging, and women couldn’t even vote will go down in history as a stain on our state,” Mayes said Tuesday.

Republicans in Arizona are scrambling to disassociate themselves from the ruling, including Kari Lake, a prominent Senate candidate and close ally of Donald Trump.  Democratic officials in Arizona are predicting the banning of nearly all abortions would cause women to turn out in droves in a key swing state to protect access to abortion rights.

Ms. Lake has called on a handful of state legislators to offer her support in any effort to repeal the law and revert to the 15-week abortion ban that was in effect prior in Arizona.

Such a stance represents an about-face for many Arizonans, who cheered when the U.S. Supreme Court overturned Roe v. Wade and then pushed quickly for reinstating the near-total ban from 1864.  Lake herself had praised the 160-year-old ban during her 2022 run for governor, calling it a “great law,” only to now call the state court’s decision “out of step with Arizonans.”

--A New York appeals court judge Tuesday rejected Donald Trump’s latest bid to delay his hush money criminal trial while he fights a gag order. 

Trump’s lawyers actually failed three times in three days to delay the Manhattan trial.

Barring further court action, the ruling clears the way for jury selection to begin Monday.

Justice Cynthia Kern’s ruling is yet another loss for Trump, who has tried repeatedly to get the trial postponed. 

Trump’s lawyers wanted a further delay to allow for a full panel of appellate court judges to hear arguments on lifting or modifying a gag order that bans the former president from making public statements about jurors, witnesses and others connected to the hush-money case.

--Allen Weisselberg, a retired executive in Donald Trump’s real estate empire, was sentenced on Wednesday to five months in jail for lying under oath during his testimony in the civil fraud lawsuit brought against Trump by New York’s attorney general.

Weisselberg pleaded guilty last month to two counts of perjury in connection with the suit.   He admitted lying when he testified he had little knowledge of how Trump’s Manhattan penthouse came to be valued on his financial statements at nearly three times its actual size.

It is Weisselberg’s second time behind bars.  The former Trump Organization chief financial officer served 100 days last year for dodging taxes on $1.7 million in company perks, including a rent-free Manhattan apartment and luxury cars.

--Jennifer and James Crumbley, who were convicted of involuntary manslaughter for failing to prevent their teenage son from killing four fellow students in the deadliest school shooting in Michigan’s history, were each sentenced on Tuesday to 10 to 15 years in prison.  They are the first parents in the country to be convicted over the deaths caused by their child in a mass shooting.

The two will receive credit for time served, two years while awaiting trial.

“Parents are not expected to be psychic,” Judge Cheryl Matthews of the Oakland County Circuit Court in Pontiac, Mich., said before issuing the sentence.  “But these convictions are not about poor parenting. These convictions confirm repeated acts or lack of acts that could have halted an oncoming runaway train – repeatedly ignoring things that would make a reasonable person feel the hair on the back of her neck stand up.”

--Peggy Noonan / Wall Street Journal

“There’s a funny thing that happens in a nation’s thoughts. At some point everyone knows something is true, and talks about it with each other.  The truth becomes a cliché before it becomes actionable. Then a person of high respect, a good-faith scholar who respects data, say, comes forward with evidence proving what everyone knows, and it is galvanizing. It hits like a thunderclap, and gives us all permission to know what we know and act on it.

“That is my impression of Jonathan Haidt’s new book, ‘The Anxious Generation: How the Great Rewiring of Childhood Is Causing An Epidemic of Mental Illness,’ that it has broken through and is clearing the way for parents’ groups and individuals to move forward together on an established idea.  Mr. Haidt, a widely admired social psychologist who teaches at New York University’s Stern School of Business, has spent his career studying emotion, culture and morality, turning along the way to child development and adolescent mental health.

“What we all know is that there’s a mental-health crisis among the young, that they seem to have become addicted to social media and gaming, and that these two facts seem obviously connected.  Mr. Haidt says, and shows, that the latter is a cause of the former....

“In 2010 came the front-facing camera on smartphones, which ‘greatly expanded the number of adolescents posting carefully curated photos and videos of their lives for their peers and strangers not just to see, but to judge.’

“This became ‘the first generation in history to go through puberty with a portal in their pockets that called them away from the people nearby and into an alternative universe that was exciting, addictive, unstable and....unsuitable for children and adolescents.’

“Pew Research reports that, in 2011, 23% of teens had a smartphone.  That meant they had only limited access to social media – they had to use the family computer.  By 2016 one survey showed 79% of teens owned a smartphone, as did 28% of children 8 to 12. Soon teens were reporting they spent an average of almost seven hours a day on screens.  ‘One out of every four teens said that they were online ‘almost constantly,’’ Mr. Haidt writes.

