Week in Review

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Week in Review

02/12/2022

For the week 2/7-2/11

[Posted 9:30 PM ET, Friday]

Note: StocksandNews has significant ongoing costs (and having just put together all the 2021 data for my accountant, I can confirm they are significant), and your support is greatly appreciated.  Please click on the gofundme link or send a check to PO Box 990, New Providence, NJ 07974.

Special thanks to George R. and Dan C. for their ongoing support.

Edition 1,191

This column is generally 90% completed, or more, by 1:00 p.m. ET on Fridays.  I then start proofing and, once the markets close at 4:00 p.m., begin to write up the week in stocks and bonds.  And there are always a few late news stories to shoehorn in before I post, generally before 10:00 p.m.

Today, I was beginning to proof the column, saw the market was tanking around 1:30 and of course knew why…there were stories that Vladimir Putin had authorized an invasion of Ukraine, having informed his generals to await the signal.

I haven’t said anything, but I’ve been preparing since late December, building a ‘short’ position that would benefit from an invasion, a play on volatility, which I completed in early January.  So I’ve just been sitting back.  For a while, by coincidence, I was benefiting from the market swoon to start off the year.  There’s no time limit on my trade and if peace suddenly broke out, I’d turn my attention to the Fed and the many moves it is bound to make this year that the market really hasn’t begun to react to, outside of a little crashette here and there.

But the stock market also hasn’t weighed the seriousness of a Russian invasion.  Literally, at all.  Today’s action was nothing, even though oil prices, suddenly up $4 in the blink of an eye, should have offered a clue.

I was going to say this week, before the late developments, that in following the weather in Ukraine as closely as I do that IF Putin was going to launch any kind of broad land offensive, he would do it Monday.  By end of next week, the nightly temperature in some key regions of the country is going to be above freezing.

So today at 2:00 p.m., national security adviser Jake Sullivan appeared in the White House press room and said Russia could take military action in Ukraine before the Winter Olympics wrap up.

Conflict “could begin during the Olympics despite a lot of speculation that it could only happen after” the Games end.  “What we can say is that there is a credible prospect that a Russian military action could take place even before the end of the Olympics.”

“Our view is that we do not believe (Putin) has made any kind of final decision, or we don’t know that he has made any final decision,” though PBS cited numerous Pentagon sources who said Putin has been telling his generals he’s decided to invade.

Without listing specific evidence, Jake Sullivan also said any American still in Ukraine should leave in the next 24-48 hours, adding a Russian invasion would start with an air assault that would make departures difficult, and that the U.S. military would not go into Ukraine to evacuate Americans in case of conflict.

“I can’t obviously predict what the exact shape or scope of the military action will be,” Sullivan added.  “As I said before, it can take a variety of forms.  It could be more limited, it could be more expansive, but there are very real possibilities that it will involve the seizure of a significant amount of territory in Ukraine and the seizure of major cities including the capital city.”

3,000 more U.S. soldiers are preparing to deploy to Eastern Europe, the Pentagon announced today, on top of the 3,000 previously mobilized to Poland, Germany and Romania.

The White House said President Biden and Vladimir Putin will speak on Saturday morning, Putin having originally proposed a call for Monday.

Because Jake Sullivan seemed certain that the conflict will commence with airstrikes, I’m guessing they could come Sunday (conveniently while Americans are celebrating the Super Bowl), Putin could wait a few hours to see if Ukraine’s government fell, and assuming no, would then launch the ground invasion Monday…wherever that’s going to be, but seemingly a march on Kyiv.

I’m personally scared to death of a simultaneous assassination in the Baltics.  That’s of course a very real threat in Kyiv, as well, to state the obvious.

So we’ll see.  I think most people are hopelessly naïve to what even a “small” conflict could bring, both in terms of human suffering, the impact on the economy, and the global order in general.

And remember, the larger the conflict in Ukraine and elsewhere in the region, the easier it is for Xi Jinping to lash out at Taiwan, with the West distracted.

I pray I am 100% wrong.  My trade is going to work out regardless.  For now, understand that the bulk of this week’s column was written before the Ukraine warning, and the reversals in the market, including on bond yields amid a sudden flight to safety.

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Meanwhile, in Canada, this afternoon a Canadian judge said he would grant police permission to forcibly remove a group of protesters who have choked off most access to a U.S.-Canada trade corridor, upending trade between the two.

The so-called Freedom Convoy began with truckers and others angry over the country’s Covid-19 restrictions and has morphed into a broader outpouring of fury from the right toward Prime Minister Justin Trudeau and his Liberal government, cheered on by conservatives in the U.S. 

Authorities ramped up efforts during the day to end the protest at the Ambassador Bridge, which connects Detroit with Windsor, Ontario, with protesters having earlier agreed to open up one lane for U.S. traffic into Canada, which has been shut since Monday.

The bridge is a key conduit for the automotive trade.  Ford, General Motors and others, such as Toyota, have been forced to shut down plants or otherwise reduce production on both sides of the border due to parts shortages.

The government of the province of Ontario will be enacting orders Saturday that would establish fines, and prison sentences, for demonstrators who block trade corridors, such as highways and airports, and gives authorities the power to revoke the driver’s licenses of protesters.

Business groups in both the U.S. and Canada have demanded that Trudeau act more decisively to address the disruption to trade and the economies of the two.

Trudeau said to the protesters today: “We heard you. It’s time to go home now,” warning that “everything is on the table” for ending the blockades, which “are hurting everyday families, auto assembly workers, farmers, truckers, and blue-collar Canadians.” 

Trudeau also said he spoke to Joe Biden.

“We discussed the American and indeed global influences on the protest,” Trudeau said.  “We talked about the U.S.-based flooding of the 911 phone lines in Ottawa, the presence of U.S. citizens in the blockade and the impact of foreign money to fund this illegal activity.”

Trudeau said that on some fundraising platforms, as much as 50% of the donations are coming from the U.S.

The U.S. Department of Homeland Security is warning the trucker protests could spread this weekend, possibly disrupting traffic around the Super Bowl, and later Washington, D.C.

Biden Agenda

--There is lots of damning news for Joe Biden, per a new CNN/SSRS poll. I note his dismal approval rating down below, but among the other findings:

Fifty-six percent of respondents say they have little or no confidence that American elections reflect the will of the people, up from 52% who felt that way in September and 40% in January 2021.  Almost three-quarters of Republicans were now skeptical that elections are representative (74%), as were 59% of independents, and only a third of Democrats (33%).  The results reflected a significant decline in confidence over the past year among both independents (45% lacked confidence in January 2021) and Democrats (13% felt that way a year ago).

When asked, ‘What has Biden done that you approve of?’ 56% said nothing/disapprove of everything he has done.

On their feelings about the pandemic, 75% said they are burned out, 60% angry, 47% optimistic.

On Biden’s handling of the economy, back in March, 49% approved, 44% disapproved.  Today, only 37% approve, 62% disapprove.

Biden’s Super Bowl interview with NBC’s Lester Holt, snippets of which have been airing, is beyond embarrassing and the president certainly isn’t helping his poll numbers with his snarky responses, especially when questioned by Holt on inflation.

--Editorial / Wall Street Journal

“Joe Biden promised to be ‘the most pro-union President you’ve ever seen’ before he took office, and he’s spent a year struggling to show it.  Now he’s announced a new pro-union agenda, including plans to skirt the law by steering federal funds toward Big Labor.

“On Monday the White House released recommendations from its Task Force on Worker Organizing and Empowerment.  The body, led by Vice President Kamala Harris and Labor Secretary Marty Walsh, was formed last April to ‘advance worker organizing and collective bargaining’ among public and private employers.  Its first report includes nearly 70 proposed policy changes.

“The boldest discourage federal agencies from issuing contracts and grants to employers that don’t show ‘strong labor standards.’  For example, the report asks the Administration to create a ‘job quality matrix’ to evaluate employers seeking federal funds.  Once the metrics are adopted, federal agencies would use them to screen award recipients.

“The kicker is that for the Biden Administration, a quality job means a union job.  The report suggests that federal assistance ‘cannot be used to deny workers the right to organize,’ but that’s already true.  In practice, the new policy could let the government discriminate against a company that has fought an effort to organize its workforce.

“A bias toward unions in awarding contracts would run up against federal law.  Companies have a First Amendment right to resist organization, and agencies can’t hold that stance against them when disbursing funds.  A federal judge in 2016 upheld this standard to block an executive order by President Obama, which would have required federal grantees to disclose any alleged labor violations publicly.

“Yet the Biden Administration wants to dodge that precedent by claiming that resistance to unions is a material factor in companies’ fitness. The report says union shops are favorable because collective-bargaining agreements ‘promote stability and minimize disruption of services and goods procured.’  Never mind that the explicit goal of the proposals is ‘increasing worker organizing.’  The Administration wants you to believe unionized firms are always the best contractors.

“The policy change could be used against nonunion companies like Amazon and Walmart, along with countless small and midsize employers. It could also steer federal money toward Democratic-leaning states, many of which lack right-to-work laws and have more unionized companies.

“This is a backdoor way of rewarding Big Labor, after pro-union legislation faltered in Congress.  The House last March passed the PRO Act, which would have banned right to work in all 50 states and restricted companies from speaking against unions.  But Democrats such as Arizona Sens. Kyrsten Sinema and Mark Kelly denied the bill a Senate majority.

“President Biden is free to sing union praises, and the parts of his agenda that concern federal workers fall within his authority. But voters, and perhaps the courts, should draw the line at bias in government funding.  Shutting nonunion companies out of grants and contracts would reward Democrats’ labor allies at the expense of taxpayers.”

--The House passed a stopgap funding bill Tuesday to fund the government for another month and avert a government shutdown.

The chamber voted 272-163 to fund the government through March 11.  The Senate is expected to pass the same legislation and then President Biden will sign it, with funding expected to run out Feb. 18.

But this is pathetic.  This concerns the 2022 fiscal year which commenced Oct. 1, 2021.

Wall Street and the Economy

There was little economic news, around the world, this week, but one big headline in the United States…January’s report on consumer prices, which came in higher than expected, and at the highest levels in 40 years.

