Week in Review

---

Week in Review

04/09/2022

For the week 4/4-4/8

[Posted 9:00 PM ET, Friday]

Note: StocksandNews has significant ongoing costs, and your support is greatly appreciated.  Please click on the gofundme link or send a check to PO Box 990, New Providence, NJ 07974.

Edition 1,199

First it was the horrors of Mariupol, then Bucha, then Borodyanka, and today, Kramatorsk.

Ukraine’s troops have retaken vast swaths of land, including everything near Kyiv as the Russians have undertaken a tactical retreat to regroup and refuel for what all know is the looming Battle of the Donbas and Russia’s attempts to fully link up with Crimea.

But as President Zelensky said last weekend, as they retreat the Russians have left a trail of mass destruction, and “They are mining all this territory.  Houses are mined, equipment is mined, even the bodies of dead people,” Zelensky said.

Over 1,500 explosives were found in one day during a search of the village of Dmytrivka, west of the capital.  As Ukraine’s leader said, “It is still impossible to return to normal life as it was.”

In many parts of the country, it will be so for a long time to come, such is the brutality of Vladimir Putin.

Vlad the Impaler has sought the complete dehumanization of the Ukrainian people, and the level of hatred being shown is incredibly dark and evil.

What’s worse is that in true Orwellian fashion, the Kremlin is bombarding its own people, and the world, with gross disinformation.

Today, European Commission chief Ursula von der Leyen toured the destruction of Bucha, commenting that the civilian deaths there showed the “cruel face” of Russia’s army and pledged to try to speed Ukraine’s bid to become a member of the European Union.

Von der Leyen looked visibly moved by what she saw as forensic investigators started to exhume bodies from a mass grave.

And it was as EU officials were about to arrive in Kyiv that we learned of the missile strike at Kramatorsk in the eastern region of Donetsk.

Von der Leyen told President Zelensky, “Russia will descend into economic, financial and technological decay, while Ukraine is marching towards the European future, this is what I see.”

But the sanctions being laid down by the West for now are basically toothless unless Europe and other big players stop buying Russian oil and natural gas, and for now they need it and that results in filling Putin’s coffers to the tune of $100s of billions, which is supporting the ruble.  That closed the week at essentially the level of a month before the invasion.

I’ve had one haunting tune coursing through my brain this week.  Tchaikovsky’s Sixth Symphony, “Pathetique,” the fourth movement.

Back in 1973, my parents and I toured the Warsaw war museum and during a film of World War II and the Ghetto Uprising, which was the resistance of the Polish Jews under Nazi occupation to the deportations from Warsaw to the extermination camp at Treblinka, which I then went to see in 1999, this passage from Tchaikovsky’s masterpiece was in the background.

https://www.youtube.com/watch?v=BVkWCHgOxw8

Have some Kleenex handy.

As we cry for Ukraine, the United States and its allies must rush even more arms to the brave Ukrainian military.  As President Zelensky said, there is a window of opportunity to hit the bastards before they can regroup.  Good must triumph over evil.

---

How the week unfolded….

Monday, NATO Secretary General Jens Stoltenberg said Russia is likely to launch a new offensive in Ukraine’s Donbas region in the next few weeks, and that Russia was planning a “very concentrated” offensive.

“We now see a significant movement of [Russian] troops away from Kyiv to regroup, re-arm and re-supply and shift their focus to the east,” Stoltenberg told a news conference.

“In the coming weeks, we expect a further Russian push in eastern and southern Ukraine to try to take the entire Donbas and to create a land bridge to occupied Crimea… Repositioning of the Russian troops will take some time, some weeks.”

“In that window,” Stoltenberg said, “it is extremely important that NATO allies provide support.”

In an address to the UN Security Council on Tuesday, President Zelensky said Russian forces killed entire families, raped women in front of their children, carried out torture and looting and crushed people under tanks “for pleasure.”

Zelensky said his country had experienced the “most terrible war crimes” seen since the second World War.  Having visited the city of Bucha, he said there was “not a single crime that they [Russian forces] would not commit.”

Zelensky said the Russian troops had killed entire families and tried to burn their bodies, and that people were shot in the street or thrown into wells.

He told the Security Council women were raped and killed in front of their children, while some people had their tongues “pulled out only because the aggressor did not hear what they wanted to hear from them.”

He said: “This is no different from other terrorists such as Daesh [ISIS] who occupy some territories, and here it is done by a member of the United Nations Security Council.”

The president accused Russia of trying to “distort the facts” about the alleged atrocities and claimed it was “already launching a false campaign to conceal their guilt in the mass killings of civilians in Mariupol.”

UN Secretary General Antonio Guterres warned the Security Council that Russia’s invasion of Ukraine was one of the greatest challenges ever to the international order “because of its nature, intensity and consequences.”

He said the war was putting even more pressure on the developing world, with more than 1.2 billion people particularly vulnerable to spiking food, energy and fertilizer costs.

“We are already seeing some countries move from vulnerability into crisis, and signs of serious social unrest.”

This week the UN released its latest global food-price index and it rose at its fastest rate in 14 years last month, 13% higher in March than in February; 33.6% over March 2021.

Wednesday, Sec. Gen. Stoltenberg warned at a gathering of foreign ministers in Brussels that allies must plan for the possibility that the war could last months or even years.

“We have to be realistic and realize that this may last for a long time, for many months, for even years,” he said.

“We have to be prepared for the long haul,” Stoltenberg added, “both when it comes to supporting Ukraine, sustaining sanctions and strengthening our defenses.”

Thursday, world leaders stepped up efforts to isolate Russia in response to mounting evidence of war crimes, with the UN voting to suspend the Russian delegation from the Human Rights Council and the European Union approving a plan to phase out imports of Russian coal.

The coal ban, which will take effect mid-August, is the fifth sanctions package against Russia to be adopted by the E.U.  But it does not ban other Russian energy imports, like natural gas and oil.

Britain froze the assets of Russia’s largest bank, Sberbank, on Wednesday and said it would ban imports of Russian coal by the end of 2022 in a new round of sanctions coordinated with Western allies to “starve Putin’s war machine.”

The action on Sberbank was taken in coordination with the United States, which announced full blocking sanctions on the bank the same day, as well as on Alfa Bank.  The U.S. Treasury halted dollar payments from Russian government accounts at U.S. banks, increasing pressure on Moscow to find alternative funding sources to pay bond investors.

The move is designed to force Russia into choosing among three unappealing options – draining dollar reserves held in its own country, spending new revenue, or going into default, according to the Treasury’s Office of Foreign Assets Control.

Washington also announced sanctions targeting President Putin’s two adult daughters, and others, including the wife and children of Sergey Lavrov.  It’s long been thought that the likes of Putin and Lavrov hide their assets through their family members.

At the same time, NATO foreign ministers meeting in Brussels discussed the future of support of Ukraine’s military.  Estonia on Wednesday joined the U.S. in sending a host of new arms to Ukraine, including anti-tank missiles, howitzers, anti-tank mines, and grenades.

“My agenda is very simple…it’s weapons, weapons, and weapons,” Ukraine Foreign Minister Dmytro Kuleba said when he arrived in Brussels as a sort of special guest.  “The more weapons we get, and the sooner they arrive in Ukraine, the more human lives will be saved, the more cities and villages will not be destroyed,” he said.  “I think the deal that Ukraine is offering is fair,” he added.  “You give us weapons; we sacrifice our lives, and the war is contained in Ukraine.  This is it.”

With Russian forces withdrawing from the areas around Kyiv, and preparing a major offensive in the Donbas, Ukrainians in the east were urged to flee. 

“You need to evacuate now, while this possibility still exists,” Ukraine’s deputy prime minister, Iryna Vereshchuk, said on Ukrainian TV.  “Later, people will be under fire and under threat of death.  We won’t be able to help because it will be practically impossible to cease fire.”

Late Thursday, airstrikes disrupted a railway evacuation route in the separatist-held Donetsk province.

And then today, Ukrainian rail authorities reported that Russian rockets hit the main train station in the city of Kramatorsk, killing at least 50 people and injuring hundreds in yet another heinous attack on civilians evacuating the region.  Thousands of people were in the station at the time.  Ukrainian authorities said Russia used cluster munitions, banned under a 2008 convention of which Russia is not a signatory, though it denies using them.

At week’s end, Russia admitted suffering “significant losses of troops” in Ukraine, with presidential spokesman Dmitry Peskov telling British channel Sky News the casualties were “a huge tragedy for us.”  He said he hoped Moscow would reach its war goals “in the coming days.”

The chairman of the Russian aluminum giant Rusal called on Thursday for an impartial investigation into the killing of civilians in Bucha, which he described as a crime, and urged an end to the “fratricidal” conflict.

While the statement from Chairman Bernard Zonneveld, a Dutch national, did not touch on who was to blame for the deaths of civilians in the town, it was unusual for a large Russian company to comment publicly on the conflict.

Rusal founder Oleg Deripaska last month said his personal opinion was that the conflict in Ukraine was “madness” which would bring shame on generations to come.

President Zelensky later Thursday said the situation in Borodyanka was “significantly more dreadful” than in nearby Bucha.  While local officials have said more than 300 people were killed by Russian forces in Bucha (and that toll is rising with the discovery of a second mass grave), hundreds could be buried in the rubble in Borodyanka, as Zelensky said in a video.  Entire high-rise buildings were leveled with virtually zero chance of survivors.

---

Russian Foreign Minister Sergei Lavrov accused the West on Tuesday of trying to derail negotiations between Russia and Ukraine by fueling “hysteria” over alleged war crimes by Moscow’s forces.  Kyiv and the West say there is evidence – including images and witness testimony gathered by Reuters and other media organizations – that Russia committed war crimes in the Ukrainian town of Bucha.  Moscow denies the charge and has called the allegations a “monstrous forgery.”

Lavrov said, without providing evidence, that Moscow believed the accusations were timed to wreck the negotiating process after what he described as progress when Ukrainian and Russian representatives met in Turkey last week.

Lavrov said Moscow was still insisting on the demilitarization and “denazification” of Ukraine and protection for Russian speakers there, but Kyiv was denying that these were real problems.

Ukraine and Western governments say these demands, presented by Vladimir Putin at the start of Russia’s invasion, were false pretexts for an illegal assault on a democratic country.  Lavrov said, again without providing evidence, that Ukraine had “tried to break off the negotiating process altogether” after Western media published the war crimes allegations.

Monday, Lavrov and other Kremlin officials accused Kyiv and Western allies of staging the atrocities.

“The other day, another fake attack was launched in the city of Bucha,” he said in televised remarks.  “After the Russian military personnel left from there in accordance with plans and agreements, a few days later they staged this fake, which is being dispersed through all channels and social networks by Ukrainian representatives and their Western patrons.”

Konstantin Kosachev, deputy speaker of the upper house of Russia’s parliament, said there was “no doubt whatsoever that it was staged.

