Week in Review

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Week in Review

04/23/2022

For the week 4/18-4/22

[Posted 9:00 PM ET, Friday]

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Edition 1,201

We learned today from an obscure Russian Maj. Gen. Rustam Minnekayev that Russia aims to seize southern Ukraine and to open a route to the separatist region of Transnistria in Moldova.

Gen. Minnekayev specified that Moscow would seek to take “full control” over the south in addition to the eastern Donbas region – the stated objective of the Russian authorities.

Transnistria is a small Russian-backed region that borders Ukraine.  It claimed independence after the fall of the Soviet Union in a bloody conflict but is not recognized internationally and officially remains part of Moldova. A small detachment of around 1,500 Russian troops has been stationed in the region since 1995 as part of a truce agreement.

It’s assumed Gen. Minnekayev’s comments were officially sanctioned.

Moldova summoned Moscow’s ambassador over the comments.

It is also assumed Russia will intensify its attacks in eastern Ukraine and along the southern coast in the coming days, and the next four weeks are critical, especially these next two.

Recall, May 9 is Victory Day in Russia, a holiday commemorating the surrender of Nazi Germany’s forces in 1945.  Vladimir Putin will declare a win of some kind in Ukraine on that date.  What will it be?

European Council President Charles Michel, who met with President Zelensky in Kyiv this week, called Putin today and highlighted Russia’s “miscalculations and losses” in its invasion.

And it’s true that Russia still has yet to take a major city, not even Mariupol, as yet.  The city of 430,000 before the war has been pulverized, a blasted wasteland with corpses in the streets; city officials saying 90% of the buildings have been destroyed.  The videos of ‘before’ and ‘after’ are heartbreaking.

But the 1,000 soldiers continue to hold out in the steel plant, denying Putin a strategic prize in the quest to build that land bridge connecting the east to the south and into Crimea.  Putin, though, is already shifting his attention to Odesa, most believe.

But does he really have the resources to achieve the goals as stated by Gen. Minnekayev?  It doesn’t seem as if he does.

John Nagl and Paul Yingling / Defense One

“Ukraine’s brilliant and tenacious resistance on land, as well as the sinking of the Moskva in the Black Sea, have checked Russia’s offensive in Ukraine.  Russian President Vladimir Putin would be wise to follow the advice of his countryman, chess grandmaster Garry Kasparov, and know when to stop.  Instead, Putin appears intent on further escalation.  In response to these events, Russia warned the United States to stop arming Ukraine, or face ‘unpredictable consequences.’  Putin even went so far as to prescribe the weapons that the United States should not provide to the Ukrainian Army.

“As Putin comes to terms with his looming defeat, he is now left with three bad, but not equally bad, options.  The least bad Russian option is to sue for peace on the most favorable terms Ukraine will grant and end this pointless and reckless war.  A worse option would be to go on the defensive in Eastern Ukraine and vainly hope for a more favorable correlation of forces in the future.  The worst option of all would be for Russia to attempt another offensive, gambling the entire army in Ukraine on one last thrust with no hope of success.  The West, in considering its response to these actions, would do well to remember Napoleon’s advice (more or less): ‘Never interfere with an enemy in the process of destroying himself.’”

President Zelensky, in an interview with an Austrian newspaper, said Russia’s political leadership had made a “catastrophic mistake” by invading his country and had dragged the Russian people into the leaders’ responsibility.

“From now on, many countries will no longer be concerned with the question of whether someone is a good or a bad Russian.  All Russians will be treated badly.  Russia has achieved that.  In the end, it’s none of my business, but that should scare the Russian people,” Zelensky said.

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And so this is how the week unfolded in Putin’s War….

--Ukrainian President Zelensky said the Battle of the Donbas had begun on Monday, with a new Russian assault on its eastern flank.

Ukrainian troops in besieged Mariupol vowed to fight to the death from their last redoubt in the strategic port – the Azovstal steel plant, one of Europe’s biggest metal works, which sprawls over more than 4 square miles beside the Sea of Azov.

While nothing is official, city officials on Monday were talking of more than 20,000 residents having possibly died in the six-week siege.  Major Serhiy Volyna, the commander of a marine brigade in Mariupol, published an open letter to Pope Francis on Monday urging him to help secure the evacuation from the Azovstal plant of vulnerable civilians who he said were living in the factory with his troops.

Sunday, Zelensky said on his Telegram account, “The occupiers will be responsible for everything they did in Ukraine,” posting images of destruction he said were akin to the “terrible times” of World War II.  He vowed to “fight absolutely to the end” in Mariupol

Zelensky admitted that Ukraine’s troops losses, as of last weekend, were between 2,500 and 3,000, with thousands wounded, many of whom will succumb to their wounds without the kind of expert medical care U.S. soldiers receive, for example.  One local commander this week talked about how six of his troops “bled to death” because they didn’t have proper tourniquet kits.

Also Sunday, Ukrainian Foreign Minister Dmytrol Kuleba said there had not been any recent diplomatic communications between Russia and Ukraine at the level of their foreign ministries and that the dire situation in Mariupol may be a “red line” in the path of negotiations, he told CBS News in an interview.

--Vladimir Putin awarded honors Monday to an army brigade that Ukraine has accused of committing war crimes in Bucha.

In a presidential decree, Putin praised the 64th Motorized Brigade for “mass heroism and bravery, steadfastness and fortitude” and for “distinguishing itself in military action for the protection of the Fatherland and state interests.”

This is sick.  Countless journalists and investigators found evidence of torture on corpses, as well as beheadings and dismemberments.  Reporters saw evidence Russian troops burned, sexually abused and haphazardly fired upon civilians.

--French President Macron said on Monday that his dialogue with Vladimir Putin had stalled after mass killings were discovered in Ukraine.

“Since the massacres we have discovered in Bucha and in other towns, the war has taken a different turn, so I did not speak to him again directly since, but I don’t rule out doing so in the future,” Macron told France 5 television.

--Monday, Russia launched multiple missile strikes on the western city of Lviv, killing at least seven.  Lviv has been spared much of the worst violence of the war.

--Tuesday, President Biden, Prime Minister Boris Johnson and Prime Minister Justin Trudeau pledged to send more artillery weaponry to Ukraine in the face of an all-out assault on that country’s east.

“This will become an artillery conflict, they need support with more artillery, that is what we will be giving them…in addition to many other forms of support.”  Canada promised it would send heavy artillery.

--But German Chancellor Olaf Scholz is catching heat at home, and elsewhere, for doing little on the heavy armaments side.  Scholz said Tuesday that Germany will continue to support Ukraine militarily although it has essentially maxed-out the weapons it can deliver from its own stocks and is instead working with its armaments industry and other nations to send more.  Which is kind of a joke.  A bad one at that.

Critics at home and abroad say Scholz is showing a lack of leadership on Ukraine.  Even members of the junior partners in his three-way coalition are now openly accusing him of dithering on Ukrainian pleas to send it more heavy weapons.

The problem is that elements of his Social Democrats (SPD) long advocated Western rapprochement with Russia prior to the war.

As a percentage of GDP, Germany is being out-donated by Estonia, Poland, Lithuania, Slovakia, Sweden, the U.S., the Czech Republic, Croatia, the UK, France, and Italy, according to data compiled by the German-based think tank the Kiel Institute for the World Economy.  Christoph Trevesch, Kiel’s research director said in a statement, “It is remarkable that the U.S. alone is giving significantly more than the entire EU, in whose immediate neighborhood the war is raging.”

--Foreign Minister Sergei Lavrov said Russia is committed to avoiding nuclear war.  Lavrov made the comments in an interview on Tuesday with India Today TV. 

--Wednesday, Moscow issued another call for the defenders of Mariupol, an estimated 1,000 soldiers, plus an undetermined number of civilians, to surrender by 2 pm Moscow time and announced the opening of a humanitarian corridor for any Ukrainian troops who agreed to lay down their arms.

As the deadline approached, a commander in the besieged Azovstal power plant issued a desperate plea for help, saying his marines were “maybe facing our last days, if not hours.”

“The enemy is outnumbering us 10 to one,” Serhiy Volyna said.  “We appeal and plead to all world leaders to help us.  We ask them to use the procedure of extraction and take us to the territory of a third-party state.”

--The President of the European Council, Charles Michel, said history will not forget the war crimes that have been committed in Ukraine, after Michel made a surprise visit to Kyiv to meet with President Zelensky.

In a tweet following the visit, Michel said: “In Borodyanka.  Like Bucha and too many other towns in #Ukraine.  History will not forget the war crimes that have been committed here. There can be no peace without justice.”

--Russia said on Wednesday it had test-launched its Sarmat intercontinental ballistic missile (also known as “Son of Satan”), a new addition to its nuclear arsenal which President Putin said would give Moscow’s enemies something to think about.  Putin was shown on television being told by the military that the missile had been launched from Plesetsk in the country’s northwest and hit targets in the Kamchatka peninsula in the far east.

“The new complex has the highest tactical and technical characteristics and is capable of overcoming all modern means of anti-missile defense. It has no analogues in the world and won’t have for a long time to come,” Putin said.  “This truly unique weapon will strengthen the combat potential of our armed forces, reliably ensuring Russia’s security from external threats and provide food for thought for those who, in the heat of a frenzied aggressive rhetoric, try to threaten our country.”

The Sarmat is a new heavy Intercontinental Ballistic Missile which Russia is expected to deploy with 10 or more warheads on each missile, according to the U.S. Congressional Research Service.  It has been under development for years and so its test-launch is not a surprise for the West, but it comes at a time of extreme geopolitical tension.

--Thursday, President Biden said America would send Ukraine an additional $800 million in military assistance, bringing the total to $3.4 billion, and another $500 million to stabilize the country’s economy and help towns brutalized by Russia’s invasion.  President Zelensky said Ukraine needs $7 billion a month to keep its economy afloat and “hundreds of billions of dollars to rebuild all this later.”  The World Bank estimated there has been $60bn worth of physical damage to Ukraine’s infrastructure thus far.

--Ukrainian officials accused Russia of burying the bodies of thousands of civilians in a mass grave in Mariupol to hide war crimes.  One estimate puts the number dead in such graves at 9,000.  Mariupol officials are talking of 20,000 civilians dead there, overall. 

Vladimir Putin claimed victory in Mariupol on Thursday, declaring the port city “liberated” after nearly two months of siege, despite up to 1,000 defenders still holding out inside the giant steelworks.

Putin said there was no need for a final confrontation with the last defenders who were boxed in.

“I consider the proposed storming of the industrial zone unnecessary,” he told defense minister Sergei Shoigu in a televised meeting at the Kremlin.  “I order you to cancel it.”

“There’s no need to climb into these catacombs and crawl underground through these industrial facilities,” he said.  “Block off this industrial area so that not even a fly can get through.”

--Zelensky ruled out heading to Moscow for direct talks at this point.  “In the name of my country, I would be ready to visit any place on this planet.  But certainly not now and certainly not Moscow.  That is simply out of the question.”