The CPI rose 0.6% in the month on both headline and core (ex-food and energy), with the year-over-year number at 7.5%, and 6.0% on core…the highest readings since Feb. 1982 and Aug. ’82, respectively.

December’s figures were 7.0% headline, 5.5% core.

The big Federal Reserve Open Market Committee meeting at which the Fed will be hiking its benchmark funds rate for the first time in years is March 15-16 and we have a reading on February consumer prices March 10. 

So the big issue is will the Fed hike rates 25 basis points (1/4-point) or 50 bps. Everyone has an opinion and the odds of a 50 basis point hike increased substantially after the CPI report.

But many of the Fed governors pushed back, saying 25 was enough to get things started.

However, a key voting member on the FOMC this year, St. Louis Fed President Jim Bullard, a hawk on inflation, told Bloomberg Thursday, following release of the CPI report, that a faster pace of rate increase would be needed to rein in inflation, i.e., 50 bps, and that sent the markets reeling Thursday afternoon, the Dow Jones, which had been up, falling 526 points on the day.

Bullard added, “I’d like to see 100 basis points in the bag by July 1.”  With three meetings before that date, in March, May, and June, that clearly suggests a 50 basis point hike at some point by July.

Separately, you have economists such as those from Goldman Sachs forecasting seven rate increases in 2022, which would mean a ¼-point hike at each of the remaining seven FOMC meetings this year.

President Biden, knowing what a killer inflation can be for the Democrats’ midterm election chances, acknowledged in a statement the hardships American families are facing, but added that “there are also signs that we will make it through this challenge.”

He was alluding to the unchanged reading in the prices of motor vehicles, one of the major drivers of inflation, but food prices rose 0.9% in the month, with strong increases in the prices of cereals, bakery products, dairy, fruits and vegetables.  As in stuff we consume.  Electricity prices jumped 4.2%.  You can go down the list.  Rents increased 0.5%, the largest rise since May 2001.  The rental vacancy rate is the lowest since 1984, so you can see the ongoing dangers here.  I know, I rent.

Healthcare costs rose 0.7%, lifted by hospital services and prescription medication.  Personally, I haven’t had the time to dispute some expenses I had to pay for as a result of my annual physical in December, even though the ‘tests’ I was paying for were part of my insurance plan in like forever…especially since ObamaCare.  I know what my doctors (and their companies) are trying to do…make up for lost revenue…but this isn’t the way it was supposed to be.

So there are all kinds of issues us common folk are facing these days.  This week for the first time we had $4.00 gasoline in my neighborhood.  That kind of sucks, especially if your Powerball tickets keep coming up empty.  [Just a little humor on a crappy topic, boys and girls.]

Editorial / Wall Street Journal

“So how’s the U.S. government’s grand experiment in modern monetary theory turning out?  Not well.  Consumer prices over the past 12 months rose 7.5% - the most in 40 years – while real wages declined 1.7%, the Bureau of Labor Statistics reported Thursday.

“The report jolted financial markets, as stocks fell and bond yields rose. But nothing in the January report should be shocking. This is what happens when the government massively expands the money supply and over-stimulates demand.  Yet the Federal Reserve and Biden Administration last year dismissed inflation as ‘transitory.’  They have belatedly dropped that line, but they still won’t concede that inflation is becoming more entrenched as price increases have exceeded 5% for eight months in a row.

“Food prices increased 0.9% in January and 7% over the year.  Gas prices ticked down 0.8% last month but are still up a whopping 40% from a year ago [Ed. and will be back up in February’s report].  It’s striking that the core index that excludes food and energy rose 0.6% in January – about twice as much as last summer – and is up 6% year-over-year….

“Fed oracles predicted prices would ease for goods that were in high demand during lockdowns.  That didn’t happen. They also forecast that the inflation rate would decline as consumption shifted to services. That also hasn’t happened.  Americans are consuming more services, which has pushed up prices for travel, medical care and dry cleaning – the service index was up 4.6% from a year ago.

“The economy needed support early in the pandemic. But Congress’ $900 billion covid relief bill in December 2020 and the $1.9 trillion in spending that Democrats passed last March were overkill.  The enormous income transfers reduced incentives to work while at the same time giving people more money to spend.

“The Fed has helped mop up Congress’ spending with bond buying, doubling its balance sheet to an astonishing $8.9 trillion.  Its monthly purchases of Treasurys and mortgage-backed securities were intended to reduce long-term interest rates, increase asset prices and create a wealth effect that stimulated consumption.  You might say it over-achieved.

“Housing prices have risen nearly 25%, and the Dow Jones Industrial Average is up some 20% from February 2020.  Many Americans no doubt felt flush from rising asset prices and generous transfer payments - at least until the inflationary side effects hit.

"Price increases are erasing even hefty nominal wage gains.  Real average hourly earnings ticked up 0.1% in January but are 1.7% lower than a year ago… Wages have been surging for lower-skilled workers especially in leisure and hospitality, but not enough to offset rising prices, since they spend more of their paychecks on food, energy and rent.

“The biggest inflation mistake since the 1970s calls for a sharp turn in fiscal and monetary policy.  President Biden’s floundering Build Back Better Act, even in smaller form, deserves a final burial.  Sen. Joe Manchin was right to oppose the bill, and his worries about inflation have been borne out, as he noted Thursday.  The economy needs a trade and deregulation agenda that will lower prices, not a regulatory onslaught that will raise them.

“The Fed’s challenge is also increasing, as markets may finally be acknowledging.  The central bank’s preferred path of three or four quarter-percent hikes in interest rates will still leave rates negative.  The Fed’s bond portfolio will also have to be reduced sooner rather than later.  Unwinding this two-year unprecedented monetary experiment will itself be an experiment, and one risk is the Fed gets spooked by the market reaction to its tightening.

“The pain might have been lessened if the Fed had begun to withdraw its pandemic money rush more than a year ago.  But Washington had grown to believe that a new era of cost-free spending and low interest rates had dawned.  The old fiscal and monetary verities no longer held, and those who warned about inflation were proclaimed to be dinosaurs from the Reagan era.

“Relearning those lessons will now be much harder than it should be, and the American worker will now pay the price.”

Lastly, until today’s late reversal in the bond market, the yield on the 30-year fixed rate mortgage was trading over 4.00% for the first time since 2019.

Separately, the Atlanta Fed’s GDPNow barometer for the first quarter stands at 0.7%.

Europe and Asia

I missed a note from last Friday concerning the eurozone economy.  December retail sales were down 3.0% compared with November, up 5.0% for 2021 vs. 2020.

And the UK reported this week that its economy soared by record levels in 2021 as GDP rebounded 7.5%, exceeding the projections of the Bank of England, and the fastest since the Office of National Statistics began keeping records in 1948…but this came after a record 9.4% slump in 2020.

The economy contracted by 0.2% in December as the hospitality and leisure sector felt the brunt of the Omicron variant, though the economy remained at pre-pandemic levels from February 2020.

Brexit: Britain’s exit from the European Union has so far made trade more expensive because of delays and red tape, and more border disruptions are likely as passenger numbers recover after the pandemic, a parliamentary committee said on Wednesday.

Supporters of Brexit said exiting would allow the United Kingdom the independence to escape what they cast as a stagnating German-dominated project that was falling behind big powers such as the United States and China.

But opponents of Brexit cautioned that leaving the EU was akin to an act of self-harm that would leave the United Kingdom diminished, poorer and more insular.  While trade was suppressed by Covid and other global supply constraints, parliament’s Public Accounts Committee found that the “EU exit has had an impact, and that new border arrangements have added costs to business.”

“One of the great promises of Brexit was freeing British businesses to give them the headroom to maximize their productivity and contribution to the economy,” said Meg Hillier, chair of the committee. “Yet the only detectable impact so far is increased costs, paperwork and border delays.”

The leaders of Brexit said that in the short term there could be additional costs as the United Kingdom adapted, but in the long term there would be considerable political and economic benefits from leaving the bloc.

In November, Britain became the last Group of Seven developed nation to see its goods exports surpass their 2018 average level since the onset of the pandemic, underlining its poor trade performance in international terms.

Bottom line, as I told you since day one of Brexit, it’s one big lie.

Turning to Asia…China’s private Caixin services PMI for January came in at 51.4 (50 the dividing line between growth and contraction) vs. December’s 53.1, befitting the country’s ongoing slowdown amidst Covid restrictions, in some metropolitan areas.

Japan reported household spending in December fell 0.2% year-over-year.  January producer prices came in at 8.6% Y/Y, a tick below December’s 8.7% but ahead of expectations. Yes, such price pressures are around the globe.

I just saw the rate of inflation in Russia in January was 8.7%, with food prices up over 10%.  Not good for Vladimir Putin and potential protests.

Street Bytes

--Stocks started the week on the upside, continuing the recent rally from the lows of January, based mostly on generally strong earnings reports, but then Thursday’s inflation news, and today’s war talk led to back-to-back 500-point declines on the Dow Jones, which finished down 1.0% for the week to 34738.  The S&P 500 lost 1.8% and Nasdaq fell 2.2%.

While next week could be dominated by Russia, we do have another key inflation metric, January producer prices on Tuesday.

--U.S. Treasury Yields

6-mo. 0.68%  2-yr. 1.51%  10-yr. 1.94%  30-yr. 2.25%

On Thursday, the yield on the two-year Note rose 22 basis points to 1.56%, representing the largest such increase since 2009, before benefiting from today’s late flight to safety.  The 10-year yield climbed above 2% for the first time since mid-2019, closing Thursday at 2.028%, hitting 2.04%, before staging its own rally.

Germany’s 10-year bund yield ended the week at 0.29%, up from -0.05% in two weeks, but this was before the late news on Ukraine.

--Oil’s winning streak was about to end this week, even as stockpiles of crude in the largest consuming nations slumped in December, tightening an already stretched global energy market, as the supply of oil continues to lag behind robustly rising global demand, OPEC said Thursday.

But then we got the late word on the potential for a Russian invasion being imminent, and oil spiked up to close the day at $93.90 on West Texas Intermediate for an eight-week winning streak.

Earlier, OPEC said oil demand was moderately stronger last year than its earlier forecasts.  For 2022, OPEC left its global economic forecasts and demand growth forecasts unchanged at 4.2%, and 4.2 million barrels a day, respectively.  While the outlook for oil demand next year looks strong, the threats to economic growth from high inflation and rising interest rates “require close monitoring,” OPEC said.