“The fact that the Kyiv authorities organized it and are now hyping it up is a crime.  And the fact that the West picks up this fabrication and adds maximum resonance to it, makes the West an accomplice of this cynical and immoral crime,” he said.

In a post on Twitter, Alexander Alimov, a Russian diplomat at the United Nations in Geneva, said video footage from Bucha was fake because the bodies on the street appeared to be alive and moving.

On Monday morning, the news feed from Yandex, the Russian search engine that is one of the leading news sources for millions of Russians, featured only two reports about Bucha.  Both were headlined using quotes from Russian officials – Kremlin spokesperson Peskov and Foreign Minister Lavrov – calling the footage of alleged Russian atrocities “fake” and “staged.”

---

Tuesday, Joint Chiefs Chairman Army Gen. Mark Milley said: “We are witness to the greatest threat to the peace and security of Europe and perhaps the world in my 42 years of service in uniform.  The Russian invasion of Ukraine is threatening to undermine the global peace and stability that my parents – and generations of Americans – fought so hard to defend.”

“With the invasion of Ukraine, Putin has created a dangerous, historical turning point and has invaded a free and democratic nation and its people without provocation,” Milley said. “Shoulder-to-shoulder with our allies, we have bolstered NATO’s Eastern Flank and imposed wide-ranging costs on Russia, demonstrating our willingness to defend the international, rules-based order.”

Milley’s advice: “The United States needs to pursue a clear-eyed strategy of maintaining the peace through unambiguous capability of strength relative to [China] and Russia,” which, of course, Milley argues the White House’s budget request addresses.  “This requires we simultaneously maintain readiness and modernize for the future.  If we do not, then we are risking the security of future generations.”

-----

--Pope Francis was in Malta last week, struggling with leg pain, but he said countries should always help those trying to survive “amidst the waves of the sea.”

At the start of the last day of his trip, Francis visited the grotto in the town of Rabat, where according to tradition, St. Paul lived for two months when he was among 75 shipwrecked on their way to Rome in the year 60 AD.  The Bible says they received unusual kindness:

“No one knew their names, their place of birth or their social status; they knew only one thing: that these were people in need of help,” the pope said in a prayer in the grotto.

Malta is one of the more important routes used by migrants who cross from Libya to Europe and it was a natural venue for Francis to repeat his appeal for the safety of migrants.  But Malta has a migrant crisis and the government said that the island, by far Europe’s most densely populated country, is “full up.”  Many are taken back to Libya.

But during the trip, the pope came the closest he has yet to implicitly criticizing Vladimir Putin, saying on Saturday a “potentate” was fomenting conflicts for nationalist interests.

“From the east of Europe, from the land of the sunrise, the dark shadows of war have now spread. We had thought that invasions of other countries, savage street fighting and atomic threats were grim memories of a distant past,” Francis said in an address to Maltese officials.

“However, the icy winds of war, which bring only death, destruction and hatred in their wake, have swept down powerfully upon the lives of many people and affected us all.  Once again, some potentate, sadly caught up in anachronistic claims of nationalist interests, is provoking and fomenting conflicts, whereas ordinary people sense the need to build a future that, will either be shared, or not be at all,” the pope said.

“Now in the night of the war that is fallen upon humanity, let us not allow the dream of peace to fade!”  The pope said the clash of interests and ideologies had “re-emerged powerfully in the seductions of autocracy, new forms of imperialism (and) widespread aggressiveness.”

On his flight to Malta, Francis said a trip to Kyiv “was on the table.” President Zelensky and Kyiv Mayor Vitaliy Klitschko have invited him, as well as church leaders in Ukraine.

Wednesday, Francis condemned “the massacre of Bucha” and kissed a Ukrainian flag sent from the town.

“Recent news from the war in Ukraine, instead of bringing relief and hope, brought new atrocities, such as the massacre of Bucha,” the pope said at the end of his weekly audience in the Vatican’s auditorium.

“Stop this war!  Let the weapons fall silent! Stop sowing death and destruction,” he said.

Francis also said: “In the war of Ukraine, we are witnessing the impotency of the United Nations.”

Thursday, Ukraine said it would expect Russia to suspend hostilities during a papal visit to Kyiv, the Ukrainian ambassador to the Vatican told Reuters.  Ambassador Andriy Yurash met with Francis and top Vatican officials to formally present his credentials.

“We discussed many things on the agenda right now, first of all the possible visit of His Holiness to Ukraine,” Yurash said.  “I gave more arguments as to why it has to be realized as quickly as possible and exactly in these circumstances,” he said.

As for Patriarch Kirill of the Russian Orthodox Church, he held a service for Russian soldiers last Sunday in which he called on them to defend their country “as only Russians can.”

At the lavishly decorated Main Cathedral of the Armed Forces outside Moscow, Kirill told a group of servicemen that Russia was a "peace-loving” country that had suffered greatly from war.

“We absolutely do not strive for war or to do anything that could harm others,” said the patriarch, who as I’ve written before is a close ally of Vlad the Impaler.

“But we have been raised throughout our history to love our fatherland. And we will be ready to protect it, as only Russians can defend their country.”

Kirill sees the war as a bulwark against a Western liberal culture that he considers decadent, particularly over the acceptance of homosexuality.

I wish only the worst for him.

--The European Union’s foreign policy chief described a summit with Chinese President Xi Jinping as a “deaf dialog,” casting doubt on how much cooperation the Asian nation will offer to end the war.

“China wanted to set aside our difference on Ukraine,” said Josep Borrell, who accompanied European leaders in talks with Xi last week.  “They didn’t want to talk about Ukraine.  They didn’t want to talk about human rights and other issues, and instead focused on the positive things.”

Borrell told the European Parliament on Tuesday that “the European side made clear that this compartmentalization is not feasible, not acceptable,” adding: “For us the war in Ukraine is a defining moment for whether we live in a world governed by rules or by force.”

While Xi has spoken to key players in the dispute including Putin and Joe Biden, he has yet to talk to President Zelensky.

So Tuesday, in its first public response to the reports and images of civilian deaths in the city of Bucha, its UN envoy described them as “very disturbing.”

Addressing a Security Council meeting, Zhang Jun said civilians should not be targeted in armed conflicts, while stressing that accusations should be based on facts.

“Reports and images of civilian deaths in Bucha are very disturbing, and the circumstances and specific causes of the incident must be ascertained,” he said.  “Any allegations should be based on facts, and all parties should exercise restraint and avoid groundless accusations until conclusions are drawn.”

An editorial in Global Times, a Chinese Communist Party mouthpiece, said the incident should not be used as a pretext for inflaming the situation.

--Russia has launched its disinformation campaign across social media platforms across Latin America, warning users that the U.S. is the bigger problem.

“Never forget who is the real threat to the world,” reads a headline from an article posted on Twitter en Espanol, which is intended for an audience half a world away from the fighting in Kyiv and Mariupol.

As the war rages, Russia is launching falsehoods into the feeds of Spanish-speaking social media users in nations that already have long records of distrusting the U.S.  The aim is to gain support in those countries for the Kremlin’s war and stoke opposition against America’s response.

While many of the claims have been discredited, they’re spreading widely in Latin America and helping to make Kremlin-controlled outlets some of the top Spanish-language sources for information about the war.

Russia’s discredited claims about Ukraine and the U.S. include allegations that the invasion was necessary to confront neo-Nazis, or that the U.S. has secretly backed biological warfare research in Ukraine.  In fact, the U.S. has long publicly provided funding for biological labs in Ukraine that research pathogens with the hope of curbing dangerous disease outbreaks.

But this type of disinformation can easily flow from Latin America into other countries – including the U.S. – that have large Spanish-speaking communities.

--Military experts have been weighing in on the failure of Russian forces to take Kyiv, what is being labeled “a defeat for the ages.”

The Russians were ill-prepared for Ukrainian resistance, proved incapable of adjusting to setbacks, failed to effectively combine air and land operations, misjudged Ukraine’s ability to defend its skies, and bungled basic military functions like planning and executing the movement of supplies.

“That’s a really bad combination if you want to conquer a country,” said Peter Mansoor, a retired Army colonel and professor of military history at Ohio State University.

Frederick Kagan of the Institute for the Study of War, said, “It’s stunning,” adding he knows of no parallel to a major military power like Russia invading a country at the time of its choosing and failing so utterly.

--Unless Russia’s biggest trade partners turn off the tap on its exports of energy, Russia will earn nearly $321 billion from such trade this year, according to Bloomberg Economics, an increase of more than a third from 2021.

But, even without an energy embargo, inflation is soaring and a deep recession looms.  Both the White House and international economists expect the Russian economy to contract by at least 10% in 2022  Inflation is running at a 15%+ clip.

--Germany’s foreign intelligence service claims to have intercepted radio communications in which Russian soldiers discuss carrying out indiscriminate killings in Ukraine.

In two separate communications, Russian soldiers described questioning Ukrainian soldiers as well as civilians and then shooting them.

The findings, first reported by the German magazine Der Spiegel and confirmed by three people briefed on the information, further undermine Russia’s denials of involvement in the carnage.  Russia has claimed variously that atrocities are being carried out only after its soldiers leave occupied areas or that scenes of massacres of civilians are “staged.”

German intelligence officials briefed members of at least two German parliamentary committees on the findings.

--We learned about the status of Fox News correspondent Benjamin Hall, who was seriously wounded after he was shot outside Kyiv while reporting on the war.

Hall tweeted: “To sum it up, I’ve lost half a leg on one side and a foot on the other. One hand is being put together, one eye is no longer working, and my hearing is pretty blown…but all in all I feel pretty damn lucky to be here – and it is the people who got me here who are amazing!”

Cameraman and friend Pierre Zakrzewski and Ukrainian journalist Oleksandra Kuvshynova died in the attack.

Some commentary….

David Ignatius / Washington Post

“Putin’s whole life has converged on the catastrophic war in Ukraine. His delusional, messianic ideas of Russian history have fused with the disdain for the laws of war he displayed in the bloody campaign in Chechnya about two decades ago.  The Russian leader fabricated the case for war in Ukraine and lied about his plans, and when he failed to achieve the easy victory he had expected, his army appears to have taken savage revenge on civilians.

“Has Putin finally hit a wall in Ukraine? Thanks to courageous Ukrainians and foreign reporters, we are seeing the butchery that his style of war produces – in Bucha, Mariupol, Kharkiv, Trostianets – places most of us had never heard of a few weeks ago but are now written in infamy, alongside Guernica and Srebrenica.  ‘Unbearable’ was how French President Emmanuel Macron described the latest images. ‘A punch to the gut,’ said Secretary of State Antony Blinken.  Putin ‘is a war criminal,’ said President Biden….

“Russia’s response to the horrifying images has been in character for Putin’s regime: a shameless campaign of lies.  The denials of brutal killings are so cavalier and reflexive that they convey a moral emptiness that should embarrass every honest Russian.

