Week in Review

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Week in Review

07/16/2022

For the week 7/11-7/15

[Posted 8:30 PM ET, Friday]

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Edition 1,213

This week saw the latest reading on consumer price inflation, and the 9.1% for June was the highest since 1981.  Biden and his band of economic ‘experts’ then went out and told the country that the rate, while “unacceptably high,” was “out of date” because it did not reflect the easing of gas prices since mid-June.

Federal Reserve Bank of Cleveland President Loretta Mester, on the other hand, said she had “not seen any convincing evidence that inflation has turned the corner.”  And Fed Board member Christopher Waller called the consumer-price index report a “major league disappointment.”

Wage pressures, unlike oil, are not likely to lessen any time soon, a big item the Fed will be watching in gauging future policy.

More on the CPI and producer price reports below.  For the opening, it is true that gasoline prices at the pump have been falling rapidly.  It was exactly a month ago that the average national price for regular hit $5.01, an all-time high, and today, as reported by AAA, the figure is $4.57.  That’s good. 

Of course over this time the price of oil, as measured by West Texas Intermediate, that which I have long quoted below, has fallen from $120 to $97.

Distressingly, however, the price of diesel, the fuel that helps convey the lion’s share of consumer goods to your stores, has only fallen from $5.77 to $5.57.

A year ago, regular gas, nationally, was $3.15 and diesel $3.26.  This is a problem, and, for now, a major reason why the price of many goods won’t be coming down that rapidly.

[For the record, the price at the pump down the street from me has fallen from $5.45 to $4.79.]

Personally, I’ve been buying oil stocks during the slide from the highs, a little at a time, and everyone needs to know that the price of crude will shoot to new highs if, and likely when, we get a monster hurricane in the Gulf of Mexico.  Let alone the fact that… “winter is coming” in Europe, and maybe here as well.

One more…U.S. oil inventories have been rising a bit, normally a good thing, but this is due in part to continuing releases from the Strategic Petroleum Reserve (SPR), which has to be replenished at some point, as well as reduced consumption, which could easily just be temporary.

On the mortgage front, Freddie Mac’s weekly 30-year fixed-rate mortgage is at 5.51%, up from last week’s 5.30%.  As noted further below, the yield on the key 10-year Treasury continued to trade this week in a wide range, depending on investors’ ideas on future Fed moves on interest rates.

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The United States, and the world, are currently in a Covid state of denial, and it’s understandable.  But facts are a sticky thing.  When the masks came off in airports, that wasn’t going to be helpful, and just look at worldometers.info…cases are slowly rising globally, all over again.

Last time I noted how I hadn’t seen a report on Covid cases in my town in ages, and then over the weekend, the regional health office finally released data that revealed Summit had 565 cases of coronavirus during the months of May (355) and June (210).  The 2022 two-month total is more than 11 times the 41 cases recorded in May (25) and June (16) 2021.

Well, there’s my answer.  My local hospital had 17 patients with Covid.

Overall, the state surpassed 1,000 hospitalizations the other day for the first time since February, back when Omicron was waning. We had peaked Jan. 11 at 6,089 Covid hospitalizations amid the winter surge.

Just further proof, BA.5 is around and able to make those it infects rather sick.  No word on how many of those who are hospitalized were unvaccinated, vaccinated, and/or boosted.

So then Thursday, the CDC recommended that almost everyone in my state mask up for public, indoor spaces.  Out of respect for my fellow citizens, I think I’m going to don the mask again.

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Vladimir Putin launched one terror attack after another on Ukraine this week, in the form of long-range missile strikes, but most experts agree the Russians are not taking any real territory after their recent gains in the Donbas.  Ukraine has received some of the weaponry it has long requested and that’s had an impact.

David Ignatius / Washington Post

“The Russian military is losing equipment rapidly, and replacements won’t be easy.  According to published Ukrainian reports (hardly unbiased but worth noting), Russia has halted or limited tank production at Uralvagonzavod Corporation and at Chelyabinsk Tractor Plant, and it has halted production of surface-to-air missiles at Ulyanovsk Mechanical Plant.  Major Russian shipyards have also been affected.

“Sanctions ‘have practically broken all the logistics in our country,’ according to Russian Transport Minister Vitaly Savelyev.  Take aviation: The United States and Europe have banned parts or services for the several hundred Boeing and Airbus jets operating in Russia, forcing Russian airlines to sharply curtail flights and cannibalize their fleets.  A European Union aviation regulator said last month he was ‘very worried’ about the safety of these Western jets in Russia.

“Let’s imagine that somehow, despite the sanctions, Russia staggers on with its bloody assault of Ukraine.  What then?  To think about Putin’s potential problems, just look at a map.  Russia is the largest country in the world, by far.  To support his reckless, illegal war in Ukraine, Putin has stripped forces from the Far East, the Baltic, the vast underbelly that borders South Asia.  He has a country that’s in slow-motion collapse, and too few people to protect it.

“Putin plays his hand boldly.  But he’s holding fewer high cards than it might appear.”

And so as the war unfolded this week….

--Saturday/Sunday….