--Russia’s defense ministry said on Friday that Ukrainian fighters and foreign mercenaries had been “securely blockaded” at the Azovstal steel plant.  The defense ministry also reported hitting dozens of targets in the Donetsk and Kharkiv regions today.

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--A small but growing number of senior Kremlin insiders are quietly questioning Putin’s decision to go to war, with mounting military losses and unprecedented international isolation.

As Bloomberg News reported:

“The ranks of the critics at the pinnacle of power remain limited, spread across high-level posts in government and state-run business.  They believe the invasion was a catastrophic mistake that will set the country back for years, according to ten people with direct knowledge of the situation.  All spoke on condition of anonymity, too fearful of retribution to comment publicly.*

“So far, these people see no chance the Russian president will change course and no prospect of any challenge to him at home.  More and more reliant on a narrowing circle of hardline advisers, Putin has dismissed attempts by other officials to warn him of the crippling economic and political cost, they said.

“Some said they increasingly share the fear voiced by U.S. intelligence officials that Putin could turn to a limited use of nuclear weapons if faced with failure in a campaign he views as his historic mission.”

But one man who is speaking out, very publicly, is Russian businessman Oleg Tinkov, who on Tuesday condemned what he called Moscow’s “crazy war,” saying 90% of his countrymen did not support it and calling on the West to offer Putin a dignified way to withdraw.

“I don’t see a single beneficiary of this crazy war!  Innocent people and soldiers are dying,” Tinkov, who founded Tinkoff Bank, Russia’s second biggest credit card issuer, wrote in an Instagram post, one of the most outspoken broadsides against the conflict by a Russian tycoon.

Many Russians have rallied around the Kremlin, which has whipped up support with a publicity campaign using the “Z” logo of the armed forces.

“Of course there are morons who draw Z, but 10% of any country are morons.  90% of Russians are AGAINST this war!” wrote Tinkov, who has denied having any close relationship with Putin or the Kremlin.

“Kremlin officials are shocked that neither they or their children will be off to the Mediterranean in the summer.  Businessmen are trying to save the rest of their property,” he said.  “The (Russian) generals, waking up with a hangover, realized that they had a shit army,” Tinkov wrote.  “And how could the army be good if everything else in the country is shit and mired in nepotism, sycophancy and servility?”

Switching to English, Tinkov wrote: “Dear ‘collective West’ please give Mr. Putin a clear exit to save his face and stop this massacre.  Please be more rational and humanitarian.”  [Reuters, editing by Mark Heinrich]

*Two Russian oligarchs, both linked to gas giants, apparently murdered their wives and daughters before killing themselves – within two days of each other this week.  One former Kremlin official and Gazprombank executive, Vladislav Avayev, 51, was found dead in his luxury Moscow apartment alongside the bodies of his wife and 13-year-old daughter on Monday.

The following day, former Novatek deputy chairman Sergey Protosenya, 55, his wife, and 18-year-old daughter, were found dead at their Spanish mansion.  Needless to say, there are questions about these two deaths occurring within 24 hours of each other.

--Meanwhile, family members of sailors who served onboard the Moskva are demanding answers as the Russian defense ministry has sought to suppress information about what happened to the ship or its estimated 510-strong crew.  The total number of dead, wounded and missing remains a state secret. 

Media reports suggest the number of casualties from the attack will be far higher than the handful of dead authorities have acknowledged.   Comparisons are being made to the Kursk submarine incident that left 118 sailors dead and struck a blow to the prestige of a young president Vladimir Putin in 2000.

New information on the young sailors who died will also renew scrutiny about the Russian government’s use of conscripts in battle, something Putin had explicitly denied was the case early in the war.

Some relatives have reportedly seen hundreds of wounded, severely burnt, sailors at a military hospital in Crimea.

Well, today, Russia’s defense ministry confirmed that the Moskva suffered casualties.  After initially saying all the ship’s crew were evacuated after an ammunition blast triggered by a fire ripped through the flagship of its Black Sea fleet, RIA news agency quoted the ministry as saying, “Attempts by the crew to extinguish the fire were not successful.  During the struggle to stabilize the ship, one serviceman died and another 27 crew members went missing.  The remaining 396 members of the crew were evacuated.  [Yes, that doesn’t add up to 510.]

--The war is to blame for exacerbating “already dire” world food insecurity, with price and supply shocks adding to global inflationary pressures, Treasury Secretary Janet Yellen said on Tuesday at a meeting of G20 finance ministers.  Even before the war, over 800 million people – or 10% of the global population – were suffering from chronic food insecurity, Yellen said, and estimates showed higher food prices alone could push at least 10 million more people into poverty.

Yellen said countries should avoid export bans* that could further increase prices, while stepping up support for vulnerable populations and smallholder farmers, a message underscored by German Finance Minister Christian Lindner:

“I want to be clear: Russia’s actions are responsible for this,” Yellen said, adding that the United States was working urgently with partners and allies to “help mitigate the effects of Russia’s reckless war on the world’s most vulnerable.”

Lindner, speaking on behalf of Group of Seven advanced economies, said targeted and coordinated action was needed, but called on all countries to “keep agricultural markets open, not stockpile and not withhold stocks, and not impose unjustified export restrictions on agricultural products or nutrients.”

Yellen emphasized that international financial institutions needed to help mitigate the global fertilizer shortage and smooth supply chain disruptions for food and critical supplies.

Indonesian Finance Minister Sri Mulyani warned that food and energy price spikes could “create huge political and social unrest.”  IMF chief Kristalina Georgieva said the food security crisis piled further pressure on the 60% of low-income countries at or near debt distress.

“We know hunger is the world’s greatest solvable problem,” she said.  “And a looming crisis is the time to act decisively.”

*So what happened this afternoon?  Indonesia, the world’s top palm oil producer, announced plans to ban exports of the most widely used vegetable oil, exactly what Yellen argued against, in a shock move that could further inflame surging global food inflation!

--The IMF’s revised economic outlooks for Russia and Ukraine has the former’s economy contracting 8.5% in 2022, and Ukraine’s 35%.  Other figures I have noted in past weeks put these at 10% and 45%, respectively.

All agree that in the case of Ukraine, as the IMF puts it, “Even if the war were to end soon, the loss of life, destruction of physical capital, and flight of citizens will severely impede economic activity for many years to come.”

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--Pope Francis, marking an “Easter of war” on Sunday, urged leaders to hear the people’s plea for peace in Ukraine and implicitly criticized Russia for dragging the country into a “cruel and senseless” conflict.

The 85-year-old pope made his comments in his twice-yearly “Urbi et Orbi” (to the city and the world) address to about 50,000 people in St. Peter’s Square after a long Mass. It was the first Easter since 2019 that the public was allowed to attend following years of Covid restrictions.

Francis dedicated much of the address, traditionally an overview of world conflicts, to Ukraine, comparing the shock of another war in Europe to the shock experienced by the apostles who the Gospel says saw the risen Jesus.

“Our eyes, too, are incredulous on this Easter of war. We have seen all too much blood, all too much violence and destruction of the cruel and senseless war into which it was dragged.”

“Let there be a decision for peace.  May there be an end to the flexing of muscles while people are suffering,” Francis said.

Quoting from a 1955 manifesto by the philosopher Bertrand Russell and the scientist Albert Einstein that warned of the danger posed by nuclear weapons, Francis said; “Shall we put an end to the human race, or shall mankind renounce war?”

“Please, let us not get used to war!  Let us all commit ourselves to imploring peace, from our balconies and in our streets!  May the leaders of nations hear people’s pleas for peace.”

“We emerged from two years of pandemic, which took a heavy toll.  It was time to come out of the tunnel together, hand in hand, pooling our strengths and resources.  Instead, we are showing that we still do not have within us the spirit of Jesus, we still have the spirt of Cain, who saw Abel not as a brother, but as a rival, and thought about how to eliminate him,” the pope said.

“I hold in my heart all the many Ukrainian victims, the millions of refugees and internally displaced persons, the divided families, the elderly left to themselves, the lives broken and the cities razed to the ground,” Francis said.

--The number of people fleeing Ukraine to escape Russia’s invasion has passed 5 million in Europe’s worst refugee crisis since the end of World War II, the UN refugee agency said on Wednesday.  Most have crossed into Poland, Slovakia, Hungary and Romania.

But many are now returning to Ukraine.

--Around 200,000 people risk losing their jobs in Moscow because foreign companies have suspended operations or decided to leave the Russian market, Mayor Sergei Sobyanin wrote on his blog Monday.  Authorities are ready to support people who lose their jobs by providing training and temporary and socially-important work.

--Russia’s justice ministry today added opposition activist Vladimir Kara-Murza to a list of “foreign agents,” which means he is subject to stringent financial reporting requirements, and must preface anything he publishes with a disclaimer.  Leonid Volkov, an ally of Alexei Navalny, was also placed on the list, both being labeled Ukrainian agents.

Some commentary…

Editorial / Wall Street Journal

“Vladimir Putin hoped that invading Ukraine would make NATO splinter, but the alliance has been energized and is now set to expand.  This is a reminder that the bloc’s growth is a response to – and not the cause of – Russia’s aggression.

“Finnish Prime Minister Sanna Marin said last week that Helsinki would decide whether to apply for NATO membership in the coming weeks.  The country’s parliament is scheduled to debate this week.  Nearby Sweden appears likely to apply too, with local media suggesting Stockholm could pursue membership within months.

“Russia isn’t taking it well.  ‘If Sweden and Finland join NATO, the length of the alliance’s land borders with Russia will more than double,’ former Russian President Dmitry Medvedev said last week.  He warned Russia would retaliate by deploying ‘Iskanders, hypersonic weapons, and nuclear-armed ships literally at arm’s length from their own homes.’ Such threats underscore the case for joining.

“Sweden and Finland are members of the European Union, but as historically neutral nations they preferred to keep a distance from NATO.  For years about a third of Swedes wanted to apply, and Finns were even more skeptical.  But support for accession has grown since the invasion.  More than two-thirds of Finns showed support in a recent survey.

“Some Swedish and Finnish elites are more hesitant.  Last month Swedish Prime Minister Magdalena Andersson suggested that joining NATO ‘would further destabilize this area of Europe and increase tension.’  Many Finnish politicians also have been ambivalent.  But the public sees the devastation in Ukraine and realizes it could happen to them. As democracies, the governments will eventually reflect the will of the people.

“Finns and Swedes are moving toward the alliance because they believe it’s the best path to peace in the long run.  The Baltic states know they would be under even greater threat if they had not joined NATO. So do the Poles.

“The U.S. Senate will have to approve accession, and the case for approval is overwhelming. The debate should be instructive, and expect opposition from the small but persistent isolationist wing of the Republican Party.  In 2019 Senators Rand Paul and Mike Lee were the lone votes against accepting North Macedonia to the alliance, and other Trump-aligned Senators could join them this time.

“Yet Finland and Sweden wouldn’t be alliance freeloaders.  Their strategic location in the Baltic Sea could be critical in a wider conflict with Russia. Finland already punches above its weight militarily, and wealthy Sweden can afford its announced defense-spending increases.  A secure Europe better capable of defending itself serves American interests.