“ ‘All those who died in Bucha were some kind of road traffic offenders,’ asserted Russian member of parliament Oleg Matveichev.  Bucha was ‘a flagrantly brutal provocation by Ukrainian Nazis,’ said Russian state TV’s Olga Skabeyeva. The West chose Bucha for their ‘egregious accusation against Russia’ because the town’s name sounds like the English word for ‘butcher,’ claimed talk show host Olesya Loseva.

“But the truth of these horrors is being confirmed, pixel by pixel. It’s a sweet bit of justice that Western social media, which Putin worked so hard to manipulate, are now dissecting Russia’s denials of responsibility for Bucha and other atrocities….

“And most devastating for Moscow: Commercial satellite imagery taken in mid-March by Maxar Technologies show dead bodies on the streets of Bucha while Russia troops occupied the town; they’re in precisely the same places that journalists found them when they arrived last weekend after Russian troops had left.  That debunks Russian claims that the Bucha evidence might be fabricated because it wasn’t discovered until after Russian troops had departed.

“What has this war meant for the Russian soldiers who followed Putin’s orders to invade their neighbor? A haunting snapshot of one elite unit, the 331st Guards Parachute Regiment, was broadcast recently by the BBC’s Mark Urban. This unit – ‘the best of the best,’ a general boasted in a video posted online last May – was sent toward Kyiv from its home base in Kostroma, northeast of Moscow, in February.

“The unit’s commander was killed during fighting in Ukraine on March 13.  Many other officers and senior enlisted men died before the unit was withdrawn last week to Belarus. The BBC identified 39 dead, and residents of Kostroma told the British network that closer to 100 members of the elite unit were killed. The BBC reported that as many as one-third of the 1,500-member force may be dead, wounded, missing or taken prisoner.

“On a social media memorial wall for Sgt. Sergei Duganov, a Russian woman wrote: ‘The 331st regiment is disappearing.  Almost every day, photos of our Kostroma boys get published.  It sends shivers down my spine. What’s happening? When will this end?  When will people stop dying?

“When will Putin’s brutal carnage end?  That demand is growing louder in Russia, Ukraine and around the world.”

Walter Russell Mead / Wall Street Journal

“We are only six weeks into Vladimir Putin’s war against Ukraine, but the conflict has already settled into a familiar pattern. Both sides often go into wars with a theory of victory, and it is only when both theories fail that the true shape of the conflict begins to appear….

“World War I started out in much the same way. The French and the Germans had both planned what they hoped would be decisive attacks, the French over their eastern border and the Germans with the Schlieffen plan for an attack through Belgium that would capture Paris.  Both offensives fell short, leaving the countries locked in a conflict that neither side knew how to win – and neither was willing to lose.

“Something similar seems to be happening with Mr. Putin’s war. The original Russian plan was to break the Ukrainian state by quickly taking the capital and major cities such as Kharkiv.  It failed.  Ukraine hoped that the shock of military setbacks plus major economic sanctions would either force Mr. Putin to accept peace terms favorable to Ukraine or lead to his overthrow.  That plan also seems to have failed, at least for now.

“Now both sides are stuck with a war that neither knows how to win, and it is difficult to see the outlines of a compromise peace that both sides can accept.  Ukraine cannot accept a peace that leaves it exposed to further Russian aggression and that involves further territorial sacrifice, and Mr. Putin cannot end the war without demonstrable gains at the expense of Ukraine.  The logic of warfare now seems to lock the two sides into further, perhaps escalating military, economic and political conflict as each looks for some pathway to victory.  Russia is refocusing its military efforts on the east and stepping up the level of violence on the battlefield and against civilians to terrorize Ukrainians into accepting Russian dominance.  Ukraine is redoubling its appeal to Western countries for more military aid and tougher economic sanctions.

“As the two sides stumble in search of a path to victory, the Biden administration has three ugly options from which to choose.

“The first option, helping Ukraine win, is the most emotionally appealing and would certainly be the most morally justifiable and politically beneficial, but the risks and costs are high. Russia  won’t accept defeat before trying every tactic, however brutal, and perhaps every weapon, however murderous.  To force Russia to accept failure in Ukraine, the Biden administration would likely have to shift to a wartime mentality, perhaps including the kind of nuclear brinkmanship not seen since the Cuban missile crisis of 1962. With China and Iran both committed to weakening American power by any available means, a confrontation with the revisionist powers spearheaded by Russia may prove to be the most arduous challenge faced by an American administration since the height of the Cold War.

“But the other two options are also bad.  A Russian victory would inflict a massive blow to American prestige and the health of the North Atlantic Treaty Organization, especially if the West were seen as forcing Ukraine to surrender to Russian demands.  Freezing the conflict is also perilous, as this would presumably leave Russia holding even more Ukrainian territory than it did following the 2014 invasions of Crimea and the Donbas.  It would be hard to spin this as anything but a partial victory for Russia – and Mr. Putin would remain free to renew hostilities at a time of his choosing.

“The failure to deter Mr. Putin’s attack on Ukraine is more than a failure of the Biden administration.  Donald Trump, Barack Obama and George W. Bush must share the blame. This failure may prove to be even costlier than failing to prevent the 9/11 attacks, and President Biden’s place in history hangs on his ability to manage the consequences of this increasingly unspeakable and unpredictable war.”

Editorial / Wall Street Journal

“The Russian withdrawal from the Kyiv region marks a setback for its original war aims, but it is still not a defeat for Mr. Putin. He might be regrouping his forces for another attempt on Kyiv later.  Or perhaps he is changing his war aims to focus on conquering the east and south of the country. The Sunday bombardment by Russian ships suggests that Odessa, a city of about one million on the Black Sea, remains a Kremlin target.

“Which makes it dismaying that Biden officials continue to assert that the war is a ‘strategic defeat’ for Mr. Putin.  They repeat the talking point as if they’re trying to persuade Americans that the war has already been won.  ‘If you step back and look at this, this has already been a dramatic strategic setback for Russia and, I would say, a strategic defeat,’ Mr. Blinken said on CNN Sunday.

“No, it isn’t.  Russia has killed thousands of Ukrainians, inflicted untold damage, and still controls more territory than it did before the invasion. If Mr. Putin secures a truce that ratifies those territorial gains, he will have snatched the part of Ukraine that contains the bulk of its energy resources.  He would be able to re-arm and continue as a lethal threat to the rest of Ukraine, the Zelensky government, and the border nations of NATO.

“This is no doubt why Mr. Zelensky continues to express frustration with the reluctance of the U.S. and NATO to provide the heavy weapons Ukraine needs to go on offense and retake lost territory.  Leaks on the weekend suggest the U.S. may finally be helping to get old Russian tanks into Ukraine, but the country also needs advanced antiship missiles to protect Odessa, as well as aircraft to attack Russian tanks and artillery, and anti-aircraft systems.

“The West’s goal shouldn’t be some abstract ‘strategic defeat’ but an actual defeat that is obvious to everyone, including the Russian public.  Ukraine will have to decide how long it is willing to fight.  But as long as it is willing, the U.S. and NATO should provide all of the military and sanctions support it needs.  If Mr. Putin gains from this war, there will be more invasions, more war crimes, and more horrific scenes like those in Bucha in the future.”

Daniel Henninger / Wall Street Journal

“In no sense now can Vladimir Putin be allowed to win in Ukraine.  People shouldn’t have to be shot in the back of the head with their hands tied behind them to make that clear, but such is history’s record of humanity slow-walking counterattacks against mass slaughter.

“Mr. Putin was going to defeat Ukraine quickly.  Now he isn’t.  But he can still win if the West’s commitments to Ukraine, however impressive, produce a frozen conflict, as Joint Chiefs of Staff Gen. Mark Milley predicted to Congress Tuesday when he said the conflict could last “years for sure.”  Time like that is Mr. Putin’s friend because he has Stalin’s stomach for death, and eventually we won’t.

“It is good in the wake of the Bucha atrocities that President Biden and Europe’s leaders are talking about holding Mr. Putin and his associates accountable for war crimes – once it is possible to collect evidence.  Still, one doesn’t have to be Volodymyr Zelensky to notice that these good intentions have little to do with the reality that the current level of help from the North Atlantic Treaty Organization still leaves Ukraine in purgatory, with one foot in Mr. Putin’s hell and the other stretching toward deliverance by the West….

“It will take a decade and unimaginable amounts of capital to rebuild what Mr. Putin has destroyed.  Who exactly is going to do that? Dividing Ukraine in two would effectively turn the eastern part into a Cold War East Germany, which would create the destabilizing post-Yalta imbalances that existed for decades between the wealthy West and those living in the Third World East….

“(A) question often put to those who interpret for Mr. Biden at the White House, Pentagon and State Department is whether we want Ukraine to win.  After this week, I think the better question is: Are we willing to make Mr. Putin lose?

“Saying that he’s experiencing a ‘strategic defeat’ is a dodge.  Every day – or year – that he is killing and wrecking, he’s winning.  Vladimir Putin has to lose in Ukraine, not only in the eyes of the aghast outside world.  NATO’s current military and political status quo – the arms flows and ratcheting sanctions – just isn’t enough.

“It’s a terrible thing to say, but one suspects that for some in Washington, Berlin and Paris, the world’s roaring moral outrage at these atrocities lets them kick the harder decisions about raising the military costs for Mr. Putin into another week.  If the media is writing about Bucha, genocide and war crimes, the argument fades for sending Ukraine high-altitude missile defenses, counter-artillery radar and other ‘escalatory’ military equipment.

“Eventually, Putin wins.  Don’t let him.”

Biden Agenda

--The Senate voted 53-47 to confirm Judge Ketanji Brown Jackson to the Supreme Court.  She will be sworn in as the first Black woman on the court when Justice Stephen Breyer retires this summer.

Underscoring the partisan tensions, Jackson’s confirmation came only after the Senate Judiciary Committee deadlocked on her nomination along party lines and Republicans forced three procedural votes on the Senate floor this week.

In the end, Jackson gained three Republicans – Sens. Lisa Murkowski (Alaska), Susan Collins (Maine) and Mitt Romney (Utah).

Democrats in the chamber erupted in loud applause when the final tally was called.  Republicans walked out.

When Jackson is sworn in, the nine-member Supreme Court for the first time will have four women.  Also for the first time, a majority of the justices will not be White men.

The largely party-line vote highlighted how contentious Supreme Court confirmation votes have become, particularly the last three, raising the prospect that in the future, Supreme Court nominees might have difficulty winning confirmation if the Senate is controlled by the opposition party.

“I can promise you – nominees like this will not make it through,” said Sen. Lindsey Graham (R-S.C.), discussing the implications for Biden if Republicans win a Senate majority later this year.  “We’ll go back to the old system of collaboration.”

Jackson’s tally fell considerably short of those earned by previous trailblazing nominees, such as Thurgood Marshall, the first Black justice, who was confirmed 69 to 11 in 1967, or Sandra Day O’Connor, the first woman, who was confirmed 99 to 0 in 1981.