--Toyota and Honda said this week that the stress on production from the pandemic was continuing, and a shortage of components was likely to stretch through this year, striking a more pessimistic tone than their peers in Detroit.

“It’s like everyone is grasping to get a supply of semiconductors,” said Seiji Kuraishi, Honda Motor’s chief operating officer.  “We’re not able to project a clear sales volume.”

Honda on Wednesday reported a 32% decline in net profit for the October-December quarter, which it said was largely due to falling vehicle sales.  The same day, Toyota ratcheted down its production forecasts, citing semiconductor shortages as well as the effects of Omicron.

General Motors and Ford had expressed more confidence early this month that the chip supply shortage would ease.  Both GM and Ford forecast hefty increases in vehicle deliveries in 2022.

Conversely, Toyota had done a good job of weathering the supply-chain crisis and became the sales leader in the U.S. for the first time in 2021, but they are now pessimistic.

The chip shortage has led to empty dealer lots in the U.S. and record prices for new cars.

--Separately, Ford Motor said Tuesday it had begun shipping its all-electric E-Transit commercial van to customers across the U.S.

The newest addition to Ford’s electric vehicle lineup has over 10,000 orders from over 300 customers including Walmart.

Ford said it aims to have, by the end of 2023, the global capacity to manufacture 600,000 battery-electric vehicles annually including 200,000-plus Mustang Mach-E SUVs and 150,000 F-150 Lightning trucks.

--Frontier Group Holdings Inc. agreed to buy Spirit Airlines Inc. for $2.9 billion in cash and stock in a deal that would create a discount-airline juggernaut.

The deal unveiled Monday would bring together two of the biggest ultralow-cost airlines, which the carriers said would create the fifth-largest U.S. airline and allow them to compete more aggressively against larger rivals.

“This transaction is centered around creating an aggressive ultralow fare competitor to serve our guests even better, expand career opportunities for our team members and increase competitive pressure, resulting in more consumer-friendly fares for the flying public,” Spirit President and CEO Ted Christie said.

The companies valued the deal at $6.6 billion, including the assumption of net debt and operating leases.

Airlines that focus on offering cheap fares to leisure travelers – as both Spirit and Frontier do – have added capacity back more quickly than larger rivals that have been held back by a slower recovery in business and international travel, and have returned to more ambitious growth plans.

Upon the deal’s close, Frontier will own about 51.5% of the combined company, and its chairman, William Franke, will become chair of the combined company’s board.

Franke was once Spirit’s chairman and had his eye on a combination of the two when Frontier was up for sale in 2013, but a private-equity firm controlled by Franke purchased Frontier from Republic Airways Holdings that year and Franke resigned from Spirit to helm Frontier.  He then helped transform Frontier into an ultralow-cost competitor to Spirit.

The deal must get past regulators, and the Justice Department for years has been concerned about a reduction in airline competition, but Frontier and Spirit said their networks will complement one another, with Denver-based Frontier’s strength in the western U.S. and Florida-based Spirit’s larger presence in the East. The two airlines overlap on some 519 cities – 18% of their combined network.

--TSA checkpoint travel numbers vs. 2019….

2/10…87 percent of 2019 levels
2/9…66
2/8…75
2/7…75
2/6…86
2/5…80
2/4…95
2/3…67

--Walt Disney Co.’s shares rose 6% after the company released a strong earnings report, thanks to Disney+ subscriber growth, which restored faith in the future of streaming video, while the company saw strong attendance at U.S. theme parks.

Disney CEO Bob Chapek said he still believes the streaming service, home to hits like “The Mandalorian” and “Black Widow,” will have 230 million to 260 million subscribers by 2024. The company added 11.8 million Disney+ subscribers in the first quarter.  And the company forecast stronger subscriber growth in the second half of its year than in its first half.

Disney+ subscribers stood at 129.8 million at the end of the fiscal first quarter.  Disney has poured billions into creating new programming to grab a share of the online video market dominated by Netflix Inc., and its much-anticipated “Obi-Wan Kenobi” series will launch on Disney+ on May 25, Chapek said.

U.S. parks and resorts delivered revenue above pre-pandemic levels, but Disney expects international parks to be impacted by Covid for weeks to come.  But the relaxing of government restrictions and pent-up demand has led to strong attendance at domestic theme parks as Omicron fears have receded.

Revenue in the parks, experiences and products segment more than doubled to $7.23 billion in the first quarter.  Operating income in the segment stood at $2.45 billion, versus an operating loss of $119 million a year ago.

The company’s overall revenue 34% to $21.82 billion in the quarter ended Jan. 1, topping estimates. Ex-items, Disney earned $1.06 per share, blowing past Wall Street ‘s estimate of 63 cents.

--Peter Thiel, the tech investor and conservative provocateur who has advised Mark Zuckerberg for nearly two decades at Facebook parent Meta Platforms Inc., will step down from the company’s board after Meta’s annual shareholder meeting in May.

Thiel, 54, a mega-billionaire, became a director in 2005 after an early investment in Facebook.  Now he plans to increase his political support of former President Donald Trump’s agenda during the 2022 midterm elections and doesn’t want his political activities to be a distraction for Facebook.

His focus will be on backing candidates who advance the Trump agenda, especially Republican candidates for the Senate.

Thiel helped elect Trump president in 2016 by donating money and speaking on his behalf at the Republican National Convention.

Thiel’s partnership with Zuckerberg was highly controversial, with Thiel instrumental in shaping Zuckerberg’s ethos during the early day and the company’s relentless pursuit of growth.  Thiel became more and more controversial in the tech space overall.

Thiel was among those reportedly encouraging Zuckerberg not to fact-check political advertisements in the run-up to the 2020 presidential election.

Many Facebook employees were upset with Thiel’s role in the 2016 campaign given the former president’s stance on issues such as immigration.

Among the candidates Thiel is supporting in this current cycle is Harriet Hageman, who is running to replace Wyoming Republican Rep. Liz Cheney.  At a fundraiser for Hagemen last month, Thiel cast Cheney as “treasonous,” according to Politico.  “The way we’re going to defeat the left, the way we’re going to roll them back, it’s going to start in the Republican Party, that’s where we have some problems, we’ve got to clean house there first,” Thiel reportedly said.

The German-born Thiel is a dangerous guy, a character out of “24,” a Bond villain.  Just watch.

--The world’s top two cola makers, Coca-Cola and PepsiCo, on Thursday warned of pressure on profits this year from a relentless rise in costs after trouncing sales expectations on robust demand and price increases.  Costs from aluminum cans to labor and shipping have surged in the last year due to pandemic-induced global supply-chain disruptions, forcing companies across the packaged food industry to respond with price hikes. 

However, with costs still rising and supply bottlenecks showing little signs of easing, analysts caution that the price hikes will likely not be enough to fully cushion the industry’s profit margins.

PepsiCo finance chief Hugh Johnston told Reuters the company could potentially raise prices further later in the year if costs climb more than expected, and did not rule out some product shortages.  “We control our supply chain basically all the way to the shelf.  That puts us in a relatively better position, but I wouldn’t say we’re not going to have challenges.  We’re not immune to that,” Johnston said.

Coke issued a similar sentiment.  “Is it likely to be perfect this year?  No, but we are doing the maximum we can to optimize our full availability,” Coca-Cola CEO James Quincey said on an analyst call.

Coca-Cola’s fourth-quarter adjusted operating margin fell to 22.1% from 27.3% a year earlier.  PepsiCo’s adjusted operating margin shrank 183 basis points (1.8%).  PepsiCo expects fiscal 2022 core earnings of $6.67 per share, below current expectations.

--Kellogg Co. forecast full-year profit growth above market expectations on Thursday, riding on higher product prices that helped overcome labor strike disruptions and soaring input costs in the fourth quarter.  Increasing costs for freight and ingredients such as wheat, corn and edible oils due to global supply chain snarls have significantly hurt packaged food companies, leaving them with little choice but to hike prices.  Kellogg also had to deal with a nearly three-month strike at its U.S. cereal plants, hiring temp workers at higher wages, and a small fire at one of the plants in early December.

Net sales fell to $3.42 billion in the quarter but beat consensus.

--Shares in KFC-parent Yum Brands rallied as the company reported comparable sales figures that beat the Street’s estimates, driven by strong online demand for its tacos and fried chicken, and new offerings across its restaurants.

To attract more customers, Yum has launched special menu items, including a crispy chicken sandwich taco at Taco Bell, a Detroit-Style pizza at Pizza Hut and a plant-based imitation of its fried chicken at KFC.

Overall comparable sales jumped 5%, topping estimates, with the company nearly doubling its digital business compared with pre-pandemic levels.

Same-store sales at KFC rose 5% in the fourth quarter, while that of Taco Bell increased 8%. Total revenue for the quarter was $1.89 billion, up from $1.74 billion a year earlier.

Although demand for fast food remains robust, companies have been hit by higher costs due to record inflation and a labor shortage in the U.S.  Total net costs and expenses increased 10% to $1.39 billion.  And the company warned expenses would pressure operating profit growth in the first six months of this year before abating in the second half.

Louisville, Kentucky-based Yum said it opened nearly 1,700 new restaurants in the quarter, taking the tally to 4,180 during 2021. It now has more than 53,000 restaurants.

--Chipotle Mexican Grill reported earnings that beat the Street and the shares rose 7% in response.  Revenue for the quarter ended Dec. 31 rose to $1.96 billion from $1.61 billion a year earlier, in line with expectations, but comp sales surged 15.2% in the quarter.

In Q1, the fast casual restaurant chain said it expects comparable restaurant sales in the mid-to-high single digits range. The company also plans to increase its North American restaurant count to 7,000, up from its previous target of 6,000, over the next few years.

--In terms of a return to dining out in New York City, New Yorkers are indeed dining out in droves, but the return is a weekend-only special, leaving operators to scramble to make up for lost revenue during the week.

Crain’s New York Business interviewed Ned Baldwin, who owns the restaurant Houseman in Hudson Square, just west of Soho.

“New Yorkers seem to be fine eating out on Friday and Saturday,” he said. On those nights, the restaurant feels like 2019. 