“Some conservatives argue that Washington should focus on China and the Pacific rather than make new security commitments in Europe.  We’re all for doing more to deter China.  But the rulers in Beijing and Moscow are working together, and the U.S. will need allies in both theaters to deter them.  Successful aggression by one revanchist state encourages the other to do the same.

“The U.S. will have to spend more on defense no matter what NATO does.  Adding Sweden and Finland spreads the burden of deterring Russia and reduces the risk of war.”

Walter Russel Mead / Wall Street Journal

“As Russia and Ukraine prepare for what could be the biggest tank battle in Europe since World War II, the future of Vladimir Putin’s war remains impossible to predict.  Large-scale tank and artillery engagements in the flat open terrain of eastern Ukraine may favor Moscow, and the sheer weight of Russia’s military machine could force territorial gains, but other outcomes are possible. Ukrainian courage, tactical brilliance and access to Western arms and equipment could produce another string of humiliating setbacks for Russia.

“The worst-case scenario for Mr. Putin would be for Russia’s war in Ukraine to end in a comprehensive military defeat, with the collapse of pro-Russian enclaves in the Donbas and Moldova and Ukraine’s integration into the West.  Such a defeat would be more than a personal humiliation; it could be a career-ending setback for him. It would also deliver a psychological and strategic shock to Russia’s standing and self-image.  The course of Russian history would change.

“Russia would not be the first former empire to face a moment of historical reckoning.  Spain’s 1898 defeat at the hands of the upstart Americans was a watershed moment in Spanish history.  The global empire that had defined Spain since the voyages of Columbus had suddenly disappeared, and Spaniards began to question everything from the monarchy to the role of the church.

“For Britain and France, their ignominious failure in the 1956 Suez campaign forced both countries to realize that they were no longer independent global powers.  The glories of empire were over, and the two former superpowers began, painfully and reluctantly, to adjust to their new circumstances.

“A decisive Russian failure in Ukraine could be Moscow’s Suez moment….

“With Ukraine under its thumb, Moscow sees itself as the greatest power in Europe.  Without Ukraine, the dream that Russia can recapture the Soviet Union’s status as a superpower will die a bitter death.

“Worse, perhaps, from the viewpoint of the ‘Eurasian’ theorists and radical Russian nationalists who provide a veneer of legitimacy for Mr. Putin’s regime, a victory for Orthodox, Slavic and democratic Ukraine over despotic Russia wouldn’t only challenge the personal legitimacy of Mr. Putin.  It would challenge the idea of Russian exceptionalism and fatally undermine the view that despotism is the form of governance best suited to the Russian soul.

“As the war exposes the darkness inherent in Mr. Putin’s regime, and as atrocities abroad and repression at home impress the mark of Cain ever more deeply on its brow, it is impossible not to hope for a Russian defeat.  Nevertheless, caution is in order.  Mr. Putin and those around him know that in Ukraine they aren’t fighting only for an adjustment of frontiers.  They are fighting for their world, and it may be psychologically impossible for them to accept defeat until every measure, however ruthless, and every weapon, however heinous, has been brought into play.

“For Vladimir Putin and the people around him, the stakes in Ukraine are almost infinitely great.”

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Biden Agenda

--According to a new Associated Press-NORC Center for Public Affairs Research poll, 54% of Americans think President Biden has been “not tough enough” in his response to Russia’s invasion of Ukraine.  Thirty-six percent think his approach has been about right, while 8% say he’s been too tough.

But as the war has dragged on, Americans’ desire to get involved has waned somewhat.  Thirty-two percent of Americans say the U.S. should have a major role in the conflict.  That’s down from 40% last month, though slightly higher than the 26% who said so in February.

It’s a problem for the White House.  With the incredibly tragic and despicable images of Russian attacks on civilians and hospitals, there’s pressure to stop Vladimir Putin and help millions of Ukrainians under attack, but the president has to manage the threat of escalation with Putin, who keeps raising the alert level on using Russia’s nuclear weapons.

Most Americans are in favor of the U.S. sanctioning Russia for invasion, providing weapons to Ukraine and accepting refugees from Ukraine into the U.S.  More Americans also support than oppose deploying U.S. troops to Eastern Europe to support U.S. NATO allies in response to the invasion, and about two-thirds say NATO membership is good for the U.S.

But only 22% favor deploying U.S. troops to Ukraine to fight against Russian forces, while 55% are opposed; 23% say they are neither in favor nor opposed.

Biden faces other significant political challenges heading into the midterms, highlighted by inflation at a 40-year high and soaring energy prices exacerbated by the war. The poll suggests the balance in the tradeoff between sanctions on Russia and the U.S. economy might be shifting.  By a narrow margin, Americans say the nation’s bigger priority is sanctioning Russia as effectively as possible over limiting damage to the U.S. economy, 51% to 45%.  Last month, more said they prioritized sanctioning Russia over limiting damage to the economy, 55% to 42%.

--Editorial / Wall Street Journal

“This has been a rough few months for the Centers for Disease Control and Prevention’s Covid-19 orders.  First its eviction moratorium went down last year. On Monday it lost again, as a federal judge blocked the agency’s mask mandate on airlines and other forms of public transportation.

“Judge Kathryn Kimball Mizelle ruled that the CDC exceeded its statutory authority and never clearly explained its justification for the broad mask mandate, among other legal infirmities.  It’s a strong opinion based in a careful reading of the Public Health Service Act of 1944, which was the basis for the CDC’s order.

“Judge Mizelle says the agency stretched the meaning of the word ‘sanitation’ in the law, which was never intended to justify such sweeping control over the behavior of millions of Americans.  She quotes the words of Jeff Sutton, Chief Judge of the Sixth Circuit Court of Appeals, in the vaccine mandate case that ‘this is no ‘everyday exercise of federal power.’’

“It certainly isn’t, which helps to justify the judge’s national injunction in the mask case.  National injunctions should be rare, but it would be hard to narrow, by geography or type of transport, a nationwide mask requirement for all public transportation.

“The ruling comes when the mask mandate is a waning health necessity, if it ever was.  The CDC recently extended it until May 3, and it is increasingly unpopular with passengers and airline executives as Covid-19 becomes endemic and less lethal.  Rather than appeal the ruling and risk a broader defeat, the CDC would be wise to drop it.”

Well, as I explain down below, the ruling is being appealed.

--Peggy Noonan / Wall Street Journal

“I want to talk about Joe Biden and his unique problems presenting his presidency.  You’re aware of his political position and the polls.  The latest from CNN has him at 39% approval.  Public admiration began to plummet during the Afghanistan withdrawal.  That disaster came as it was becoming clear the president was handing his party’s progressive caucus functional control of his domestic agenda, which fell apart and never recovered.

“James Carville the other night on MSNBC amusingly and almost persuasively said Democrats in the 2022 congressional elections should hit Republicans hard on their weirdo content – candidates who are both extreme and inane, conspiracists in the base.  But the Democrats too have their weirdo quotient – extreme culture warriors, members of the Squad – and last summer the president appeared to have thrown in with them.  That and Afghanistan were fateful for his position, and then came inflation.

“But what struck me this week was a little-noticed poll from the New Hampshire Journal.  It’s always interesting to know what’s going on in the first presidential primary state, but the Journal itself seemed startled by the answer to the question: If the 2024 election were held today and the candidates were Joe Biden vs. Republican Gov. Chris Sununu, who would you back?  Mr. Sununu trounced the president 53% to 36%.  Mr. Sununu is popular and that unusual thing, a vigorous moderate conservative who appears to have actual intellectual commitments.  But Mr. Biden carried New Hampshire in 2020 with 53%.  He’s cratering….

“In 50 years (Biden) has cycled through Dashing Youth, the Next JFK, Middle-Class Joe and Late-Life Finder of His Inner Progressive.  But the mood he represents now isn’t a good one.  It’s there in the New Hampshire poll. Asked if they thought Biden was ‘physically and mentally up to the job’ if there’s a crisis, ‘not very/not at all’ got 54% and ‘very/somewhat’ 42%.  Here we all use euphemisms: ‘slowing down,’ ‘not at the top of his game.’  If Mr. Biden’s policies were popular, nobody would mind that he seems to be slowing.  But they aren’t.”

Noonan then goes on to blister the president’s presentation skills, or lack thereof.

--Biden embarrassingly misspoke on Thursday in confusing a question on the mask mandate with Title 42, the Covid-related expulsion policy that has effectively closed down the U.S. asylum system, saying he was referring to a mask mandate for public transportation that was struck down by a federal judge.

I was watching and thought I didn’t hear the question right, which was on the mask mandate, and then he answers it by talking about Title 42.

“I want to clarify that, in comments at the conclusion of my remarks this morning, I was referring to the CDC’s mask mandate,” Biden said in a statement after.

--Rich Lowry / New York Post

“Joe Biden is falling down on his promise to bring normality back to the presidency for a basic reason – he’s not normal.

“Biden’s long pedigree, conventional politics and contrast with Donald Trump suggested that he’d bring predictability and calm to the highest reaches of the nation’s politics.

“The press touted this impending shift.  A headline in The Financial Times announced, ‘Biden signals return to normality on first day as president.’ The CNN political analyst Chris Cillizza opined, ‘The single most radical thing that Biden has done in his first 48 hours of being president is act totally and completely normally.’

“Yeah, well, a funny thing happened on the way to renewed normality – President Biden has engaged in one bizarre escapade after another as he’s crashed his presidency into the rocks of incompetence, tone-deafness and stubbornly misplaced priorities….

“It’s not normal for a president to be such a tepid performer that it’s very difficult for him to command a stage.

“It’s not normal for a president to misspeak so routinely that it almost seems strange when he gets it right.

“It’s not normal for a president to shovel trillions of dollars into a growing economy, and then still want to spend trillions more when it’s clear that inflation is a real problem….

“It’s not normal for a president’s son and brother to get millions of dollars in easy money from a company that is a cat’s paw of the Chinese government.

“It’s not normal for a first-term president to be on the verge of becoming a lame duck because almost no one believes his assurances that he’s going to run again (only 41% of Democrats in a recent Wall Street Journal poll say they think Biden will run in 2024).

“It’s a badly divided country at a time of growing threats abroad and of declining faith in U.S. institutions. These are serious challenges that it would take deft, far-sighted presidential leadership to overcome.  Instead, what’s on offer isn’t even above-average presidential leadership, and that’s not going to change.

“For Joe Biden, this rocky, uninspired performance is indeed the norm.”

Wall Street and the Economy

On Thursday, Fed Chair Jerome Powell said a half-point interest rate increase will be “on the table” when the Fed meets on May3-4 to approve the next in what are expected to be a series of rate increases this year.

With inflation running roughly three times the Fed’s 2% target, “it is appropriate to be moving a little more quickly,” Powell said at a meeting of the International Monetary Fund.  “Fifty basis points will be on the table for the May meeting.”

The Fed chair also said he felt investors currently anticipating a series of half-point hikes were “reacting appropriately, generally,” to the Fed’s emerging fight against rising prices.  Traders are now expecting half-point hikes at three upcoming meetings and quarter-point increases at the year’s three other sessions.