“Girls moved their social lives onto social media. Boys burrowed into immersive video games, Reddit, YouTube and pornography.

“The tidal wave came to these children during puberty, when the human brain is experiencing its greatest reconfiguring since early childhood. In puberty, as brain researchers say, ‘neurons that fire together, wire together.’  What you do at that time ‘will cause lasting structural changes in the brain,’ Mr. Haidt writes.

“ ‘Suddenly children ‘spent far less time playing with, talking to, touching or even making eye contact with their friends and families.’  They withdrew from ‘embodied social behaviors’ essential for successful human development.  It left them not noticing the world.

“Signs of a mental-health crisis quickly emerged.  Rates of mental illness among the young went up dramatically in many Western countries between 2010 and 2015.  Between 2010 and 2024 major depression among teens went up 145% among girls, 161% among boys. There was a rise in disorders related to anxiety as well....

“Mr. Haidt suggests four reforms:

“No smartphones before high school, only basic phones with no internet capability.

“No social media before 16. Let their brains develop first.

“All schools from elementary through high school should be phone-free zones – students can store their devices in lockers.

“Bring back unsupervised play.  Only in that way will kids naturally develop social skills and become self-governing.

“Parents feel defeated and powerless.  ‘It’s too late,’ they tell Mr. Haidt, ‘That ship has sailed.’  No, he insists. America has always found ways to protect children while mostly allowing adults to do what they want. Automobiles?  Seat belts and car seats. Cigarettes? Age limits and a ban on vending machines.

“We can’t abstain and allow a virtual world in which adults run free and children are defenseless. Concrete measures and collective action, to which Mr. Haidt devotes the last third of the book, at least offer improvement.

“Near the end he quotes Sean Parker, the first president of Facebook, on the inner thinking of the Silicon Valley pioneers who created the new world.  In a 2017 interview, Mr. Parker said they wished to ‘consume as much of your time and conscious attention as possible.’ The ‘social validation feedback loop’ they created exploits ‘a vulnerability in human psychology.’  The apps need to ‘give you a little dopamine hit every once in a while, because someone liked or commented on a photo or a post or whatever. And that’s going to get you to contribute more content, and that’s going to get you...more likes and comments.’  He said that he, Mark Zuckerberg and Kevin Systrom, a co-founder of Instagram, ‘understood this consciously. And we did it anyway.’  He added: ‘God only knows what it’s doing to our children’s brains.’

“We know now.”

[Last Saturday, Michael Smerconish on his CNN show interviewed Haidt and if you want further information, look up the transcript, or, of course, buy the book!]

--For the 10th consecutive month, Earth in March set a new monthly record for global heat – with both air temperatures and the world’s oceans hitting an all-time high for the month, the European Union climate agency Copernicus said.

March 2024 averaged 14.14 degrees Celsius (57.9 Fahrenheit), exceeding the previous record from 2016 by a tenth of a degree, according to Copernicus data.  And it was 1.68 degrees C (3 degrees F) warmer than in the late 1800s, the base used for temperature before the burning of fossil fuels began growing rapidly.

Since last June, the globe has broken heat records each month, with marine heat waves across large areas of the globe’s oceans contributing.

The record-breaking heat during this period wasn’t surprising to scientists due to a strong El Nino, that warms the central Pacific and changes global weather patterns.

“But it’s combination with the non-natural marine heat waves made these records so breathtaking,” said Woodwell Climate Research Center scientist Jennifer Francis.

With El Nino waning, the margins by which global average temperatures are surpassed each month should go down, Francis said.

But “The trajectory will not change until concentrations of greenhouse gases in the atmosphere stop rising,” she said.

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Pray for the men and women of our armed forces...and all the fallen.

Pray for Ukraine and the innocent in Gaza.

God bless America.

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Gold $2371...another weekly record close...intraday high of $2412
Oil $86.08

Bitcoin: $67,100 [4:00 PM ET, Fri.]

Regular Gas: $3.63; Diesel: $4.05 [$3.62 / $4.20 yr. ago]

Returns for the week 4/8-4/12

Dow Jones  -2.4%  [37983]
S&P 500  -1.6%  [5123]
S&P MidCap  -3.0%
Russell 2000  -2.9%
Nasdaq  -0.5%  [16175]

Returns for the period 1/1/24-4/12/24

Dow Jones  +0.8%
S&P 500  +7.4%
S&P MidCap  +4.2%
Russell 2000  -1.2%
Nasdaq  +7.8%

Bulls 58.1
Bears 14.5

Hang in there.

Brian Trumbore

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