But all goes quiet during the week. Houseman is closed on Mondays, and “Tuesday, Wednesday and Thursday are abysmal.”

Reservations at restaurants that use OpenTable and have reopened in Gotham were at 80% the level of 2019 on Saturday, Feb. 5.  On Tuesday, Feb. 1, it was just 50%.

Tourism is still down, and visitors often fill seats on weekdays when New Yorkers might be at home.  And business and international travel is still way down, with hotel occupancy high on weekends, an indication of regional visitation.

--Pfizer said on Tuesday that it expects to generate more than $50 billion in revenues this year from its Covid-19 vaccine and antiviral treatment pill.

The company reported its 2022 forecast in its quarterly earning report, which showed that Pfizer made almost $24 billion in revenue in the final quarter of 2021.  About half of that came from sales of its Covid vaccine and $76 million from sales of its antiviral treatment pill authorized in the U.S.

Pfizer missed projections for revenue in the fourth quarter, while beating on earnings.  The company was seeking regulatory approval for a smaller dose of its Covid vaccine specifically for children under 5, but then Pfizer/BioNTech said they are extending their rolling submission to the Food and Drug Administration to amend the emergency use authorization of their vaccine as they expect more three-dose data in April.

For all of 2021, Pfizer said it had $81.3 billion in revenue – about twice its figure from 2020. Q4 earnings increased by more than double compared to 2020.

For 2022, Pfizer said it expects to sell $32 billion worth of its Covid-19 vaccine, and $22 billion worth of Paxlovid, the antiviral treatment.

--CVS Health Corp. got a sales boost from doling out more than 59 million Covid-19 vaccines and tens of millions of tests last year, but doesn’t expect the same benefit this year, the company said Wednesday.

Covid vaccine and test demand surged end of last year as Omicron swept through the U.S.  CVS’ same-store sales, those from stores or digital channels operating for at lest 12 months, rose 13% in the fourth quarter from a year earlier, when the vaccines were being authorized.

The company gave over 20 million vaccines in the U.S. during the fourth quarter

Revenue rose 10% to $76.6 billion, slightly above the Street’s expectations, with pharmacy services climbing 8.2% to $39.34 billion.

Covid-19 vaccinations, in-store testing and take-home test kits made up about 35% of operating profit for CVS’s retail segment in the fourth quarter.  On an adjusted basis, the company posted earnings of $1.98 a share, beating the Street.

The company maintained its EPS guidance for the current quarter, saying that benefits from Covid-19-related sales could wane, especially in the second half of 2022.  The company doesn’t expect the authorization of a new Covid-19 booster shot this year.

For the current year, CVS expects vaccine volume to fall 70% to 80% versus last year and in-store Covid testing to fall 40% to 50%, with overall retail revenue to be plus or minus 1% versus the prior year.

CVS executives do say they expect many of the shoppers they gained throughout the pandemic to stick around.

The company previously announced it would close around 900 of its roughly 10,000 stores over three years and open more primary-care clinics.

--DuPont posted quarterly earnings that surpassed market expectations and the shares of the industrial materials maker rose sharply on Tuesday as price hikes and strong demand in its electronics unit helped offset a hit from surging raw material costs.  The company also boosted its dividend by 10% and announced a new $1 billion share buyback program.

DuPont, which makes advanced electronic materials for smart and autonomous vehicles and 5G wireless services, said organic sales in its Electronics & Industrial segment grew by 9%, boosted by strong volumes in the Semiconductor Technologies division.  Sales in its Water & Protection segment, which provides treatment and purification technologies, grew by 16% in the quarter.

To hedge inflationary pressure roiling several industries, DuPont hiked the price of its products by 7% in the quarter.  The company expects 2022 net sales between $17.4 billion and $17.8 billion, higher than analyst estimates.

But company execs said high costs for raw materials and logistics would continue to impact margins, prompting DuPont to forecast roughly flat profit growth in the first quarter.

--Twitter Inc. reported weaker-than-expected quarterly advertising revenue and user growth on Thursday and forecast revenue short of Wall Street targets, indicating that its turnaround plan has yet to bear fruit.  Still, the social networking site said it made “meaningful progress” toward its goal of reaching 315 million users and $7.5 billion in annual revenue by the end of 2023, and said user growth should accelerate in the United States and internationally this year.

Twitter has been pursuing big projects such as audio chat rooms and newsletters to end long-running stagnation and attract new users and advertisers.  But the quarterly results raised questions about Twitter’s plan as analysts had expected faster signs of progress.

Monetizable daily active users, or users who see ads, grew 13% to 217 million in the fourth quarter ended Dec. 31, missing consensus, but up from 211 million users in the previous quarter.

Advertising revenue for the fourth quarter grew 22% year-over-year to $1.41 billion, also missing analysts’ estimates.  Twitter needs to add over 12 million users each quarter over the next two years to hit its target of 315 million by the end of 2023.

The quarterly results are the first since CEO Parag Agrawal took the helm in November, after co-founder Jack Dorsey stepped down.

--SpaceX’s newest fleet of satellites is tumbling out of orbit after being struck by a solar storm.  Up to 40 of the 49 small satellites launched last week have either reentered the atmosphere and burned up, or are on the verge of doing so, the company said on Tuesday.

SpaceX said a geomagnetic storm last Friday made the atmosphere denser, which increased the drag on the Starlink satellites, effectively dooming them.

Ground controllers tried to save the compact, flat-panel satellites by putting them into a type of hibernation and flying them in a way to minimize drag.  But the atmospheric pull was too great, and the satellites failed to awaken and climb to a higher, more stable orbit, according to the company.

SpaceX still has close to 2,000 Starlink satellites orbiting Earth and providing internet service to remote corners of the world.  They circle the globe more than 340 miles up.

But the 2,000 is expected to grow to 30,000 and NASA has expressed concerns, saying it could lead to a “significant increase” in potential collisions in low Earth orbit and interfere with science activities in space.

In a letter submitted to the Federal Communications Commission, NASA also voiced unease about the potential to disturb space and ground-based telescopes and disrupt its launch schedules.

--The fast-moving bipartisan drive to ban stock trading by members of Congress is hitting resistance with some lawmakers questioning its reach into their families’ business and whether it would discourage public service.

Various proposals from both sides of the aisle have been surfacing with varying levels of restrictions from requiring securities to be put in a blind trust to outright bans on ownership of individual stocks.

Senate Majority Leader Chuck Schumer has generally endorsed the idea.  House Speaker Nancy Pelosi, long opposed to a stock trading ban, has been bowing to the growing momentum within her party, but has yet to fully embrace it.

Instead she’s asked the House Committee on Administration to draw up options, including tightening existing disclosure requirements, and suggested she wants any new restrictions extended to the federal judiciary.

--The Justice Department said Tuesday it seized over $3.6 billion worth of digital currency stolen during a hack of a cryptocurrency exchange and arrested two suspects for allegedly trying to launder the proceeds.

The value of the cryptocurrency at the time it was seized last week marks the largest financial seizure ever by the Justice Department, officials said.

Ilya Lichtenstein, 34, and his wife, Heather Morgan, 31, were both arrested without incident Tuesday in Manhattan.  They have promoted themselves on social media as entrepreneurs with deep knowledge of tech and a love of travel.

According to court documents, the suspects allegedly conspired to launder nearly 120,000 bitcon stolen from Bitfinex’s platform in 2016 after a hacker breached the exchange’s systems and initiated more than 2,000 unauthorized transactions.

Lichtenstein and Morgan were granted bail, with each facing the possibility of a 20-year prison sentence, so they have a motivation to run, a prosecutor told the New York judge.  The judge set bail at $3 million for Morgan and $5 million for Lichtenstein. The latter holds dual U.S. and Russian citizenship.

--Speaking of bitcoin, Tesla said on Monday that the value of its holdings in the cryptocurrency was $1.99 billion on Dec. 31.  The company had invested $1.50 billion in bitcoin and briefly accepted the cryptocurrency as a payment for sales of certain products last year.

[Bitcoin finished the year at about $46,200 and sits at roughly $42,300 this evening.]

--Peloton Interactive reported a loss of $439.4 million in its fiscal second quarter, with a loss of $1.39 per share, missing Wall Street expectations.

The exercise bike and treadmill company posted revenue of $1.13 billion in the period, which also fell short of Street forecasts.  For the current quarter ending in April, Peloton said it expects revenue in the range of $950 million to $1 billion.

But just hours before announcing results, Peloton told the Wall Street Journal that John Foley, its chief executive, will step down to become executive chair. Some 2,800 jobs will also be cut.  It was then announced that former Spotify Technology and Netflix CFO Barry McCarthy would succeed Foley as CEO, with Foley, the company’s co-founder, becoming executive chair.

And the shares rose strongly on news that Amazon and Nike are each considering bidding for the firm.

--Uber said on Wednesday that growing revenue and returning passengers sent a strong signal that its business was bouncing back in the final three months of 2021 from the showdown caused by the pandemic.

Uber’s revenue grew to $5.8 billion, an 83% increase from a year earlier, exceeding analyst expectations.  The company also marked its second profitable quarter as a public company, earning $892 million largely from its investment in Greab, the Southeast Asian ride-hailing company that went public in December, and Aurora, the autonomous vehicle start-up.

Uber lost $968 million during the same period a year earlier.  Its investments in other ride-hailing companies will probably continue to cause fluctuations in its profits and losses, Uber said in its earnings statement.

Uber’s loss from operations in the quarter was $550 million, a 37% improvement from a year earlier.  The company reported 118 million users during the fourth quarter, a 27% increase from a year earlier.

CEO Dara Khosrowshahi said, “While the Omicron variant began to impact our business in late December, mobility is already starting to bounce back.”

Uber rival Lyft Inc. missed expectations for ridership growth and said the Omicron variant would lead to a first-quarter drop in riders compared with the end of last year, a cautious view that initially sent the shares down 6%, though they recovered.

“This outlook suggests a decline of $120 million to $170 million in revenue versus Q4,” CFO Elaine Paul said on an investor call, which equates to Q1 revenue of $800 million to $850 million, below forecasts.

Lyft reported 18.7 million active riders in the fourth quarter, compared with analyst expectations for 20.2 million.