Editorial / Wall Street Journal

“As Justice Antonin Scalia argued, if the High Court is going to be an activist institution that dictates abortion policy for 330 million people, then confirmation hearings are inevitably going to be partisan brawls.  But distinctions are capable of being drawn.  The claim that Judge Jackson was treated worse than Justice Kavanaugh, who was falsely accused of sexual assault, is dishonest.  But that isn’t a hall pass for unfortunate Republican behavior.

“Take the floor speech this week by Sen. Tom Cotton.  ‘The last Judge Jackson,’ he said, referring to Justice Robert Jackson, ‘left the Supreme Court to go to Nuremberg and prosecute the case against the Nazis. This Judge Jackson might have gone there to defend them.’  Bringing up the Nazis, based on a coincidence of somebody’s last name, is an embarrassing moment for Mr. Cotton.

“Republicans shouldn’t forget who is to blame for their predicament. If President Trump hadn’t been preoccupied with imagined fraud conspiracies after the 2020 election, Republicans probably would have retained two Senate seats in the January 2021 Georgia runoff elections.  Without Democratic Senate control, President Biden might have been forced to choose a more moderate nominee than Judge Jackson, or possibly a jurist older than age 51, with a shorter prospective Supreme Court career.

“Conservatives could spend the next 30 years ruing Justice Jackson’s decisions.  Spare a thought for how Mr. Trump helped it happen.”

--The Biden Administration’s decision to end the Title 42 policy on immigration on May 23 is beyond disastrous for Democrats in the midterms.

Sen. Mitt Romney put it best in a tweet:

“Worst domestic news today: the Biden Administration will admit double or more the number of ‘undocumented’ immigrants at the border, starting May 28 [Ed. May 23].

“Best GOP political news today: the same as above.  (Arizona, Nevada, and more Dem senators will lose their elections).”

Democratic Sen. Joe Manchin (W.Va.) released a statement.

“Today’s announcement by the CDC and the Biden Administration is a frightening decision. Title 42 has been an essential tool in combatting the spread of Covid-19 and controlling the influx of migrants at our southern border. We are already facing an unprecedented increase in migrants this year, and that will only get worse if the Administration ends the Title 42 policy. We are nowhere near prepared to deal with that influx. Until we have comprehensive, bipartisan immigration reform that commits to securing our borders and providing a pathway to citizenship for qualified immigrants, Title 42 must stay in place.”

In Fiscal Year 2021, encounters with migrants reached an all-time high of 1.7 million people, which is four times higher than the 400,000 encounters reported the previous year, and the United States is on pace to set a new record again this year.  Through the first five months of FY22, the Department of Homeland Security reports that Customs and Border Patrol has experienced more than 838,000 migrant encounters.

Sen. Mark Kelly (D-Ariz.), as Mitt Romney alluded to a top GOP target in November’s midterm vote: “This is the wrong decision.  It’s unacceptable to end Title 42 without a plan and coordination in place to ensure a secure, orderly, and humane process at the border,” Kelly said in a joint statement with fellow Arizona Democrat, Sen. Kyrsten Sinema.

Sen. Maggie Hassan (D-N.H.), who is also facing a competitive reelection race this fall, piled on.

“Ending Title 42 prematurely will likely lead to a migrant surge that the administration does not appear to be ready for,” she tweeted.

The Washington Post editorialized:

“(A fix at the border) was supposed to be Vice President Harris’ brief, but she appears to have done little to address the problem. Absent progress on that front, the Biden administration and its successors will surely face more chaos at the border.”

Come November, it’s a bigger issue than Ukraine, rivaling inflation and the economy, and that spells tsunami for Republicans.

--The Air Force and the Defense Advanced Research Projects Agency quietly conducted a successful hypersonic missile test last month.

A defense official told Defense News the Pentagon chose not to announce the test of the Hypersonic Air-breathing Weapon Concept, or HAWC, for about two weeks to avoid inflaming already-delicate tensions with Russia.

Wall Street and the Economy

It was light week for economic data, with the ISM service sector reading for March coming in at 58.3 (50 the dividing line between growth and contraction) vs. 56.5 in February.  Factory orders for February were down 0.5%.

Weekly jobless claims, however, at 166,000, were the lowest for the category since 1968, befitting the strong labor market.

The Atlanta Fed’s GDPNow barometer for first-quarter growth is at just 1.1%.

Which leaves the Fed….

Federal Reserve Governor Lael Brainard on Tuesday rocked the stock and bond markets when in a speech she said she expects a combination of interest rate increases and a rapid balance sheet runoff to bring U.S. monetary policy to a “more neutral position” later this year, with further tightening as needed.

It was the balance sheet comment that the markets made note of.

“I think we can all absolutely agree inflation is too high and bringing inflation down is of paramount importance.” 

To do so, she said, the Fed will raise rates “methodically” and, as soon as next month, begin to reduce its nearly $9 trillion balance sheet, quickly arriving at a “considerably” more rapid pace of runoff than the last time the Fed shrank its holdings.  The rapid portfolio reductions “will contribute to monetary policy tightening over and above the expected increases in the policy rate reflected in market pricing and the Committee’s Summary of Economic Projections,” she said.

The hawkish tone from one of the Fed’s usually more dovish policymakers sent stocks down and Treasury yields up.

The yield on the 10-year Treasury jumped to 2.56%, its highest level since April 2019, from 2.46%. It would then surge to over 2.70%.

“Given that the recovery has been considerably stronger and faster than in the previous cycle, I expect the balance sheet to shrink considerably more rapidly than in the previous recovery, with significantly larger caps and a much shorter period to phase in the maximum caps compared with 2017-19,” Brainard said.  Back then, the Fed began by limiting runoff from its $4.5 trillion balance sheet to $10 billion a month and took a year to ramp that up to a maximum of $50 billion a month.

So then we learned, Fed officials in March “generally agreed” to cut up to $95 billion a month from the central bank’s asset holdings as another tool in the fight against surging inflation, even as the war in Ukraine tempered the first U.S. interest rate increase, minutes of the Fed’s March 15-16 meeting revealed.  There was deepening concern among policymakers that inflation had broadened through the economy, which convinced them to not only raise the target policy rate by a quarter of a percentage point from its near-zero level but also to “expeditiously” push it to a “neutral posture,” estimated to be around 2.4%.

“Many” Fed officials said they were prepared to raise rates in half-percentage-point increments in coming policy meetings to try to bring prices under control, even though the rising risks tied to the Ukraine war held them to the standard hike in March, according to the minutes, which were released Wednesday.

But they also moved forward with plans to pull out of key financial markets that have been benefiting from massive Fed support since March of 2020, when the coronavirus pandemic prompted the central bank to buy trillions of dollars in Treasury bonds and mortgage-backed securities.

After months of debate, policymakers rallied around a plan to as soon as next month reduce the Fed’s holdings of Treasury bonds by up to $60 billion per month and its MBS holdings by up to $35 billion per month, with the amounts phased in over three months, or thereabouts.

There are six more Fed Open Market Committee meetings the rest of the year, and the markets are expecting a further 225 basis points of increases by year end, which would equate to three 50 bp increases and three quarter-point hikes – assuming the FOMC raises borrowing costs at each of the remaining gatherings.  So that would be 2.5% this year, given the first 25-basis point hike in March.

Bill Dudley, the former president of the Federal Reserve Bank of New York, vice chairman of the Federal Open Market Committee, and chief U.S. economist at Goldman Sachs, penned an opinion piece for Bloomberg that read in part:

“It’s hard to know how much the U.S. Federal Reserve will need to do to get inflation under control. But one thing is certain: To be effective, it’ll have to inflict more losses on stock and bond investors than it has so far….

“ ‘As [Fed Chair Powell] put it in his March press conference:  “Policy works through financial conditions.  That’s how it reaches the real economy.’

“He’s right. …Equity prices influence how wealthy (people) feel, and how willing they are to spend rather than save.

“So far, the Fed’s removal of stimulus hasn’t had much effect on financial conditions.  The S&P 500 index is down only about 4% from its peak in early January, and still up a lot from its pre-pandemic level….

“Investors should pay closer attention to what Powell has said: Financial conditions need to tighten. If this doesn’t happen on its own (which seems unlikely), the Fed will have to shock markets to achieve the desired response.  This would mean hiking the federal funds rate considerably higher than currently anticipated.  One way or another, to get inflation under control, the Fed will need to push bond yields higher and stock prices lower.”

Finally, the head of the Bank for International Settlements warned the world is facing a new era of higher inflation and interest rates as deteriorating ties between the West, Russia and China and Covid after-effects drive globalization into reverse.  Soaring global energy and food prices mean almost 60% of developed economies now have year-on-year inflation above 5%, the largest share since the late 1980s, while it is over 7% in more than half of the developing world.

Agustin Carstens said, “Most likely, this will require real interest rates to rise above neutral levels for a time in order to moderate demand,” acknowledging that it could make them unpopular.

Europe and Asia

Last week we had the March PMI numbers for the eurozone for the manufacturing sector, and this week it was services, courtesy of S&P Global, with the reading for the EA19 at 55.6, a 4-month high amid looser Covid restrictions.

Germany 56.1, France 57.4, Italy 52.1, Spain 53.4, Ireland 63.4

UK 62.6…2nd-best since May 1997.

But as strong as the numbers are, as S&P Global’s Chris Williamson put it, “the resilience of the economy will be tested in the coming months by headwinds which include a further spike in energy costs and other commodity prices due to Russia’s invasion of Ukraine, as well as worsening supply chain issues arising from the war and a marked deterioration in business optimism regarding prospects for the year ahead.

“Exports are already back in decline as the war has directly hit travel and transport, and the downturn in confidence suggests that domestic demand conditions across the eurozone could also come under pressure, notably from consumers via the soaring cost of living, at the same time as companies struggle with a lack of materials.

“The outlook for growth has therefore deteriorated at a time when the inflation outlook has worsened.”

Speaking of which, industrial producer prices rose 1.1% in February in the euro area, and a ginormous 31.4% compared with Feb. 2021. 

Retail sales in February increased by 0.3% over January, 5.0% from a year ago.

France: Sunday is the first round of the presidential election and Emmanuel Macron’s lead has been shrinking.  A Reuters poll of polls (April 7) has Macron leading Marine Le Pen by only 27% to 24%, with far-left candidate Jean-Luc Melenchon at 17%.  Since Macron is not going to receive 50%, the run-off between the top two would be April 24.

But here’s the thing.  Le Pen received just 34% in the last run-off against Macron (who got 66%), 2017, but she’s supposedly trailing Macron in a hypothetical run-off by just six points, 53-47.  Her candidacy seemed to be dead with Putin’s invasion of Ukraine, Le Pen, like Hungary’s Victor Orban*, from the far right and known to be a Putin apologist.  Vlad publicly backed Le Pen during her last race.  Her National Rally party is currently repaying a loan from a Russian bank.  But she has deflected discussion of the war in Ukraine by focusing on her core campaign topic: rising prices at home.

*More on Orban below.

For his part, Macron staged a huge rally last weekend in front of 30,000 and warned of the risk of a Brexit-style election upset.  It was his only campaign rally before the first round.