“We really are committed to using our tools to get inflation back” to the point where the Fed is no longer relying on help from improving global supply chains, for example.  “We have had an expectation that inflation would peak around this time and come down over the course of the rest of the year and then further,” Powell said.  “These expectations have been disappointed in the past.  We are wanting to see actual progress… We are not going to count on help from supply side healing.  We are going to be raising rates and getting expeditiously to levels that are more neutral,” and then higher if needed.

St. Louis Federal Reserve Bank President James Bullard on Monday repeated his case for increasing the funds rate to 3.5% by the end of the year to slow the 40-year-high inflation rate.  He also said he did not rule out a 75 basis-point rate hike.  Other Fed governors have issued more dovish comments.

On the data front, March housing starts came in at their highest pace since 2006, 1.793 million, annualized, but this was almost solely because of multi-family dwellings, not single-family homes.

The National Association of Realtors released existing-home sales for March, a tick below forecast at 5.77 million (ann.), down 4.5% from March 2021.  It was the second consecutive month of declines.

“The housing market is starting to feel the impact of sharply rising mortgage rates and higher inflation taking a hit on purchasing power,” said Lawrence Yun, NAR’s chief economist.  “Still, homes are selling rapidly, and home price gains remain in the double-digits.”

With mortgage rates expected to rise further, Yun predicts transactions to contract by 10% this year, for home prices to readjust, and for gains to grow around 5%.

The median existing-home price for all housing types in March was $375,300, up 15.0% from March 2021, marking 121 consecutive months of year-over-year increases, the longest-running streak on record.  Unsold inventory sits at a 2.0-month supply, up from 1.7 months in February.

First-time buyers were responsible for 30% of sales in March, but it’s going to be tougher and tougher as mortgage rates climb.  One real-estate agent in San Diego, Monika Prasai, remarked to the Journal, “We do see a lot of serious, pre-approved buyers that were ready to go just a month ago, and now they’re not in the market anymore.”

The rate on a 30-year fixed mortgage is at 5.11%, per Freddie Mac on Thursday, which is up from 3.22% at the beginning of the year.

According to Realtor.com data, the monthly payment on a $405,000 home with an interest rate of 5% is 38.1% higher than the payment on a similarly priced home would have been a year ago.  With a 20% down payment, that would boost monthly mortgage payments by $481.

The Atlanta Fed’s GDPNow barometer for the first quarter is at 1.3%, with our first official look at GDP for the first three months coming next week.

Meanwhile, the International Monetary Fund said Tuesday in its most recent update to its World Economic Outlook that the Russian invasion of Ukraine will severely impact the recovery from the pandemic.

“Global economic prospects have worsened significantly since our last World Economic Outlook forecast in January,” the IMF said.  “At the time, we had projected the global recovery to strengthen from the second quarter of this year after a short-lived impact of the Omicron variant.  Since then, the outlook has deteriorated, largely because of Russia’s invasion of Ukraine – causing a tragic humanitarian crisis in Eastern Europe – and the sanctions aimed at pressuring Russia to end hostilities.”

The forecast for world output growth in 2022 was revised down to 3.6% from 4.4% in January, while the outlook for 2023 stands at 3.6%, lower than the 3.8% expectation in the previous report.  World growth is estimated to have been 6.1% in 2021.

“The war will severely set back the global recovery, slowing growth and increasing inflation even further,” the IMF said.

The U.S. economy is now expected to expand 3.7% in 2022, a downward adjustment from the 4% increase previously estimated, followed by 2.3% in 2023.  The U.S. economy expanded by 5.7% in 2021.

Growth in the Euro Area will be even more severely impacted by the war, rising by 2.8% in 2022, a sharp downward adjustment from 3.9% in the January estimate following a 5.3% pace in 2021.  The IMF sees 2.3% growth for 2023.  German growth is expected to be only 2.1% in 2022, compared with 3.8% as forecast only three months ago.

Europe and Asia

We had flash April PMIs for the euro area, courtesy of S&P Global, and the composite reading came in at 55.8 (50 the dividing line between growth and contraction), a 7-month high, with manufacturing 50.4, a 22-month low, and services 57.7, an 8-month high amid reopenings.

Germany’s flash manufacturing reading for April was 47.4, a 22-month low, with services at 57.9, an 8-month high.

France’s flash figures were 51.2 mfg., services 58.8, a 51-month high.

The UK reported readings of 53.8 for manufacturing output, with the service sector at 58.3.

Chris Williamson / S&P Global

“April saw a two-speed eurozone economy. Manufacturing came close to stalling due to ongoing supply constraints, rising prices and signs of spending being hit by risk aversion due to the war.  However, April also saw manufacturers suffer due to a shift in demand from goods to services amid looser pandemic restrictions, most notably via a record surge in spending on activities such as travel and recreation.

“Common across both sectors, however, was a further surge in cost pressures, driven by soaring energy and raw material costs, as well as rising wages. Average prices charged for goods and services rose at an unprecedented rate in April as these higher costs were passed on to customers, sending a worrying signal that inflationary pressures continue to build.

“The eurozone has therefore started the second quarter on a stronger than anticipated footing, confounding consensus expectations of a slowdown. However, the weakness of the manufacturing sector is a major concern as it points to an economy that is not firing on all cylinders.  Similarly, the ever-rising cost of living suggests that service sector growth could cool sharply once the initial rebound from the opening up of the economy fades.

“Policymakers may nevertheless tilt to a more hawkish stance, reflecting the persistence of unprecedented inflationary pressures at a time of encouragingly robust economic growth.”

Elsewhere on the data front for the eurozone, Eurostat released a report on March inflation in the EA19, 7.4%, up from 5.9% in February.  A year earlier, the rate was 1.3%.  Ex-food and energy, the figure is 3.2% vs. 2.9% in February and 1.0% in March 2021.

Germany 7.6%, France 5.1%, Italy 6.8%, Spain 9.8%, Netherlands 11.7%, and Ireland 6.9%.

February industrial production in the euro area rose 0.7% over January…up 2.0% vs. a year earlier.

France: In 2017, French President Emmanuel Macron won his runoff election against Marine Le Pen by a 66-34 margin, but this year’s runoff between the two, Sunday, promises to be much closer.

Macron tore into his far-right challenger in their televised debate Wednesday for her ties to Russia and for wanting to strip Muslim women of their right to cover their heads in public, as he seeks another 5-year term.

It was the only head-to-head confrontation before the vote and Macron took the gloves off, arguing that a loan that Le Pen’s party received in 2014 from a Czech-Russian bank made her unsuitable to deal with Moscow.  He also said plans by the anti-immigration candidate to ban Muslim women in France from wearing headscarves in public would trigger “civil war” in the country that has the largest Muslim population in western Europe.

Le Pen, in turn, sought to appeal to voters struggling with surging prices amid the fallout of Russia’s war in Ukraine. She said bringing down the cost of living would be her priority if elected as France’s first woman president and she portrayed herself as the candidate for voters unable to make ends meet.

She said Macron’s presidency had left the country deeply divided.  She repeatedly referenced the co-called “yellow vest” protest movement that rocked his government before the pandemic, with months of violent demonstrations against his economic policies.

“France needs to be stitched back together,” she said, though her policies wouldn’t exactly do that.

But Macron hammered away on the bank loan to Le Pen’s party, arguing that because of the debt ($9.8 million), Le Pen’s hands would be tied when dealing with Vladimir Putin, should she win.

“You are speaking to your banker when you speak of Russia, that’s the problem,” Macron charged.  “You cannot correctly defend France’s interests on this subject because your interests are linked to people close to Russian power.  You depend on Russian power and you depend on Mr. Putin.”

Le Pen bristled at such talk, describing herself as “totally free” and said Macron “knows fully well that what he says is false.”  She said the party is paying off the loan and Macron was “dishonest for raising the issue.”

It is true, as I remember, that French and European banks refused to give Le Pen’s party a loan so she/they had little choice but to seek alternatives.  The optics, especially today, however, are terrible.

Macron countered, “How would you like if it a French politician took a loan from Cosa Nostra?  Well, this here is the same thing.”

Le Pen was best when she was talking about the issues long a centerpiece of her politics and appeal to far-right voters: combatting what she called “anarchic and massive immigration” and crime.

Since the first round, when initial polls had the race at basically 51-49 Macron, his lead has widened, as it is wont to do ahead of the second round in French voting, many on the fence going for the ‘establishment’ candidate over the extremist.

It will certainly be closer than 2017, with most polls today showing 56-44 or thereabouts and that’s what I’ll go with, 56-44.

I marched along with Le Pen’s supporters at her annual May Day gathering in 2011 and 2014.  I was curious as to the makeup of her then-National Front followers, as she was breaking away from her father, the virulent racist Jean-Marie Le Pen.  I have some pictures of the two of them from about five feet away, not having any problem getting right up close.

Marine has been trying to rebrand the party, which before her political turn was known as a bunch of “jack-booted thugs.”  I found nothing like that.  Just pretty normal folks to me as I placed myself in the middle of the throng at both marches.

But it’s difficult for Marine Le Pen to soften her image as she can’t escape the extremist label that many have long assigned to her party, and it’s true, if she won, France would distance itself from both the EU and NATO, sever ties with Germany, and have an alliance of some sort with Putin.

Ukrainian President Zelensky and Russian dissident Alexei Navalny both said this week that they hoped for a Macron victory.

Jean Luc Melenchon, the far-left leader who came in third in the first round of balloting with about 22%, said he has not given any voting instructions for the runoff but has called on his followers not to vote for Le Pen.  “You will make a colossal mistake if you vote for Mrs. Le Pen.  I don’t tell you to vote for Macron, search inside your heads for what’s best, but don’t do this,” he said in a television interview.

For his part, Melenchon is focusing on the legislative elections this summer, which are going to be very big.  Macron could win another five-years, but end up with minority support in parliament.

Brexit: According to the IMF, Britain faces the slowest growth of all major advanced economies in 2023 as the cost-of-living crisis threatens to choke activity.  The IMF’s latest undermines Prime Minister Boris Johnson’s claims that the UK is the fastest growing Group of Seven nation because of how its vaccine rollout boosted the recovery.  The IMF also said the UK faces a worse inflation shock than Germany, France, Italy, Canada, Japan and the U.S.

The IMF slashed the UK’s growth rate in 2022 to 3.7%, down from 4.7% in the January estimate, followed by a 1.2% pace in 2023.  The UK economy grew by 7.4% in 2021.

The Institute of Directors said that 42% of UK businesses that trade internationally are exporting less to the EU than they did in the last five years, and 28% are importing less from the bloc.  As I’ve been writing ad nauseam, it’s about the cost of complying with the new customs rules and other administrative burdens since the UK exited the EU.

Turning to Asia…China reported first-quarter GDP of 4.8% year-over-year, compared with 4% in the fourth quarter.  While this was a little better than expected, the Covid restrictions, especially in industrial cities, are having a major impact.

Separately, March industrial production rose 5% Y/Y vs. 7.5% in February; retail sales in the month declined 3.5% year-over-year vs. +6.7% prior; and fixed asset investment rose 9.3% for the first three months of 2022.  The unemployment rate rose to 5.8% last month from 5.5%. 