Revenue per active rider jumped 13.5% to an average of nearly $52 in the quarter ended Dec. 31, with overall revenue rising 70% to $969.9 million from a year ago.

Both Lyft and Uber discovered their surprising power to raise prices without alienating riders.  The average ride-hailing fare was about 19% higher on a per-mile basis in the fourth quarter of 2021 vs. the same period in 2019 in the United States, with fares increasing as much as 34% in Seattle and 27% in Los Angeles, according to research firm YipitData.

--Popular podcaster Joe Rogan issued an apology for the second time in a week, this time for using racial slurs after a montage video surfaced showing him repeatedly saying the N-word.  In an apology video posted on Instagram on Saturday, Rogan said it was the “most regretful and shameful thing that I’ve ever had to talk about publicly.”

Rogan’s apology came after Grammy award-winning singer-songwriter India Arie pulled her music from the Spotify streaming service, which hosts Rogan’s podcast, after posting clips on his Instagram feed of him using the N-word.

--Fox Corp., parent of Fox News and the Fox broadcast network, reported higher revenues in the latest quarter, amid improving ad sales driven by its news programming, live sports and streaming platforms.  Executive chairman and CEO Lachlan Murdoch said the company planned to continue to emphasize the three.

Commercials for sports betting were a significant factor in the increased ad revenue.  Murdoch said there was 50% more local sports betting in the quarter than the company had in all of the fiscal year ended June 30.

Murdoch also added that “Fox News leads by a wide margin,” noting that network has gained market share among younger, Democratic and independent viewers.  “We simply could not be better placed as we look forward to the midterm elections.”

Revenue at Fox increased nearly 9% to $4.44 billion for the quarter ended Dec. 31, topping expectations.  Advertising revenue rose about 6% over the prior year.

The company’s cable programming unit, which includes Fox Business Network and Fox Sports 1 channel, as well as Fox News, generated $1.64 billion in revenue, a 10% increase from the same quarter last year.

--As for the ad market and Super Bowl Sunday, some advertisers are spending $7 million for a 30-second spot this year on NBC, who is broadcasting the game.  According to Axios, the average SB ad is going to cost around $6 million, an increase from $5.5 million that advertisers spent for the same amount of time last year.  With the surge in cryptocurrency and sports betting across the country, crypto exchanges and sports books will probably be at the front of the line.

And you’ll have the usual suspects such as Doritos, Coca-Cola, Pepsi and Budweiser, along with the auto companies.

The Super Bowl first crossed the landmark $1 million mark in 1995, climbing to $2 million in 2000, and then about $3 million in 2010.

Meanwhile, a record 31.4 million Americans plan to bet on Super Bowl LVI, a 35% increase from last year’s game, according to the American Gaming Association.  Bettors are estimated to wager $7.61 billion on this year’s game, a 78% jump from last year’s.

The growing legalization of sports betting across the U.S. is fueling the rapid growth.

--Lastly, as predicted, the television ratings for the Beijing Olympics have been awful and will only worsen, I imagine.  Thus far, the ratings are generally down 50%+ when compared with a comparable night of the PyeongChang Games of four years ago.

The Pandemic

Some experts have welcomed loosening mandates.  Dr. Leana Wen, a professor of health policy and management at George Washington University, and former Baltimore Health Commissioner who has been on the airwaves a lot during the pandemic, said where hospitals aren’t under strain and cases are dropping rapidly, rolling back restrictions makes sense.

“We need to give people a break while we can,” Dr. Wen said.

Others say we are moving too quickly, while indicators including cases and hospitalization rates remain elevated, and could prolong the virus’s spread.  Deaths, a lagging indicator, remain elevated, as you see below, though nearly half of the deaths in January 2022 were among those 75 and older, compared to about a third in September during the more lethal Delta variant surge.

And virtually all of the deaths nationwide are among the unvaccinated.

Dr. Robert Citronberg, Advocate Aurora Health’s (Illinois’ largest health system) and executive medical director of infectious diseases and prevention, noted that when it comes to the deaths being among the unvaccinated:

“There’s also a big group of patients who are politically motivated and don’t want to be told what to do.  They are willing to die from this disease because they don’t want to be told what to do, and it’s basically crazy.”

Meanwhile, more than 99% of U.S. counties have high enough levels of virus transmission to warrant masking in indoor, public spaces, according to CDC data and guidance.  The CDC still recommends universal indoor masking in K-12 schools, regardless of vaccination status, according to the agency’s website. The agency’s director, Rochelle Walensky, again said Wednesday that it was up to states and local leaders to set guidelines on masking and other measures, but that it is too soon for all Americans to take off their masks in indoor public places.

“Our hospitalizations are still high, our death rates are still high,” she said during a news briefing.  “So, as we work toward that and as we are encouraged by the current trends, we are not there yet.”

But as has been the case this whole pandemic, the CDC’s deliberations have been painfully slow and costly.

As Dr. Wen noted, “The administration needs to read the room and see that nearly all elected leaders are moving on without them.  No one is expecting the CDC to say that everyone should go maskless right now.  What they are looking for are clear metrics on when restrictions can be lifted and when they may need to return.”

So nine states this week announced plans to roll back requirements that people wear masks at indoor venues, including businesses and, in some cases, schools, as Covid cases numbers decline and pressure to return to normal life rises.

Officials in New York, Illinois, Massachusetts and Rhode Island said Wednesday that rules requiring masks or proof of vaccinations intended to curb the spread of the Covid-19 pandemic would end by March. Earlier in the week, California, Oregon, New Jersey, Connecticut and Delaware officials announced similar rollbacks.

All of those states, which voted for President Biden in 2020, now aren’t following the CDC’s recommendations after previously hewing to federal guidance to continue requiring face coverings indoors and in schools.

Separately, again, as noted above, the FDA and Pfizer/BioNTech agreed to hold off on making a decision on the Pfizer vaccine for children from six months to four years as they await data on a three-dose regimen from the companies, not just two shots.

Meanwhile, the CDC said its studies show the booster shot’s effectiveness when it comes to hospitalizations and serious illness begins to wane after four months, so some of us will be clamoring for a fourth shot in the coming months.  Or in the case of moi, having had my booster on Nov. 8, I may wait until the summer because I would want real effectiveness should there be a new problem in the fall.

Covid-19 death tolls, as of early tonight….

World…5,819,704
USA…942,005
Brazil…637,232
India…508,012
Russia…338,813
Mexico…311,554
Peru…207,737
UK…159,351
Italy…150,555
Indonesia…144,958
Colombia…136,764
France…134,5365
Iran…133,437
Argentina…123,859
Germany…120,611
Poland…107,757
Ukraine…102,403
South Africa…96,851
Spain…95,995
Turkey…89,994
Romania…61,363
Philippines…54,854
Hungary…42,360
Chile…40,370
Vietnam…38,784
Czechia…37,712
Canada…35,371
Ecuador…34,854
Bulgaria…34,314
Malaysia…32,099
Pakistan…29,687
Belgium…29,563
Bangladesh…28,771
Tunisia…27,004
Iraq…24,655
Greece…24,609
Egypt…23,233
Thailand…22,390
Netherlands…21,377
Bolivia…21,240
Portugal…20,442

[Source: worldometers.info]

U.S. daily death tolls…Mon. 1,269; Tues. 2,826; Wed. 2,953; Thurs. 2,465; Fri. 1,916.

Covid Bytes

--The World Health Organization says coronavirus case counts fell 17% worldwide over the last week compared to the previous week, including a 50% drop in the United States, while deaths globally declined 7%.

The weekly epidemiological report from the UN health agency, released Tuesday, shows the Omicron variant is increasingly dominant – making up nearly 97% of all cases tallied by the international virus-tracking platform known as GISAID.  The other 3% is the Delta variant.

Just amazing how quickly Omicron took over. Thank God it has largely been less severe.

But you still have disturbing stories out there, like Russia and Turkey, to name two.  Just look at their charts.

--And cases in Hong Kong have been spiking, hitting a record 1,160 new infections on Wednesday, as well as the first deaths in five months.  The global financial hub / Beijing-controlled territory has stuck to a “dynamic zero” strategy employed by mainland China to suppress all coronavirus outbreaks as soon as possible in order to eliminate the virus.

A big problem in Hong Kong is the elderly have vaccine hesitancy and only 50% have been vaccinated, as opposed to 80% of the rest of the city’s residents.

--On the positive side, Australia will open its borders to all vaccinated tourists and business travelers from Feb. 21, after the nation imposed some of the world’s toughest travel controls in March 2020 to prevent the coronavirus from entering the country.

Foreign Affairs

Russia/Ukraine: Britain said on Thursday the “most dangerous moment” in the West’s standoff with Moscow appeared imminent, as Russia held military exercises in Belarus and the Black Sea following the build-up of forces near Ukraine.

The Russian navy is firing off shells in three regions around Ukraine: The Black Sea, the Sea of Azov, and the Kerch Strait.  The latter sits as an entry point into the Azov Sea from Ukraine’s Crimean peninsula, which Russia invaded in 2014.

Ukraine’s foreign affairs office is furious over the naval exercises and the firing of shells because “it disables international navigation in both seas, leading to economic consequences in the region and for Ukrainian ports in particular,” a foreign affairs spokesman said.

Russia’s Black Sea naval presence currently involves 13 large landing ships, with dozens of landing craft and fast-attack boats; enough to mount a sizable amphibious landing.  Russia also recently sent more troops closer to Ukraine’s border with Belarus, and dispatched jet fighters, electronic jamming systems, nuclear-capable Iskander missile systems, and S-400 surface-to-air missile systems to Belarus, per reports.

Ukraine also staged war games and the United States urged Americans in the country to leave immediately due to the increased threats of Russian military action.

Leaders on all sides hoped diplomacy could still prevail, but the latest round of talks involving visits to Moscow by French President Emmanuel Macron and British Foreign Secretary Liz Truss were an abysmal failure.

British Prime Minister Boris Johnson, following a meeting with NATO Secretary-General Jens Stoltenberg, said: “I honestly don’t think a decision has yet been taken” by Moscow on whether to attack.  “But that doesn’t mean that it is impossible that something absolutely disastrous could happen very soon indeed.”