--President Volodymyr Zelensky said Russia had carried out 34 air strikes since Saturday – one hit a five-story apartment block in Chasiv Har, killing more than 50 and trapping dozens.

--Over the weekend, the Pentagon sent a message to Moscow: “If the Russians think they can outlast the Ukrainians, they need to rethink that, because this effort – we are already pivoting towards thinking about what the Ukrainians will need in the months and years ahead.”

Another Pentagon official told reporters the flow of arms to Ukraine from the U.S. “is a steady drumbeat now and it is a long-term commitment…So we’ll be ready for whatever the experts tell us is required for the battlefield.”

The Pentagon said they assume Russia’s military plans to subjugate all of Ukraine.  Russian officials have indicated the same.

The U.S. official, speaking on the cover of anonymity, told reporters that when it came to Moscow: “The specific military objectives were – at the outset – to move to Kyiv, to overthrow the government and control it.  I think the objective remains the same, which is to prevent the existence of a sovereign, independent Ukraine. It’s just the specific military objectives have shifted as they failed in that initial take on it and you know, I don’t think those political objectives have changed; it’s the military means or operations have.”  [Defense One]

--Russian Foreign Minister Sergei Lavrov was at a meeting of foreign ministers from the Group of 20 industrialized nations in Bali, Indonesia, last weekend, despite his country’s pariah status in Europe and elsewhere over the war.  His country’s invasion of Ukraine drove the two central topics of discussion: global disruptions of food and energy supplies.

Secretary of State Antony Blinken declined to meet with Lavrov, ditto other Western foreign ministers.  So many refused to pose with Lavrov that the customary group photograph was canceled.

But, not everyone felt this way and Lavrov sat down with several FMs from nations that have declined to join the Western-led coalition against his country, including diplomats from China, India, Brazil, Turkey, Argentina and Indonesia.

Blinken, in remarks at a plenary session focused on food and energy insecurity, renewed Western charges that Russia’s blockade of Ukraine’s Black Sea ports is preventing the export of grain and other agricultural products, causing shortages and spiraling prices worldwide.

“To our Russian colleagues: Ukraine is not your country,” Blinken said. “Its grain is not your grain.  Why are you blocking the ports?  You should let the grain out.”

Lavrov, though, had left the room and didn’t hear Blinken’s remarks.

Ukrainian police in the parts of Kherson region that Ukraine still occupies accused Russia of deliberately destroying crops.  In a Facebook post they displayed photos of burning fields and say: “Large-scale fires occur every day, hundreds of hectares of wheat, barley and other grain crops have already burned.”  They also accuse Russian troops of destroying granaries and agricultural equipment, and of preventing locals from extinguishing the fires.

--Monday/ Tuesday….

--Ukraine expects a fresh assault by Russian ground forces, following widespread shelling which killed more than 30 people.

Ukraine’s general staff and the shelling across the country amounted to preparations for an intensification of hostilities as Russia seeks to seize Donetsk province, and control the whole of the Donbas industrial heartland.

--Ukraine launched long-range rocket attacks on Russian forces in Southern Ukraine and destroyed an ammunition depot (and various military equipment such as armored vehicles), its military said, as Russia continued to pound the east.

The strike on Nova Kakhovka in the Kherson region killed 52 people, Ukraine’s military said on Tuesday.  The town’s Russia-installed authorities said that at least seven had been killed, Russia’s Tass news agency reported.

Kherson was seized by Russian forces soon after launching the invasion on Feb. 24 and is of strategic importance with Black Sea access, a once thriving agricultural industry, and a location just north of Russian-annexed Crimea.

The strike came after Washington supplied Ukraine with advanced HIMARS mobile artillery systems that Kyiv says its forces are using with growing efficiency.

A Russian-local administration official said that Ukraine had used the HIMARS missiles.

The U.S. is sending four more HIMARS, along with a thousand rounds of 155mm artillery ammunition, “demolition munitions,” counter-battery systems, and more, the Pentagon announced.

Ukraine’s military chief, Oleksi Reznikov told the Wall Street Journal the HIMARS are a “game changer.”  But: “We need more. We need it quickly” because “the war is grim.”

A Pentagon official said Russian reports that they have destroyed HIMARS systems are “not correct.  Eight HIMARS are there, so it will be a dozen after the next four arrive and crews are trained up.”

--Ukrainian government officials have spoken of efforts to marshal up to 1 million troops and of their aim to recapture southern parts of the country under Russian control which they have said are important for economic and political reasons.

--President Putin will travel to Iran next week amid reports that Tehran could supply weapons-capable drones to Russia for its war in Ukraine.

Putin’s trip will come after President Biden had been in Israel and Saudi Arabia where Iran’s nuclear program and its other actions in the region will be a hot topic of discussion.

The Russian leader will be attending a trilateral meeting with Turkey’s President Erdogan and leaders of Iran involving Syrian-related talks, the Kremlin announced.

Monday, National Security Advisor Jake Sullivan said that officials had “information” that Iran was preparing to train Russian forces to use drones as soon as this month, including those that could carry weapons.  He said it wasn’t clear if the drones, possibly in the hundreds, were already delivered.

The Biden administration is trying to slow Russian weapon manufacturing by denying it components made with Western technology.

