Week in Review

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Week in Review

03/05/2022

For the week 2/28-3/4

[Posted 8:30 PM ET, Friday]

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Edition 1,194

It’s a bit disconcerting that the word “nuclear” continually entered the conversation this week with regards to Vladimir Putin’s War on Ukraine.  Sunday, he issued an order putting Russian nuclear forces on high alert, which a U.S. defense official told Reuters, speaking on condition of anonymity, “It’s clearly, essentially, putting in play forces that, if there’s a miscalculation, could make things much, much more dangerous.”  But at least there were no visible signs Russian nuclear forces were increasing their activity, something the United States can track, and the Pentagon and White House did not look to reciprocate with an alert of their own.

Putin, in an address on state television, was reacting to the heavy financial sanctions that had just been levied on his regime, including on the Russian banking system.

“As you can see, not only do Western countries take unfriendly measures against our country in the economic dimension – I mean the illegal sanctions that everyone knows about very well – but also the top officials of leading NATO countries allow themselves to make aggressive statements with regards to our country,” said Vlad.

Then on Thursday, many of us were startled to see the Russian army firing on Europe’s largest nuclear power plant at Zaporizhzhia and a very visible fire at the facility.  Ukraine Foreign Minister Dmytro Kuleba said on Twitter: “Fire has already broke out. If it blows up, it will be 10 times larger than Chernobyl!  Russians must IMMEDIATELY cease the fire, allow firefighters, establish a security zone!” referring to the 1986 accident in the Chernobyl nuclear power plant when the country was part of the Soviet Union, considered the worst nuclear disaster in history.

Just last week I told you to watch HBO’s terrific series titled “Chernobyl” from a few years ago.  All the more so you need to watch it now.  More on Zaporizhzhia below.

Wednesday, Russian Foreign Minister Sergei Lavrov said that if a third World War were to take place, it would involve nuclear weapons.

Meanwhile, the impact of the war on the global economy, according to the president of the World Bank, David Malpass, is “a catastrophe.”

In an interview with the BBC today, Malpass said, “The war in Ukraine comes at a bad time for the world because inflation was already rising.”

He stressed his biggest concern is “about the pure human loss of lives” that is occurring.

Malpass cites the surge in global energy prices in particular “hit the poor the most, as does inflation.”

I get into inflation specifics below, with Russia and Ukraine being big food producers, including a combined 29% of global wheat exports.

“There’s no way to adjust quickly enough to the loss of supply from Ukraine and from Russia, and so that adds to prices,” said Malpass.

This story is so sickening, so sad.  The pictures of all the women and children, many of the latter disabled or orphaned. 

The one million+ refugees, half of which might be children; a total that will soar.  The bombed-out villages. The death and destruction to come.

Tonight, Ukrainian President Zelensky condemned NATO leaders’ refusal to establish a no-fly zone over his country.

“All the people who die, starting today, will also die because of you.  Because of your weakness, because of your disconnection.”

“All the intelligence agencies of the NATO countries are well aware of the enemy’s plans,” Zelensky continued.  “They confirmed that Russia wants to continue the offensive.

“NATO has deliberately decided not to close the skies over Ukraine.  NATO countries created a narrative that closing the skies over Ukraine would provoke Russia’s direct aggression against NATO.

“This is the self-hypnosis of those who are weak, insecure inside, despite the fact they possess weapons many times stronger than we have.”

It’s a tone we haven’t heard from Zelensky.  He’s stressed to the max.

I do not support instituting a no-fly zone in this situation.

Zelensky later addressed large protests taking place across Europe, telling demonstrators: “If Ukraine does not survive, the whole of Europe will not survive.

“If Ukraine falls, the whole of Europe will fall.”

When it comes to the protests, you had the scene of the old Russian woman in St. Petersburg, Russia, arrested for carrying placards calling for peace.  We pray for her.  And this Sunday could be explosive across Russia.  As I note below, Alexei Navalny is calling for mass demonstrations.

But for all the talk that Vladimir Putin seems different, seems “off,” I would just point out his first days as leader of Russia in 1999.  I wrote about it.  I wrote about the apartment bombings that his FSB (the successor to the KGB) perpetrated as a pretext for Putin’s brutal assault on Chechnya.  I called him out on it then…I wrote he was responsible weeks before the late-William Safire famously did in his New York Times column.  No one was going out on a limb like I did back then, until Safire concurred.  It was Putin’s first false flag operation…over 300 died in the bombings.

I went back and watched a terrific PBS “Frontline” program from 2015 on the rise of Vlad the Impaler.  Given what we are witnessing today, it’s chilling.  So this is your homework assignment. 

pbs.org/wgbh/frontline/film/putins-way/

Actually, I watched it twice.  Putin hasn’t changed.  He’s always been a cold-blooded killer.  Only now he’s a cornered rat, which you’ll see in the program is a key story from his past.

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--In an interview on CNN’s “State of the Union,” Republican Sen. Mitt Romney (Utah) had some of the following thoughts.

“Look, this is one of the greatest demonstrations of good vs. evil that we have seen during our lifetime, and the demonstration of courage.  I mean, look at Vladimir Putin.

“Here he is – behind this huge table in this big white room. I mean, it looks like a mausoleum where honesty and honor have gone to die.

“And contrast that with Zelensky, with his courage, with his passion, with his true leadership.  This is remarkable. And it’s having an impact. And I hope it makes us a better people and it makes us more committed to the principles of freedom.

“Look, you recognize that, in the history of the world, authoritarianism has been the default setting.  And to have freedom, it requires people to stand up and protect it.  And you’re seeing the terrible miscalculation by Vladimir Putin, causing the kind of commitment to freedom that we’d hoped we’d see….

“The Biden administration has done some things very well and some things not so well.  The not-so-well side is, they continued the policy of prior administrations not to provide the defensive weapons Ukraine needed. That was the mistake.

“The positive thing was sharing our intelligence with our allies and combining our efforts with our allies.  We used to be 40 percent of the world economy. Today, we’re about half of that.  And so for us to have the kind of economic clout we used to have back in the ‘50s and ‘60s and ‘70s, we really do need to combine with our allies.

“And that’s something President Biden has done extraordinarily well.”

--Vladimir Putin urged Russia’s neighbors on Friday not to escalate tensions by imposing more restrictions, sanctions.

His comments came hours after Russian forces seized the largest nuclear power plant in Europe, after a building at the complex was set ablaze, and later entered the port city of Mykolayiv for the first time, according to Ukrainian authorities.

Fears of a potential nuclear disaster at the Zaporizhzhia plant had spread alarm across world capitals, before authorities said the fire, in a building identified as a training center, had been extinguished.

The head of the United Nations’ atomic energy agency said Ukrainians were still in control of the reactor (reportedly at gunpoint), adding that only one reactor (of six) was operating at about 60 percent capacity. 

Russia’s defense ministry blamed the attack at the nuclear plant on Ukrainian saboteurs, calling it a “monstrous provocation.”

In televised remarks Friday, Putin said: “There are no bad intentions towards our neighbors.  And I would also advise them not to escalate the situation, not to introduce any restrictions.”

H added: “We do not see any need here to aggravate or worsen our relations. And all our actions, if they arise, they always arise exclusively in response to some unfriendly actions, actions against the Russian Federation.”

Meanwhile, secretary general of NATO, Jens Stoltenberg, called on Putin to withdraw all troops from Ukraine without conditions after a meeting of the alliance’s foreign ministers in Brussels, where they discussed calls from Kyiv to implement a no-fly zone.

NATO allies then rejected Ukraine’s demand for no-fly zones, saying they were increasing support but that stepping in directly would lead to a broader, even more brutal European war.

“We are not part of this conflict, and we have a responsibility to ensure it does not escalate and spread beyond Ukraine,” Stoltenberg told a news conference.

Ukrainian President Zelensky has called for Western powers to enforce a no-fly zone since Moscow’s invasion started nine days ago.

“We understand the desperation but we also believe that if we did that (a no-fly zone) we would end up with something that could lead to a full-fledged war in Europe involving much more countries and much more suffering,” Stoltenberg said.

The only way for NATO to implement a no-fly zone would be to send NATO planes to shoot down Russian ones, he said, adding that the risk of escalation would be too big.

Stoltenberg added: “The days to come are likely to be worse, with more deaths, more suffering and more destruction.”

NATO has moved an additional 22,000 troops into eastern Europe, while at least 20 countries – mostly NATO members – are supplying arms to Ukraine.

For the first time, NATO has activated its rapid-reaction response force, comprising 40,000 troops, including from non-alliance countries such as Finland and Sweden.

On Thursday, Zelensky said that if allies wouldn’t meet his request to protect Ukrainian air space, they should instead provide Kyiv with more war planes.

U.S. Secretary of State Antony Blinken said the alliance would defend “every inch” of NATO territory from attack.  “Ours is a defensive alliance. We seek no conflict. But if conflict comes to us, we are ready for it.”

“The truth is: It is not NATO that is threatening Putin but the desire for freedom in Ukraine. He wants to break this urge for freedom – in Ukraine, and also in his own country,” German Foreign Minister Annalena Baerbock said.

Thursday, Zelensky issued a dire appeal for help.

“The end of the world has arrived,” he said during a televised news conference in Kyiv.  He called for direct negotiations with Putin.

“Good Lord, what do you want?  Leave our land. If you don’t want to leave now, sit down with me at the negotiating table.  But not from 30 meters away, like with [French President Emmanuel] Macron and [German Chancellor Olaf] Scholz,” Zelensky said, alluding to the lengthy table Putin uses for meetings with foreign leaders and his own advisers.

“Sit down with me and talk, what are you afraid of?  We’re not threat to anyone,” Zelensky added.

He also vowed to continue defending the nation while pleading with NATO countries to help.

“If we are no more, then, God forbid, Latvia, Lithuania, Estonia will be next,” the Ukrainian leader said.

Also Thursday, French President Emmanuel Macron held a call with Putin, in what appeared to have been a markedly more tense exchange than previous exchanges between the two leaders.

After the 90-minute call, a senior French official said it left Macron convinced that “the worst is yet to come” and that Putin aims to take control of all of Ukraine.

“Your country will pay dearly because it will end up as an isolated country, weakened and under sanctions for a very long time,” Macron told Putin, according to a French official, who added that Macron “called on Vladimir Putin to not lie to himself.”

The Kremlin’s news service cited Putin as having told Macron that the objectives “of the special military operation” – the term the Kremlin has used to refer to Russia’s invasion – “will be fulfilled in any case.”

“Attempts to gain time by dragging negotiations will only lead to additional requirements for Kyiv in our negotiating position,” Putin told Macron, according to the readout.

Earlier Putin told the Russian people in a televised speech that the military operations in Ukraine were going according to plan and he praised its soldiers as heroes.  “I want to say that the special military operation is proceeding strictly in line with the timetable.  According to plan.  All the tasks that have been set are being successfully resolved,” he said.

“Now on Ukrainian territory, our soldiers and officers are fighting for Russia, for a peaceful life for the citizens of Donbass, for the denazification and demilitarization of Ukraine, so that we can’t be threatened by an anti-Russia right on our borders that the West has been creating for years,” he said.

Putin also alleged that Ukrainian forces had tortured and killed Russian prisoners of war, without providing any evidence.

--Belarusian leader Alexander Lukashenko said on Friday that the Belarusian armed forces were not taking part and would not take part in Russia’s military operation in Ukraine.

--The key Ukrainian port city of Mariupol was “near to a humanitarian catastrophe” on Wednesday after more than 15 hours of continuous bombardment by Russian forces, the city’s deputy mayor told the BBC.