“Look at what happened with Brexit, and so many other elections: what looked improbable actually happened,” Macron told the crowd.  “Nothing is impossible.”

“The danger of extremism has reached new heights because, in recent months and years, hatred, alternative truths have been normalized,” he said.  “We have got used to see on TV shows antisemitic and racist authors.”

Turning to Asia…we had the private service sector PMI for China from Caixin, just 42.0 in March vs. 50.2 the month prior as pandemic-related restrictions severely hampered activity.

Coronavirus lockdowns have also hit operations at the world’s largest container port, Shanghai Port, by disrupting the logistical chain on land.  The port is a major export gateway for goods produced in the nearby manufacturing hubs of Jiangsu and Zhejiang provinces.  Work continues at the port 24 hours a day, according to reports, but it’s inside a “closed loop” bubble, which requires workers to stay on site all the time.

The city of Shanghai is effectively under total lockdown.

In Japan, the final service sector reading for March was 49.4 vs. 44.2.  Separately, household spending rose 1.1% year-over-year in February, well below consensus.

Street Bytes

--Stocks lost ground this week, the tech-heavy Nasdaq not liking what it heard from the Fed, down 3.9%.  The Dow only lost 0.3% to 34721, while the S&P 500 fell 1.3%.

But now we have earnings season and this is going to be interesting the next 3-4 weeks in particular.

--U.S. Treasury Yields

6-mo. 1.14%  2-yr. 2.51%  10-yr. 2.70%  30-yr. 2.72%

The inversion between the 2- and 10-year didn’t last long, and Fed Gov. Brainard’s hawkish tone spooked the bond market; the yield on the 10-year hitting 2.73% at one point, highest since March 2019.

Euro bond yields rose too this week, with the German bund yield now at 0.70%, it’s highest level since Feb. 2018.  It was -0.08% on March 4.

--The International Energy Agency on Wednesday said its member countries had agreed to release 120 million barrels of oil, with the United States contributing half (though the U.S. still plans to draw 180 million barrels in about six months overall).

Member countries besides the United States have agreed to release 60 million barrels of oil from storage, though individual country releases weren’t stated.

Wednesday, top oil company executives were grilled by House lawmakers over high gasoline prices, rejecting claims by Democrats that they are taking advantage of a global crisis to gouge consumers.

Democrats said oil giants were raking in historically high profits while slowing their investment in U.S. production.

The company leaders countered that prices were driven by Russia’s invasion of Ukraine, restrictive U.S. energy policies and supply-chain shortages slowing down the industry.

“(We are) experiencing severe cost inflation, a labor shortage due to three downturns in 12 years, shortages of drilling rigs, frack fleets, frack sand, steel pipe and other equipment and materials,” said Scott Sheffield, CEO of Pioneer Natural Resources Co., one of the largest U.S. independent oil and gas producers.

“We can’t grow faster,” he said.

The oil executives said pump prices are set by retailers, and that prices are a result of several factors including local wages and other operating costs.

“We do not control the price of crude oil or natural gas, nor of refined products like gasoline and diesel fuel,” Chevron CEO Mike Wirth said.  “And we have no tolerance for price gouging.”

On the week, oil slid a bit more to $97.90 on WTI.

--Elon Musk announced a 9.2% stake in Twitter on Tuesday, and then the company appointed him to its board.  Musk indicated he would target “significant improvements” to the platform.

Musk will serve on the board through 2024, the company said in a regulatory filing.  During his tenure as director and for 90 days after, Musk will not be allowed to increase his stake in Twitter above 14.9%.

“Through conversations with Elon in recent weeks, it became clear to us that he would bring great value to our board,” Twitter CEO Parag Agrawal said in a tweet.

Twitter’s stock surged 27% Monday when word of Musk’s disclosed ownership was released.

Late in March, Musk asked people on Twitter whether it adheres to free speech principles. After 70% of respondents said no, Musk, who has more than 80 million followers on the site, asked whether a new social media platform was needed.  He ran another poll on Monday about whether an edit function should be introduced on Twitter.

“Looking forward to working with Parag & Twitter board to make significant improvements to Twitter in coming months!” Musk tweeted in a reply to Agrawal.

No sooner had Musk snapped up stock and signed onto the board than followers of former President Trump started badgering him to reinstate Trump’s account on the platform.

Twitter told the New York Daily News that Musk would have no more clout than anybody else, and that board members don’t make decisions, though their input is welcome.

Trump was permanently banned due to “the risk of further incitement of violence” two days after supporters stormed the Capitol.

Separately, Musk’s Tesla Inc. reported record electric vehicle deliveries for the first quarter, but its production fell from the previous quarter as supply chain disruptions and a China plant suspension weighed heavily.

“This was an exceptionally difficult quarter due to supply chain interruptions & China zero Covid policy,” Musk tweeted.  Tesla delivered 310,048 vehicles in the quarter, a slight increase from the previous quarter, and up 68% from a year earlier.  Wall Street had expected deliveries of 308,836 cars, according to Refinitiv data.

Tesla produced 305,407 vehicles during the January to March period, from 305,840 the previous quarter.  A recent spike in Covid cases in China forced Tesla to suspend production temporarily at its factory in Shanghai as the city locked down to test residents for the virus.

Tesla said it sold a total of 295,324 Model 3 sedans and Model Y sport utility vehicles, while it delivered 14,724 Model S luxury sedans and Model X premium SUVs.

Tesla started delivering vehicles made at its factory in Gruenheide, Germany, in March and deliveries of cars made at its plant in Austin, Texas, were to begin in the near future.

The existing two factories (the other in Fremont, Calif.) are critical for Tesla’s goal to boost deliveries by 50% this year, as its new factories in Berlin and Austin are expected to see production ramp up slowly in their first year of production.

--JetBlue Airways offered to buy Spirit Airlines for about $3.6 billion and break up a plan for Spirit to merge with rival budget carrier Frontier Airlines.

Spirit said Tuesday that its board will evaluate the JetBlue bid and decide what’s best for its shareholders.

JetBlue offered $33 a share in cash, which would be about 40% higher than Frontier would pay for Spirit under terms of a deal announced in February.  Frontier’s offer in cash and stock was worth $2.9 billion when it was announced, but Frontier’s shares have fallen since then, reducing the value of the deal to Spirit shareholders.

In a statement, New York-based JetBlue said combining with Spirit would lead to lower fares by creating “the most compelling national low-fare challenger” to the nation’s four biggest airlines: American, Delta, United and Southwest.

Denver-based Frontier used that same argument to support its acquisition of Spirit.

A Frontier-Spirit tie-up would combine Frontier’s route map in the western United States with Spirit’s network along the East Coast and the Caribbean.  Both are discount airlines that offer rock-bottom fares and make up some of the difference by charging extra for many things that bigger airlines include in the ticket price, including carry-on bags and soft drinks.

JetBlue is not the same kind of so-called ultra-low-cost-carrier, and its base fares are often slightly higher than Frontier and Spirit.  JetBlue’s strength on the East Coast, including Florida, would mean much more overlap with Spirit.

The Frontier/Spirit deal was small enough that many felt it would not get the close scrutiny from antitrust regulators that JetBlue/Spirit may receive.  Last year the same regulators blocked a more limited partnership between JetBlue and American.

Late Thursday, Spirit said it would enter talks with JetBlue, saying in a statement that its outside financial and legal advisers determined JetBlue’s offer could “reasonably” top the cash-and-stock deal to merge with Frontier.

Spirit noted that its board had not deemed JetBlue’s proposal to be better than the Frontier merger and said that the board’s prior recommendation that shareholders adopt that merger still stood.

--European planemaker Airbus delivered 142 aircraft in the first quarter, up almost 13% from the same period last year, as the company announced today.

Airbus is in the midst of planned production increases of single-aisle jets, the A321neo, but faces growing concerns over manufacturing supply chains.  The company has publicly committed to raising output to 65 a month by the summer of 2023.

--Shares in Boeing fell on Friday as media reports showed that a Boeing cargo jet operated by DHL split into two on Thursday after skidding off the runway in Costa Rica.

The crew made an emergency landing due to hydraulic problems with the aircraft, while the two pilots were unharmed, media outlets reported, citing a statement from DHL.

The company has started an investigation and will be assisted by the National Transportation Safety Board.

--Ryanair Chief Executive Michael O’Leary expects average fare prices for June through September’s peak summer air travel to increase 5% to 10% from pre-pandemic levels in 2019.

O’Leary doesn’t expect any “Covid scares” this summer, with lower capacity and increased demand the current price drivers.

“Travel is recovering strongly. I think people are fed up. We have been locked up at home for the last two years on Zoom calls. They want to go travel again. Families want to go on holidays again,” O’Leary told the Irish Independent newspaper.

--The U.S. National Transportation Safety Board said it was assisting Chinese investigators with the download of the cockpit voice recorder in Washington from a China Eastern Airlines Boeing 737-800 jet as it sent a team of investigators to China.

China’s decision to send a key piece of evidence to Washington for assistance shows the urgency of the investigation at a time when the two nations have been at odds over other issues.

--Travel this Easter season is already proving to be a mess.  There were huge delays for those heading to France from Briton due to a shortage of ferries at the Port of Dover, while airports have been warned to expect large lines.  Today, more than 2,000 trucks were stuck in a queue of more than 20 miles to get to Dover.

London’s Heathrow airport needed, get this, another 12,000 staff, according to the CEO of the Airport Operators Association in Britain, as it scales up after Britain’s Covid-19 restrictions on travel were removed.

--Similarly, Germany’s biggest airport operator, Fraport, said Wednesday it had to cancel flights as it was struggling to hire enough people after massive job cuts due to the Covid-19 crisis, especially in the field of ground handling.  The group, which runs aviation facilities in nine countries worldwide and the main airport in Frankfurt, did not specify the number of flights it would cancel.

In late March, Fraport warned about likely delays around Easter due to staff shortages in departments crucial for processing flights.

Fraport is not the only European company facing a staffing problem. Britain-based low-cost carrier easyJet and British Airways as well as Ireland’s Ryanair have also reported issues.

So then German flag carrier Lufthansa said it would cancel some domestic flights to Frankfurt from Thursday as a result of Fraport’s problems.  Lufthansa will offer replacement train connections to passengers who booked on the affected flights.

--And last weekend was a mess in the U.S., with thousands of flights delayed and canceled, particularly at Southwest Airlines, which blamed “intermittent performance issues following routine overnight maintenance of some of its backend technology.”

--TSA checkpoint travel numbers vs. 2019….

4/7…89 percent of 2019 levels
4/6…89
4/5…88
4/4…90
4/3…90
4/2…95
4/1…92
3/31…91

--Berkshire Hathaway Inc. disclosed Wednesday that it has purchased nearly 121 million shares of HP Inc., the latest in a series of investments by the conglomerate controlled by Warren Buffet.  The investment gives Berkshire a roughly 11.4% stake in HP, with the share price of the printer and computer maker up over 10% on the news.