China’s slowdown hurts China’s trading partners by depressing demand for oil, steel, consumer goods, food and other imports.

The IMF slashed its growth forecast for China this year to 4.4%, well below what Beijing aims to achieve (5.5%).  It’s the IMF’s second downgrade of its China forecast in three months.

Many of Beijing’s problems are self-inflicted.  President Xi’s campaign last year to steer China away from Western-style capitalism has eroded business confidence and caused a plunge in private investment.  The Covid policies, including severe lockdowns, have hurt consumer spending and the supply chain has been disrupted.

And now you have weaker overseas demand and heightened inflationary pressure because of soaring commodity prices, both made worse by Putin’s war.

Japan reported its flash PMI readings for April, with manufacturing at 51.7 and the service sector reading at 50.5, an improvement from March’s 49.4.

March exports rose 14.7% vs. 19.1% the prior month, while imports increased 31.2%.

Industrial production in March was up just 0.5% year-over-year.  March inflation was 1.2%, but -0.7% ex-food and energy.

Street Bytes

--Stocks had a dreadful week amid hawkish Fed talk and mixed earnings reports.  The Dow Jones fell 981 points today, 2.8%, its worst point loss since Oct. 2020.  For the week the Dow lost 1.9% to 33811, the S&P 500 declined 2.8% and Nasdaq 3.8%.  Nasdaq is now down 10% the last three weeks.

And coming up is ‘tech week’ in terms of earnings, with the likes of Amazon, Apple, Alphabet (Google), Facebook and Microsoft leading the way, while we have other biggies such as Caterpillar, General Motors, Chevron and Exxon Mobil.  We’re going to learn all kinds of ‘stuff’ when it comes to demand and the global supply chain.

--U.S. Treasury Yields

6-mo. 1.30%  2-yr. 2.68%  10-yr. 2.90%  30-yr. 2.95%

The short end of the yield curve rose sharply on further talk of a series of 50 basis point rate hikes, while the long end stabilized, for now, though still at levels not seen in over three years.

The German 10-year hit 0.96% on Tuesday, its highest since July 2015 on European Central Bank tightening expectations.  Uncertainty about the next moves from the ECB has increased volatility and left rates more exposed in the eurozone to spillover effects from foreign markets, namely U.S. rates.  The ECB last week avoided any pledge beyond the end of bond buying and kept its options open.

So Wednesday, the German bund yield dropped to 0.86%, but then Thursday, it was back to 0.94%, and finished the week at 0.97%.

--It was another volatile week in the oil market, with supply concerns emerging as the European Union mulls a potential ban on Russia oil imports while the market deals with reduced supplies from Libya.  The latter said it was losing more than 550,000 barrels per day of output due to blockades at major fields and export terminals.

With OPEC and allies like Russia (OPEC+) struggling to meet their production targets and with U.S. crude stockpiles down sharply in the last week, capacity remains limited.

But then you have the demand outlook in China, as it slowly eases some Covid restrictions that have hit manufacturing activity and global supply chains.

For the week, oil lost about $5 to $101.75.

--Netflix shares tumbled a shocking 35% on Wednesday as the company reported an unexpected drop in subscribers of 200,000 in the first quarter when a gain of 2.7 million was expected.  It was the first loss in worldwide subscribers in its history, although the service previously saw a decline in U.S. subscribers in 2019.

The news deepened troubles at the streaming service that have been mounting since a surge of signups from a captive audience during the pandemic began to slow.  Now Netflix is bracing for things to get even worse with a projected loss of another 2 million subscribers during the April-June period.

Revenue for the quarter ended March 31 was $7.87 billion, up from $7.16 billion a year earlier.  The company expects Q2 revenue to grow about 10% year over year. 

It marked the fourth time in the last five quarters that Netflix’s subscriber growth has fallen below the gains of the previous year, raising investor fears that its streaming service is mired in a malaise that has been magnified by stiffening competition from well-funded rivals such as Apple and Walt Disney.

The company made excuses for its poor performance: “The large number of households sharing accounts – combined with competition, is creating revenue growth headwinds.  The big Covid boost to streaming obscured the picture until recently,” explaining its difficulty in signing up new customers.

True, there is intense competition these days from established rivals like Amazon.com, traditional media companies such as Walt Disney and the newly formed Warner Bros Discovery Inc. and cash-flush newcomers like Apple Inc.  Streaming services spent $50 billion on new content last year, in a bid to attract or retain subscribers, according to researcher Ampere Analysis.  That’s up over 50% from 2019, when many of the newer streaming services launched, signaling the quick escalation of the so-called “streaming wars.”

Netflix is citing its opportunities abroad.  “While hundreds of millions of homes pay for Netflix, well over half of the world’s broadband homes don’t yet – representing huge future growth potential,” the company said in a statement.

And it said it realizes it needs a lower-priced, ad-supported option to court cost-conscious viewers.  But this is just in the “exploration” phase.  It’s down the road.

Executives also said that while it will continue to grow spending on content to more than $20 billion this year, it will scrutinize the programming more closely, which Netflix says doesn’t mean the service will go cheap on production.

Netflix shares had climbed as the coronavirus pandemic took hold and peaked in November at $700 (11/17/21), more than doubling from the start of 2020.  With Wednesday’s plunge, it was down 68% from that level, 62% this year.  The shares then finished the week at $215.

Bill Ackman’s Pershing Square Capital Management sold its stake in Netflix after losing more than $430 million on his investment in less than three months in light of the unexpected drop in subscribers.

Ackman became one of Netflix’s 20 largest shareholders this year, buying after the stock had already begun to dip over concerns about its subscriber base.

Based on price before Ackman disclosed his stake on Jan. 26, his fund lost about $435 million on his more than 3.1 million-share position.

In a letter to shareholders on Wednesday, Ackman said his fund overall is down 2% in 2022. He had he has learned from past mistakes to exit bad bets early.  He said he will redeploy the money from the Netflix stake sale to other opportunities.

--Speaking of streaming, it was rather shocking to see Warner Bros. Discovery ditch its CNN+ offering after less than a month, leaving 300 staffers out of work.  Estimates of the amount of money spent on the project range up to $300 million, plus another $100-$200 million in lost advertising.

CNN paid up for talent like former Fox News host Chris Wallace, specifically for the streaming service, and now it’s helter-skelter where everyone will be slotted into the regular network schedule.

I signed up, one of about 100,000 to do so, so I could catch old Anthony Bourdain episodes. 

“As we become Warner Bros. Discovery, CNN will be strongest as part of WBD’s streaming strategy which envisions news as an important part of a compelling broader offering along with sports, entertainment, and nonfiction content,” Chris Licht, Chairman and CEO of CNN Worldwide, said in a statement.

Licht added: “(Our) customers and CNN will be best served with a simpler streaming choice.”

--China’s aviation authority said on Wednesday that the black boxes of a China Eastern Airlines Boeing 737-800 jet that crashed last month were badly damaged and it was still recovering and analyzing the data to help determine the cause.

In a statement on its preliminary crash report, the Civil Aviation Administration of China (CAAC) did not make public any information from the flight data recorder and cockpit voice recorder that were sent to Washington for analysis.  The CAAC said the flight crew were qualified, the jet was properly maintained, and the weather was fine when flight MU5735 plunged from cruising altitude and crashed in the mountains of Guangxi on March 21, killing all 132 people on board. 

Investigators have found no sign that navigation or monitoring instruments failed on the plane, state news agency Xinhua reported.

A final report could take a year or more to complete.

China Eastern then resumed flights using the same type of plane, a sign it is working toward putting the entire fleet back in the air, after grounding more than 200 of the Boeing 737-800 aircraft.

--United Airlines reported it lost $1.38 billion in the first quarter but said it expects to return to profitability in the current three-month period as post-pandemic travel ramps back up.

The Chicago-based airline posted revenue of $7.67 billion in the quarter ending March 31, down 21% from the first quarter of 2019.

The airline is still running fewer flights than before the pandemic.  But it said it had reopened all of its lounges, resumed 19 international routes and restarted services to six cities that haven’t been served since the pandemic began.  The shares rose nearly 10% in response.

United said it was flying with roughly 73% of its available seats full, which while not as high as the 81% of all seats before the pandemic, it is much better than it was in 2021’s first quarter, when roughly half of all seats were filled.

The airline is optimistic that its pandemic-related losses were behind it.  United said it expects to post a profit for the second quarter and for the full year 2022.  This is despite United facing higher fuel costs this quarter, up 40% from a year earlier.

“The demand environment is the strongest it’s been in my 30 years in the industry.  We’re now seeing clear evidence that the second quarter will be an historic inflection point for our business,” United CEO Scott Kirby said in a statement.

--American Airlines Group also offered an upbeat outlook on bookings, saying rebounding passenger numbers would help it back to profitability in the current quarter. Shares rose 5% on the news.

The Texas-based carrier also said rising travel demand had translated into “record” sales in March and drove monthly revenue above levels in pre-pandemic 2019.  The airline estimates that its revenue in the June quarter would be up 6-8% from the same period in 2019.  Analysts, in contrast, expect its quarterly revenue to be down about 6% from the pre-pandemic period.

“The demand environment is very strong,” CEO Robert Isom said in a statement.  After a setback caused by the Omicron variant early in the year, travel demand has bounced back.

For Q1, American reported a smaller than expected adjusted loss of $2.32 per share, better than expected. Revenue also beat at $8.9 billion.

--TSA checkpoint travel numbers vs. 2019

4/21…90 percent of 2019 levels
4/20…90
4/19…89
4/18…88
4/17…94
4/16…95
4/15…94
4/14…89

--Tesla reported Wednesday that its first-quarter net earnings were over seven times greater than a year ago, powered by strong sales despite global supply chain kinks and pandemic-related production cuts in China.

The EV and solar panel company made $3.32 billion, with earnings of $3.22 per share, ex-items, vs. the Street’s forecast of $2.26.

Revenue for the quarter was $18.76 billion, also beating estimates of $17.85 billion.  It was boosted by multiple price hikes meant to offset rising costs of lithium, nickel, cobalt and other precious metals used to make batteries.  In addition, sales of its regulatory credit to other automakers jumped 31% to $679 million in the first quarter from a year earlier, helping boost revenue and profits.

Tesla said it may be harder to post similar numbers later this year, amid rising costs from ramping up new factories in Germany and Texas, as well as rising commodity prices. It’s also facing increased competition as startups and legacy automakers roll out more electric models.

“Although limited production (at the Shanghai factory) has recently restarted, we continue to monitor the situation closely,” the company said in a letter to investors.

Tesla seems to have dealt with parts shortages better than the rest of the industry.

The shares rose 7% on the news.

Despite the Chinese production and supply chain problems, Tesla reiterated its guidance of 50% annual average growth in vehicle deliveries over the next several years.  “The rate of growth will depend on our equipment capacity, operational efficiency and the capacity and stability of the supply chain,” the company said.

Tesla said the ramp in production at the Texas and German factories will take time, and that the factories will run below capacity because of parts supply shortages.