Serhiy Orlov said Russian forces had launched strikes on key infrastructure, cutting water and power supplies to parts of the city.  One densely populated residential district on the city’s left bank had been “nearly totally destroyed,” he said.

“We cannot count the number of victims there, but we believe at least hundreds of people are dead. We cannot go in to retrieve the bodies.  My father lives there, I cannot reach him, I don’t know if he is alive or dead.”

Russian forces had targeted strikes against pump stations and electoral transformers, Orlov said, and there were food shortages in parts of the city.

Russian troops seized Kherson on Wednesday, the first major Ukrainian city to fall since the start of the invasion.

--In a significant shift, the German government said last Saturday it will send weapons and other supplies to Ukraine and supports some restrictions of the SWIFT global banking system for Russia.

Chancellor Olaf Scholz also announced a new 100-billion-euro defense spending plan, breaking with Germany’s pacifist tradition and culture of military restraint.  German warplanes are even flying armed patrols over Polish airspace.

--In a Quinnipiac University poll, Americans think 66-20 percent that Putin has intentions to invade other countries beyond Ukraine.  If Russia invades a NATO country, Americans say 70-21 percent that American troops should get involved.

More than 8 in 10 (81%) have an unfavorable opinion of Vladimir Putin, 4% have a favorable opinion, and 12% haven’t heard enough about him.  [Keep those 12% out of the voting booths in 2022 and 2024.]

Americans say 86-6 percent that Russia is not justified in making the claim that Ukraine should be reclaimed by Russian and no longer be a sovereign territory.

--Jailed Kremlin critic Alexei Navalny told Russians on Friday to protest against the war in Ukraine in Russian cities and across the world on March 6 and accused Vladimir Putin of bringing shame on the Russian national flag and language.

Navalny told Russians in a post on his blog to shrug off fears of protesting against Russia’s invasion of Ukraine and to take to the squares of their cities even if they had already left Russia.

“Show the world that Russians don’t want war.  Come out in the squares of Berlin, New York, Amsterdam or Melbourne, wherever you are.  Now we are all responsible for Russia’s future.  For what Russia will be in the eyes of the world,” he said in the post.

Thousands of people have been detained thus far in protests against the invasion, and I’m surprised Navalny is still alive. 

--Russian Lawmakers have backed legislation that would introduce jail terms of up to 15 years for people deemed to have spread “false” information about Russia’s army.  Putin then signed it today. 

The BBC said it would temporarily suspend the work of all its journalists and support staff in Russia following the introduction of the law.

Tim Davie, the director general of the BBC said, “The safety of our staff is paramount and we are not prepared to expose them to the risk of criminal prosecution simply for doing their jobs.”

Late Friday, CNN, ABC News and Bloomberg were among the other news organizations suspending their operations until they get clarification on the new rules.

--Similarly, Putin has been dismantling the last vestiges of a free press in Russia.  Two pillars of Russia’s independent broadcast media collapsed under pressure from the state on Thursday.

And Dmitri Muratov, the journalist who shared the Nobel Peace Prize last year, said that his newspaper Novaya Gazeta, which survived the murders of six of its journalists, could be on the verge of shutting down as well, Muratov told the New York Times.

This afternoon, Russia’s telecommunications regulator, Roskomnadzor, decided to block access to Facebook.

The move amounts to a further escalation in the Kremlin’s attempts to freeze its citizens’ access to information about the war.

--According to the Times of London, assassins have tried to kill Volodymyr Zelensky at least three times since Russia invaded Ukraine. The assassination plots were foiled when anti-war Russians fed intel to Ukraine about two separate mercenary groups that planned to launch the attacks.

The shadowy Kremlin-backed Wagner Group was behind two of the attempts, the Times reported.  If they had been or are successful, Moscow could deny direct involvement in the assassination plot.

“They would be going in there with a very high-profile mission, something that the Russians would want to be deniable – a decapitation of a head of state is a huge mission,” a diplomatic source told the newspaper.

--A majority of Swedes are in favor of joining NATO, a poll showed on Friday, with Russia’s invasion spurring a rapid shift in attitudes in a country long known for neutrality.  Sweden has not been in a war since 1814 and has built its foreign policy on “non-participation in military alliances.”  It remained neutral throughout World War II even as neighboring Nordic countries were invaded, and during the Cold War.

A poll by Demoskop and commissioned by Aftonbladet newspaper showed 51% of Swedes are now in favor of NATO, up from 42% in January.  People against joining fell to 27% from 37%.  It’s the first time such a poll has shown a majority in favor.

--Russian firms have been rushing to open Chinese bank accounts as sanctions bite.  Many of the companies seeking new accounts do business with China and it was expected yuan transactions by such firms would increase.

China has repeatedly voiced opposition to the West’s strict sanctions, calling them ineffective and insisting it will maintain normal economic and trade exchanges with Russia.

It’s kind of basic. It you can’t use U.S. dollars, or euros, and U.S. and Europe stop selling you many products, you have no option but to turn to China.

Over time, this could chip away at the dominance of the U.S. dollar in global trade.

--Separately, according to the New York Times, a Western intelligence report confirms that senior Chinese officials told senior Russian officials in early February not to invade Ukraine before the end of the Winter Olympics in Beijing, with Chinese officials having some level of knowledge about Russia’s plans or intentions before the war started.

--The U.S. House passed a resolution on Wednesday to declare support for Ukraine’s sovereignty, while urging an “immediate cease-fire.”

The resolution passed 426-3.  The three votes in opposition came from three Republicans; Reps. Paul Gosar (Ariz.), Thomas Massie (Ky.) and Matt Rosendale (Mont.). 

Rep. Adam Kinzinger (R-Ill.) said it was “unreal” that three fellow Republicans voted against the resolution.

“Talk to me when our border is secure,” Gosar retorted on Twitter. 

I’m biting my tongue.

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Some commentary….

Editorial / The Economist, Part I

“From the start, Mr. Putin has made clear that this is a war of escalation – a hygienic word for a dirty and potentially catastrophic reality. At its most brutal, escalation means that, whatever the world does, Mr. Putin threatens to be more violent and more destructive even, he growls, if that means resorting to a nuclear weapon. And so he insists that the world back off while he sharpens his knife and sets about his slaughter….

“(To) abandon Ukraine to its fate would be wrong, but also because Mr. Putin will not stop there. Escalation is a narcotic.  If Mr. Putin prevails today, his next fix will be in Georgia, Moldova or the Baltic states. He will not stop until he is stopped.

“Escalation is at the heart of this war because it is how Mr. Putin tries to turn defeat into victory. The first wave of his invasion proved as rotten as the cabal who planned it – just like his earlier efforts to suborn Ukraine.  Mr. Putin seems to have believed his own propaganda that the territory he has invaded is not a real country.  The initial assault, which led with botched helicopter strikes and raids by lightly armed units, was conceived for an adversary that would implode.  Instead, Ukrainian spirits have flourished under fire.  The president, Volodymyr Zelensky, has been transformed into a war leader who embodies his people’s courage and defiance.

“The optimism of the warmonger made Mr. Putin lazy. He was so sure Ukraine would fall rapidly that he did  not prepare his people for it.  Some troops have been told they are on exercises, or that they will be welcomed as liberators.  Citizens are not ready for a fratricidal conflict with their fellow Slavs.  Having been assured that there would be no war, much of the elite feels humiliated.  They are horrified at Mr. Putin’s recklessness.

“And Russia’s president believed that the decadent West would always accommodate him….

“The world must stand up to him, and to be credible it must demonstrate that it is willing to bleed his regime of the resources that enable him to wage war and abuse his own people even if that imposes costs on Western economies.  The sanctions devised after Mr. Putin annexed Crimea in 2014 were riddled with loopholes and compromises. Instead of being deterred, the Kremlin concluded that it could act with impunity.  By contrast, the latest sanctions, imposed on February 28th, have crumpled the ruble and promise to cripple Russia’s financial system.  They are effective because they are destructive.

“The danger of escalation is that this can easily become a test of who is most willing and able to go to extremes… The invasion of Ukraine is different, because Mr. Putin can charge all the way to Armageddon and he wants the world to believe he is ready to do so.

“The idea of Mr. Putin using a battlefield nuclear weapon is surely unlikely, but not impossible.  He has, after all, just invaded his neighbor. And so the world must deter him.

“Some will say there is no point in saving Ukraine only to trigger a spiral that may destroy civilization.  But that is a false choice.  Mr. Putin says he wants to drive NATO out of the former Warsaw Pact countries and America out of Europe.  If escalation serves him, the next confrontation will be even more dangerous because he will be less ready to believe that, for once, the West will stand its ground.

“Others may conclude that Mr. Putin is insane and deterrence is hopeless. True, his goals are abhorrent, as are his means of achieving them.  Neither does he have Russia’s true interests at heart. But he nonetheless has an understanding of power and how to keep it.  No doubt he is alive to the language of threats….

“What, then, can it do to deter Mr. Putin without courting devastation?  Only Mr. Zelensky and his people can decide how long to fight.  But if Mr. Putin causes a bloodbath, the West can tighten the screws.  An oil-and-gas embargo would further ruin Russia’s economy. Ukraine’s backers can send more and better arms. NATO can deploy more troops in its frontline states….

“And there is work to do in Russia.  Military commanders should know they will be prosecuted for war crimes using the evidence generated by innumerable smartphones.  So should Mr. Putin’s entourage.  His enforcers signed up to line their pockets in a kleptocracy, not for a ticket to The Hague.  The West can discreetly assure them that, if they remove Russia’s president from power, Russia will get a fresh start.  However nauseating, the West should give Mr. Putin a route into retirement and obscurity – just as it should give asylum to those fleeing his terror.

“A palace coup may come to seem more plausible as the horror of what Mr. Putin has done sinks in. The economy faces disaster. Russian military casualties are growing.  Russians’ Ukrainian kin are being massacred in a conflict unleashed to satisfy one man.  Even now brave Russians are taking to the streets to protest against a crime that stains their country. In a deep sense, Mr. Putin’s needless war is one that neither he nor Russia can win.”

Robin Wright / The New Yorker

“Looking back, the central flaw in the West’s strategy was the fear that any preemptive actions – whether providing more high-powered weaponry to Ukraine or imposing economic sanctions on Russia’s power brokers sooner – would be used by Putin as justification to attack Ukraine. The West also tried to avoid enacting economic sanctions that would disrupt the flow of the world’s energy supplies and their own economies.  It’s now clear that the Russian leader intended to invade, whatever the West did.  ‘He’s gone off the rails,’ former Defense Secretary and CIA director Robert Gates said on Sunday, on CNN.  While Putin has always been a calculated risk-taker during his twenty-two years in power, ‘this behavior is different.’  As Western powers mobilize to aid Ukraine and confront Putin more aggressively, there is an underlying sense of regret. And the protests around the world prove that there are already questions being asked, with many others certain to follow, about why far more was not done in advance to prepare Ukraine for war or to stop Russia’s deranged leader.”

Editorial / The Economist, Part II

“The Georgian war (2008), in which Russian forces performed poorly, was said to have led to sweeping reforms. They were evidently not sweeping enough.  Mr. Putin has spent over a decade pouring money and technology into his armed forces, but in the words of one Western defense official he only has a ‘Potemkin army’ to show for it.  In some cases, its tactics have verged on the suicidal. A video reportedly taken in Bucha, northwest of Kyiv, shows a Russian armored vehicle using its loudspeakers to tell civilians to remain calm. A man wielding a rocket-propelled grenade strolls up to the vehicle and calmly destroys it….