The HP stake is Berkshire’s third big investment since Feb. 26, when Buffett said in his annual shareholders letter that “internal opportunities deliver far better returns than acquisitions” and little “excites us” in equity markets.

On March 21, Berkshire agreed to buy insurance company Alleghany Corp. for $11.6 billion in cash, adding to its portfolio of insurers including Geico, and earlier in March, Berkshire revealed a 14.6% stake in Occidental Petroleum Corp., which cost well over $6 billion to amass.

Before announcing the Alleghany purchase Buffett had gone six years without a major acquisition, leaving Berkshire with $146.7 billion in cash.

--JPMorgan Chase & Co. CEO Jamie Dimon said the U.S. economy is facing unprecedented risks that have him preparing for dramatic upheavals.

In his annual letter to shareholders Monday, the head of the nation’s biggest bank offered a largely upbeat view of the economy’s health, with consumers and businesses flush with cash, wages rising and the economy growing rapidly after its pandemic shutdown.

But Dimon warned that the war in Ukraine could collide with rising inflation to slow the pandemic recovery and alter global alliances for decades to come.

“They present completely different circumstances than what we’ve experienced in the past – and their confluence may dramatically increase the risks ahead,” Dimon wrote.  “While it is possible, and hopeful, that all of these events will have peaceful resolutions, we should prepare for the potential negative outcomes.”

Dimon also warned that the Federal Reserve could move interest rates “significantly higher than the markets expect.”

“This process will cause lots of consternation and very volatile markets,” Dimon said.

Russia’s war against Ukraine and Western sanctions meant to stop it will “at a minimum” slow the global economy, Dimon said.  Oil, commodity and agriculture markets are already reeling.

“Along with the unpredictability of war itself and the uncertainty surrounding global commodity supply chains, this makes for a potentially explosive situation,” Dimon added.

--Awhile back I called PayPal founder and billionaire Peter Thiel a very bad guy, “dangerous,” and yesterday, speaking at the Bitcoin 2022 conference in Miami, Thiel slammed critics of the cryptocurrency, naming Warren Buffett “enemy number one” and claiming critics are old, left-leaning investors who run “woke companies.”

Thiel called out Buffett, along with fellow Bitcoin critics Jamie Dimon and Larry Fink, CEO of BlackRock.

“Enemy number one,” Thiel said as he pulled up a photo of Buffett to a booing crowd, “the sociopathic grandpa from Omaha.”

He then showed a picture of the three men – labeling them a gerontocracy, a state governed by old people – and claimed they had a left-leaning political bias against Bitcoin, which he said would never be controlled by the government.

Thiel added that Dimon and Fink had “New York City banker bias.”  Only one way to read that statement.

I really, really don’t like the guy.

--General Motors and Honda Motor said Tuesday they will develop a series of affordable electric vehicles powered by GM’s Ultium battery technology as the automakers expand their ties on electric and autonomous cars.

They plan to produce millions of EVs globally starting in 2027, building on GM’s goal to produce 2 million EV units by the end of 2025.  These EVs will include compact crossover vehicles.

“GM and Honda will share our best technology, design and manufacturing strategies to deliver affordable and desirable EVs on a global scale, including our key markets in North America, South America and China,” said GM CEO Mary Barra.

--Monday, Ford Motor reported first-quarter sales of about 432,000 in the U.S., down from some 521,000 in the same period last year.  Outside of Tesla, Ford’s numbers completed a series of mostly undistinguished U.S. sales reports from the big vehicle manufacturers.

The overall message is that supply bottlenecks are still putting a speed limit on vehicle production.  Deliveries to dealers tumbled in the second half of last year as car makers ran out of key parts, notably microchips, and are recovering only very gradually.

--BMW halted production at two German factories. Mercedes is slowing work at its assembly plants. Volkswagen, warning of production stoppages, is looking for alternative sources for parts.

For more than a year, the global auto industry has struggled with a disastrous shortage of computer chips and other vital parts that has shrunk production, but now Russia’s war with Ukraine has thrown up another obstacle. Critically important wiring, made in Ukraine, is suddenly out of reach.

While the war’s damage to the auto industry has emerged first in Europe, U.S. production will likely suffer eventually, too, if Russian exports of metals – from palladium for catalytic converters to nickel for electric vehicle batteries – are cut off.

The impact on prices for a new vehicle has been substantial, up 13% in the past year in the U.S., to $45,596, according to Edmunds.com.  Average used car prices have surged far more: They’re up 29% to $29,646 as of February.

--Longtime Starbucks leader Howard Schultz, who returned to the company as interim CEO on Monday, said his first major action will be suspending Starbucks’ share buyback program and plowing those billions of dollars into the company instead.

“This decision will allow us to invest more profit into our people and our stores, the only way to create long-term value for all stakeholders,” Schultz said in an open letter to employees posted on Starbucks’ website.

Starbucks announced late last year that it was committing to a three-year, $20 billion share repurchase and dividend program to return profits to investors.  That was on top of a $25 billion share buyback and dividend program the company announced in 2018.

Investors weren’t pleased by the news and the shares fell 4%.

Monday’s announcement indicates Schultz is feeling some heat from employees, many of whom have publicly complained about understaffed stores and lagging pay.

Last fall, Starbucks committed to spending $1 billion over two years to increase U.S. employee pay, which will average $17 per hour by this summer.

But many workers have questioned if that was adequate and Starbucks is facing growing unionization efforts that Schultz may be seeking to quell.  Ten of the company’s 9,000 company-owned U.S. stores have voted to unionize since December, and at least 181 more in 28 states have filed to hold union elections.

Schultz said he plans to travel to stores and manufacturing plants worldwide to get input on how to remake the company after several turbulent years.

--Walmart said it is boosting starting pay for its 12,000 long-haul truck drivers who deliver merchandise to its stores and Sam’s Club locations amid a shortage of drivers that threatens to prolong supply chain snarls and merchandise shortages.

Qualified drivers – who tend to be in their late 40s and 50s, according to government and industry officials – remain in short supply.  Federal limits on daily working hours, the pandemic and other hurdles have prompted many truck drivers to quit.

Walmart’s drivers were already among the best compensated in the nation.  Now the world’s biggest retailer is upping the ante by resetting truck drivers’ starting salaries to $95,000 to $110,000 a year, from $87,500 previously.  That far exceeds 2020’s median pay of $47,130 for American big-rig drivers, whose “real” earnings have lagged inflation and effectively remain at about 70% of what they were in the 1970s, according to the Bureau of Labor Statistics.

Walmart’s move could strengthen its competitive advantage at a time when safe, experienced 18-wheeler drivers are in short supply and as Amazon builds its own network of trucking contractors.

--Carnival Corp. reported its highest booking week in the company’s history, March 28-April 3.

--A lot of Apple employees apparently aren’t real happy about the company’s return-to-work policy.  While Meta, Google and Amazon are letting at least some employees work remotely forever, Apple CEO Tim Cook is ordering all corporate employees back into the office at least one day per week beginning on April 11.  The mandate rachets up to two days per week on May 2 and three days per week on May 23.

“I don’t give a single f--- about ever coming back to work here,” one Apple employee ranted on corporate message board Blind this week, saying they planned to resign the day they come back to the office.  This was not a lone sentiment.

Apple employees will be required to go in on Mondays, Tuesdays and Thursdays, while Wednesdays and Fridays will be “flexible.”   Employees will also be allowed to work fully remotely for up to four weeks per year.

By comparison, Google is also requiring many employees to come in three days per week starting this Monday – but unlike Apple, Google is giving some employees the option of switching offices or working fully remotely forever.

The offer includes the caveat that employees could take pay cuts if they leave the San Francisco Bay Area or New York City for less expensive areas.

--Manhattan’s real estate market is continuing its record-breaking streak, reporting the highest number of units ever sold during the first quarter of any year since at least 1989, according to a new report from Douglas Elliman.

“Even with rising interest rates, there is remaining optimism for fairly robust quarters ahead,” said the report’s author, Jonathan Miller.

Despite falling to 39% in the first quarter, its lowest level since 2014, the share of homes sold to cash buyers has now risen to the markets’ usual rate of 47%, he added.

“If you think about how much of the market is not dependent on mortgage rates and the number of sales for higher-end properties which are also not mortgage-dependent, you start to see why the market is so strong,” Miller said.

The number of contracts signed during the first quarter increased 46%, to 3,585, from the 2,457 signed during the same period in 2021, the data showed.

The average sale price for a Manhattan unit has climbed 19.3%, to just over $2 million, since the first quarter of 2021, and nearly 5% since the previous quarter.

--Broadway ticket sales and attendance have been climbing, but sales are still just 78% of 2019 levels, with attendance at 71% of pre-pandemic levels.

The average capacity at all of the 31 shows playing on the Great White Way was 84%.

The highest grossing shows included “The Music Man,” “Hamilton,” “Wicked” and “The Lion King.”

--TV viewing for the Grammy Awards was just a notch above last year at 9.6 million, as estimated by CBS.  The figure was 26 million as recently as 2017.  Yikes.  But there wasn’t a headline-making performance this year, while next year it will be Adele, whose latest smash album was not yet eligible this go ‘round.

The Pandemic

--House of Representatives Speaker Nancy Pelosi was the latest in Washington, including the White House, to test positive for Covid-19 and is currently asymptomatic, her office said on Thursday.    President Biden tested negative Wednesday, after being with Pelosi over the course of the prior two days, though it was not considered a close contact as defined by the CDC.

Maine Sen. Susan Collins tested positive after voting for new Supreme Court Justice Jackson.  A slew of other officials have tested positive, including Attorney General Merrick Garland.

--Congress reached a deal on Monday for an additional $10 billion in Covid funding, after nearly a month of contentious negotiations between Democrats and Republicans and increasing pressure from the White House.  The $10 billion falls well short of the amount President Biden has said is needed.

“If we fail to invest, we leave ourselves vulnerable if another wave of the virus hits,” Biden said.

Sen. Mitt Romney (R-UT) spearheaded the negotiations, saying Congress would redirect $10 billion in unspent funds from the American Rescue Plan for “urgent Covid needs and therapeutics.”

--A fourth shot of the Pfizer Covid vaccine, or second booster, increased protection against viral infection for only four to seven weeks, according to a massive study published Tuesday.

The study included 1.25 million people age 60 and over in Israel who received their fourth dose between January and March.  Israel only uses the Pfizer vaccine.

People who got the fourth dose were half as likely to test positive for Covid four weeks later when compared to people who only had three doses, according to the study.

But by the eighth week, the groups were almost equally likely to catch Covid, researchers found.

The fourth shot has of course been the subject of much debate in the U.S., with regulators approving it last week for people age 50 and older.

While increased protection against infection was short-lived, the fourth booster continued to protect against severe illness for at least six weeks, the study found.

The study only compared people with the fourth dose to people with a third dose.  Previous research had suggested that the third dose provided a significant bump in infection protection over zero, one or two doses.

Only about 30% of the U.S. population has received a third dose, according to the CDC.