Tesla delivered a record 310,000 vehicles worldwide in the first quarter, up 68% from the same period in 2021, when they delivered 185,000.

With an expected 50% growth rate for 2022, that would equate to about 1.4 million vehicles vs. last year’s 936,000.

Meanwhile…on the Musk/Twitter front…Musk has secured a $46.5 billion financing commitment to acquire Twitter and is considering starting a tender offer for its outstanding shares, a filing showed on Thursday.  He has offered to buy Twitter for $43 billion, which prompted Twitter to adopt a ‘poison pill’ to limit his ability to raise his stake in the company.

The market yawned and the shares closed at $46.50, well off Elon’s offer of $54.20.  But then Friday investors reassessed the situation and the stock closed the week at $48.60.

--Bank of America’s first-quarter profit declined year-on-year as investment banking fees slumped 35% amid “challenging markets and volatility,” but the lender still saw revenue gains across its main segments.

The banking giant posted earnings of $0.80 per share, down from $0.86 a year earlier but ahead of consensus. Revenue for the three months ended March 31 ticked up 2% to $23.23 billion and was slightly ahead of the Street’s view for $23.09 billion.

“Across our businesses, ongoing organic growth combined with good expense management drove operating leverage for the third consecutive quarter,” CEO Brian Moynihan said in a statement.  “Our strong first quarter client activity drove results that allow us to deliver for shareholders while continuing to invest in our people, businesses, and communities.”

Net interest income grew 13% to $11.57 billion, “driven by strong loan and deposit growth,” according to the company.  Non-interest income fell 8% to $11.66 billion.

Consumer banking revenue increased 9%, while global wealth and investment management revenue climbed 10% on higher asset management fees.

Global markets revenue fell 15%, due to lower fixed-income, currencies and commodities sales and trading revenues and investment banking fees.

BofA recorded $30 million in provisions for credit losses, compared with a benefit of $1.89 billion in the 2021 period, but released $362 million from its reserves it had set aside for bad loans.

“Looking ahead, we continue to feel good about the asset quality results of our consumer and commercial businesses near term, given our customers’ high liquidity, low unemployment and rising wages,” the company said.

--Bank of New York Mellon’s first-quarter profit slid a bit year on year as the firm’s move to suspend new business in Russia capped gains, while it revised the outlook for this year.

Earnings fell to $0.86 per share from $0.97 a year earlier, but topped estimates.  Revenue edged higher to $3.93 billion from $3.92 billion, a little shy of consensus.

The bank took an $88 million hit in revenue by suspending new business in Russia.  EPS would have been higher excluding the Russian impact, the company said.

“We are in an increasingly uncertain environment, including the war in Ukraine, volatile markets, and persistently higher inflation which will require more meaningful monetary policy adjustments,” said retiring CEO Todd Gibbons, who was a major reason why I went to Wake Forest, a fellow Summit High School grad.  Robin Vince, currently CEO-elect, takes over in September.

--Shares in IBM rose sharply as it expects to hit the top end of its revenue growth forecast for 2022 even as it accounted for a hit of a “few hundred million dollars” from the suspension of its business in Russia.  Servers from IBM, Dell Technologies and Hewlett Packard Enterprises top the market in Russia.

IBM said it expects to hit the higher end of its mid-single-digit revenue growth forecast for this year, after it trounced first-quarter estimates for revenue, energized by its focus on cloud services amid higher global spending on technology.  IBM’s revenue grew 3.9% in 2021.

Analysts on average expect annual revenue of $60.69 billion, which implies a 5.8% rise from last year.

Having shed its large and laggard IT managed infrastructure business last year, IBM has placed its bets on high-growth software and consulting businesses with a focus on the so-called “hybrid cloud” to put an end to its years of stagnating revenue growth.

Hybrid cloud, in which enterprises use a combination of their own data centers and leased computing resources to store and process data, lets IBM take a dip in the lucrative enterprise cloud market without having to directly compete with large providers such as Amazon.com’s AWS and Microsoft’s Azure.

IBM’s cloud revenue grew 14% to $5 billion during the quarter ended March 31.  Revenue from software and consulting segments, which make up over 70% of IBM’s business, rose 12% and 13%, respectively.  Total revenue rose 8% to $14.20 billion during the quarter, beating estimates.

--Johnson & Johnson shares hit a new all-time high even as the company is suspending sales forecasts for its Covid-19 vaccine only a few months after saying the shot could bring in as much as $3.5 billion year.

The health care giant said Tuesday that a global supply surplus and demand uncertainty prompted the move, which will not affect the company’s operational earnings per share guidance.

J&Js one-shot vaccine brought in $457 million in global sales during the first quarter, with most of that coming from outside the United States.  The vaccine brought in only $75 million in sales in the U.S., or about 25% less than what it rang up after debuting in last year’s first quarter.  The company said it doesn’t intend to profit from the vaccine.  It brought in $2.38 billion in sales last year.

Vaccine options from Pfizer and Moderna have been much more commonly used so far in the U.S., where overall vaccine sales have slowed in recent weeks as the Omicron surge of the virus started to ease.

Meanwhile, overall revenue for J&J rose 5% to $23.43 billion from a year ago, a little shy of expectations, with quarterly net income of $5.15 billion.  The company also raised its quarterly dividend by 6.6%.

--Procter & Gamble posted higher fiscal third-quarter results that topped analysts’ estimates, driven by revenue gains across all of the consumer goods giant’s product segments and leading it to lift its sales growth outlook for 2022.  Earnings per share of $1.33 were up from $1.26 a year earlier and above consensus.  Net sales for the three months ended March 31 climbed 7% to $19.38 billion and were ahead of the Street’s view for $18.69 billion.

The health care segment logged the highest growth in sales of 13%, as a more intense flu season drove demand for personal health care products, up more than 30%.  The fabric and home segment saw net sales rise by 7%, while the beauty and grooming segments recorded a 2% and 3% increase, respectively.  Sales in the baby, feminine and family care segment also increased 7% on an annual basis.

Gross margin decreased 400 basis points versus a year ago driven by higher commodity and freight costs.

“We delivered another quarter with strong sales growth and made sequential earnings growth progress despite significant and increasing costs headwinds,” CEO Jon Moeller said in a statement.  “These results enable us to raise our top-line growth outlook for the fiscal year and to maintain our EPS guidance range.”

P&G increased its fiscal full-year sales growth outlook to a range of 4% to 5% from previous guidance of 3% to 4%.

--AT&T shares rose a bit on Thursday after the company posted a 2.5% rise in core wireless revenue for the first quarter, as the telecom giant benefited from the expansion of its fiber internet and 5G services.  The Dallas, Texas-based firm – whose WarnerMedia unit completed its merger with Discovery Inc. earlier this month to form the new media firm Warner Bros. Discovery – added 691,000 monthly phone subscribers during the quarter.

AT&T is refocusing on its original business of providing internet and phone services after unwinding a years-long effort to become a media and entertainment company. 

The company’s revenue for the core wireless business rose to $29.7 billion in the first quarter from $29 billion a year earlier.  Total revenue, however, was down more than 13%, reflecting the impact of its divested TV business and weakness in its business wireless unit.

Total global subscribers for premium TV channel HBO and streaming service HBO Max, which are part of WarnerMedia, rose by 3 million from the previous quarter.

Net income fell to $4.8 billion from $7.5 billion a year earlier.

--Verizon Communications said Friday that its 2022 adjusted per-share earnings will likely come in at the bottom end of its prior guidance as the telecommunications company flagged the possibility of inflationary pressures intensifying, after it reported mixed first-quarter results.

Wireless service revenue growth is seen at the bottom end of its 9%-10% outlook.

Energy, transportation and labor costs are “major areas of exposure,” and while these direct costs have not significantly impacted results so far, they “have the potential to drive additional expense pressures throughout the rest of the year,” said CFO Matthew Ellis on a call with analysts.

Adjusted earnings per share came in at $1.35, down slightly from $1.36 a year earlier.  Total operating revenue was $33.55 billion, up from $32.87 billion a year ago.

The company lost 36,000 phone subscribers in the first quarter. Broadband net additions totaled 229,000.

“The inflation we have seen throughout the economy may alter both the consumer and business landscape in which we compete,” Ellis said.

Shares in Verizon plunged 5.6% today.

--T-Mobile U.S. said Wednesday it reached one million home internet customers early in April, one year following the commercial launch of its service.

The company also said more than 40 million U.S. households are now eligible for its 5G home internet service following the expansion of its network.

--The Florida House of Representatives on Thursday gave final passage to a bill that would dissolve Walt Disney World’s private government, handing Republican Gov. Ron DeSantis a victory in his feud with the entertainment giant over its opposition to a measure that critics have dubbed the “Don’t Say Gay” law.

The move could have huge tax implications for Disney, whose series of theme parks have transformed Orlando into one of the world’s most popular tourist destinations, and serves to further sour the relationship between the Republican-led government and a major political player in the state.

This afternoon, DeSantis signed the bill into law, eliminating the Reedy Creek Improvement District, as the 55-year-old Disney government is known as well as a handful of other similar districts by June 2023.  The measure does allow for the districts to be reestablished, leaving an avenue to renegotiate the future of the deal that allows the company to provide services such as zoning, fire protection, utilities and infrastructure.

DeSantis said today that the company would end up paying more taxes than it currently does and that the law isn’t expected to cause tax increases for residents around Disney, but there are no details.

The Pandemic

--Lots of confusion this week as a federal judge in Florida voided the federal mask mandate Monday.  Travelers will no longer be required to wear masks on airplanes and other forms of transportation.  The Centers for Disease Control and Prevention had extended mask requirements on planes, trains, buses and other modes of public transportation through May 3 even as several states (mostly Republican led) and business leaders in the airline industry pushed to have the mandate lifted.  A March Kaiser Family Foundation poll found Americans were roughly divided on whether the federal government should extend the mask requirement for airplanes, trains and other public transportation (48 percent) or let it expire (51 percent).

The confusion lay in items such as not only do a lot of air passengers still want to wear a mask, and they can, but also you have the likes of New Jersey Transit pulling its mandate in response, so no mask required on the trains, for example, but then get into New York and you still have to wear a mask on the subway.  And, believe me, you want to wear a mask on the subway.

Anyway, the five largest U.S. carriers – American, Alaska Air, Delta, Southwest and United – immediately said they were dropping their mandates, making their use optional for both passengers and crew.  JetBlue also said mask wearing would be optional.

Most airports, though, will still require a mask in the terminal, and this is part of the confusion.

Well, at week’s end, the Biden administration was appealing the ruling, and it’s about who has control over a health issue.  It is worrisome that with the loss of credibility at the CDC because of its handling of various issues regarding the pandemic, that when the next virus comes along, or a Covid variant that eludes the vaccines being employed today, and it’s clear masks should go back on, half of America will go “(no way)”.

An Axios/Ipsos poll taken in the days after the judge’s ruling, however, found that 75% support mask requirements in airports, with 46% saying they’re very likely to wear a mask in airports.

Even 57% of Republicans said they supported mask requirements in airports.