“At the center of this has been Volodymyr Zelensky, the country’s unlikely president.  Having spent months playing down the threat of war he has made an astonishingly rapid transformation from hapless political outsider to wartime hero and global icon of decency.  His charisma and acting background have suited him perfectly to a war immersed in social media.

“As Mr. Putin harangues subordinates in gilded halls, Mr. Zelensky posts selfies with his team in which he explains the thinking behind their conduct of the war and urges his fellow citizens to be strong.  He wants to make use of global goodwill with an international Legion which will integrate foreign soldiers into Ukrainian forces.  Ukrainian embassies worldwide report numerous requests to join.

“Any such new troops are likely to find the going getting tougher.  Russian tactics are changing; artillery is back in its accustomed role as the army’s mainstay.  On February 28th the city of Kharkiv was bombarded with shells, rockets and cluster munitions which release bomblets over a wide area.  There were heavy civilian casualties….

“There is a widespread fear that Kyiv could share the fate of Grozny, the capital of Chechnya, much of which was left in ruins after an artillery pounding ordered by Yeltsin in 1994 left 20,000 civilians dead.*  It is a memory which should frighten the Russians, too. Even after a second battering pounded the ruins into rubble, victory required that ground forces fought their way in to take the city.  And Kyiv, a much larger city than Grozny, offers Ukraine the ‘perfect terrain to defend,’ according to Anthony King, author of ‘Urban Warfare in the Twenty-First Century.’  It is large, dense, bisected by a river, criss-crossed with roads and railway lines and has an extensive metro and sewer system that could be used by defenders.

*Ed. The First Chechen War…Putin’s destruction was in the Second Chechen War.

“Watching a prolonged and bloody siege of Kyiv would further enrage public opinion in large parts of the world and could thus lead to even harsher sanctions on Russia….

“Kirill Rogov, a political analyst critical of Mr. Putin, calls what is happening in Ukraine a tragedy; what is happening in Russia, he says, is a catastrophe.  Many are unwilling to stay and participate in it.  A visit to a veterinary clinic on March 2nd found people queuing up to be able to take their animals with them as they fled their country. Some came carrying suitcases, ready to dash to catch a train or a flight as soon as they left.  ‘What if Turkey closes the border, how will you come back?’ a middle-aged lady with a dog asked a younger woman leaving Russia for the first time.  ‘I have no plans to return,’ came the answer.”

New York Daily News / Editorial

“Donald Trump lives through a looking glass bordered by a gold-plated frame.  It is only in this alternate reality that he can blame his successor’s weakness for inviting Vladimir Putin’s invasion of Ukraine.

“To be sure, decades of failures by western leaders, including by American presidents of both parties, helped give Putin the yellow if not the green light to do his worst.  But nothing compares to the consistent coddling delivered by Trump as a candidate and in his four years in power.

“Two of a kind.

“A very abbreviated recap:

“During the presidential transition period, Trump spoke openly about easing off sanctions that had been imposed on Russia for its election meddling. Weeks into his term, after he said he respected Putin and was challenged that the Russian president was ‘a killer,’ Trump pushed back with this apologia: ‘What, do you think our country’s so innocent?’

“In mid-July 2017, Trump tried to weaken new congressionally imposed sanctions against Russia – before they passed by veto-proof majorities and he begrudgingly signed them into law, calling them ‘seriously flawed.’

“On that ignominious day in July 2018, standing alongside Putin, Trump was asked whether he sided with U.S. intelligence agencies’ universal assessment that Russia had interfered in the 2016 elections.  His reply: ‘President Putin says it’s not Russia.  I don’t see any reason why it would be.’ Deference has rarely been so devious.

“As former national security adviser John Bolton documents, in 2019, Trump tried to block sanctions against Russia for the poisoning in England of former Russian military officer Sergei Skirpal and his daughter.  He told his secretary of state to call his Russian counterpart and blame ‘some bureaucrat’ for them.

“The coup de grace: In 2019, rather than deliver congressionally authorized military aid to Ukraine, Trump tried to make it contingent on Volodymyr Zelensky announcing an investigation into Joe Biden’s son Hunter.

“The former U.S. president who today can’t stop admiring Putin’s supposed strength and cunning is the same sad man who, looking forward to the 2013 Miss Universe pageant in Moscow, mused about Putin becoming ‘my new best friend.’  Best friend of Ukraine’s worst enemy.”

Biden and The State of the Union Address

--Editorial / Wall Street Journal

“President Biden is no Olaf Scholz.  The new Chancellor upended decades of center-left German defense and energy policy this week after Vladimir Putin invaded Ukraine, and Mr. Biden had a similar opportunity in his State of the Union address Tuesday. He missed the moment. The President remained on the same policy course of his first year, albeit dressed up in new anti-inflation packaging.

“More defense spending to meet the threats from autocrats?  No.  A new appreciation for the contribution of fossil fuels to American and European security?  Not a word.  A note that government spending contributed to the highest inflation in 40 years?  Nope.  A word of praise for the private Pharma innovation that developed Covid therapies and vaccines?  He proposed government price controls instead.

“Mr. Biden did offer stirring support for Ukraine and its fight for freedom, which received bipartisan applause.  His Administration deserves credit for helping to rally Europe and other nations to impose sanctions and provide more military aid.  He was properly condemning of Mr. Putin.

“But his self-congratulation ignored the failure to deter the Russian autocrat.  ‘We were ready’ if Mr. Putin invaded, Mr. Biden said.  But if the U.S. had been ready, Mr. Putin wouldn’t have invaded. The Russian invaded because he thought the West would do little.  And Mr. Putin finds himself in a struggle now because of the bravery of 41 million Ukrainians, not the strength of Europe or the United States.

“What we also didn’t hear was a vow that Russia will not be allowed to conquer and hold Ukraine. There was no warning to Mr. Putin not to launch missiles into residential neighborhoods or surround and starve cities into submission like a medieval siege.  This was not Harry Truman at the dawn of the Cold War calling the world to meet a new danger.

“On his domestic agenda, Mr. Biden acknowledged inflation, as he had to given the polls.  But he blamed rising prices on the pandemic and greedy businesses, and his solutions are to unleash prosecutors and antitrust cops, and to spend even more money on social welfare and entitlements.  His most other-worldly line was that his program would ‘cut energy costs for families an average of $500 a year by combating climate change.’

“The entire point of his climate agenda is to raise the price of energy for Americans by reducing the supply and increasing the cost of coal, oil and natural gas.  His regulators are working to do that every day in every way.  It was as if the horror of the last week, which exposed the folly of Europe’s dependence on Russian oil and gas, had never happened.  The climate left still has a choke hold on this Presidency.

“An anxious world is looking for American leadership in a dangerous new era. Instead Mr. Biden offered a rehash of his first-year domestic agenda that has brought him to his low political ebb.  It’s dispiriting that a White House facing so many daunting challenges could come up with so little. The President really does need to fire some people and get better advice.”

--John Podhoretz / New York Post

“Since Joe Biden’s finest moments as president have come in the past few weeks – as he’s been a key part of the West’s determination to confront the depredations of Vladimir Putin – it makes sense that the finest moments of his State of the Union address were the ones at the outset in which he discussed the awful events in Ukraine.

“Putin, he said, ‘thought he could roll into Ukraine and the world would rollover.  Instead, he met a wall of strength he never imagined.  He met the Ukrainian people.  From President Zelensky to every Ukrainian, their fearlessness, their courage, their determination, inspires the world.’

“His description of the efforts taken against the Russian economy and Russian oligarchs were firm and strong.  And he made it ‘crystal clear the United States and our Allies will defend every inch of territory of NATO countries with the full force of our collective power.’

“This firm expression of commitment to the most important alliance in world history after more than a decade of neglect and a certain amount of contempt on the part of his two predecessors was heartening and important.

“It was a serious and sober opening. Too bad that so much of the rest of the speech was preposterous.

“Did you know that everything in America is just great?

“Millions of new jobs (even though we’re still 3 million jobs under the total number before the pandemic)!  Wonderful pieces of glorious legislation, including one that will make this the ‘infrastructure decade!’

“Electric cars! Computer chips!  And you know all that inflation?  That was because ‘our economy whirred back faster than most predicted’! And it’s mostly because of cars anyway!

“You’d never know this president has an approval rating (according to Real Clear Politics) lower on this date than Donald Trump had the exact comparable day – March 1, 2018.  Biden is at 40.6; Trump was at 41.2.  That led many concerned Democrats to believe he needed the speech to reset his presidency.

“The crisis in Ukraine changed that somewhat, because it has given his presidency a new purpose and direction.  But you could see the outlines of the effort to change gears in the surprising passage about policing, in which he made a slight feint toward a Sister Souljah moment in taking on his own radicals.

“He spoke movingly about the two young NYPD officers shot in cold blood in January and then insisted that ‘we should all agree: the answer is not to ‘defund the police.’ The answer is to FUND the police with the resources and training they need to protect our communities.’

“Even so, you can tell that Joe Biden thinks his presidency is going swimmingly.  His words weren’t defensive. They were triumphalist.  He even seemed to promise he would bring the opioid epidemic to an end and, for good measure, would also end cancer ‘as we know it.’

“The immodesty of these ambitions, as we stumble out of the Covid era into an uncertain future in which the dollars in our pocket are worth less every week while Europe faces a continental war and a potential refugee flood of colossal size, had a somewhat delusional aspect.

“We’re in an unprecedented crisis abroad, following our unprecedented health crisis over the past two years and an inflationary spiral we haven’t seen the like of in four decades.

“Maybe we should, you know, focus on those things.”

--Regarding the State of the Union, following are some comments from the Washington Post’s fact checkers….

Biden: “Our economy created over 6.5 million new jobs just last year, more jobs created in one year than ever before in the history of America.”

“The only president ever to cut the deficit by more than 1 trillion dollars in a single year.”

The Post:

“Both of these figures are misleading because of the context – the impact the once-in-a-century pandemic had on jobs and federal finances.  Jobs plunged and deficits soared in 2020 when the coronavirus stuck and shuttered the worldwide economy.

“Now, the United States is emerging from a pandemic that caused huge job losses in 2020 – 9 million jobs, in fact. The rounds of stimulus bills – passed under President Donald Trump and Biden – certainly had an impact.  But they also increased the deficit.  As the economy recovers, government finances are also returning to normal, with receipts growing rapidly.  In the first four months of fiscal 2022, which began last October, the federal government ran a deficit of $259 billion, $477 billion (65 percent) less than at this point in fiscal 2021.”

--In a Yahoo/YouGov poll, only 36% approve of Biden’s handling of the economy, 33% on both his handling of crime and immigration.  Even on Covid, just 44% approve of Biden’s performance vs. 47% who disapprove.

--A new ABC News/Washington Post poll spells dreadful news for Democrats, with a generic Republican candidate leading a generic Democratic one by a 49% to 42% margin among registered voters nationally.

Back in 2018, the Democrats had a +7 advantage on the generic ballot question just before the midterm election and won a net of 40 House seats.

But in 2010, Democrats with a +5 advantage, they lost a net of 64 seats.  History shows that when the Democratic edge is five points or less on the generic ballot, the party has experienced major seat losses in midterm elections.

Dems would say, hey, this survey was from February, not November 2022.

Also in this poll, 75% of Americans rate the economy’s condition as not so good or poor, the most in ABC/Post polls since 2013.  The public by a 3-1 margin says it’s gotten worse rather than better since Biden took office, 54-17 percent (with the rest saying it’s stayed the same).  That “gotten worse” number is more than double what it was when measured during Trump’s presidency in 2019 (22 percent) and 11 points higher than under Obama in 2012.