“For confirmed infection, a fourth dose appeared to provide only short-term protection and a modest absolute benefit,” the study’s authors wrote.

“Overall, these analyses provided evidence for the effectiveness of a fourth vaccine dose against severe illness caused by the Omicron variant, as compared with a third dose administered more than 4 months earlier.”

--Shanghai’s daily Covid infections set a record for the sixth straight day on Thursday, as citywide mass testing identified 19,982 cases in China’s financial and commercial hub.  The number of symptomatic cases ticked up to 322, from 311 a day earlier, according to data provided by Shanghai’s health authorities.

Shanghai remains the epicenter for the latest outbreak in China, caused by Omicron.

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

World…6,198,625
USA…1,011,486
Brazil…661,122
India…521,686
Russia…371,169
Mexico…323,508
Peru…212,420
UK…169,759
Italy…160,973
Indonesia…155,556
France…143,156
Iran…140,528
Colombia…139,703
Germany…132,141
Argentina…128,194
Poland…115,594
Ukraine…108,118
Spain…103,104
South Africa…100,084

Canada…37,977

[Source; worldometers.info]

U.S. daily death tolls…Mon. 244; Tues. 697; Wed. 608; Thurs. 441; Fri. 299.

Foreign Affairs

Iran: Tehran handed over documents related to outstanding issues to the UN nuclear watchdog, Iranian nuclear chief Mohammad Eslami said on Wednesday, as Iran demands closure of the agency’s investigation into uranium particles found at three undeclared sites.

Iran and the International Atomic Energy Agency (IAEA) last month agreed to a three-month plan to try to resolve a long-stalled issue over uranium particles found at old but undeclared sites in the country.  Resolving the issue would remove an obstacle to the revival of the 2015 nuclear deal.

The IAEA has long said Iran had not given satisfactory answers on those issues, but IAEA chief Rafael Grossi said he will aim to report his conclusion by the June 2022 Board of Governors’ meeting, which begins on June 6.

June 6?  But, Mr. Editor, I thought you told us like 6-8 weeks ago that there were then just weeks to complete a deal or any future pact would be worthless due to Iran’s progress in its nuclear program?  That’s true.

Separately, the IAEA has monitored Iran’s removal of all its equipment to make centrifuge parts from Karaj to its sprawling Natanz site.  “Agency inspectors verified that these machines remained under Agency seal at this location in Natanz and, therefore, were not operating.”

Israel: In yet another terror attack, an Arab man opened fire at a bar in Tel Aviv, killing two and wounding 12 others, with Israeli security forces then launching a massive manhunt, with over 1,000 members of the Israeli police, army special forces and Shin Bet involved.  The man, from Jenin in the occupied West Bank, was tracked down and killed in a shootout.

The spate of attacks in Israel has killed 13 people over the past few weeks.

Meanwhile, Israel’s government began to crumble Wednesday after Yamina MK and coalition whip Idit Silman announced her resignation from the government.

With this, Prime Minister Naftali Bennett’s government loses its majority in the Knesset, leaving it neck-and-neck with the opposition at 60-60. If another MK were to leave the coalition, the government could be brought down in a law brought by the opposition that would disperse the Knesset.

Should the opposition have a majority, they would be able to attempt to form a government without even needing to go to elections.

Silman said that she “could not take it anymore,” and that she could not continue undermining the Jewish identity of the State of Israel, a reference to a disagreement she had with the health minister over allowing “leavened grain products” (chametz) into hospitals over Passover.

I’m biting my tongue.  Benjamin Netanyahu, remember him?...congratulated Silman on her decision.

Labor MK Gilad Kariv said it was clear that the disagreement over the chametz was “not the real issue,” adding that the government was always careful when it came to matters of religion and state.

China / Hong Kong / Taiwan:  Chinese Foreign Minister Wang Yi warned that any visit by House Speaker Nancy Pelosi would cross Beijing’s “red line.”  It was a rare direct comment on a specific American visitor to the self-ruled island.

Pelosi was scheduled to travel to Taipei next week, but then she tested positive for Covid.  She was to travel there from Japan.  Pelosi’s office did not say if the trip would be rescheduled.

Wang warned that Washington would bear sole responsibility for the consequences of a visit, in a phone conversation with a French diplomat.  According to a foreign ministry statement, Wang accused the U.S. of “a blatant double standard” during his conversation with French diplomatic counselor Emmanuel Bonne.  He said the U.S. called for a respect of sovereignty and territorial integrity for Ukraine, but “openly tramples on the red line of the one-China principle” regarding Taiwan.

“If Pelosi, a political leader of the United States, knowingly visits Taiwan, it would be a malicious provocation against China’s sovereignty and gross interference in China’s internal affairs, and would send an extremely dangerous political signal to the outside world,” he said.

“If the United States insists on going its own way, China will surely make a firm response and the U.S. side will bear all the consequences.”

The Taiwanese defense ministry said military jets from the mainland had been spotted over the past few days crossing the island’s southwest air defense identification zone.

Meanwhile, Chairman of the Joint Chiefs Gen. Mark Milley said China and Russia are bent on changing the “rules-based current global order.” 

In an appearance before Congress on the defense budget, Milley said: “We are entering a world that is becoming more unstable, and the potential for significant international conflict between great powers is increasing, not decreasing.”

Russia’s invasion of Ukraine threatens “not only European peace and stability but global peace and stability that my parents and a generation of Americans fought so hard to defend.”

Milley referred to Russia in the same breath as China.

The growth of China’s military, particularly its navy, has concerned American defense officials and lawmakers in recent years and now we have a new arms race, an emblem of which are concerns over hypersonic missiles.

There is a growing narrative – not unlike the one pushed by President Joe Biden that the U.S. is falling behind China in its technological capacity – that the U.S. military is falling behind China’s.

“Unprecedented Chinese military modernization has enabled them to leapfrog us in key capabilities,” Rep. Mike Rogers of Alabama said at the hearing Tuesday.  “The Chinese Communist Party now controls the largest army and navy in the world.  It has more troops, more ships and more hypersonic missiles than the United States.”

The United States still spends far more on its military than China, but the U.S. maintains a global presence and has military assets spread out all over the globe…while China’s forces are much more focused within the region – and it also spends more than Japan, South Korea and Vietnam combined.

Tuesday, the State Department approved the potential sale to Taiwan of equipment, training and other items to support the Patriot Air Defense System in a deal valued at up to $95 million, the Pentagon said.

In an analysis of lessons learned for China from Russia’s war in Ukraine, Thomas Corbett, Ma Xiu and Peter W. Singer offered up the following in an opinion piece for Defense One:

“While China and the PLA (People’s Liberation Army) will surely watch Ukraine closely and try to take away the correct lessons, there is one uncomfortable parallel which China may be unable to avoid by the very nature of its authoritarian system.  The runup to the Ukraine invasion featured multiple strategic miscalculations by Putin, driven at least in part by him surrounding himself with the yes-men who inevitably cling to authoritarian leaders, eager to please and afraid to speak truth to power. This was obvious in the visibly uncomfortable reaction of Russia’s SVR (foreign intelligence) chief as he was publicly pressured to agree with Putin in the days leading up to the war, as well as in the sackings and arrests of multiple military and intelligence officials after the war turned poorly. Authoritarian leaders have systemic problems in gaining reliable intelligence, oftentimes magnified by their overconfidence in their own singular understanding of a situation.  As China continues its slide away from a system of intra-Party consensus toward a one-man cult of personality in which dissenting views are increasingly unwelcome, Xi is bound to encounter the same problem.  It is unclear whether Xi will learn this lesson from Putin, or make his own similar miscalculations in the future towards China’s own neighbors.”

Lastly, Hong Kong’s No. 2 official, John Lee Ka-chiu has formally tendered his resignation, paving the way for a run in next month’s chief executive election as the sole candidate with the blessing of the central government.

Lee’s move follows that of Chief Executive Carrie Lam, who announced she was resigning.  Lee will be the sole candidate endorsed by the central government in the leadership race.

Lam’s five-year term was an utter disaster, a period marked by huge protests calling for her resignation, a security crackdown that has quashed dissent and most recently a Covid wave that overwhelmed the health system.

Pakistan:  The Supreme Court ruled on Thursday that Prime Minister Imran Khan’s move to dissolve parliament was unconstitutional and ordered lawmakers to return, a decision that could spell the end of his premiership within days.

The former cricket star had moved to break up the lower chamber ahead of a no-confidence vote against him that he had looked destined to lose.  The court said in its judgment that the vote should now go ahead.

“The advice tendered by the Prime Minister…to the President to dissolve the Assembly was contrary to the Constitution and of no legal effect,” Chief Justice of Pakistan Umar Ata Bandial said.  Dozens of opposition members outside the building shouted in jubilation when the unanimous ruling was announced.

Angry Khan supporters chanted anti-American slogans in reply as police in riot gear separated the sides.

The constitutional crisis has threatened economic and social stability in the nuclear-armed nation of 220 million people, with the rupee currency hitting all-time lows earlier on Thursday and foreign exchange reserves tumbling.

When opposition parties united against Khan last week to push for a no-confidence motion, the deputy speaker of parliament, a member of Khan’s party, threw out the motion, ruling it was part of a foreign conspiracy and unconstitutional.  Khan then dissolved parliament.

Thursday’s ruling could spell the premature end of Khan’s tenure in a country where no elected leader has finished their full term in office.  The 69-year-old who steered Pakistan to cricket World Cup victory in 1992, came to power in 2018 after rallying the country behind his vision of a corruption-free, prosperous nation respected on the world stage.

But he could not deliver on all his lofty promises and failed to avert an economic decline partly sparked by the pandemic.

If Khan were to lose a no-confidence vote, the opposition could nominate its own prime minister and hold power until August 2023, by which date fresh elections have to be held. Shehbaz Sharif, a member of the powerful Sharif political dynasty, could be nominated to take over should Khan be ousted.

The crisis threatens Pakistan’s relationship with long-time ally the United States, who Khan has crazily blamed for being behind a conspiracy to overthrow him.

A key is the military, who viewed Khan and his conservative agenda favorably when he won a general election, but their support has waned.  The military has stepped in to remove civilians governments and take over on three occasions since Pakistan’s independence in 1947, citing the need to end political uncertainty.

Hungary: Prime Minister Viktor Orban, the closest thing Vladimir Putin has to a friend in the club of European Union leaders, won a fifth term in power Sunday in an election that became a referendum on his promise to block support for Ukraine in its war with Russia.  Orban’s coalition led by his nationalist Fidesz party was on track to win 135 of 199 seats in the parliament.  His opponent was a weak candidate.

Orban now has four more years in power and sets up some enormous fights for Europe. He can also continue with an agenda that critics say amounts to a subversion of democratic norms, media freedom and the rights of minorities, particularly gay and lesbian people.

Orban has in effect cemented his one-party rule by overhauling the constitution, taking control of a majority of media outlets and rejiggering election rules, while rewarding businessmen close to Fidesz with lucrative state contracts.