But just 34% of Republicans said they’re very likely to keep wearing masks on planes even though they no longer have to – compared to 58% of Democrats and 46% of independents.

Overall, 53% say they believe the ending of mask requirements will lead to a rise in Covid cases.

--An ambitious effort by the World Health Organization to calculate the global death toll from the pandemic has found that vastly more people died than previously believed, a total of about 15 million by the end of 2021, more than double the official total of 6 million reported by countries individually.

But the release of the staggering estimate, the result of more than a year of research and analysis by experts around the world, has been delayed for months because of objections from India, which disputes the calculation of how many of its citizens died and has tried to keep it from becoming public.

More than one-third of the additional 9 million deaths are estimated to have occurred in India, where the government of Prime Minister Narendra Modi has stood by its own count of about 520,000.  The WHO shows the country’s toll is at least 4 million, which would give India the highest tally in the world, the report says.

The official report has yet to be released, but various people and organizations have seen it.

The new WHO numbers also reflect undercounting in other populous countries such as Indonesia and Egypt.

--Shanghai said on Friday that it will only lift its lockdown in batches once virus transmission outside quarantined areas was stamped out to a satisfactory level, as it announced a new round of city-wide testing

In a question and answers posted on its official WeChat account, the Shanghai government said the city’s epidemic was showing a “positive trend” and that life in the city could return to normal soon as long as the policy was adhered to.  In a separate statement issued late on Thursday, it announced a new round of “nine major” actions, that would include more Covid testing for all its residents from Friday.

On Thursday, Shanghai announced eight people infected with Covid died, while the number of cases outside of quarantined areas rose.  The day earlier, the death toll was supposedly seven.

Domestic support for a zero-Covid policy has worn thin in recent weeks as virus-related restrictions have triggered food shortages, family separations, lost wages and economic pain.

--India is a major concern when it comes to Covid variants, including a new one, a combination of the existing BA.1 and BA.2 strains, called Omicron XE. India supposedly has six million cases of it so far this month alone with only about a third of the population vaccinated.

Professor Kingston Mills of Trinity College Dublin observed: “When you have a poorly vaccinated population with a vaccine that is not 100 percent effective, that’s an environment that encourages the evolution of variants.”

At least 1,200 cases XE have been confirmed in the UK.

“In healthy people, (XE) is not a severe disease but we have seen with Omicron that people are still ending up in hospital and in ICU.  It is not a trivial disease for people who are older or vulnerable,” Mills explained.

The WHO has yet to deem XE a variant of concern or interest.

--Anecdotally, cases are definitely ticking up not just across the U.S., but also my own community here in Summit, NJ, so I’ve decided to get my second booster tomorrow.

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

World…6,238,752
USA…1,017,862
Brazil…662,618
India…522,146
Russia…374,563
Mexico…324,033
Peru…212,715
UK…173,352
Italy…162,466
Indonesia…156,040
France…144,945
Iran…140,940
Colombia…139,765
Germany…134,471
Argentina…128,344
Poland…115,926
Ukraine…108,306
Spain…103,918
South Africa…100,286

Canada…38,753

[Source: worldometers.info]

U.S. daily death tolls…Mon. 104; Tues. 437; Wed. 440; Thurs. 308; Fri. 199.

*The CDC reported today that Covid-19 was the third leading cause of death in the United States in 2021.  For the second consecutive year, it was third after heart disease and cancer.

Foreign Affairs

Iran: Tehran will not abandon plans to avenge the 2020 U.S. killing of Quds Force Commander Qassem Soleimani, despite “regular offers” from Washington to lift sanctions and provide other concessions in return, a top Iranian official said on Thursday.

Over the last year, Iran and the United States have engaged in indirect talks in Vienna to revive the 2015 nuclear accord that then-President Trump pulled out of in 2018 and that Iran, in turn, began violating.

It seemed back in March, the parties to the 2015 Joint Comprehensive Plan of Action (JCPOA) were close to resurrecting the deal, but talks stalled over last-minute Russian demands and whether Washington might drop Iran’s Islamic Revolutionary Guards Corps (IRGC), which includes the Quds Force, from its Foreign Terrorist Organization (FTO) list.

“The enemy keeps sending messages that if we give up on avenging Soleimani, they will give us some concessions or lift some sanctions,” Revolutionary Guards’ Navy Commander Alireza Tangsiri said.  “This is pure fantasy.  The Supreme Leader has emphasized the need for revenge is inevitable and that we will choose the time and place for it,” he added.

When asked about the comments, a State Department spokesperson said if Iran wanted sanctions relief beyond the 2015 nuclear deal, it must address U.S. concerns beyond the pact.

So it is still down to this.  There is no reviving the nuclear deal unless the U.S. removes the IRGC from the FTO.

North Korea: The leaders of the rival Koreas exchanged letters expressing hope for improved bilateral relations, which plummeted in the past three years amid a freeze in nuclear negotiations and North Korea’s accelerating weapons development.

North Korea’s state media said Kim Jong Un on Wednesday received a personal letter from outgoing South Korean President Moon Jae-in and replied on Thursday with his own letter appreciating Moon’s peace efforts during his term.  Pyongyang’s official Korean Central News Agency said Friday their exchange of letters showed their “deep trust.”

Kim said in his reply that their “historic” summits in 2018 gave “hope for the future” to the people, and the two agreed that the ties would develop if both sides “make tireless efforts with hope.”

Experts say the North’s announcement of the letters, which came as Kim is possibly preparing for a nuclear test and other major provocations, is aimed at dividing public opinion in South Korea and discouraging the incoming government in Seoul from taking a hard line toward Pyongyang after its inauguration in May.

Speaking of provocations, last Sunday, Pyongyang’s state media reported the military tested a new type of tactical guided weapon described to be of “great significance” in enhancing the operation of “tactical nukes.”

Analysts fear the test was the firmest indication yet that North Korea intended to arm its short- and medium-range missiles – already operational – with nuclear warheads.

Doing so not only poses a severe threat to Seoul but to other targets including Japan and Guam.

The latest launch came less than a month after North Korea resumed testing its intercontinental ballistic missiles for the first time since 2017.

China / Taiwan: In a speech on Thursday, President Xi Jinping sent a strong message to Washington and its allies that China will firmly oppose decoupling, while its economy can play a lead role in global recovery as the world stands at a crossroads between the pandemic, trade conflicts and war in Ukraine.

Xi called for stronger macro coordination between major economies to prevent “severe and negative” spillover effects from policy decisions and to help stabilize the global supply chain.

He pledged to press ahead with reforms and emphasized the resilience of China’s economy, saying the country “offers powerful momentum” for recovery from the pandemic, while playing down concerns about the economic impact of Beijing’s hardline virus control measures.

Xi also proposed a Chinese-led global security initiative based on the United Nations framework, renounced unilateral action and confrontation and promoted non-interference and respect for sovereignty and territorial integrity.

“The facts have proven again that a cold war mentality, hegemonism and power politics will only breach global peace,” he told delegates at the opening of the Boao Forum for Asia, a China-led equivalent to the Davos Forum, via a video link.

“We support any endeavors that can solve a crisis through peaceful means, oppose double standards, unilateral sanctions and long-arm jurisdiction.”

“In today’s world, any unilateralism and extreme egoism are fundamentally unworkable.  Any decoupling, cutting off supplies, and extreme pressure are fundamentally unworkable.”

Yup, comments such as these come as Beijing continues to refuse to condemn Putin’s invasion of Ukraine.

And they come after a group of U.S. senators delivered a message of support for Taiwan during a visit last weekend, a move that China answered with a display of military force.

Members of the delegation, including Sen. Lindsey Graham (R-S.C.), told Beijing that the U.S. will start making China account for bullying Taiwan and supporting Vladimir Putin’s war.

“Here is my promise to you and the Taiwanese people: We are going to start making China pay a greater price for what they are doing all over the world,” Graham said during a meeting with President Tsai Ing-wen.  “The support for Putin must come with a price.  The never-ending cyberattack on your economy and people by the Communist Chinese needs to come with a price.”

The People’s Liberation Army said it conducted air and naval training near Taiwan in response to the “wrong signals” recently sent by the U.S.

Separately, Solomon Islands’ decision to sign a security pact with China will not hurt or undermine peace and harmony in the region, Prime Minister Manasseh Sogavare told parliament on Wednesday.

Sogavare confirmed the pact had been signed by foreign ministers from the two countries, a day after China announced the signing at a news briefing in Beijing.

The move, days before a White House delegation, including Indo Pacific Coordinator Kurt Campbell, was to arrive in Honiara (the capital of the Solomon Islands…think Guadalcanal), has heightened concerns in Australia about the potential for a Chinese military presence about 1,200 miles away.

The U.S., Japan, New Zealand and Australia share concerns about the security pact “and its serious risks to a free and open Indo-Pacific,” the White House said in a statement.

Australia complained the agreement had not been reached in an open and transparent way.  Solomon Islands lawmakers urged Sogavare to publicly disclose the terms of the security pact.  Sogavare said the details would be disclosed eventually, adding the security cooperation with China was not directed at any countries or external alliances, “rather at our own internal security situation.”

The agreement, however, apparently includes provisions for Chinese naval vessels to replenish in the Solomon Islands, alarming Australia.  Sogavare told parliament the pact would not allow a Chinese military base.

Australian Prime Minister Scott Morrison, in the middle of a national election campaign, has been criticized by the opposition for what they call the largest diplomatic failure in the Pacific since World War II.  Australia has traditionally provided policing support to Honiara.

This is a big deal…and the West blew it.

So in response, this afternoon the U.S. said it will expedite the opening of an embassy in the Solomon Islands, senior officials told Prime Minister Sogavare.

Meanwhile, back on Taiwan, an alert from Taiwan TV accidentally broadcast that the island was under attack from the Chinese military.  It happened early and on the news ticker at the bottom of the screen, as Reuters reported on Wednesday.  The alert said a train station had been set on fire by “Chinese agents” and that President Tsai declared a state of emergency.  Neither was true. 

A correction then came at 10 a.m. local, when an anchor urged citizens to “please don’t be overly panicked.  We hereby clarify the information and apologize.”

The incident recalled the accidental missile alert sent to Hawaiians near the height of the “fire and fury” days of the Trump administration, back in January 2018.

Afghanistan: It was a violent week. Thursday, a series of explosions across the country killed at least ten and wounded scores more, the attacks mostly targeting the country’s minority Shiite Muslims and had all the hallmarks of the ISIS affiliate known as Islamic State in Khorasan  Province, or IS-K.

Earlier, in a particularly heinous attack at least six people were killed in a suspected suicide bombing outside a boys’ school in Kabul.  The school is in an area of the city with a largely Hazara Shia population – a minority that has been targeted by Sunni militant groups including Islamic State.

Then today, a blast tore through a Sunni mosque during Friday prayers in the northern city of Kunduz, killing 33 and wounding dozens more.  No claim of responsibility, as yet.

Random Musing

--Presidential approval ratings….

Gallup: New numbers…41% approve of President Biden’s job performance, 56% disapprove; 35% of independents approve (Apr. 1-19).  That 35% figure for independents is a killer.