--A CBS News/YouGov poll found Biden’s approval rating on the economy at just 38%, immigration 37%, and inflation 30%.

Thirty percent thought the condition of the economy was good, 63% thought it was bad.

Overall, ‘Things in America today are going very well/somewhat well’ sits at 32%; ‘somewhat badly/very badly’ 68%.

--The White House received a major endorsement for Supreme Court nominee Judge Ketanji Brown Jackson from a prominent conservative, retired federal Judge J. Michael Luttig, considered a luminary in conservative legal circles, enthusiastically endorsed Jackson, describing her as a candidate who is “eminently qualified to serve on the Supreme Court of the United States.”

“Indeed, she is as highly credentialed and experienced in the law as any nominee in history, having graduated from the Harvard Law School with honors, clerked at the Supreme Court, and served as a Federal Judge for almost a decade,” Luttig added.

Luttig played a critical role in the heated fight over the certification of the 2020 presidential election.  In a series of tweets, he provided legal ammunition to help former Vice President Pence defy Donald Trump’s attempt to overturn the election.

In a statement of support for Jackson, Luttig called for bipartisan support, writing that, “Republicans, in particular, should vote to confirm Judge Jackson.”

Noting the court’s 6-3 conservative majority, Luttig called on Republicans “to confirm Judge Jackson out of political calculation, even if they cannot bring themselves to confirm her out of political magnanimity, and then proudly take the deserved credit for their part in elevating the first black female jurist to the Supreme Court of the United States.”

Wall Street and the Economy

Less than two weeks to go before the big March 15-16 meeting of the Federal Reserve’s Open Market Committee and this week, Fed Chair Jerome Powell said the central bank would begin carefully raising interest rates at that meeting, but be ready to move more aggressively if inflation does not cool as quickly as expected.

Powell, in his semi-annual testimony to the House Financial Services Committee, called the Russian invasion of Ukraine “a game changer” that could have unpredictable consequences.  “There are events yet to come and we don’t know what the real effect on the U.S. economy will be,” Powell said.

But he said for now the Fed was proceeding largely as planned to raise the target overnight funds rate and reduce the size of its balance sheet in order to tame inflation that is currently the highest since the 1980s.

Powell said he will back a quarter-point rate increase, ending any suspense over whether the Fed will hike a ½-point.  Can’t telegraph things more than that…Chair Powell a master of this, as he’s learned how not to upset the markets. Stocks rallied hard on his testimony, Wednesday, erasing Tuesday’s big losses.

Powell added he was ready if needed to use larger or more frequent rate moves if inflation does not slow, and may over time need to push rates to restrictive levels above 2.5% - slowing economic growth rather than simply stimulating it less robustly.

In his prepared testimony, Powell noted the job market was “extremely tight,” and Fed officials have declared their maximum employment goal was effectively met.  The pandemic’s impact on the economy appeared to be easing and “demand is strong,” Powell said.

As to inflation being triple the Fed’s 2% target, a major concern for the Biden administration and the looming mid-term elections, Powell described the current environment as a collision between strong consumer demand and pandemic constraints on global product supply that was “not as transitory as we had hoped…Other mainstream economists and central banks around the world made the same mistake.  That doesn’t excuse it, but we thought these things would be resolved long ago.”

As to the war in Ukraine, Powell said too much remained unknown about an event whose full implications may “be with us for a very long time.”

“The near-term effects on the U.S. economy of the invasion of Ukraine, the ongoing war, the sanctions, and of events to come, remain highly uncertain,” Powell said.  “Making appropriate monetary policy in this environment requires a recognition that the economy evolves in unexpected ways.  We will need to be nimble in responding to incoming data and the evolving outlook.”

On another threat, Powell said, “Everything we can do…we are doing it,” to protect against a cyberattack.

As for the economic data, the Chicago PMI for February came in way below expectations at 56.3 (50 the dividing line between growth and contraction), while the February ISM manufacturing reading was 58.6.  The ISM services reading was also well below forecasts at 56.5.

Which led up to today’s employment report for February, and it was a strong one, the economy adding 678,000 new jobs, far more than expected, with January revised upwards from 467,000 to 481,000.

The unemployment rate fell to 3.8%, with U6, the underemployment rate at 7.2%.

Leisure and hospitality jobs rose by 179,000, a good sign.

Average hourly earnings, though, were unchanged, and up 5.1% from a year ago, well below the 5.8% estimate and down from the prior month’s revised 5.5%.  This is good if you are concerned about wage pressures, but it means the average American is further behind when inflation is 7.5%.  Retail workers, however, did see a strong bump in their wages, 7.1% from a year ago.

[As an aside, world food prices hit a record high in February, a 24.1% increase year-on-year, per a report today from the UN food agency.  The Food and Agriculture Organization noted one example of the impact of the war is on the prices for vegetable oils, which rose 8.5% month-on-month.  Ukraine and Russia account for about 80% of global exports of sunflower oil.]

The Atlanta Fed’s GDPNow barometer for first-quarter growth is 0.0%.  Yup, unchanged.  Most are forecasting 1% to 2%, which won’t look good for the Biden administration.

One final note.  New York City Mayor Eric Adams has been pleading with business leaders to get their employees back to the office. But this week Adams and New York Gov. Kathy Hochul conceded that we could be headed for a four-day workweek.

I have my own local commuter parking lot indicator and the number of cars in the lots that I pass virtually every day is ticking up, slowly, with a seemingly new high yesterday in one of them, about 35 cars, out of more than 150 available spots, which were all filled pre-pandemic.  A lot of these folks work in the financial services industry so they’ve been able to work at home the past two years.

But Gotham desperately needs the workers to come back to fuel small business, number one, and more people on the streets and subways should lead to less crime.

Europe and Asia

We had the release of the final PMIs for the month of February in the eurozone this week, courtesy of IHS Markit, and the final EA19 manufacturing PMI came in at 58.2, with the service sector reading at 55.5.

Germany: 58.4 mfg., 55.8 services
France: 57.2 mfg., 55.5 services
Italy: 58.3 mfg., 52.8 services
Spain: 56.9 mfg., 56.6 services
Ireland: 57.8 mfg., 61.8 services
Netherlands: 60.8 mfg.
Greece: 57.8 mfg.
Austria: 58.4 mfg.

UK: 58.0 mfg., 60.5 services

So strong numbers all around.

Chris Williamson / IHS Markit

“The survey data for February depict a eurozone economy that was regaining robust growth momentum ahead of the invasion of Ukraine.  Business activity accelerated to a pace commensurate with GDP growth in excess of 0.6%, buoyed by a relaxation of virus restrictions.

“Covid-19 containment measures, which had been stepped up to the highest for eight months across the region in January against the threat of the Omicron wave, were eased in February to the lowest since last November, driving a revival in spending on consumer-facing services in particular.  Demand growth accelerated and hiring was stepped up as firms reported brighter prospects.

“However, business activity continued to be constrained both by supply chain bottlenecks and labor shortages, meaning a sellers’ market persisted for many goods and services.  Prices rose to the greatest extent yet recorded in almost a quarter of a century of data collection.

“Although some of these constraints will ease as the Omicron wave ebbs, energy and other commodity prices, notably agricultural goods, are spiking higher again due to the conflict in Ukraine, meaning the risks are heavily tilted towards inflation running even higher and persisting for longer than previously expected, squeezing household budgets.

“Though it remains early days to be assessing the impact of the war, growth prospects are also likely to have been hit by heightened risk aversion and new sanctions, dampening the rebound from the pandemic.

“With inflation risks rising and growth prospects waning, the Ukraine conflict adds to business and household headwinds for the coming months, and exacerbates the difficult juggling act of the ECB in controlling inflation while sustaining a robust economic recovery.”

Separately, euro area January unemployment stood at 6.8%, down from 7.0% in December and from 8.3% in January 2021.

Germany 3.1%, France 7.0%, Italy 8.8%, Spain 12.7% (down from 15.8% a year ago), Ireland 5.3%, Netherlands 3.6%.

And a flash reading on eurozone inflation for February came in at 5.8%, up from January’s 5.1%! A year ago it was 0.9%.

Ex-food and energy, the rate was 2.9% vs. 1.2%, Feb. 2021.

Brexit: In the wake of Russia’s attack on Ukraine, the U.K. is suddenly tightening its relationship with the European Union. Isn’t that ironic.  The war has rekindled the NATO military alliance, which reminds everyone that Britain’s security is inextricably linked to Europe’s.

London’s role as a financial capital for Russian money, “Londongrad,” is also being challenged by sanctions against Russia and scrutiny of the oligarchs close to Putin.  New legislation is intended to crack down on money laundering and requires foreign owners of British property to register their holdings, while expanding powers to investigate the source of wealth.

Turning to Asia…China’s official manufacturing PMI for February was 50.2, services 51.6, according to the National Bureau of Statistics.  The private Caixin readings (small- and medium-sized businesses) had manufacturing at 50.4 and the service sector 50.2.  All of these barely reflecting growth in the economy.

Japan’s February manufacturing PMI was 52.7, down from January’s 55.4, with services at a putrid 44.2, owing to Covid restrictions.

Industrial production for January was -1.3%, month-over-month, -0.9% year-over-year.  Retail sales for Jan. were 1.6% M/M, -1.9% Y/Y.  The unemployment rate for January was 2.8%.

South Korea’s manufacturing PMI for February was 53.8; Taiwan’s 54.3.

Street Bytes

--Market veteran Mohammed El-Erian, former chief executive of PIMCO, who last year predicted inflation would be the problem it is now, says investors should “just be humble and have humility” in navigating today’s uncertainty and I couldn’t agree more.  I get a kick out of some of the bombastic statements I hear on CNBC, for example.  It’s a topic I may revisit if I get the time because it reminds me of the days immediately after 9/11, when some key figures were like carnival barkers with their “Buy America” (specifically stocks) rhetoric at a time when we had no idea what would happen next.

I agree with noted hedge fund investor Kyle Bass, who believes investors still haven’t factored in all of the possible outcomes that could result from Russia’s invasion, including a prolonged conflict that weighs on global growth and sends inflation even higher than it is today, with rising commodity prices.

“This is going to get worse before it gets better,” he told Reuters in an interview, a week ago, and he’s of course been right.  “Asset managers don’t have these outcomes in their realm of possibilities.”

Thanks to the soothing words of Fed Chair Powell, who shot down talk of a 50-basis point rate hike in two weeks, stocks limited their losses, which otherwise could have been big with the awful visuals from Ukraine and surging commodity prices.

Both the Dow Jones and S&P 500 lost 1.3%, Nasdaq 2.8%.  The S&P is now off 9.8% from its high.

But Europe not only didn’t have a Chair Powell of their own, they have to deal more directly with Vlad the Impaler and European share prices fell hard, the Stoxx Euro 600 (like our S&P 500) falling 7%.  London lost 6.7%, and Frankfurt and Paris cratered over 10% each.

--U.S. Treasury Yields

6-mo. 0.68%  2-yr. 1.57%  10-yr. 1.96%  30-yr. 2.27%

The flight to safety was hardly smooth, with the yield on the 10-year plummeting to 1.68% on Tuesday, then up to 1.86% Wednesday, before finishing the week at 1.75%.

You had the same volatility overseas, with the German 10-year bond yield experiencing its biggest fall, 31 basis points, since November 2011.