An Iranian spokesman, addressing the claims, didn’t deny them on Tuesday.

“Iran’s cooperation with Russia in some sophisticated technologies dates to before the Russia-Ukraine war,” said Nasser Kanaani.  “There has not been any special development in this regard recently.”

--Monday, President Putin eased rules for Ukrainians to acquire Russian citizenship.

--The British military elaborated slightly on its battlefield update Monday, which emphasized that the apparent “lack of scheduled breaks from intense combat conditions is highly likely one of the most damaging of the many personnel issues the Russian [military] is struggling to rectify amongst the deployed force.”

--Fault lines have been emerging among Kyiv’s allies as nations struggle with soaring energy and food prices and rising inflation.

Europe’s dependence on Russia energy was preoccupying policymakers and businesses as the biggest pipeline carrying Russian gas to Germany began 10 days of annual maintenance.  Governments, markets and companies are worried the shutdown might be extended because of the war.

Monday morning, Gazprom, Russia’s state energy goliath, shut down all flows along Nord Stream 1, the main conduit through which Russian gas reaches Europe. 

In June, the volume of Russian gas exported via all the main pipelines to Europe was down by about two-fifths compared with May and barely a third the level of early 2021.  When the colder weather comes, Putin has maximum leverage.

German Economy Minister Robert Habeck, in warning EU countries to be prepared in case gas shipments did not resume, admitted Germany had become too dependent on Russian gas.

He described that as “a grave political mistake as we can see today, which we are trying to remedy as quickly as we possibly can.”

The head of the International Energy Agency, Fatih Birol, has warned Russia may cut off gas supplies to Europe entirely and that Europe needs to prepare now.

Russia has already cut gas supplies to Poland, Bulgaria, the Netherlands, Denmark and Finland over their refusal to comply with a new payment scheme.

--President Zelensky warned the Kremlin would perceive exceptions to sanctions as a sign of weakness.  He said Moscow would now try to “completely stop the gas supply to Europe at the most urgent moment.  This is what we need to prepare for now.  This is what is being provoked now.”

A senior U.S. Treasury official said on Tuesday that the global price of oil could surge by 40 percent to around $140 per barrel if a proposed price cap on Russian oil is not adopted.

--In an effort to ease global food prices, the West aims to reopen Ukraine’s Black Sea ports, which remain shut by a Russian blockade.

But efforts to mediate by Turkish President Erdogan on the grain issue have gone nowhere.

--Wednesday thru Friday….

French President Macron warned his country’s people Thursday to prepare for a total cutoff of Russian natural gas by supporting alternatives, having public lights switched off at night and engaging in a period of nationwide energy “sobriety.”

With no end in sight for the Ukraine war, Macron said, the French should brace themselves for costs to remain high.

“This war will continue,” he said in a televised interview marking France’s national holiday, Bastille Day.  “The summer, early autumn will be very hard.”

“Russia is using energy, like it is using food, as a weapon of war,” Macron said.  “We should prepare ourselves for the scenario where we have to go without all Russian gas.”

He said the government would prepare a “sobriety plan” to conserve energy, which would start with turning off public lights at night when they aren’t useful.

--Russian missiles that struck a city in central Ukraine killed at least 23, while wounding nearly 100 on Thursday.  President Zelensky called the attack “an open act of terrorism” against civilians in locations without military value.

Three missiles hit an office building and damaged nearby residential buildings in Vinnytsia, which is located 167 miles southwest of the capital, Kyiv.

A child, seen in a video minutes earlier pushing a stroller, was among the victims.  Zelensky suggested the attack was deliberately aimed at civilians.

“Every day Russia is destroying the civilian population, killing Ukrainian children, directing missiles at civilian objects.  Where there is no military (targets).  What is it if not an open act of terrorism?” Zelensky wrote on the Telegram messaging app.

Foreign Minister Dmytro Kuleba tweeted Thursday: “This is terrorism, [the] deliberate murder of civilians to spread fear. Russia is a terrorist state and must be legally recognized as such.”

--The British Defense Ministry said Thursday that despite continued shelling in the Donbas region, Russian forces did not make major territorial gains in recent days.

“The aging vehicles, weapons and Soviet-era tactics used by Russian forces do not lend themselves to quickly regaining or building momentum unless used in overwhelming mass – which Russia is currently unable to bring to bear,” the British ministry said.

--Ukrainian forces hit two military checkpoints and a landing pad on Thursday in the second strike this week on a Russian-held area in southern Ukraine, Ukrainian officials said.

--Russian long-range airstrikes hit two universities in the southern city of Mykolaiv Friday morning.  A regional official said ten missiles hit the two campuses.  “I’m asking universities of all democratic countries to claim Russia [is] what it really is – the terrorist,” tweeted Vitaliy Kim.

--German leaders are now mulling an extension of three nuclear power plants’ operations beyond their scheduled 2023 deadlines because of the threat from Russia to cut gas supplies.

--In Ireland, voters are concerned at the numbers of refugees coming to the country and favor a limit on the number of Ukrainians who are admitted into the country, according to the latest Irish Times / Ipsos poll.