“This is probably the most dangerous moment, I would say, in the course of the next few days, in what is the biggest security crisis that Europe has faced for decades.”

Stoltenberg agreed: “The number of Russian forces is going up. The warning time for a possible attack is going down.”

Nearly nine hours of talks in Berlin between Ukraine and Russia on Thursday failed to produce a breakthrough.

Visiting Moscow, British Foreign Secretary Truss was upbraided by Russian Foreign Minister Sergei Lavrov, who accused her of refusing to listen.

“I’m honestly disappointed that what we have is a conversation between a mute person and a deaf person,” the 71-year-old veteran Russian diplomat told a news conference.

“Our most detailed explanations fell on unprepared soil…numerous facts that we produced bounced off the British delegation.”

Truss challenged Lavrov over his assertion that Russia’s build-up of troops and weaponry was not threatening anyone.

“I can’t see any other reason for having 100,000 troops stationed on the border, apart from to threaten Ukraine.”

Earlier, French President Macron held nearly six hours of talks with Putin at the Kremlin, and members of Macron’s entourage said after that Putin spent much of the time reciting grievances that date back to the end of the Cold War.

In a detailed read-out on Monday’s meeting, the sources said Macron had been struck by how different Putin was to the man he had met in his summer residence on the French Riviera three years ago.

“(Putin) gave him five hours of historical revisionism,” said one of the entourage members in an interview with Reuters after, describing how Putin laid out his belief that the West had broken commitments to Russia since 1997 with the enlargement of NATO to include former Soviet bloc states.  “So he goes on for hours rewriting history from 1997 on.  He drowns you in these long monologues.  And the president (Macron) kept on going back to the issues of the day,” said the source.

Putin said after at a joint news conference with Macron:

“You know, we have tried to talk to them about avoiding certain actions for 30 years now.  What we get in response is total disregard for our concerns.”

But Putin’s own actions over the years make clear he has become more hawkish, including his crackdown on domestic opponents, the pressure on independent journalists, and now the massive deployment.

Russia denies planning to invade Ukraine but says it wants to enforce “red lines” to make sure that its former Soviet neighbor does not join NATO and that the alliance does not set up bases and missiles there.

Macron first told reporters that President Putin assured him that Russian forces would not ramp up the crisis near Ukraine’s borders, which Russia immediately said was “not right.”

That was Monday.  By Thursday, the Russian navy was in action.

I also can’t help but add that Macron refused to take a Covid test when he was in Moscow for fear of giving up his DNA.  That tells you everything.

Marc A. Thiessen / Washington Post

“A new Politico-Morning Consult poll shows most Americans support the people of Ukraine in the face of Russia’s aggression.  63 percent want to impose crippling sanctions on Russia if Vladimir Putin invades; 58 percent support allowing Ukraine to apply for NATO membership…48 percent support sending U.S. troops to Eastern Europe to bolster NATO allies in the region.

“Only small minorities oppose most of these policies.  But a significant number of Americans tell pollsters they are just not sure what to think.  Many understandably wonder: Why is this the United States’ problem?  It’s a fair question. And the answer is: Because if the United States allows Russia to invade and overthrow a European democracy, the consequences of our inaction would reverberate across the globe.

“China is watching. If Putin can invade Ukraine, Taiwan may be next.  In October, following President Biden’s disastrous August retreat from Afghanistan, China flew a record number of fighters and bombers into Taiwan’s air defense zone – the largest Chinese air force incursion ever against Taiwan.  A few weeks ago, as Putin massed forces along Ukraine’s border, China made another major incursion.  If the United States fails to deter Russia less than a year after surrendering in Afghanistan, Beijing may calculate that it has a short window of weak U.S. presidential leadership to invade and crush Taiwan’s democracy.  The result could be a war in the Pacific.

“North Korea and Iran are watching as well.  If Putin invades, both countries will have every incentive to accelerate their development of nuclear weapons and the means to deliver them. They both know that after the Soviet Union collapsed, Ukraine inherited an arsenal of nearly 2,000 strategic nuclear weapons.  But in December 1994, the United States brokered an agreement called the Budapest Memorandum on Security Assurances in which Ukraine agreed to give up those weapons along with its intercontinental ballistic missiles and strategic bombers.  In exchange, Russia pledged to ‘refrain from the threat or use of force against the territorial integrity or political independence of Ukraine,’ while the United States and Britain promised ‘to provide assistance to Ukraine…if Ukraine should become a victim of an act of aggression.’

“In 2014, Russia violated that agreement when it invaded Ukraine and annexed Crimea.  Now, Putin is threatening to finish the job.  If he is allowed to do so, no nation will ever give up its nuclear weapons in exchange for U.S. security assurances again.  To the contrary, the lesson from Pyongyang to Tehran will be that the only path to security is to develop and deploy nuclear weapons and the missiles to deliver them.

“This could spark a global arms race. Saudi Arabia has pledged to develop its own nuclear arsenal if Iran becomes a nuclear power.  Indeed, Amos Yadlin, former head of Israeli military intelligence, has warned that ‘the Saudis will not wait one month’ to go nuclear.  Other countries could follow suit.  Nuclear nonproliferation as we know it would be dead.

“And United States credibility would lie in tatters – as would the credibility of NATO….

“Since the end of the Cold War, democratic self-government has spread throughout the world. Of those still living in autocracy, most live in just two countries: China and Russia.  It is no coincidence that those are the two countries that pose the greatest threat to peace.  The unprecedented expansion of liberty over the past three decades has produced unprecedented prosperity at home and abroad. All of that is at risk if the last remaining autocracies are emboldened by the failure of the world’s democracies to deter their aggression.

“That’s why we should care what happens in Ukraine… when our adversaries believe we are weak, they are more likely to test our resolve – and more likely to miscalculate. And that could have consequences far beyond Kyiv.”

China: Washington approved a $100 million deal to upgrade Taiwan’s Patriot missile defense system, reflecting the willingness to help Taipei arm itself against Beijing’s growing military threats.

Taiwan hailed the approval amid mounting tensions.

Chinese foreign ministry spokesman Zhao Lijian said Beijing opposed the arms sale, saying it seriously damaged China-U.S. relations and peace across the Taiwan Strait.

“China will take strong and legitimate measures to defend its sovereignty and security interests,” he said in a press conference Tuesday.

North Korea: In a new UN report, a panel of experts said that there was “a marked acceleration” of Pyongyang’s testing and demonstration of new short-range and possibly medium-range missiles through January, “incorporating both ballistic and guidance technologies and using both solid and liquid propellants.”

“New technologies tested included a possible hypersonic guiding warhead and a maneuverable re-entry vehicle,” the panel said.  North Korea also demonstrated “increased capabilities for rapid deployment, wide mobility (including at sea), and improved resilience of its missile forces.”

The experts said North Korea “continued to seek material, technology and know-how for these programs overseas, including through cyber means and joint scientific research.”

“Cyberattacks, particularly on cryptocurrency assets, remain an important revenue source” for Kim Jong Un’s government, the experts monitoring implementation of sanctions against the North said in the new report.

One thing I’ve been struck by with Pyongyang’s renewed testing is the lack of failure.  I don’t recall South Korean experts, for instance, saying any single test was an absolute failure.

Recall, back in the old days, the missiles failed like 50% of the time.  This is what is even more disturbing.

Iran: Israeli Prime Minister Naftali Bennett spoke with President Biden in a call on Sunday.  A few hours earlier at a cabinet meeting, Bennett said the Iran nuclear deal that world powers are negotiating in Vienna will make it harder to stave off a nuclear Iran.

“Foremost among the threats to the State of Israel is Iran,” Bennett said.  “We, as the cabinet, are responsible for taking on the Iranian nuclear [threat] and are closely following what is happening in the talks in Vienna.”

Bennett said, “The agreement and what appears to be its conditions will damage the ability to take on the nuclear program.

“Whoever thinks an agreement will increase stability is wrong,” he added.  “It will temporarily delay enrichment, but all of us in the region will pay a heavy, disproportionate price for it.”

U.S. Special Envoy for Iran Rob Malley admitted in an interview over the weekend that the breakout time in a new deal would be shorter than the original JCPOA.

“Because of the advances that they’ve made over the years since we withdrew from the deal…it’s going to be hard to recapture the full non-proliferation benefits, the full breakout timeline,” Malley said.  “That’s obviously one of the many catastrophic consequences of the decision to leave the deal.”

Iran’s current breakout time, without any deal, is weeks away, Malley argued, and a deal would extend that timeline.

Editorial / Wall Street Journal

“The diplomatic signs point to the Biden Administration striking a revised nuclear deal with Iran, and the latest bad news is sanctions relief even before an accord is struck.

“On Friday Secretary of State Antony Blinken restored sanctions waivers on Iranian civilian nuclear activity that the Trump Administration had rescinded in 2020.  Foreign companies working on such projects will now be exempt from economic penalties.  Iran’s foreign minister responded that the latest move was “good but not enough.”  Pre-emptive concessions invite more demands.

“ ‘We did NOT provide sanctions relief for Iran and WILL NOT until/unless Tehran returns to its commitments under the JCPOA,’ State Department spokesman Ned Price tweeted. This is semantic spin.  Friday’s move was only the most recent concession.

“Washington lifted sanctions on several Iranian officials and firms in June and ended the fight to restore ‘snap back’ sanctions at the United Nations a year ago.  Iran’s oil exports began recovering last year after falling from 2.5 million barrels a day in 2017 to less than half a million daily in 2020, as U.S. enforcement eased.

“Western negotiators have been saying since December that there are only weeks left to restore the deal, yet the talks roll on.  Members of the American team reportedly quit over chief negotiator’s Robert Malley’s soft stance.

“The 2015 deal was weak enough, with nuclear restraints phased out by 2031. It didn’t address Iran’s missile program nor its malign regional activity.  The nuclear knowledge Iran has gained from violating the deal can’t be unlearned.  ‘The Biden administration expects a restored nuclear deal would leave Iran capable of amassing enough nuclear fuel for a bomb in significantly less than a year, a shorter time frame than the one that underpinned the 2015 agreement,’ the Journal reported last week.