--OPEC and its Russia-led allies quickly decided to maintain their existing plans for increasing collective oil output by 400,000 barrels a day for April.  That was despite the surge in oil prices to $115 on West Texas Intermediate, highest since 2008.

In a press release, the group said current oil market fundamentals point to a “well-balanced market” and that the volatility today is caused not by market fundamentals but geopolitical developments.

True, punitive sanctions have been responsible for the recent rise, but the market was tight before the invasion.  Oil in commercial stockpiles of countries that are part of the Organization for Economic Cooperation and Development were at their lowest point in seven years, according to the International Energy Agency report from February.  As of mid-February, inventories in the U.S., including the Strategic Petroleum Reserve, were more than 10% below their five-year average.

Tuesday, the U.S. and other major oil-consuming nations said they would coordinate a release of 60 million barrels of oil from their emergency stockpiles; or 2 million barrels a day, spread over 30 days…2% of global oil demand.  The release is only the fourth time the IEA has overseen a coordinated drawdown of reserves since it was created in 1974.

More barrels might be coming from Iran as well, with a deal on its nuclear program still expected.  That would bring an estimated 1 million barrels if an agreement is reached (more on this below). 

But for now, it’s about the disruption to Russian exports, Russia being the world’s third-largest oil producer.  It exports more oil than any other country – about 5 million barrels a day of crude – and accounts for roughly 12 percent of global trade.

A new round of sanctions announced by the White House on Wednesday banned export of specific refining technologies, making it harder for Russia to modernize oil refineries.  Traders also remain wary of Russian oil.  At least 10 tankers failed to find buyers on Wednesday, market sources said.

Replacing Russia’s oil exports in the long term using emergency reserves is not an option, industry analysts say.

The United States still imports some oil from Russia and the administration, already being slammed in the polls because of soaring inflation, is hesitant to prohibit it, but a Reuters/Ipsos poll completed on Friday showed that 80% of Americans say the country should stop buying the oil. 

Meanwhile, the average nationwide price of regular gasoline at the pump in the U.S. hit $3.84 this week, according to AAA. Californians are paying an average $4.94 per gallon, followed by Hawaii ($4.63), and Oregon ($4.16).

San Francisco was the first U.S. city to hit $5.00 on Thursday.

The price down the street from my place in New Jersey is now $4.15, and I’m sure will go up another 10 cents or more tomorrow.

--Exxon Mobil on Tuesday said it would exit Russia oil and gas operations that it has valued at more than $4 billion and halt new investment as a result of Moscow’s invasion of Ukraine.  The decision will see Exxon pull out of managing large oil and gas production facilities on Sakhalin Island in Russia’s Far East, and puts the fate of a proposed multi-billion dollar liquefied natural gas (LNG) facility there in doubt.

“We deplore Russia’s military action that violates the territorial integrity of Ukraine and endangers its people,” the company said in a statement.

Exxon’s exit follows dozens of other Western companies ranging from Apple, Microsoft and Boeing, to BP PLC, Shell and Norway’s Equinor ASA that have halted business or announced plans to abandon their Russia operations.

Exxon operates three large offshore oil and gas fields with operations based on Sakhalin Island on behalf of a consortium of Japanese, Indian and Russian companies that included Russia’s Rosneft.

Exxon has been developing oil and gas fields in Russia since 1995, while operating the Sakhalin facilities since 2005, which have been pumping 220,000 barrels per day of oil.

Last weekend, BP PLC announced it was abruptly unwinding its Russia ties of more than 30 years, the British oil company saying it would divest its nearly 20% stake in Russian state oil company Rosneft, valued around $14 billion at year-end.

Earlier, BP had defended its longstanding partnership with Rosneft even as Vladimir Putin intensified his threats against Ukraine.

“I have been deeply shocked and saddened by the situation unfolding in Ukraine and my heart goes out to everyone affected.  It has caused us to fundamentally rethink BP’s position with Rosneft,” BP CEO Bernard Looney said.

Rosneft accounts for around half of BP’s oil and gas reserves and a third of its production.

Now the challenge for BP is getting anything close to preinvasion value for the Rosneft stake, but for now the company will take a charge of up to $25 billion at the end of the first quarter.

--The world’s biggest shipping lines, MSC and Maersk, suspended container shipping to and from Russia, deepening the country’s isolation.

Major auto and truck makers, including Volvo, General Motors, Harley-Davidson and Jaguar Land Rover are among those cutting off exports to Russia.

--Ryanair saw bookings drop 20% after Russia launched its attack, but sales have already begun to recover, CEO Michael O’Leary said on Wednesday, and Europe’s biggest discount carrier still expects a bumper Easter and summer.

O’Leary said Ryanair had hedged out about 80 percent of its exposure to soaring fuel costs out to March 2023.  This will allow the airline to keep down prices even as competitors are forced to raise fares in response to the spiraling cost of crude.

--The European Union is working with its U.S. counterparts about extending a ban on Russian flights, as the EU closed its airspace to Russian aircraft imposed after Moscow’s invasion of Ukraine.

Airlines already face potentially lengthy blockages of key east-west flight corridors after the EU and Moscow issued tit-for-tat airspace bans.  The EU has said Russian oligarchs, even those with dual nationalities, would not be able to get around the EU airspace ban.

Global supply chains, already hit hard by the pandemic, will face increasing disruption and cost pressure from the closure of the skies which will affect over a fifth of air freight.  Hardest hit are likely to be Russian carriers, which make up approximately 70% of the flights between Russia and the EU.  Transport between Europe and north Asian destinations like Japan, South Korea and China is in the front line of disruption after reciprocal bans barred European carriers from flying over Siberia and prevented Russian airlines from flying to Europe.  Airlines responsible for moving around 20% of the world’s air cargo are affected by those bans.

Last I saw, major Asian carriers like Korean Air Lines and Japan’s ANA are still using Russian airspace, however, as are Middle Eastern airlines.

--TSA checkpoint travel numbers vs. 2019….

3/3…85 percent of 2019 levels
3/2…81
3/1…83
2/28…88
2/27…93
2/26…91
2/25…113
2/24…92

--U.S. banks saw their profits jump nearly 90% in 2021 as firms shrank how much money they were setting aside to protect against credit losses, the FDIC said on Tuesday.

Banks reported $279.1 billion in profits in 2021, up $132 billion compared to 2020, the FDIC said.  The jump was mainly due to economic growth and banks rapidly shrinking their credit loss provision expenses, which dropped $163.3 billion in 2021, it added.

FDIC Acting Chairman Martin Gruenberg cautioned that banks still face a number of headwinds including rising interest rates and geopolitical uncertainty.  Gruenberg singled out the fact that higher interest rates could weigh down real estate and impact borrowers’ ability to repay, adding that bank supervisors plan to closely monitor those areas this year.

--Ford Motor Co. said on Wednesday it will boost spending on electric vehicles to $50 billion, up from the previous $30 billion, through 2026 and run its EV unit separately from its legacy combustion engine business, in a move aimed at catching industry leader Tesla Inc.

The reorganization and additional investment comes as CEO Jim Farley bets aggressively on the company’s electrification strategy.  Farley said Ford plans to build more than 2 million EVs in 2026, about one-third of its annual global production, with EVs rising to 50% of its total volume by 2030.

Ford shares were up nearly 9% Wednesday on the announcement. 

Although the EV business, named Ford Model e, will be separated from the company’s internal-combustion engine (ICE) unit, Ford Blue, the two divisions will share technology and “best practices,” the automaker said.

--Lucid Group Inc. lowered its production target for 2022 to a range of 12,000 to 14,000 cars, down from a previous goal of 20,000 for the year, citing “extraordinary” challenges with logistics and its supply chain.

The luxury electric vehicle startup (which just opened a showroom in the next door Mall at Short Hills) also came up short on its stated goal for deliveries last year.  Lucid said Monday it delivered 125 of its Air sedans in the final quarter of 2021 after originally planning to ship more than 500.  And it delayed the launch of its second vehicle, the gravity SUV, from 2023 to the first half of 2024.

The shares fell hard in response.

CEO Peter Rawlinson said on a conference call that Lucid is struggling more to secure supplies of parts such as window glass and interior carpeting than computer chips, shortages of which have tripped up many other automakers’ production plans.

The company said an expansion of its Casa Grande, Arizona, vehicle assembly facility is “on track.”  Lucid plans to build a second factory in Saudi Arabia, SA’s sovereign wealth fund owning more than 60% of the automaker.

Lucid’s Air sedan costs $169,000.

--Salesforce.com Inc. logged higher revenue in the fourth quarter and raised its annual sales outlook, as the company looks to maintain its leadership role in cloud-based services that have expanded in response to the Covid-19 pandemic.

Sales rose to $7.33 billion for the three months ended Jan. 31, compared with $5.82 billion a year earlier. 

For fiscal 2023, the company is now expecting sales of around $32 billion, slightly ahead of its previous guidance.

“This year has just been characterized by a lot of complexity, from the pandemic, to inflation, supply chain, and now, this war in Europe, but the thing that really has endured is I think this trend towards digital transformation,” co-CEO Bret Taylor said in an interview.  He added, “The demand environment continues to be very strong.”

Salesforce thrived as the pandemic pushed entire industries and government to purchase digital tools as they shifted to remote work.

--HP Inc. raised its annual profit outlook, boosted by strong sales of computers to businesses, but warned that Russia’s invasion of Ukraine would dent its bottom line this quarter.

For the quarter, it projected a profit of 95 cents to $1.01 a share, basically in line with analysts’ forecasts.

The roughly $17 billion in net revenue for the January-ended quarter beat consensus and reflected sales growth across notebooks and desktops along with a continued recovery in workstations.

CEO Enrique Lores said HP had seen some supply-chain improvement but that the print business is seeing the impact from earlier factory lockdowns and expects shortages to continue the rest of the year.

Printing revenue fell 4% to $4.83 billion, missing analysts’ forecast.

Lores pointed to strength on the commercial side, as offices re-open and companies invest in equipment to allow for hybrid work arrangements.

“Employees need higher-end PCs to be able to connect, to communicate, with better cameras, more memory, better displays,” he said.

Commercial PC revenue rose 26% in the latest quarter, while consumer PC sales declined 1%.

PC vendors like HP have said demand would trend even higher were it not for supply-chain issues.  They cite hybrid work and education arrangements as changes that are expected to continue to lift sales.

Top PC vendor Lenovo Group Ltd. said last week that the market is expected to remain solid and shift to commercial and premium segments, which should drive up average selling prices.

Dell Technologies Inc. last week reported a record year for its PC business and projected another strong performance this business year.  But it also noted that supply-chain issues worsened in the fourth quarter in servers and storage and are expected to remain during the first half of the year.

--Target Corp. reported fiscal Q4 adjusted earnings of $3.19 per share, up from $2.67 a year earlier and well ahead of expectations.

Revenue totaled $30.99 billion for the quarter ended Jan. 29, up from $28.34 billion a year earlier, and also slightly below forecast.

The retailer’s comp sales grew 8.9% for fiscal Q4, compared with growth of 20.5% a year ago.

For full-year fiscal 2022, Target said it expects high-single digit growth in adjusted EPS, with low- to mid-single digit revenue growth.

The shares surged on the favorable outlook, including the company saying it saw margin pressures easing later in the year, with higher profits, banking on tie-ups with companies such as Starbucks and curbside pickup shopping options to drive sales.

Rival Walmart had also predicted improving gross margins this year.

--Best Buy’s fiscal fourth-quarter earnings declined year-on-year while sales fell short of analysts’ estimates, impacted by higher inventory constraints and reduced store hours in January due to staffing issues caused by the Omicron variant.