But they also say that Ireland should “live up to its international obligations to protect people who are at risk,” the poll finds.

A large majority (84%) said that they agreed with the statement “There is a limit to the number of asylum seekers and refugees Ireland can cope with,” while 60% said they were concerned that “too many asylum seekers and refugees might come to Ireland.”

However, despite this, a large majority (82%) also agree that “It is important that Ireland lives up to its international obligations to protect people who are at risk.”

Ireland, like other countries, is stressed in many ways, such as housing, due to the influx.

Some commentary….

Fareed Zakaria / Washington Post

“There’s a famous saying that no military plan survives its first contact with the enemy.  The greatest theorist on war, Carl von Clausewitz, often explained that strategy must be dynamic, constantly changing and rejuvenating itself.  In his famous treatise ‘On War,’ he wrote that some generals ‘consider only lateral action, whereas war consists of a continuous interaction of opposites.’  The West needs to take these lessons to heart in its struggle with Russia and adjust its strategy – which is in danger of failing.

“The core of the West’s strategy has been two-pronged: to provide Ukraine with arms, training and money, as well as imposing massive sanctions on Russia.  That basic idea still makes sense, but the balance needs to change. It is now clear that the economic war against Russia is not working nearly as well as people thought it would.  President Vladimir Putin cares less about what these sanctions do to the Russian people than he does about what they do to the Russia state. And thanks to rising energy prices, Bloomberg News projects the Russian government will make considerably more revenue from oil and gas than it did before the war, around $285 billion this year compared with $236 billion in 2021.

“Meanwhile, Europe is facing its worst energy crisis in 50 years.

“The basic problem with the economic war against Russia, as I have argued before, is that it is toothless because it exempts energy.  The Russian economy is fundamentally an energy economy.  Revenue from oil and gas alone make up almost half of the Russian government’s budget. And unfortunately, the solution would not be for the West to stop buying Russian energy altogether because, with less supply in the world’s markets, that would only drive prices even higher.  Having developed a dangerous dependence on Russian energy over the past two decades, Europe cannot quickly change that without plunging into a deep and protracted recession….

“Putin’s strategy appears to be to impose costs on the West and play for time, assuming that cracks in the coalition against him will grow as economic pain in these countries grows.

“Western countries are still not treating this challenge as a paramount priority.  The Netherlands has a huge gas field, but it’s actually slowing production.  Germany still will not reverse its self-defeating phaseout of nuclear energy.  The Biden administration is still making it harder to finance long-term investments in natural gas and oil.  It also cannot seem to find a way to restore the Iran nuclear deal – a move that would bring an enormous influx of new oil supplies onto the world market and almost certainly stabilize the price.  I understand that there are valid objections and concerns with all these policies – but the priority has to be to defeat Putin.

“Meanwhile, Putin’s real vulnerability is on the military front.  The Russian army has expanded its control in the Donbas region of Ukraine, but at great cost.  Thousands of Russia’s soldiers have died, its supplies are dwindling, and most important, it is finding it very tough to get recruits. The Economist reports that the government is having a hard time filling the ranks and is offering new recruits triple the median wage.

“Russia is suffering heavy losses of weapons that will be difficult to replace, especially when they require sophisticated technology – almost all of which it used to import from the West and its allies.  Recently, Secretary of Commerce Gina Raimondo revealed that captured Russian equipment is being found to contain computer chips that were taken out of refrigerators and dishwashers.

“Western leaders should recognize that economic sanctions simply will not work in a time frame that makes any sense.  They should increase as much of the supply of energy worldwide as they can but also dial back those sanctions that clearly are causing more pain to the West than Russia.  Meanwhile, they should amp up military support to Ukraine, erring on the side of taking more risks.  Freeing up the blockade around Odessa would be a huge economic win for Ukraine, and a shattering symbolic defeat for Russia.

“Winter is coming.  Homes in Europe might not have enough heat. Troops in Ukraine will find it harder to dislodge Russians once the snow blankets the land.  Time is not on our side.”

Jacqueline Feldscher / Defense One

“U.S. military aide for Ukraine could dry up if Republicans retake control of the House or Senate in the November midterm elections, conservative analysts predict.

“Nearly five months into the Russian invasion, support for U.S. military and financial assistance to Kyiv is shrinking among the GOP’s right-wing base, a group that has been primed by its leaders and top media personalities to oppose the Biden administration’s plans for American intervention or even side with Russia’s illegal invasion.  With Russia pausing its most recent offensive in Ukraine’s east to reset and rearm its frontline forces, some observers wonder just how much longer Americans – especially right-wing voters and lawmakers – will fund a costly stalemate between Kyiv and Moscow.  Few predict Ukraine can win without significantly more firepower, ground forces, or direct military involvement by NATO-member neighbors.  Should the GOP win control of Congress, whether the United States continues to arm Ukraine could depend on who controls the policy and purse strings: the internationalist moderate Republican leaders sitting atop key committees or isolationist far-right party superstars….

“Some Democrats are warning that a Republican-controlled Congress puts aid to Ukraine in the crosshairs.