Rasmussen: 41% approve of the president’s performance, 57% disapprove (April 22).

Just amazing how consistent the poll numbers have been…consistently dreadful for the president and his party.

--Piers Morgan had a rather hilarious bit in Thursday’s New York Post on his attempted interview with his old friend, Donald Trump, down in Mar-a-Lago.

Things got off to a bad start before the two even sat down when Trump’s staff prepared a compilation of all the bad things Morgan had said about Trump, from his handling of the pandemic, through Jan. 6 and after.

Trump confronted Morgan with the list before the interview, the two shouted at each other, Morgan turned the subject to golf and Trump’s hole-in-one, that got Trump back in a good mood, so after all that, they finally sat down.

Morgan:

“But things took a dramatic downward turn when I finally brought up his refusal to accept defeat in 2020 and the appalling scenes on January 6.

“I told him I believe he lost the supposedly ‘rigged, stolen’ election, I repeatedly pointed out his failure to produce any evidence of the widespread voter fraud he insists occurred to rob him of his presidency, and I blamed his refusal to admit defeat for the deadly riots at the Capitol.

“The moment the interview started to take a turn.

“ ‘Then you’re a FOOL!’ he sneered.  ‘And you haven’t studied!’

“He was back to the furious Trump he’d been in his office and branded me a fool six more times, in between calling Senate Minority Leader Mitch McConnell ‘stupid,’ and his former vice president, Mike Pence, ‘foolish and weak.’

“Our collective crime was that none of us agree he had the election stolen.

“Now abandoning any pretense at cordiality, Trump ranted that he was far more honest than I, and again sneered that I wasn’t ‘real’ before haranguing me for exceeding our 20 minutes, which was particularly disingenuous given that during all our previous interviews, he’d invariably decided exactly how long he wanted to keep talking.

“As he bellowed insults at me for disbelieving his rigged-election bullshit, it reminded me of the scene in ‘A Few Good Men’ where Jack Nicholson’s arrogant, deluded Colonel Jessup calls Tom Cruise’s military lawyer, Lt. Kaffee, a ‘snotty little bastard’ for grilling him about ordering a deadly Code Red punishment on a Marine.

“ ‘I want the truth,’ demands Kaffee.

“ ‘YOU CAN’T HANDLE THE TRUTH!’ roars a contemptuous Jessup, before losing his rage, lecturing Kaffee about loyalty and honor, and then finally admitting his culpability.

“I don’t expect Trump to ever admit he lost the election fairly or confess to being responsible for the January 6 carnage.

“We’ll never hear him say, ‘You’re goddamn right I did!’ like Col. Jessup because, ironically, he can’t handle the truth.

“Incensed, Trump tried to end things by declaring, ‘That’s it!’ before I reminded him that we hadn’t discussed his hole-in-one, which he then sat down again and did – briefly – before abruptly jumping to his feet, looking hateful, and barking at the shocked crew: ‘TURN THE CAMERAS OFF!’

“Then he turned on his heels, and sloped angrily off through a side door, loudly muttering, ‘SO dishonest…’

“It wasn’t a rhetorical observation.

“Apparently, he was later heard denouncing me as a ‘scumbag’ and saying he wished he’d never done the interview.

“But I thought it was the best one we’ve ever done together, and all the tension created by the damning document he was given gave it a crackle and energy that makes for compelling television.

“As for who sent him the document in the first place, Trump told me it came from London and gave it to me to ‘keep as a souvenir of your treachery.’….

“The next day, I sent Trump an email thanking him for his time and included these words: ‘You had every right to get annoyed and call me a fool for not believing the election was stolen from you, but I also have every right to my opinion, and I wasn’t going to lie to your face just to avoid annoying you.  The best friends are the most honest/critical ones, not the sycophants.’

“As I write this, 10 days later, I haven’t had any reply.

“Perhaps we’ll never speak again, and our friendship is over?

“I hope not.  Donald Trump remains one of the world’s most interesting people, he is still the most popular Republican choice for 2024 nominee, and if Biden’s presidency continues to self-implode as badly as it currently is, he could end up back in the White House in two years.

“In which eventuality, I can only imagine his fury if we all say that election was rigged, and Biden had the presidency stolen from him.”

--House Republican leader Kevin McCarthy told fellow GOP lawmakers shortly after the Jan. 6 Capitol insurrection that he would urge then-President Trump to resign, according to an audio that emerged Thursday.

In the recording of a Jan. 10, 2021, House Republican Leadership call posted by the New York Times last night, McCarthy is heard discussing the Democratic effort to remove Trump from office and saying he would tell Trump, “I think it will pass and it would be my recommendation he should resign.”

It’s unclear whether McCarthy, who desperately wants to become House speaker if Republicans gain control during the midterm elections, followed through on his thinking or was merely tossing an idea out there shared privately with his colleagues in the aftermath of the deadly Capitol assault.

In the same conversation, McCarthy told his colleagues he doubted Trump would take the advice to step aside.

“That would be my recommendation,” McCarthy is heard saying in response to a question from Rep. Liz Cheney (Wyo.), who would emerge as a staunch Trump critic.  “I don’t think he will take it, but I don’t know.”

Earlier Thursday, after the Times published its initial story describing the conversation, McCarthy released a statement calling it “totally false and wrong.”  His spokesman, Mark Bednar, had told the paper, “McCarthy never said he’d call Trump to say he should resign.”

It’s just another bombshell.  Weeks after the attack, McCarthy was visiting Trump at Mar-a-Lago, kissing the ring, looking ahead to November 2022.

But wait…there’s more!  As in more audios….

The New York Times today released an audio of McCarthy on a call that took place on Jan. 11.

“Let me be very clear to all of you, and I have been very clear to the president: he bears responsibilities for his words and actions.  No if, ands or buts.”

“I asked him personally today, does he hold responsibility for what happened?” McCarthy said.  “Does he feel bad about what happened?  He told me he does have some responsibility for what happened and he’d need to acknowledge that.”

McCarthy’s assertion is at odds with the former president’s refusal, then and now, to accept responsibility for the deadly attack.  But it’s an illustration of the vast gulf between the private, derisive tone Republican leaders use about the former president and their public flattery of their de facto leader.

In another audio from the Jan. 10 call released today, McCarthy says: “I’ve had it with this guy. What he did is unacceptable.  Nobody can defend that, and nobody should defend it.”

All of the above is based on reporting in the upcoming book “This Will Not Pass: Trump, Biden and the Battle for America’s Future,” by Jonathan Martin and Alexander Burns.

Trump and McCarthy then spoke on the phone Thursday night, and according to various reports, the former president wasn’t upset about McCarthy’s remarks and was glad the Republican leader didn’t follow through, which Trump saw as a sign of his continued grip on the party.

But House Republicans will be awaiting Trump’s orders on whether they should still back McCarthy as their leader and potential speaker come November’s election.

--Speaking of Trump, Democrat Jamie Raskin, of the House select committee on Jan. 6, said Congress will hold public hearings on the topic in May.

“This was a coup organized by the president against the vice president and against the Congress in order to overturn the 2020 presidential election,” Raskin said in an interview with Reuters and The Guardian newspaper, when asked what he has learned so far from the committee’s probe.

Rep. Bennie Thompson, who chairs the select committee organized by Democrats to look into events leading up to the Jan. 6 assault, has told reporters he expects public hearings to resume in May.

“We’re going to tell the whole story of everything that happened.  There was a violent insurrection and an attempted coup and we were saved by (then-Vice President) Mike Pence’s refusal to go along with that plan,” said Raskin, during the interview, who emphasized he was expressing only his thoughts or the thinking also of fellow lawmakers serving on the committee made up of seven Democrats and two Republicans.

Raskin said the hearings will lay out for the public the steps the former president and his associates took to try and stay in power.  Had the rioters succeeded in preventing the certification, Raskin said, Trump “was prepared to seize the presidency” and likely declare martial law.  He said the committee had yet to decide whether to try to seek testimony from Trump or Pence.

About 800 people have been charged with crimes relating to the attack.  The House panel has collected more than 100,000 documents, with investigators conducting more than 800 interviews.

--Republican Sen. Mike Lee (Utah) worked on early efforts to overturn the results of the 2020 election, helping push legally dubious schemes to keep then-President Trump in power, before he shifted course and quickly backed away.

Lee’s efforts were revealed in text messages obtain by the House select committee and drew quick condemnation from his reelection challengers.

The texts between Lee and then-White House chief of staff Mark Meadows detail how Lee encouraged top Trump advisers to embrace Sidney Powell, a Republican lawyer who later spread some crazy (stuff) about a rigged election.

Later, Lee explored a plan to encourage state legislatures to alter the outcome of the election by appointing alternate electors.

But by mid-November, the messages show Lee beginning to lose confidence in Powell and, eventually, the alternate electors plan.  He also questioned efforts to object to the vote certification after no evidence of widespread fraud emerged.

“I only know that this will end badly for the President unless we have the Constitution on our side,” Lee wrote to Meadows.

Lee’s Republican primary opponent Becky Edwards, a former state lawmaker, said the messages show Lee “researched overturning a lawful, democratic election for partisan and political gain…he allowed the situation to continue and enabled those seeking to keep themselves in power, no matter the consequences.”

Lee’s spokesman, for his part, said the senator did follow the Constitution and the messages “tell the same story Sen. Lee told from the floor of the Senate the day he voted to certify the election results.”

--Thursday, Sean Hannity claimed the title of longest-running primetime cable news host in television history, surpassing the late Larry King.  The Fox News host has been doing his thing since the founding of the channel in 1996…over 25 1/2 years, breaking King’s record.

--As reported by the New York Daily News, chronic absenteeism among New York City public school students has hit unprecedented levels this year, according to Education Department data.

Before the pandemic, the percentage of city students marked “chronically absent” – those who miss 10% or more of school days – hovered around 25% and was generally on the decline.  That progress stopped in March 2020 when Covid-19 shuttered school buildings and 35% of kids were marked chronically absent during virtual classes.

Now the figure is 37%, a percentage that, if it persists through the end of the year, would be far higher than any year-end chronic absence rate going back at least to 2000.

The causes are complex – ranging from technology barriers that restricted access to remote learning, to increased economic and familial responsibilities, alienation and mental health challenges that surged during the pandemic, as well as coronavirus fears.

--Bald eagles have made a huge comeback in the contiguous U.S., with an estimated 300,000+, up from 72,000 in 2009, and about 15,000 in 1972, before enactment of the Clean Water Act and the banning of DDT. 

---

Gold $1932
Oil $101.75

Returns for the week 4/18-4/22

Dow Jones  -1.9%  [33811]
S&P 500  -2.8%  [4271]
S&P MidCap   -1.7%
Russell 2000  -3.2%
Nasdaq  -3.8%  [12839]

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

Dow Jones  -6.9%
S&P 500  -10.4%
S&P MidCap  -9.1%
Russell 2000  -13.6%
Nasdaq  -17.9%

Bulls 32.1
Bears 33.3

Hang in there.

Brian Trumbore

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