Adjusted earnings dropped to $2.73 per share from $3.48 a year earlier, but were slightly above consensus.  Revenue for the quarter ended Jan. 29 ticked down to $16.37 billion from $16.94 billion, while the Street’s view was for $16.54 billion.  Comparable sales were down 2.3%, compared with 13% growth a year ago, and wider than analysts’ expectations of a 0.7% decline.

Domestic online sales, which accounted for 39% of domestic revenue in the quarter, fell 11% to $5.91 billion.

The consumer electronics retailer expects revenue of $49.3 billion to $50.8 billion and a comparable sales decline of 1% to 4% for fiscal 2023.

But the shares rose over 10% on the earnings news due to a massive increase in the quarterly dividend and a new $5 billion share repurchase program.  The company also said it would be back to pre-pandemic sales by 2024.

--Dollar Tree posted fiscal Q4 earnings of $2.01 per diluted share, down from $2.13 per share a year ago, but above consensus.

Revenue was $7.08 billion for the quarter ended Jan. 29, compared with $6.77 billion a year ago, less than forecast. 

For the current quarter, the company expects earnings above current forecasts, but sales below the Street’s estimates.

--Shares in Nordstrom soared after the company reported strong fiscal fourth-quarter earnings of $1.23 per share, up from $0.21 a year earlier, with revenue of $4.49 billion for the quarter ended Jan. 29, up from $3.65 billion a year earlier.

--The Canadian economy grew 6.7% in the fourth quarter on an annualized basis, beating expectations, according to Statistics Canada data.

--India’s economy grew 5.4% year-on-year in the fourth quarter, slower than the previous two quarters, official data on Monday showed.

--Zoom Video Communications Inc. forecast full-year revenue and profit below Wall Street estimates on Monday, signaling a hit from tough competition and lower sign ups for its core Meetings platform.

The video conferencing platform, which derives a large portion of its revenue from smaller organizations, has been hit by slowing growth as schools and workplaces reopen, as well as competition from Cisco’s conferencing tool Webex, Microsoft’s Teams and Salesforce’s Slack.  However, Zoom said it would continue to focus on expanding internationally to boost growth.

Zoom beat estimates for fourth-quarter sales and profit, as revenue from enterprise customers grew by 38%.  Revenue in Q4 rose 21% to $1.07 billion, the company’s slowest-ever growth since it went public in 2019.

But the company forecast annual adjusted profit and revenue below current forecasts and the shares fell hard, again.

--Dine Brands Global, the parent company of IHOP and Applebee’s, reported higher fourth-quarter results as customers returned to restaurants but the chain operator still experienced supply chain disruptions and labor shortages.

Adjusted earnings for the December quarter rose to $1.32 per share from $0.39 a year ago.  Analysts expected $1.27.  Revenue increased to $229.6 million from $196 million but missed Street consensus.

“Guests are back in our restaurants and consumer intent to return to restaurants is at a pandemic period high,” CEO John Peyton said on a call with analysts.  “Yet, at the same time, we’re combating meaningful macroeconomic headwinds, inflation, the labor shortage, supply chain disruption and now the war in Ukraine.”

Applebee’s comparable same-restaurant sales grew nearly 35% year-over-year, while IHOP increased more than 39%.

“While we expect supply chain availability and pricing to moderate throughout 2022, the increases in cost of labor are likely to remain over the long term,” Peyton said.  “Despite these headwinds, we are increasingly encouraged that we’re at the beginning of the end of Covid.”

--Domino’s Pizza reported fourth-quarter results on Tuesday that missed analysts’ expectations as the company said it will face cost pressures in the U.S. this year and its chief executive will retire from the food chain.

Adjusted earnings for the quarter ended Jan. 2 rose to $4.25 per share from $3.46 per share a year ago, shy of consensus.  Revenue fell to $1.34 billion from $1.36 billion, also below the Street’s expectations.

The fourth quarter was impacted by more issues with staffing across the U.S. as the year progressed, along with dwindling benefits from the government stimulus that impacted sales in the first two quarters, the company said.

Global retail sales fell 0.2% in the quarter but grew 9% when excluding the extra week in the year-ago period and the negative impact of foreign currency.

U.S. same store sales increased 1% in the quarter “driven by ticket growth as we continue to see customers order more items per transaction,” Treasurer Jessica Parrish said on a call with analysts.  International same store sales rose 1.8%.

“As we look forward into 2022 and the inflationary forces across the U.S. economy, we expect to face unprecedented cost pressures on our U.S. business,” CEO Ritch Allison said.  “We also expect to make significant incremental labor investments in our corporate stores this year, and we believe many franchises will be facing similar cost increases in their businesses.”

Separately, Domino’s said it appointed Russell Weiner, the company’s chief operating officer and president of Domino’s U.S., as CEO, effective May 1.

Yours truly is a fan of Domino’s thin-crust pizza.

--Warren Buffett’s Berkshire Hathaway Inc. on Saturday said fourth-quarter profit swelled, boosted by gains in many of its businesses and common stock investments such as Apple Inc., and said annual earnings reached a record high.  Berkshire also signaled renewed confidence in its own stock, repurchasing $6.9 billion in the quarter, and boosting total buybacks in 2021 to a record $27 billion.

In his annual letter to Berkshire shareholders, Buffett said buybacks make “good sense” when alternatives such as buying whole companies or more stocks appear “unattractive.”  He also expressed confidence in Berkshire’s dozens of operating businesses such as the BNSF railroad and GEICO auto insurer, after having gone six years since a major acquisition and letting Berkshire’s cash stake swell to $146.7 billion.

“Today, internal opportunities deliver far better returns than acquisitions,” Buffett wrote.

Quarterly operating income rose 45% to $7.29 billion.  Results benefited from insurance underwriting gains, higher profit from BNSF, and currency fluctuations, among other factors.  Net income rose 11% to $39.65 billion, with both totals reflecting large gains from stocks such as Apple Inc.  Apple alone represents 46% of the $350.7 billion of stocks that Berkshire owns.

The company said it plans for the first time since 2019 to hold its usual shareholder weekend in Omaha, including the April 30 annual meeting.  “Woodstock for Capitalists,” as Buffett calls the weekend, typically draws about 40,000 people.  Proof of Covid-19 vaccination will be required to attend the annual meeting.

--Kroger offered an upbeat full-year outlook driven by momentum in the grocer’s business after it reported fiscal fourth-quarter results that exceeded Wall Street estimates.

The company expects to report adjusted earnings of $3.75 to $3.85 per share for 2022, higher than analysts’ $3.53 consensus, and adjusted same-store sales growth without fuel of 2% to 3%, compared with a Street view of 1%. The stock jumped 11% in response.

For the quarter ended Jan. 29, revenue came in at $33.05 billion, up from $30.74 billion a year ago.

“2021 was an incredible year for Kroger, and we are committed to continued growth,” CEO William McMullen said during a conference all.

--OxyContin maker Purdue Pharma reached a settlement Thursday over its role in the nation’s deadly opioid crisis that includes U.S. states and thousands of local governments, with the Sackler family members who own the company boosting their cash contribution to as much as $6 billion.

The deal follows an earlier settlement that had been appealed by eight states and the District of Columbia.  They agreed to sign on after the Sacklers kicked in more cash and accepted other terms, including apologizing.  In exchange, the family would be protected from civil lawsuits.

In all, the plan could be more than $10 billion over time.  It calls for members of the Sackler family to give up control of the Stamford, Connecticut-based company so it can be turned into a new entity with profits used to fight the crisis.

An apology is something Sackler family members have not unequivocally offered in the past. And victims are to have a forum in court to address Sackler family members – something they have not been able to do in a public setting.

The settlement, in a mediator’s report filed in U.S. Bankruptcy Court in White Plains, New York, still must be approved by a judge.

--Blackstone Inc. CEO Stephen Schwarzman took home a record $1.1 billion in 2021, a reflection of the private-equity giant’s growing dominance on Wall Street.

Dividends on his 19% stake in Blackstone accounted for the biggest chunk of Mr. Schwarzman’s haul, totaling $941.6 million for the year.  He also earned $160.3 million in compensation, composed of profits tied to investment performance and a base salary of $350,000, according to a regulatory filing late Friday.

Blackstone’s assets under management reached $880.9 billion by the end of the fourth quarter, as initiatives to reach wealthy individuals and expand its base of insurance clients helped Blackstone tap new pools of capital.

The firm’s market cap stands at $155 billion, more than four times that of Apollo Global Management Inc. – its closest private-equity peer – and well beyond that of Wall Street heavyweight Goldman Sachs Group Inc.

Schwarzman, 75, co-founded Blackstone in 1985 and is worth an estimated $37.3 billion, according to Forbes.

--Bitcoin surged this week amid what analysts said was increased demand from Russian and Ukrainian buyers.  Russians are flocking to escape the ruble.

--Discovery Inc. has tapped producer Chris Licht to lead CNN after it takes over the cable-news channel, turning to a veteran news and late-night TV showrunner to steady a network roiled by the sudden departure of its long-serving president.

Licht is currently executive producer of “The Late Show with Stephen Colbert” on CBS.  He has also been the executive producer of “CBS This Morning” as well as MSNBC’s “Morning Joe.”

--Fanatics Inc. has raised $1.5 billion from a group of big investors, pushing the sports-merchandising giant’s valuation to $27 billion as it works to expand beyond its core business.

Investors in the latest round include Fidelity Management & Research Co., funds managed by BlackRock Inc. and Michael Dell’s family office, known as MSD Capital LP, according to the Wall Street Journal.

Last August, after raising $325 million, Fanatics was valued at $18 billion.

The Pandemic

--The Russian invasion of Ukraine could unleash a new public health crisis in the region, worsening the pandemic and potentially sparking surges of polio and other diseases.  Continued attacks are forcing health workers and patients to hide in makeshift shelters.  Hospitals are running low on supplies.  Hundreds of thousands of refugees are streaming across Ukraine’s western border.  Global health experts warn that the conflict could have long-lasting health consequences.  “Viruses and bacteria are happy to exploit those situations where human beings are put under pressure,” one expert said.

Regarding Covid, Ukraine was coming off one of its worst waves of it since the pandemic began, according to WHO data. Without tests available, the virus could easily spread.

“Low rates of testing since the start of the conflict mean there is likely to be significant, undetected transmission.  Coupled with low vaccination coverage, this increases the risk of large numbers of people developing severe diseases,” WHO Director-General Tedros Adhanom Ghebreyesus said. 

In addition, the WHO director-general said three major oxygen plants in Ukraine are closed.

--The first real-world data on how well the Pfizer-BioNTech vaccine works in American children and adolescents looks a lot like the data for adults.  Researchers found that the vaccine’s ability to prevent infections in kids 5 to 11 years old waned over time – but the shots continued to shield against hospitalization and death, even amid the Omicron variant surge.  It’s another reminder that kids are much better off with the vaccine than without it, experts said.

--The Centers for Disease Control and Prevention said Thursday that more than 90% of the U.S. population is in a location where Covid-19 levels are low enough that people do not need to wear masks.

The CDC also said about half of booster-eligible people have gotten one so far, compared with about 69% of the eligible population who have completed a regular vaccine series.

Cities around the country are rolling back vaccine mandates for dining and going to shows. Cases are down and local officials feel that the requirements have essentially run their course.  Those who haven’t gotten the shots by now probably never will.