“ ‘Fact is if the Republicans take over the House in 2022 U.S. support to Ukraine will come to a halt,’ Rep. Ruben Gallego, D-Ariz., tweeted last week.  ‘They will not be able to stop @RepMTG & @mattgaetz from dictating our Ukraine policy,’ referring to two of the GOP’s most extreme isolationist personalities, Rep. Marjorie Taylor Greene, R-Ga., and Rep. Matt Gaetz, F-Fla.

“Gaetz replied, ‘Ruben is correct.’”

Republican Sen. Josh Hawley told Defense One: “Nation building in Ukraine is a major mistake, just like it was in Afghanistan and Iraq.  Our European allies must do more for their own security and we must focus our national security efforts abroad on countering China, and at home, on our southern border.”

J.D. Vance, who is running for the Senate in Ohio and is backed by Donald Trump, earned wide praise and criticism when he said he doesn’t “really care what happens to Ukraine one way or the other,” and then walked back the statement.  Blake Masters, who is running for the Senate in Arizona, said that “geography is real.  Ukraine is crucial to Russian security, not to ours.”

Needless to say I do not agree with J.D. Vance and Blake Masters, but as Jacqueline Feldscher points out:

“Sen. Marco Rubio, R-Fla., voted for the more than $40 billion aid package in May, but said afterward that Biden ‘should not assume Congress will rubber stamp his next request’ if the president cannot defend why spending in Ukraine keeps Americans safer at home.  Sen. John Cornyn, R-Tex., also voted in support of the supplemental spending, but has since retweeted opinion pieces that are critical of open-ended support, including one titled, ‘We Can’t Be Ukraine Hawks Forever.’”

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Biden Agenda

--I cover President Biden’s trip to the Middle East down below, but back home, Sen. Joe Manchin (D-W.Va.) told Senator Majority Leader Chuck Schumer that he will oppose an economic measure they have been negotiating if it includes climate or energy provisions or boosts taxes on the rich or corporations.

Manchin’s demands upend party leaders’ hopes for a more sweeping election-season package they’ve hoped to present to voters by August, leaving the measure’s future unclear.  In talks with Schumer over the months, Manchin had previously expressed support for energy and climate language and for raising levies on high-earners and big companies.

Manchin derailed the Democrats’ far bigger and wider-ranging social and environmental package last December (“Build Back Better”) and now he has told Schumer he will only support a package limited to curbing pharmaceutical prices and extending federal subsidies for buying health care coverage.

Manchin said it’s time to get “unnecessary spending under control,” calling inflation a “clear and present danger to our economy.”

“No matter what spending aspirations some in Congress may have, it is clear to anyone who visits a grocery store or a gas station that we cannot add any more fuel to this inflation fire,” Manchin said.

Manchin added he’s going to make sure he scrubs any item that could be considered inflationary: “We can’t afford mistakes in the highest inflation we’ve seen in 40 years.”

His comments came after Tuesday’s 9.1% reading on June consumer prices.

Biden and top Democrats were hoping to revive a roughly $1 trillion version of the $2 trillion package that Manchin killed in December and push it through Congress by next month to tout a legislative achievement before the mid-term elections.

--In a New York Times/Siena College national poll, only 13% of American voters said the nation was on the right track, one of many deadly numbers for Joe Biden come November.

In a sign of deep vulnerability and of unease among what is supposed to be his political base, only 26% of Democratic voters said the party should renominate him in 2024.  [A Yahoo News/YouGov poll has just 18% of Americans overall saying Biden should run for reelection.]

The backlash among younger voters is even worse.  In the survey, 94% of Democrats under the age of 30 said they would prefer a different presidential nominee.

Among those who are typically working age – voters 18 to 64 years old – only 6% said the economy was good or excellent, while 93% rated it poor or only fair.

Daniel Henninger / Wall Street Journal…in citing the above poll figures…

“Mr. Biden’s personal fall will help Republicans in the midterm elections, but a U.S. presidency with the public’s confidence so fully withdrawn this early in a four-year term is very bad for the country.  Hard as it is to believe, politics still has a higher purpose.

“For this mess, I blame the Democrats, not – as many of them have put it – Mr. Biden’s alleged unwillingness to ‘fight.’

“To be blunt: The reason most Americans don’t want Mr. Biden to run is that it’s clear by now he has cognitive problems unacceptable in a person responsible for conducting the presidential office.

“Since Inauguration Day, every public statement he has made to the American people, large or small, has been written by someone else for him to read by rote from a teleprompter. His off-the-cuff follow-ups are painful.

“Mr. Biden’s condition didn’t begin on Inauguration Day. Those around him knew there was a problem, but the needs of the party prevailed.  Concerned that a progressive such as Bernie Sanders or Elizabeth Warren couldn’t win the general election, the Democrats fashioned a faux moderate candidacy out of Mr. Biden.

“The ploy worked.  A slim majority of the country preferred Mr. Biden over Donald Trump.

“As they say in politics, you do what you gotta do.  That said, a responsible party leadership would have hedged this clear national risk by nominating a strong vice-presidential candidate able to step in if necessary, say, Minnesota Sen. Amy Klobuchar.”

Gee, where have you seen this name before, boys and girls?  Too late now.