“It’s egregious that all this is happening as Iran continues to spread terror in the region (see the Houthis) and stonewall international nuclear inspectors. Washington has held off on censuring Tehran at the International Atomic Energy Agency, fearful that a rebuke at the organization’s Board of Governors will cause the Iranians to walk. But if Iran won’t allow outsiders to fully verify its nuclear activity, what good is a deal that claims to limit nuclear activity?

“ ‘I have been cautiously optimistic about the Biden administration’s initial efforts. I waited for the last year to see results,’ Senate Foreign Relations Chairman Bob Menendez, a Democrat, said last week.  ‘However, a year later, I have yet to hear any parameters of ‘longer’ or ‘stronger’ terms or whether that is even a feasible prospect.’  That’s a reference to the Biden Administration’s apparently abandoned promise to negotiate a better follow-up deal. The Democrat added that ‘we seriously have to ask what exactly are we trying to salvage?’

“Mr. Malley said last month that the U.S. was unlikely to strike a deal if four U.S. citizens currently held hostage by Tehran aren’t released.  He claims those negotiations are separate from nuclear talks, but that’s hard to believe.  Recall that the Obama Administration airlifted $400 million in cash to Iran as the regime released four detained Americans.

“The Islamic Republic clearly learned from the last time it negotiated with a Democratic Administration.  Apparently President Biden’s negotiators haven’t.”

Afghanistan: President Biden started to clear a legal path for certain relatives of victims of the Sept. 11, 2001, attacks to pursue $3.5 billion from assets that Afghanistan’s central bank had deposited in New York before the Taliban takeover, Biden signing an executive order today.

At the same time, the goal is to consolidate and freeze all $7 billion of the total assets the Afghan central bank kept in New York and ask a judge for permission to move the other $3.5 billion to a trust fund to pay for immediate humanitarian relief efforts in Afghanistan.

But these moves were unnecessary, as the government was not near collapse until the United States announced it was withdrawing.  The result is mass starvation, that is in turn creating another wave of refugees, resulting in further destabilization.

Random Musings

--Presidential approval ratings….

Gallup: 40% approve of President Biden’s job performance, 56% disapprove, 33% of independents approve (Jan. 3-16).  We’ll get a new survey next week.

Rasmussen: 42% approve, 56% disapprove (Feb. 11).

A new CNN/SSRS poll gives Biden a 41% approval rating, 58% disapprove.

Even more worrisome for Biden, while 36% of Democrats strongly approve of the job Biden is doing, about three-fourths (76%) of Republicans strongly disapprove of how he is managing the job.  As in the GOP base is on fire, passionate in its distaste for the way Biden has handled the presidency, which will translate at the polls.

--Trump World….

--Senate Minority Leader Mitch McConnell knocked the Republican National Committee on Tuesday for its decision last week to censure the two Republican members of the Jan. 6 select committee.

“That’s not the job of the RNC,” McConnell said in an interview at the Capitol.  “Traditionally the view of the national party committee is we support all members of our party regardless of their positions on some issues.”

McConnell also responded to language in the text of the censure resolution in which the RNC described the Jan. 6 committee’s work as “a Democrat-led persecution of ordinary citizens engaged in legitimate political discourse.”

“Let me give you my view on what happened Jan. 6th. We all were here,” McConnell said.  “It was a violent insurrection for the purpose of trying to prevent the peaceful transfer of power after a legitimately certified election from one administration to the next.”

Donald Trump replied in a statement: “Mitch McConnell does not speak for the Republican Party, and does not represent the views of the vast majority of its voters.  He did nothing to fight for his constituents and stop the most fraudulent election in American history.”

Last week I wrote how Sen. Mitt Romney, RNC Chair Ronna McDaniel’s uncle, blistered the decision.  It “could not have been a more inappropriate” message, and, “Anything that my party does that comes across as being stupid is not going to help us,” he said this week.

McConnell was joined by Sen. Todd Young (R-ind.): “I don’t know any American that regards that as legitimate political discourse.  I certainly haven’t encountered that here in the state of Indiana.”

Sen. John Cornyn (R-TX) said Monday that the RNC has said it wants the party to be unified, “and that was not a unifying action.”

Sen. Susan Collins (R-ME) said the rioters who “broke windows and breached the Capitol were not engaged in legitimate political discourse, and to say otherwise is absurd.”

Collins said the GOP started out the year with an advantage on issues that could decide the election, but “every moment that is spent re-litigating a lost election or defending those who have been convicted of criminal behavior moves us further away from the goal of victory this fall.”

The RNC has said that the phrase “legitimate political discourse” was not intended to refer to those who stormed the Capitol on Jan. 6, but only to those who did not assault police or enter the Capitol and have been subpoenaed by the committee.

But the RNC’s mishandling of the text made the entire episode a referendum on the Jan. 6 attack, rather than the two Republicans the RNC intended to penalize: Reps. Liz Cheney and Adam Kinzinger.

Amanda Carpenter, who once worked for Sen. Ted Cruz (R-TX) said: “The fact the RNC is censuring Cheney and Kinzinger for investigating January 6 and not condemning Trump for causing January 6 is absolutely demented.”

On the other hand there is Republican Sen. Josh Hawley of Missouri, a truly pathetic figure.

“Whatever you think about the RNC vote, it reflects the view of most Republicans,” said Hawley, who objected to the 2020 election results on Jan. 6. “In my state, it’s not helpful to have a bunch of D.C. Republicans commenting on the RNC…super unhelpful.”

McConnell is not particularly worried his Senate leadership days are numbered, as was suggested by Trump.

When asked by the Washington Examiner if he’s concerned Trump “might spark a revolt against his leadership,” or prevent him from becoming majority leader should Republicans regain the chamber in midterms, McConnell repeatedly seemed unbothered by the suggestion.

“Every reporter in town, including, I’m sure, you, have been probing to find one for months, right?” he said, alluding to the possibility of finding a Republican senator who agrees with Trump and wants to oust McConnell.  “Have you found one?”

No Senate Republican has announced feeling such a way, writes the Examiner.  “That’s the answer to your question,” McConnell said.

McConnell also laughed off Trump’s “Old Crow” nickname for him, opting to take it instead as almost a compliment.

“It’s my favorite bourbon,” McConnell told the Examiner, referring to a drink of the same name.

“Aren’t we using Old Crow as my moniker now?” he asked a member of his staff.  “It was Henry Clay’s favorite bourbon.”

But when it comes to the midterm elections, McConnell has it just right.  He has sought to cast Joe Biden and his pricy “Build Back Better” social spending plan that is stalled in the Senate as creatures of the Democratic Party’s left wing.  And McConnell has accused Biden of ignoring troubles facing American families such as inflation, including higher energy costs.

Editorial / Wall Street Journal

“The United States desperately needs a Republican Party that is a sane alternative to the ruling Democrats who have lurched to the coercive left.  On that score, Americans should welcome Mike Pence’s stand for constitutional principle on elections no matter its political cost….

“Mr. Pence stands out as a rare Republican these days willing to stand up to Mr. Trump’s disgraceful behavior after the election. Too many in the GOP seem to have lost their constitutional moorings in thrall to one man.

“The conventional wisdom now is that Mr. Trump controls the Republican Party and can have the 2024 nomination if he wants it. But someone should remind voters that Mr. Trump ended as a three-time election loser. He mobilized Democrats against him in historic numbers to cost the GOP the House in 2018, then the White House in 2020, and finally the two Georgia Senate seats in 2021.

“Mr. Trump had significant policy successes, but Mr. Pence has received too little credit for his policy and personnel advice.  His conservative network and instincts helped to avoid more than one Trumpian self-implosion.  He was loyal to Mr. Trump, and the President repaid him by pressuring him publicly and privately to commit an unconstitutional act.  Loyalty has always a one-way street for Mr. Trump.

“We wrote often during his Presidency that Democrats couldn’t defeat Donald Trump, but Mr. Trump could defeat himself.  He did, and his post-election behavior compounded the harm to his party.  Republicans who want to repeat the experience may find the electoral result is the same – and this time without the fortunate presence of Mike Pence.”

--The National Archives and Records Administration has asked the Justice Department to examine Donald Trump’s handling of White House records, sparking discussions among federal law enforcement officials about whether they should investigate the former president for a possible crime.

The referral from the National Archives came amid reports that officials recovered 15 boxes of materials Trump’s Mar-a-Lago residence in Florida that were not handed back in to the government as they should have been, and that Trump had turned over other White House records that had been torn up.  Some of the documents may have been considered classified.

The Presidential Records Act requires the preservation of memos, letters, notes, emails, faxes and other written communications related to a president’s official duties, and Trump’s years-long defiance of the Act has long raised concerns among historians and legal observers.  Politico first reported on his penchant for ripping up official documents, but the practice has drawn new scrutiny due to the Jan. 6 House select committee’s investigation.

The material the National Archives recovered at Mar-a-Lago included correspondence with North Korea’s Kim Jong Un that Trump once described as “love letters.”

In a statement, Trump said he had engaged in “collaborative and respectful” discussions with the Archives and had arranged for the “transport of boxes that contained Presidential Records in compliance with the Presidential Records Act.”

“Much of this material will someday be displayed in the Donald J. Trump Presidential Library for the public to view my Administration’s incredible accomplishments for the American people,” he said.

Federal law makes it a crime to destroy government records, but it requires that a person know specifically they are breaking the law when doing so.

Editorial / Washington Post

“Former President Donald Trump liked the feel of tearing things up – figuratively, as he did with laws and norms of public service; but also literally, as he did with documents that he was required to preserve under the Presidential Records Act….

“(Trump) routinely destroyed briefing papers, schedules, articles, letters and memos, ripping them into quarters or smaller pieces, leaving the detritus on his desk in the Oval Office, in the trash can of his private West Wing study or on the floor of Air Force One.  [Ed. and we’ve learned, flushed down the toilet.]  Mr. Trump’s aides were left to retrieve the pieces and piece them back together, sometimes hunting through special ‘burn bags’ intended for classified material to find torn documents that needed to be reassembled and preserved….

“Mr. Trump broke the law. After President Richard M. Nixon’s resignation, Congress passed a number of laws intended to preserve the integrity of documents and other materials from Nixon’s presidency, and made the laws applicable to all future presidents….