--Hong Kong’s leader Carrie Lam called for calm on Tuesday after residents emptied supermarkets, stocking up on produce ahead of reports of compulsory mass Covid-19 testing and rumors of a city-wide lockdown.  Local media reported compulsory testing would start after March 17, sparking concerns many people will be forced to isolate and families with members testing positive would be separated.

Officials are planning to test the city’s 7.4 million people three times over nine days, with the government recommending that people stay home during the period.

Infections have been surging in Hong Kong from just over 100 a day at the start of February to over 34,000 on Monday.  Deaths are also climbing, with facilities for storing dead bodies at hospitals and public mortuaries at maximum capacity.  Hong Kong continues to stick to a Covid policy of “dynamic zero,” the same as mainland China.

One reason for the extreme caution is Xi Jinping’s expected trip to Hong Kong early this summer, last I saw.

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

Starting this week, this portion will be abbreviated.  Perhaps once a month I’ll show the entire list of nations over 20,000 deaths because it’s for the historical record.  But a shorter list tonight.

World…6,009,157
USA…983,440
Brazil…651,343
India…514,908
Russia…354,787
Mexico…319,296
Peru…210,907
UK…162,008
Italy…155,609
Indonesia…149,596
France…139,123
Colombia…138,984
Iran…137,593
Argentina…126,624
Germany…124,517
Poland…112,336
Ukraine…105,505
Spain…100,431

Canada…36,905

[Source: worldometers.info]

U.S. daily death tolls…Mon. 843; Tues. 1,670; Wed. 1,885; Thurs. 1,389; Fri. 1,405.

Foreign Affairs

Iran: Indirect talks between Iran and the United States on salvaging the 2015 Iran nuclear deal are in the final stages but “definitely not there yet,” the talks’ coordinator, Enrique Mora of the European Union, said on Twitter on Thursday.  “We are at the final stages of the #ViennaTalks on #JCPOA*.  Some relevant issues are still open and success is never guaranteed in such a complex negotiation.  Doing our best in the coordinator’s team.  But we are definitely not there yet,” he said. 

*Joint Comprehensive Plan of Action.

Tehran said on Thursday “extra efforts” were needed to revive Tehran’s 2015 accord with world powers and that issues remained to be dealt with as indirect talks with the United States continued.

“#ViennaTalks still continue.  Premature good news does not substitute good agreement,” a Iranian Foreign Ministry spokesperson tweeted.  “Nobody can say the deal is done, until all the outstanding remaining issues are resolved.  Extra efforts needed.”

Russia’s envoy to the Iran nuclear talks said there were still some “relatively small” issues that needed to be finalized, but that he did not believe talks would now collapse.  Mikhail Ulyanov said a ministerial meeting was likely to happen Saturday, Sunday or Monday.  “There are some issues that need to be finalized…the outstanding issues are relatively small, but not yet settled,” he said.

But the above comes as a quarterly report from the International Atomic Energy Agency, released Thursday, said that the stock of enriched uranium amassed by Iran in breach of the 2015 accord is growing to the point that its most highly-enriched material is most of the way to a common bomb yardstick.

Western powers have warned time is running out before Iran’s nuclear progress makes the talks pointless, and the report showed Iran’s stock of uranium enriched to up to 60% fissile purity had almost doubled.  A senior diplomat said that is around three-quarters of the amount needed, if enriched further, for one nuclear bomb according to a common definition – 25 kg of uranium enriched to 90%.  Iran has enriched at least 33 kg to 60%.

When Donald Trump pulled the United States out of the deal in 2018, Iran responded by breaching many of the deal’s restrictions, including a 3.67% cap on the purity to which it could purify uranium and a 202.8-kg limit on its enriched uranium stock.  That total stock of enriched uranium now stands at 3.2 tons, an increase of 707.4 kg, the IAEA’s report showed.  That is still less than the more than five tons Iran had accumulated before the 2015 deal but the highest purity then was 20%.

In a separate report, the IAEA has found particles of processed uranium at three apparently old sites that Iran never declared.  That issue is one of the main remaining obstacles in talks, since access to the sites by IAEA inspectors is the only way the 2015 deal can be revived.

North Korea: Pyongyang broke its silence on Russia’s invasion of Ukraine, with the North Korean Foreign Ministry saying in a statement that the West was guilty of “abuse of power.”

“The root cause of the Ukraine crisis totally lies in the hegemonic policy of the U.S. and the West, which enforce themselves in high-handedness and abuse of power against other countries.”

Washington has called for a resumption of talks on dismantling Pyongyang’s nuclear and missile programs, but North Korea has rejected the overtures, demanding U.S. “hostile policy” and “double standards” be dropped.

Pyongyang has also threatened to restart testing its longer-range missiles and even nuclear weapons.

North Korea accused Washington and its allies of “ignoring Russia’s reasonable and legitimate demands” for guaranteeing legally backed security assurances.  They “systematically undercut the European security environment by pursuing the North Atlantic Treaty Organization’s expansion towards the east, including blatantly deploying attack weapons systems,” the official North Korean news agency said.  “The reality proves once again that as long as the U.S. unilateral and double-dealing policy that threatens a sovereign country’s peace and safety exists, there will never be peace in the world.”

Last Sunday, the North fired a ballistic missile in what was the first test since a record number of launches in January.  The missile flew to a maximum altitude of 390 miles and to a range of about 190 miles, according to South Korea’s Joint Chiefs of Staff.  The “lofted” trajectory suggested it was a medium-range ballistic missile.

North Korea’s previous test, Jan. 30, was of a Hwasong-12 intermediate-range ballistic missile, the largest weapon test-fired since 2017.  It reportedly flew to an altitude of 1,200 miles and a range of about 500 miles.

South Korea has a presidential election March 9.

*And tonight, North Korea fired at least one more rocket as I go to post.  All I’ve seen is that South Korea is calling it another ballistic missile.

China/Taiwan: The U.S. is signaling its support for Taiwan with a visit by former national security and defense officials, a trip that comes as Washington heaps sanctions on Russia for its invasion of Ukraine.  The delegation included former chairman of the Joint Chiefs of Staff Michael Mullen and ex-undersecretary of defense Michele Flournoy, who met with President Tsai Ing-wen on Wednesday.

Tsai last week downplayed worries that Russia’s attack could trigger a crisis in Taiwan, which Beijing claims as its territory to be taken by force if necessary.  She also warned the public about “external forces” using fake information about the situation in Ukraine to sow panic about a possible Chinese threat to the island.

Officials in Taipei see the risk of China launching an imminent attack some 160 km (100 miles) across the Taiwan Strait as low. That’s because Beijing wants stability before a congress of the ruling Communist Party later this year that is likely to hand President Xi Jinping a precedent-busting term in power and also because the People’s Liberation Army is seen as lacking the capabilities to guarantee the success of any venture.

I disagree with the above, but I’ll have more to say on it next week.  Yes, Ukraine has changed things.

Random Musings

--Presidential approval ratings….

Gallup: 41% approve of Biden’s job performance, 55% disapprove; 35% of independents approve (Feb. 1-17). 

Rasmussen: 42% approve, 55% disapprove (Mar. 4).

A new Yahoo/YouGov nationwide poll had 41% approving of Joe Biden’s handling of his job, while 53% disapproved.  Biden’s approval rating peaked last April at 54% in this one.

But in a hypothetical rematch among registered voters, Biden leads Donald Trump 45-42 percent.  Trump’s unfavorable rating (55%) remains higher than Biden’s (51%).

A new Quinnipiac University national poll has Biden with a 38% job approval rating, 52% disapproval, among registered voters (11% no opinion).  In February, the same poll had a 37-56 split.

An ABC News/Washington Post national poll gave Biden a 37% approval rating, just 30% approval among independents.  55% disapprove.

In data since Harry Truman, only two presidents have had approval ratings this low heading into their first State of the Union address – Donald Trump, at 36%, and Gerald Ford, 37%.

An NPR/PBS NewsHour/Marist national poll from last Friday that I had missed had Biden’s approval rating at 39%, 55% disapproval.

But a new CBS News/YouGov survey had Biden’s overall job rating at 44% approval, 56% disapproval.  This poll had Biden with a 62% approval rating in March.

--Texas Gov. Greg Abbott won the Republican party nomination in his bid for a third term in office on Tuesday, fending off two main challengers (out of seven, if I read it right).

Abbott will face Beto O’Rourke in the November general election after the El Paso Democrat won the Democratic primary contest with more than 90% of the vote, according to early results.

Abbott finished the latest fundraising period with $49.8 million on hand to O’Rourke’s $6.8 million.

--Oklahoma Republican Sen. Jim Inhofe, 87, announced last weekend that he would retire from politics effective Jan. 3 of next year.

Inhofe is the top Republican on the Senate Armed Services Committee.  He was up for re-election in 2026.

Under Oklahoma law, a special election will take place this fall to his seat, which is highly likely to remain in Republican hands.  Inhofe endorsed his chief of staff, Luke Holland, to replace him, but there is a pretty long list of potential candidates.

--I watched the interview with Arkansas Republican Sen. Tom Cotton on ABC’s “This Week” on Sunday and it was embarrassing.  I often agree with him, but host George Stephanopoulos, after hearing all of Cotton’s hardline talk in opposition to Vladimir Putin, couldn’t help but ask if the senator condemned Donald Trump’s praise of Putin.

Repeatedly, Cotton refused to.

It’s pathetic that Republican leadership just doesn’t have the guts to stand up to Trump.  He told the CPAC (Conservative Political Action Conference) audience in Orlando the night before he was running in 2024, all but formally announcing it.

In his speech to thousands of cheering activists, Trump falsely blamed his 2020 election loss on widespread voter fraud, for which there is no evidence.  As Russian troops advanced on the Ukrainian capital in an invasion widely condemned by Western leaders, Trump described Vladimir Putin as “smart.”

“Of course he’s smart,” Trump said, doubling down on praise of the Russian leader that many other Republicans have avoided in the wake of the invasion.  “But the real problem is our leaders are dumb.  Dumb.  So dumb.”

[Earlier in the week, Trump described Putin’s actions in Ukraine as “genius” and “pretty savvy.”]

While Trump expressed support for the Ukrainian people and called the country’s president, Zelensky, a “brave man,” he also noted his ties with other leading autocrats.  He specifically pointed to his friendly relationships with Xi Jinping of China and North Korea’s Kim.

“As everyone understands, this horrific disaster would never have happened if our election was not rigged and if I was the president,” Trump said.

Trump also cited Russia’s invasion of Georgia under George W. Bush and Crimea under Barack Obama before declaring: “I stand as the only president of the 21st century on whose watch Russia did not invade another country.”

Trump then left no doubt he is the most powerful voice in Republican politics by indicating he will run for president a third time in 2024.  “We did it twice, and we’ll do it again,” Trump said.  “We’re going to be doing it again, a third time.”

--CPAC’s annual, unscientific, straw poll at the end of the conference showed Trump receiving 59% of the vote of attendees, with Florida Gov. Ron DeSantis garnering 28%.

[In 2021, it was 70% Trump, 21% DeSantis.]

--Liz Cheney tweet:

“President Trump spent a large part of his presidency attacking NATO, saying that NATO was obsolete, and attacking our allies.

We are certainly seeing today how crucially important NATO is, how crucially important our allies are.”

--Former Attorney General William Barr writes in a new book that former President Trump has “shown he has neither the temperament nor persuasive powers to provide the kind of positive leadership that is needed,” and that it is time for Republicans to focus on rising new leaders in the party.

The release of Barr’s 600-page book, “One Damn Thing After Another,” is coming at an interesting time.  Barr writes that he was convinced that Trump could have won re-election in 2020 if he had “just exercised a modicum of self-restraint, moderating even a little of his pettiness.”