As Henninger continues:

“But by the summer of 2020, the Democrats were in the grip of compulsive wokeness and decided the running mate had to be a black woman.  The one with national prominence at that moment was Sen. Kamala Harris.  But Democratic voters themselves had already concluded in the presidential primaries she wasn’t ready for high office.

“As to invoking the 25th Amendment on presidential incapacitation, the last thing the U.S. needs – with Russia, China and Iran also circling with the vultures – is a destructive succession crisis….

“Unembarrassed gall may be the mother’s milk of politics, but it’s more than too much to see the Democrats who gave the country Joe Biden and designed the policies that collapsed beneath him knifing their own creation.  Et tu, Bernie? ….

“To his credit, Mr. Biden retains some vestige of respect for the dignity of his office. The party that is abandoning him should look in the mirror.”

--Republican Sen. Chuck Grassley said it would be “unconstitutional” to restrict people from traveling across state lines to seek abortion services.

“We cannot stop people from traveling anyplace they want to,” he told reporters Wednesday.  “It’s a constitutional issue and a freedom.”

The issue has gained traction after the Supreme Court overturned Roe v. Wade and, with it, a constitutional right to abortion.  Now, as Republican-led states work to curtail or outlaw the procedure, some abortion opponents have advocated for putting restrictions on a person’s ability to travel to other states where abortions are more accessible.

Many corporations have begun to cover travel expenses for employees needing to travel out of their home state to seek abortion services.

And so we had the Ohio case that drew national attention Wednesday after a man was charged with raping a 10-year-old Ohio girl who later traveled across state lines to receive an abortion in Indiana.  The procedure is banned in Ohio after about six weeks, and there are no exceptions for cases involving rape or incest.

Far-right political leaders and right-wing talk show hosts, along with editorial boards including the Wall Street Journal, claimed the case of the 10-year-old was fabricated.  It was a classic example of my dictum “wait 24 hours.”  Their apologies after the facts came out were weak at best.

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Wall Street and the Economy

We are ten days from another huge Federal Open Market Committee meeting where Chair Jerome Powell and his band of merry pranksters will be raising the benchmark funds rate another 75 basis points.

There had been some uncertainty the past few weeks whether the Fed needed to do another 75, but any hopes for less were dashed with this week’s inflation numbers for June.

The consumer price index rose 1.3%, more than expected, with the core reading, ex-food and energy, which are hard to ex- out these days, up 0.7%, also higher than forecast.  Year-over-year, the CPI rose 9.1%, highest since 1981, and 5.9% on core, which was at least down from the recent high of 6.5%, which was the highest since 1982.

The next day we had producer prices, up 1.1%, also higher than forecast, with the core up 0.4%, down a tick from the 0.5% expected.  Year-over-year, the PPI was up 11.3%, less than the March reading of 11.5%, while the core was 8.2%, down from a high of 9.6%.

Christopher Waller, a member of the Fed’s Board of Governors, said Thursday that he would be open to supporting a huge 1 percentage point increase in the funds rate at the FOMC meeting, while conceding faster rate increases would heighten the risks that the central bank’s anti-inflationary policies would cause a recession.  The Fed hasn’t raised its rate by 1 percentage point since 1981.

In prepared remarks for a speech in Idaho, Waller said he still supports a 0.75% point increase, and with these remarks, I would place my bet on 75.

But we will see further economic data prior to the Fed’s meeting, including on housing next week.  If those figures “come in materially stronger than expected,” Waller said Thursday, “It would make me lean towards a larger hike,” i.e., a full point.

Price increases, while driven by higher costs for food* and gas, were widespread and in many cases accelerating in such areas as rents (up 5.8% from a year ago), restaurant meals and other economic services.

*Grocery prices shot up at their fastest pace since 1979 in June, rising 12.2% from a year before.

[The Bank of Canada raised its policy rate by a full percentage point and said that further rate increases are necessary.  The full point, from 1.50% to 2.50%, was the biggest onetime increase since 1998. The BofC had increased rates a half-point in each of April and June.  Annual inflation in Canada hit 7.7% in May, a 39-year high, and is expected to average 8% in Q2 and Q3.]

Two other economic data points this week…June retail sales were a touch better than expected at up 1.0%, vs. a revised -0.1% in May.  Ex-autos, sales were the same 1.0%.

June industrial production was worse than expected, -0.2%.

The Atlanta Fed’ GDPNow barometer for the second quarter is now at -1.5%, down from last week’s -1.2%.

Finally, the federal government ran an $89 billion deficit during June, a 49% decline from a year earlier, as spending fell and revenue increased, though higher than the $75 billion deficit expected.

Federal outlays in June dropped by 12% to $550 billion.

Government receipts for the month rose by 3% from a year earlier to $461 billion, the Treasury Department said, as revenue from corporate taxes and customs duties rose.

The federal deficit narrowed 77% through June of this fiscal year, which began in October, compared with the same period the prior year, falling to $515 billion from $2.2 trillion.  That was the largest-ever deficit decline in the first nine months of a fiscal year.

Spending has dropped 18% through nine months, while receipts are up 26% from 2021.  The stronger-than-expected tax receipts reflect both an improving economy and factors that have yet to be fully understood.