Critics say the public perception of the war has been influenced by state-controlled media which have amplified Orban’s accusations that an opposition-led government would support sanctions on Russian gas shipments and put Hungary at risk by shipping weapons to Ukraine.

Orban has banned any transport of arms to Ukraine via Hungarian territory, facing criticism from his nationalist allies in Poland, and said benefits of close ties with Russia include gas supply security.

Edit Zgut, a political scientist at the Polish Academy of Sciences in Warsaw, predicted that a clear victory for Orban would allow him to move further in an autocratic direction, sidelining dissidents and capturing new areas of the economy.

“Hungary seems to have reached a point of no return,” she said.  “The key lesson is that the playing field is tilted so much that it became almost impossible to replace Fidesz in elections.”

President Zelensky of Ukraine last weekend depicted Orban as out of touch with the rest of Europe.

“He is virtually the only one in Europe to openly support Mr. Putin,” Zelensky said.

While speaking to supporters on Sunday, Orban singled out Zelensky as part of the “overwhelming force” that he said his party had struggled against in the election – “the left at home, the international left all around, the Brussels bureaucrats, the Soros empire with all its money, the international mainstream media, and in the end, even the Ukrainian president.”

I can guarantee that my Uncle Geza, whom I visited in Budapest in 1973, is rolling over in his grave.

Yemen: In a major success for diplomacy, at least for now, a UN-brokered deal between the Saudi-led coalition and the Iran-aligned Houthi rebel group has led to a two-month truce, or ceasefire, a significant step towards ending a conflict that has killed tens of thousands and pushed millions into hunger.  At worst, hopefully aid relief is now pouring in.

Random Musings

--Presidential approval ratings….

Gallup: 42% approve of Biden’s job performance, 54% disapprove; 38% of independents approve (Mar. 1-18).

Rasmussen: 41% approve, 57% disapprove (April 8).

--Illinois Republican Rep. Adam Kinzinger is sick and tired of what he is hearing – and not hearing – from some of his Republican colleagues when it comes to Russia and Vladimir Putin.

In a recent two-minute video posted to Twitter, Kinzinger sharply criticized members of his party for what he sees as their unwillingness to speak out against the crisis in Ukraine.

“We are being governed by a bunch of children,” says Kinzinger.  “By a bunch of people that are not serious about running the United States of America and truly don’t understand the threat that’s out there from Vladimir Putin, from China and from some of these actors in the world that want to destroy our place here.”

Kissinger mentions only House Minority Leader Kevin McCarthy and Fox News host Tucker Carlson by name in the video.

“The world order is being challenged for the first time since World War II and they’re sitting around thinking today about how we can win our next election, what the newest outrage is, what’s the next thing we can do go get people angry and upset and get their money from them for our reelection,” he says in the video.

Around the time Kinzinger was posting his video, Michigan Rep. Fred Upton – who, like Kinzinger, was one of the 10 House Republicans who voted to impeach Donald Trump last year – was announcing his retirement in the wake of the former president endorsing his primary opponent.  [Kinzinger has already said he isn’t running again.]

As CNN’s Chris Cillizza pointed out, Kinzinger’s warning will fall on deaf ears.

--Former President Trump said he did not destroy records of phone calls from the official White House log or use so-called burner phones during his supporters’ deadly Jan. 6, 2021, attack on the Capitol.  Trump told the Washington Post he had not been contacted by congressional investigators about the assault.

Just before the crowd marched to the Capitol, Trump repeated his false claims about election fraud at a rally outside the White House.  The Post reported last week that there was a gap of nearly eight hours in the White House record of Trump’s calls as the rioting unfolded.  Trump told the paper he had a “very good” memory but could not remember whom he talked to that day.

“From the standpoint of telephone calls, I don’t remember getting very many,” he said.  “Why would I care about who called me? If congressmen were calling me, what difference did it make?  There was nothing secretive about it.  There was no secret.”

There you have it, people.  Nothing to see here.  Now move along….

--Former Alaska Gov. Sarah Palin announced last weekend that she’s running for Congress, against like 50 other candidates for the lone seat in the state, left vacant when longtime Rep. Don Young died about three weeks ago.

Palin, 58, said she is returning to politics because she believes “America is at a tipping point” with economic hardships like soaring inflation and high gas prices.

“As I’ve watched the far left destroy the country, I knew I had to step up and join the fight,” Palin said in a statement.

She has not held an elected office since she resigned as Alaska’s governor in 2009.

I can’t believe it’s been 14 years already since she ran with John McCain. 

--Life expectancy in the United States, which declined dramatically in 2020 as the coronavirus slammed into the country, continued to go down in 2021, according to a new analysis that shows the U.S. faring worse during the pandemic than 19 other wealthy countries.

Across all groups, life expectancy dropped to 76.60 years in 2021. That compares with 76.99 in 2020 and 78.86 in 2019.

--Crime surged 44% in New York during the first three months of 2022 – the first three months of Mayor Eric Adams’ term.  The increase came in every category except murder, which declined 9%.

The NYPD points to repeat offenders, with more than 500 suspects having been arrested three times in 2022 on robbery, burglary or shoplifting charges, police said.

Law enforcement officials have complained about what they see as lenient bail laws that put too many criminal suspects back on the streets instead of in jail as their cases make their way through the courts.

--A man charged with posing as a federal agent claimed connections to Pakistan’s intelligence agency and had visas from Pakistan and Iran, a federal prosecutor told a judge Thursday, calling for the continued detention of the man and his alleged associate a day after their arrest in Washington.

The prosecutor argued that Haider Ali’s visas and purported ties to Pakistan’s Inter-Services Intelligence spy agency established him as a flight risk and that he should be detained while his court case proceeds.  The prosecutor said the government hadn’t verified Mr. Ali’s claims and said prosecutors believe he is a U.S. citizen.

Ali and another man, Arian Taherzadeh, are accused of impersonating federal agents and providing rent-free apartments and other gifts to U.S. Secret Service officers.

The men allegedly posed as Department of Homeland Security employees and claimed to be involved in investigations related to gangs as well as the Jan. 6, 2021, attack at the Capitol, according to the FBI.  Federal prosecutors say the two men sought to ingratiate themselves with members of federal law enforcement and the defense community.

It is far from clear what the motives were, but this is a crazy case.

Personally, when I saw the Iran-Pakistan link, that made total sense.  Years ago, when I tried to go to Iran, I had to send my passport to the Pakistani embassy in Washington, because Pakistan acted on behalf of the Iranians.  Iran turned me down…and I ended up in Morocco instead.

--The motion picture academy on Friday banned Will Smith from attending the Oscars or any other academy event for 10 years following his slap of Chris Rock at the Academy Awards.

Smith pre-emptively resigned from the academy last week.

“I accept and respect the Academy’s decision,” Smith said in a statement.

The academy also apologized for its handling of the situation and allowing Smith to stay and accept his best actor award.

“During our telecast, we did not adequately address the situation in the room. For this, we are sorry.”

--The World Health Organization says nearly everybody in the world breathes air that doesn’t meet its standards for air quality, calling for more action to reduce fossil-fuel use.

The WHO is drawing on a database of 6,000 cities, towns, and villages across the globe, with 99% of the global population breathing air that exceeds its air-quality limits and is often rife with particles that can penetrate deep into the lungs, enter the veins and arteries, and cause disease. Air quality is poorest in WHO’s Eastern Mediterranean and Southeast Asia regions, followed by Africa, it said.

The database, which has traditionally considered two types of particulate matter known as PM2.5 and PM10, for the first time has included ground measurements of nitrogen dioxide, which originates mainly from human-generated burning of fuel, such as through automobile traffic, and is most common in urban areas. The highest concentrations were found in the eastern Mediterranean region.

As for particulate matter, India has the highest levels of PM10, while China leads in PM2.5.

“Particulate matter, especially PM2.5, is capable of penetrating deep into the lungs and entering the bloodstream, causing cardiovascular, cerebrovascular (stroke) and respiratory impacts,” WHO said.

--In the final part of a global assessment published on Monday, the UN Intergovernmental Panel on Climate Change warned the chance to avoid the worst impacts of the climate crisis will be lost if global greenhouse gas emissions do not start to fall in less than three years.

Without “immediate and deep carbon emissions reductions across all sectors, limiting global warming to 1.5 degrees is beyond reach.”

“It’s now or never, if we want to limit global warming to 1.5 degrees,” said report co-chair Prof. Jim Skea.

The report says drastic cuts to fossil fuels combined with scale-up of renewable energy is the single most effective option.  Existing and currently planned fossil fuel projects are already more than the climate can handle, it finds.  In spite of this, countries are considering increasing fossil fuel use because of uncertainty over supplies of Russian oil and gas.

The report reflects “a litany of broken climate promises,” said UN Secretary General Antonio Guterres.  “Some government and business leaders are saying one thing but doing another.  Simply put, they are lying. And the results will be catastrophic.”

--According to a long-range forecast from AccuWeather, there’s a high chance for another active hurricane season, noting that a season comparable to 2021’s prolific record is in store.

“The 2021 tropical year was…prolific with 21 named storms, making it the third most active on record in terms of named storms,” AccuWeather wrote.

To date, 16 to 20 named storms and six to eight hurricanes are in the cards for this season, according to AccuWeather meteorologist and hurricane expert Dan Kottlowski.  Around three to five are expected to reach major status.

However, over 20 storms could hit the U.S. if the currently weak La Nina intensifies later this year.

The 2022 prediction is higher than the 30-year average of 14 named storms per year.

--Alas, none of 2022’s named Atlantic storms will impact California, which badly needs water after another awful snow season.  As of last week, the mountain snowpack in the Sierras was just 38% of the long-term average at the end of the traditional snow season.  December was great.  The next three months awful on the snow front.  The levels of most of California’s biggest reservoirs, from Shasta Lake to San Luis Reservoir, measure far below average.

Water deliveries have been cut back for many farming areas in the state this year and Karla Nemeth, director of the state Department of Water Resources, said those cutbacks are expected to lead to more farmland being left dry and unplanted.

Scientists have found that the extreme dryness since 2000 in the West, from Montana to northern Mexico, now ranks as the driest 22-year period in at least 1,200 years and has been worsened by the heating of the planet.

Last year, the Sierra Nevada snowpack peaked at 72% of average in April but then rapidly melted during the hottest spring on record.

---

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

God bless America.

We pray for Ukraine.

---

Gold $1950
Oil $97.89

Returns for the week 4/4-4/8

Dow Jones  -0.3%  [34721]
S&P 500  -1.3%  [4488]
S&P MidCap  -3.4%
Russell 2000  -4.6%
Nasdaq  -3.9%  [13711]

Returns for the period 1/1/22-4/8/22

Dow Jones  -4.4%
S&P 500  -5.8%
S&P MidCap  -7.9%
Russell 2000  -11.2%
Nasdaq   -12.4%

Bulls 39.1
Bears 31.0

Hang in there.

Brian Trumbore

 

---