“The election was not ‘stolen,’” Barr writes.  “Trump lost it.”  Barr urges conservatives to look to “an impressive array of younger candidates” who share Trump’s agenda but not his “erratic  personal behavior.”  He didn’t mention any of the candidates by name.

Barr also describes times when he was privately frustrated by Trump’s aggressive style and constant comments on the Justice Department’s work.

He provides the details of a contentious meeting on Dec. 1 in the Oval Office hours after Barr said publicly that there wasn’t evidence of widespread voter fraud in the presidential election that could reverse Joe Biden’s victory, contradicting Trump’s claims.

“This is killing me – killing me. This is pulling the rug right out from under me,” Trump shouted at Barr, according to the book.  “He stopped for a moment and then said, ‘You must hate Trump.  You would only do this if you hate Trump.’”

Barr writes that he reminded Trump that he had “sacrificed a lot personally to come in to help you when I thought you were being wronged,” but that the Justice Department had not been able to verify any of his legal team’s assertions about mass voter fraud.

Trump then launched into a list of other grievances he had with his AG….and Barr countered by offering to submit his resignation, according to the book.  “Accepted!” Trump yelled, banging his palm on the table.  “Leave and don’t go back to your office.  You are done right now. Go home!”  White House lawyers persuaded Trump not to follow through with Barr’s ouster.

Barr then resigned a few weeks later. He said that Trump “lost his grip” and that his false claims of voter fraud led to the Jan. 6, 2021, attack on the Capitol.

“The absurd lengths to which he took his ‘stolen election’ claim led to the rioting.

--Wednesday, the special House select committee investigating the deadly Jan. 6 attack said for the first time that it had gathered evidence indicating that former President Donald Trump and others “engaged in a criminal conspiracy to defraud the United States.”

The committee alleged in court documents that the conspiracy occurred as Trump and his associates pushed false theories of election fraud and pressured former Vice President Pence to invalidate the 2020 election.

“The evidence supports an inference that President Trump and members of his campaign knew he had not won enough legitimate state electoral votes to be declared the winner of the 2020 Presidential election during the January 6 Joint Session of Congress,” the committee disclosed.  “But the President nevertheless sought to use the Vice President to manipulate the results in his favor.”

The committee’s extraordinary filing was part of the continuing legal effort to force former Trump legal adviser John Eastman to disclose documents that the committee says outline a scheme to overturn the election.

As part of Eastman’s plan, according to the documents, Trump repeatedly pushed Pence to “exercise unilateral authority illegally, as presiding officer of the Joint Session of Congress, to refuse to count electoral votes.”

“In service of this effort, he and (Eastman) met with the Vice President and his staff several times to advocate that he unilaterally reject and refuse to count or prevent the counting of certified electoral votes, and both also engaged in a public campaign to pressure the Vice President,” the committee documents state.

Committee Chairman Bennie Thompson, D-Miss., has said the panel would be “obligated” to refer evidence of potential crimes to the Justice Department.

Thompson and Co-Chair Liz Cheney appeared to indicate that such evidence exists.

“The facts we’ve gathered strongly suggest that Dr. Eastman’s emails may show that he helped Donald Trump advance a corrupt scheme to obstruct the counting of electoral college ballots and a conspiracy to impeded the transfer of power,” the panel leaders said in a joint statement.

Eastman drafted a two-page memo after the 2020 election that outlined ways for Vice President Pence to derail the count of Electoral College votes in Congress on Jan. 6.  He also spoke alongside Trump’s lawyer Rudy Giuliani at the Jan. 6 rally that preceded the storming of the Capitol.

Following the riot, Eastman “sent an email to Vice President Pence’s lawyer stating: ‘The ‘siege’ is because YOU and your boss did not do what was necessary to allow this to be aired in a public way so the American people can see for themselves what happened,” according to the court filing.

“Later that evening, plaintiff made a final plea to the vice president’s lawyer: ‘I implore you to consider one more relatively minor violation [of the Electoral Count Act] and adjourn for 10 days to allow the legislatures to finish their investigations, as well as to allow a full forensic audit of the massive amount of illegal activity that has occurred here,” he wrote, according to the committee.

Eastman knew what he was proposing would violate the law, but he nonetheless urged the vice president to take those actions, the committee said.

--Editorial / Wall Street Journal

“Just when we thought Georgia Rep. Marjorie Taylor Greene couldn’t get more embarrassing for the GOP, there she goes again. This weekend she and Rep. Paul Gosar addressed a rally organized by Nick Fuentes, a fringe internet figure who has a long record of praising a coming ‘tidal wave of white identity.’

“Ms. Greene is now playing dumb, to choose a phrase.  ‘I do not know Nick Fuentes,’ she said.  ‘I’ve never heard him speak.  I’ve never seen a video.  I don’t know what his views are, so I’m not aligned with anything that may be controversial.’  But in the public mind she is aligned, since she accepted a laudatory introduction from Mr. Fuentes as his special ‘mystery speaker.’

“Here’s what Mr. Fuentes said minutes before she took the stage.  ‘Take a look at everything we’ve put together,’ he said.  ‘You want to know the secret?  To borrow a phrase from a friend of mine, our secret sauce here, it’s these young, white men.  That’s what we call the secret ingredient.  America and the world has forgotten about them, but not us.’

“He added: ‘They say about America, they say ‘diversity is our strength,’ you know.  And I look at China, and I look at Russia.  Can we give a round of applause for Russia?’  The crowd cheered and chanted ‘Putin.’  Yes, cheers for Vladimir Putin.

“Later in the day Mr. Fuentes said: ‘The United States government has become the Great Satan that many have called it.’  And: ‘They’re going on about Russia and ‘Vladimir Putin is Hitler’ – and they say that’s not a good thing.’  Was Ms. Greene not paying attention backstage?  She should’ve sprinted for the exit.  Mr. Gosar didn’t attend in person but sent a video message.

“Associating with the likes of Mr. Fuentes is wrong as a moral matter, and it’s also political poison.  A primary challenger to Ms. Greene or Mr. Gosar couldn’t have asked for better opposition research than they willingly served up.  House GOP Leader Kevin McCarthy can hope they lose their primaries.  But if they don’t, he will have to make clear they don’t speak for the Republican Party.”

--Appearing on CNN’s “State of the Union” Sunday program, Sen. Mitt Romney (R-UT) implied that some of his fellow Republicans are “morons” treading dangerously close to treason after MTG and Gosar appeared at the white nationalist conference.

“There’s no place in either political party for this white nationalism and racism,” Romney told CNN’s Dana Bash, calling it evil and questioning their mental competence.  “It’s simply wrong.”

“Marjorie Taylor Greene and Paul Gosar, I don’t know them, but I’m reminded of that old line from ‘Butch Cassidy and the Sundance Kid’ where one character says, ‘Morons. I’ve got morons on my team,’” Romney said.  “And I have to think anybody that would sit down with white nationalists and speak at their conference was certainly missing a few IQ points.”

Marjorie Taylor Greene, in rebutting the criticism Sunday, said: “We’re not going to be deterred by journalists and Washington insiders who fear the name of Our Lord, and relentlessly attack those of us who proclaim His name. We know that Christ is our only judge,” Greene said in a statement.  “The Pharisees in the Republican Party may attack me for being willing to break barriers and speak to a lost generation of young people who are desperate for love and leadership. But I won’t abandon these young men and women, because I believe we need to do better by them.”

What a bunch of garbage.

--In an effort to win the “Jerk of the Year” award, Florida Gov. Ron DeSantis admonished a group of high school students for wearing face masks at an indoor news conference this week, saying it was time to stop what he called “this Covid theater.”

DeSantis approached the students and asked them to remove their masks as they waited for him at the press event Wednesday at the University of South Florida in Tampa.

The college is located in an area where the federal Centers for Disease Control and Prevention still recommends indoor masking due to high Covid-19 risk.

“You do not have to wear those masks. I mean, please take them off.  Honestly, it’s not doing anything. We’ve got to stop with this Covid theater. So if you want to wear it, fine, but this is ridiculous,” he said, letting out an audible sigh and shaking his head.

Some of the parents of the students appearing with DeSantis were not happy with the governor.

--Northeast and eastern Australia have been pounded with historic rains, killing at least 11, forcing tens of thousands to flee their homes…town centers submerged, power lines cut.  Sydney was hit on Wednesday as the storms came down from the north.  I plugged Sydney into Weather.com Wednesday morning and there were 15 warnings.  I don’t know if even during a hurricane I’ve seen more than 7 for a given location. 

Sydney was expecting months’ worth of rain to fall within a few hours (like 8 inches in six hours), as the Warragamba Dam, the city’s major water supply, began overflowing Wednesday morning.

--California’s snowpack has shrunk to about two-thirds of normal, as the state’s relentless drought produced the driest January and February on record, after one of the wetter December’s on record, which had provided some hope.  So the state is facing another year of wildfires and deeper water cuts to cities and farms.  There are no major storms on the horizon.  California’s wet season ends in April.

As an example of how dry it’s been, San Francisco recorded 0.65 inches of rain in January and February, compared with a normal of 8.77 inches, according to the National Weather Service.

--A UN report, the Intergovernmental Panel on Climate Change (IPCC), released Monday in Berlin, paints a grim picture.

The report assesses scientific literature documenting the devastating effects of human-caused climate change on society and ecosystems worldwide.

“Human-induced climate change, including more frequent and intense extreme events, has caused widespread adverse impacts and related losses and damage to nature and people, beyond natural climate variability,” the report said.

Urgent action is needed to curb rising temperatures and limit the effects climate change is already having on physical and mental health and well-being, the panel concluded.

The IPCC was established by the United Nations Environment Program and the World Meteorological Organization in 1988 to provide scientific assessments on climate change and its implications and risks.

The assessments, released every six to seven years, are meant to provide governments around the world with information to develop climate policies.

Increased heat waves, droughts and floods are already exceeding plants’ and animals’ tolerance thresholds, driving mass mortalities in species such as trees and corals, according to the report.

The past seven years have been Earth’s hottest on record and there’s no signs of ‘slowing down.’

Even if global warming is limited to the goal of 1.5 degrees Celsius, human life, safety and livelihoods across North America will be placed at risk from sea level rise, severe storms and hurricanes, especially on coastal areas, the report said.

The increasingly intense storms “combined with sea-level rise will result in losses and damages, despite our best efforts to adapt,” Thomas said. “And unfortunately, these negative impacts of climate change have disproportionate effects on those that are least able to respond: the poorest and most vulnerable communities.”

Without limiting warming to 1.5 degrees Celsius, the risks to North Americans are expected to intensify rapidly, one of the report’s authors said.  It would result in “irreversible changes to ecosystems, mounting damage to infrastructure and housing, and really stress economic sectors and disrupt livelihoods, mental health, physical health and safety.”

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

God bless America.

We pray for Ukraine.

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Gold $1974…highest since Aug. 2020
Oil $115.00…highest since 2008

Returns for the week 2/28-3/4

Dow Jones  -1.3%  [33614]
S&P 500  -1.3%  [4328]
S&P MidCap  -1.7%
Russell 2000  -2.0%
Nasdaq  -2.8%  [13313]

Returns for the period 1/1/22-3/4/22

Dow Jones  -7.5%
S&P 500  -9.2%
S&P MidCap  -8.0%
Russell 2000  -10.9%
Nasdaq  -14.9%

Bulls 29.9
Bears 34.5

Hang in there.

Brian Trumbore

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