The nonpartisan Congressional Budget Office projects that the deficit will fall to $1 trillion this fiscal year from roughly $2.8 trillion the previous year.

The federal government’s interest costs have risen as the Fed has lifted interest rates.  Spending on interest on the public debt totaled $521 billion in the fiscal year through June, up by $102 billion from last year.

Europe and Asia

Only one broad metric for the eurozone this week…May industrial production was up 0.8% in the euro area compared with April, and up 1.6% year-over-year.

Separately, the euro and the U.S. dollar essentially hit parity this week, a 1-fo-1 rate for the first time in nearly two decades, when the Euro currency was in its infancy.

The euro has been losing ground against the dollar since the start of the year, when it hovered near $1.13, amid an aggressive inflation-fighting campaign by the Federal Reserve, along with broader global disruptions set off by Russia’s invasion of Ukraine, while the European Central Bank has done nothing, though it has promised to finally raise rates a bit at the end of July.

The stronger dollar is good news for Americans considering a European vacation or buying goods abroad.

Inflation across Europe is soaring…Ireland’s Central Statistics Office revealed Thursday that consumer prices there rose by an average of 9.1% in the 12 months to June – the fastest pace since 1984, and up from 7.8% in May.

German and French annual inflation for June were confirmed at 7.6% and 5.8%, respectively.

Britain: The Conservative/Tory Party has embarked on its process to come up with a new party leader and prime minister to replace Boris Johnson.

Candidates need the backing from at least 20 fellow legislators to be on the ballot for run-off votes, which started Wednesday.

Among the successful contenders were frontrunners Rishi Sunak, the former Treasury chief; Foreign Secretary Liz Truss; and Trade Minister Penny Mordant.

So in the first test of opinion, Rishi Sunak emerged as the preferred candidate, but Penny Mordant ran strongly.  Sunak had 101 votes, followed by the largely unknown Mordant with 83 and Truss with 67.

Thus a woman will be among the final two, who will then embark on a six-week campaign to seek votes from the 200,000 dues-paying Tory party members.

There are now a few days before the candidates go through another series of vote among MPs until two remain.

When people said Boris Johnson was hardly standing down immediately, they meant this whole process, which won’t be complete until September. 

Italy: This nation is now in crisis after the political turbulence of Thursday.  Prime Minister Mario Draghi said he would resign and make way for a new government, only the country’s president, Sergio Mattarella rejected Draghi’s resignation and asked him to reassess whether he can hold a majority together.

The chaos started after days of backroom negotiations among parties that could lead to a decisive rupture.

Draghi for 17 months has been a unifying force in Italian politics, commanding a wide left-to-right backing.  But that unity has faltered as pandemic concerns have been replaced by inflation, record drought and the war in Ukraine.

Despite the above three major issues, the coalition was pushed by the brink over debate for a trash incinerator in Rome…a badly needed incinerator if you follow the disgusting trash situation in the city.  The Five Star Movement, one of the biggest parties in Draghi’s coalition, opposes the incinerator on environmental grounds.  Others call it an urgent solution.

Italy could now be headed towards another election in September.  The tumult occurred as the parties were preparing for their summer holidays.

Turning to Asia…lots of key data in China, though it was all about the GDP print for the second quarter, just 0.4% year-over-year, lowest in two years and less than the consensus of 1.0%, while the quarter-over-quarter number was a dismal -2.6%, worse than forecast.  GDP was 4.8% in the first three months of the year.

Goldman Sachs then cut their 2022 growth forecast for China to 3.3% from 4.0%.

A feeble year for China deprives the global economy of a dependable engine of expansion when growth is being squeezed in the U.S. and Europe.

The National Bureau of Statistics also released data on retail sales, up 3.1% year-over-year, with industrial production rising 3.9% Y/Y, and June fixed asset investment up 6.1% for the first six months of the year.

The June unemployment rate was 5.5%, down from May’s 5.9%.

While Covid restrictions have been relaxed in some parts, the “Zero Covid” policy is not going away and parts of Shanghai are still in lockdown, for example, and the BA.5 subvariant has arrived.

Meanwhile, exports in June rose 17.9% year-over-year, handily beating market forecasts and accelerating from May’s 16.9% rise.  Imports were up one percent.  A relaxation of some Covid-19 control measures in Shanghai and Beijing helped.

Exports to the U.S. rose 19.3%, and the EU 17.1%, while declining 17% to Russia.  For the first six months, exports to Russia grew only 2.1%.

Japan reported on producer prices in June, which rose 0.7% month-over-month, and 9.2% year-over-year (vs. 9.1% prior).

May industrial production fell 3.1% Y/Y.

Street Bytes

--Stocks fell this week, though losses were limited by a big rally Friday, owing to a decent retail sales number and Citigroup beating expectations, which dragged the rest of the banking sector higher, even those stocks that had deeply disappointed the day before.

And stocks benefited from a reassessment of the Fed…that it can’t possibly raise the funds rate 100 basis points at its next meeting and will do 75 instead.

So, the Dow Jones fell just 0.2% to 31288, while the S&P 500 lost 0.9% and Nasdaq 1.6%.