“Mr. Trump cannot plead ignorance.  He was warned about the legal requirements by White House counsel Donald McGahn and by two chiefs of staff, Reince Priebus and John F. Kelly.  Internal memos to the White House staff also warned in 2017 that destroying presidential records is a federal crime… Unfortunately, the records act lacks teeth, although other laws impose criminal penalties for willful destruction of records….

“Mr. Trump, who mercilessly attacked Hillary Clinton for using a private email server, turned out to be a slovenly steward of the people’s property.  He regarded himself as above the law, but he was not.  What’s left of the jigsawed and taped-up pages might not provide the thoroughgoing record of his presidency that the law demands, but they are a wrenching testament to his penchant for wanton destruction.”

Laughably, among the pieces of paper found in the boxes at Mar-a-Lago was a map Trump famously drew on with a black Sharpie to demonstrate the track of Hurricane Dorian heading toward Alabama in 2019 to back up a declaration he had made on Twitter that contradicted weather forecasts.

--In the weeks after the 2020 election, Rudy Giuliani and other legal advisers to President Trump asked a Republican prosecutor in northern Michigan to get his county’s voting machines and pass them to Trump’s team, Antrim County prosecutor James Rossiter said in an interview with the Washington Post. 

Rossiter said Giuliani and several others made the request during a telephone call after the county initially misreported its election results. The inaccurate tallies meant that Joe Biden appeared to have beaten Trump by 3,000 votes in a Republican stronghold, an error that soon placed Antrim at the center of false claims by Trump that the election had been stolen.

Rossiter said he declined.  “I said, ‘I can’t just say: give them here.’  We don’t have that magical power to just demand things as prosecutors.  You need probable cause.”

After addressing the mistakes in the days that followed, officials announced that Trump had in fact beaten Biden by more than 3,000 votes, a result that was confirmed by a hand recount of the paper ballots marked by voters.  The county clerk later said in a report that the error was an honest mistake that she “owned, acknowledged and accepted.”

--Democratic Sen. Joe Manchin and Republican Sen. Lisa Murkowski endorsed each other Sunday in an appearance on CNN’s “State of the Union.”

“I’m endorsing my dear friend Lisa Murkowski.  Alaska could only be so lucky to have her continue to serve them,” Manchin, of West Virginia, said on the show.

“It’s hypocritical to basically work with a person day-in and day-out, and then when they’re in cycle, you’re supposed to be against them because they have an R or D by their name,” he explained.

Murkowski returned the favor moments later, saying, “If he’s running, I’ll endorse him.”

Manchin also defended his opposition to Joe Biden’s $2 trillion social spending bill, which has drawn the ire of members of his caucus, as well as his refusal to vote to change the filibuster rule to allow Democrats to bypass the Senate’s 60-vote threshold to pass voting reforms.

--A new Quinnipiac University Poll of registered New York City voters revealed some good news for new mayor Eric Adams.  By a 64-37 percent margin, New Yorkers say they are optimistic about the next four years with him as mayor.

After his first roughly five weeks, on the key issue of crime, 49 percent approve of his job so far while 35 percent disapprove.  Seventy-four percent of New York City voters think crime is a very serious problem, which is a record high since the Quinnipiac poll started asking this question in 1999.  Until now, the highest number of voters thinking crime was a very serious problem was 50 percent back in January 2016.

--The American Transportation Research Institute, the trucking industry’s research arm, publishes an annual survey of the most congested sections of highway in the country and for the fourth year in a row, a stretch of Interstate 95 where it meets Route 4 just west of the George Washington Bridge in Fort Lee was ranked No. 1.

What I get a kick a get out of is that no one is writing in their stories that this is the scene of former New Jersey governor Chris Christie’s famous Bridgegate episode.

As an aside, during the first 11 months of 2021, GWB traffic increased 17% vs. the same period in 2020, as commuters slowly began returning to the office and more customers were ordering online and wanted their purchases delivered quickly.

New Jersey Turnpike traffic rose 22% in 2021 over 2020.

Two of the top five bottlenecks nationwide were in Atlanta…I-285 at I-85 (North), and I-20 at I-285 (West).

--Daniel Henninger / Wall Steet Journal

“Needless to say, I won’t be watching the Winter Olympics in China, where it’s winter every day for the human spirit. Best of luck to our athletes, who are sentenced to performing in whichever country the endlessly disagreeable International Olympic Committee chooses. The IOC’s Plan B choice for the Winter Olympics was Kazakhstan, last seen inviting in Vladimir Putin’s army to crush antigovernment protests.

“But even from the moral comfort of a couch, Xi Jinping’s internal repression, external hacking of foreign reporters, absorption of Hong Kong and antidemocratic compact with Mr. Putin – struck on the eve of the Opening Ceremonies – makes the Beijing Olympics a bit too redolent of the Munich Games in 1936 to merit this viewer’s tube time.”

--Retired Pope Benedict XVI asked forgiveness Tuesday for any “grievous faults” in his handling of clergy sex abuse cases, but admitted to no personal or specific wrongdoing after an independent report criticized his actions in four cases while he was archbishop in Munich, Germany.

“I have had great responsibilities in the Catholic Church. All the greater is my pain for the abuses and the errors that occurred in those different places during the time of my mandate,” the retired pope said.

A report from a German law firm had been commissioned by the German church to look into how cases of sexual abuse were handled in the Munich archdiocese between 1945 and 2019.  Benedict, the former Cardinal Joseph Ratzinger, headed the archdiocese from 1977 to 1982.

The report’s authors faulted Benedict’s handling of four cases during his time as archbishop, accusing him of misconduct for having failed to restrict the ministry of the priests in the cases even after they had been convicted criminally.

The conclusion from Benedict’s legal advisers to the law firm was resolute: “As an archbishop, Cardinal Ratzinger was not involved in any cover-up of acts of abuse,” they wrote.  Furthermore, they said, the report provided no evidence that Benedict was aware of the criminal history of any of the four priests in question.

--Brazil recorded the most deforestation ever in the Amazon rainforest for the month of January, according to government data Friday, as deforestation continues to worsen despite the government’s recent pledges to bring it under control.

Deforestation in Brazil’s Amazon totaled 166 square miles last month, five times higher than January 2021, according to preliminary satellite data from government space research agency Inpe.  That’s the highest for January since the current data series began in 2015/2016, equal to an area more than seven times the size of Manhattan.

Blame right-wing President Jair Bolsonaro’s weakening of environmental protections since he took office in 2019.  With little fear of punishment, speculators are increasingly clearing forest for ranches in illegal land grabs.

--Sadly, we will forever remember that the discovered cause of death of comedian Bob Sagat was head trauma.  His family announced that the medical examiner’s report pointed to him hitting the back of his head on an unknown object before going to sleep.  He was found dead in a hotel apartment in Orlando, Florida, lying on his bed…no drugs or alcohol involved.

So you think of being in a strange room and you accidentally hit your head on the headboard after turning out the lights.  You’d think if he had fallen in the tub or shower, the report would have talked of bruising elsewhere, but instead was all about a bruise(s) to the back of the head.

But this is scary.

Sagat also tested positive for Covid at the time of death, but he had reported he had Covid back in December.

--A scientific breakthrough may enable paralyzed people to walk again as researchers have created human spinal cord implants in a world first.

The 3D implants, made using human cells, had an 80% success rate in restoring the ability to walk in paralyzed mice in the laboratory, researchers said.

Tissue samples from patients are transformed into functioning spinal cord implants through a process that mimics the development of the spinal cord in human embryos.

Over the next few years, the scientists plan to be able to create personalized implants to repair tissue damaged from injury, and without the risk of rejection by the body.  Clinical trials in humans are coming.

The study was led by Professor Tal Dvir and his researchers at Tel Aviv University.  [I think I have this right.  Not sure if all of the research was conducted in Tel Aviv.]

--In a message marking the 70th anniversary of her reign, Queen Elizabeth II said that it was her “sincere wish” that Camilla, the Duchess of Cornwall, become Queen Camilla, formally known as “Queen Consort,” when her eldest son, Charles, the Prince of Wales, succeeds her.

“When, in the fullness of time, my son Charles becomes king, I know you will give him and his wife Camilla the same support that you have given me,” the monarch wrote.  “And it is my sincere wish that, when that time comes, Camilla will be known as Queen Consort as she continues her own loyal service.”

The message ties up a loose end that has hung over the House of Windsor since Charles’ divorce from Princess Diana.

Prince Charles welcomed his mother’s wish that Camilla be known as Queen Consort when he becomes King, saying he and his wife were “deeply conscious of the honor.” [“honour,” in the UK, the editor typed with a grin.]

We also learned that Charles has been reinfected with the coronavirus, and having met recently with his mother, this raises questions whether she is at risk. 

The Queen said that, 70 years on, the day is one she remembers “as much for the death of my father, King George VI, as for the start of my reign.”

In a statement to the nation, the 95-year-old said: “I would like to express my thanks to you all for your support. I remain eternally grateful for, and humbled by, the loyalty and affection that you continue to give me.”

The Queen signed off the message, which included her reflections on support given “unselfishly” by Prince Philip: “Your servant Elizabeth R.”  [The ‘R’ stands for “regina,” which means “queen” in Latin.  I pass this on because, gosh darnit, I sure as hell didn’t know and had to look it up.  A king would use ‘R’ as well for “rex.”  And now you know….the rest of the story…]

Meanwhile, as a general supporter of the monarchy, the last thing I want to see is Charles as King.  Daniel Craig would be a better choice.

---

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

God bless America.

Pray for Ukraine.

---

Gold $1860
Oil $93.90

Returns for the week 2/7-2/11

Dow Jones -1.0%  [34738]
S&P 500  -1.8%  [4418]
S&P MidCap  +0.9%
Russell 2000  +1.4%
Nasdaq  -2.2%  [13791]

Returns for the period 1/1/22-2/11/22

Dow Jones  -4.4%
S&P 500  -7.3%
S&P MidCap  -6.9%
Russell 2000  -9.6%
Nasdaq  -11.9%

Bulls 34.1
Bears 25.9

Hang in there.

This week marks 23 years of StocksandNews.  As David Byrne sang in “Once In A Lifetime”:

And you may ask yourself
Am I right?...Am I wrong?
And you may say to yourself
My God!...What have I done?!

 

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