Earnings season really begins to kick in next week.

--U.S. Treasury Yields

6-mo. 2.85%  2-yr. 3.12%  10-yr. 2.92%  30-yr. 3.08%

The yield curve is badly inverted between the 2- and 10-year, a traditional warning sign for the economy.  The extreme volatility in the 10-year is rather historic. 

--Despite the recent big drop in prices, oil closing the week at $97.57, down another $7,  International Energy Agency Executive Director Fatih Birol said Tuesday at a global energy forum in Sydney, that a global squeeze on energy supply that’s triggered crippling shortages and sent power and fuel prices surging may get worse.

“The world has never witnessed such a major energy crisis in terms of its depth and its complexity.  We might not have seen the worst of it yet – this is affecting the entire world.”

Look around the world, like in Sri Lanka and Africa, where inflationary pressures and the cost of filling gas tanks, heating homes and powering industry is leading to deadly protests.

“This winter in Europe will be very, very difficult,” Birol said.  “This is a major concern, and this may have serious implications for the global economy.”

--U.S. natural gas production is expected to rise 3% this year, with consumption also increasing 3%, according to the Energy Information Administration.

U.S. natural gas inventories are forecast to end the 2022 storage injection season in October at levels 6% below the five-year average and 5% below year-ago levels.

--JPMorgan Chase reported lower second-quarter earnings that missed analysts’ estimates as the lender set aside more cash to cover for potential loan losses amidst a deteriorating economic outlook and suspended its share repurchase program.

The banking group on Thursday posted profit of $2.76 per share, down from $3.78 a year earlier and below consensus of $2.89.  Reported revenue for the quarter to June 30 ticked up to $30.72 billion from $30.48 billion, but missed the Street’s forecast of $31.82 billion.

Provisions for credit losses amounted to $1.1 billion, including a $428 million charge for building net credit reserves, which led to the decline in earnings, and $657 million of net charge-offs, according to the bank.  In the 2021 quarter, the lender reported a net benefit of $2.3 billion, including a loan release of $3 billion and $734 million of charge-offs.

Consumer and community banking revenue slipped 1% to $12.61 billion as home lending tumbled 26% and credit card and auto dropped 6%.  Corporate and investment banking fell 10% to $11.95 billion amid a decrease in banking revenue that came on the back of a 61% slump in investment banking to $1.4 billion.

Asset and wealth management revenue rose 5% to $4.31 billion as deposits and loans grew.

JPM is also temporarily suspending its share buyback programs in order to meet higher regulatory requirements, CEO Jamie Dimon said in a statement.

Dimon also said that while the U.S. economy is growing and the job market and consumer spending are solid, a number of factors “are very likely to have negative consequences on the global economy sometime down the road,” including shrinking consumer confidence and the Federal Reserve’s efforts to bring decades-high inflation under control.

--Morgan Stanley reported declines in second-quarter earnings and revenue as well, as the investment banking segment was dented by economic uncertainty, the firm said.

Revenue in the three months through June 30 came in at $13.13 billion, down from $14.76 billion a year earlier and below consensus of $13.49 billion. Earnings fell to $1.39 a share from $1.85 previously, while the Street was looking for $1.55.

“Overall the firm delivered a solid quarter in what was a more volatile market environment than we have seen for some time,” said CEO James Gorman.  “Strong results in equity and fixed income helped partially counter weaker investment banking activity.”

Investment banking revenue sank to $1.07 billion from $2.38 billion a year ago as MS saw fewer completed merger and acquisition deals, as well as a plunge in equity underwriting, amid market uncertainty and lower fixed income underwriting.  That pushed institutional securities revenue down to $6.1 billion from $7.1 billion, even as equity revenue rose 5% and fixed income was up 49%.

Wealth management revenue also slowed, dipping to $5.74 billion from $6.1 billion previously, dented mostly by a drop in transaction revenue from lower activity by the bank’s clients.

Gorman said the quarter was “a more volatile market environment than we have seen for some time.”  In the period, Morgan Stanley’s assets under management dropped to $1.35 trillion from $1.52 trillion in the second quarter of 2021.

--Citigroup Inc. reported second-quarter earnings of $4.55 billion, or $2.30 per share, adjusted, which topped Wall Street’s expectations.

Citi posted revenue of $23.03 billion in the period, which also topped forecasts, and shares soared 13%, the others in the sector surging in sympathy.

“In a challenging macro and geopolitical environment, our team delivered solid results and we are in a strong position to weather uncertain times,” CEO Jane Fraser said.

But as with the other banks, investment banking reported a 46% plunge in revenue.

--Wells Fargo’s second-quarter sales and profit fell short of Wall Street expectations, even as the nation’s largest mortgage lender saw its net interest income jump due to higher interest rates.

The San Francisco bank earned $3.1 billion in the period, or 74 cents per share, coming up short of the 80 cents per share forecast by analysts surveyed by FactSet.  Sales were $17 billion, also below the $17.5bn Wall Street projected.

But total interest income jumped 16% to $10.2 billion from $8.8 billion in last year’s second quarter, though non-interest income, which comes from venture capital, investment banking, mortgage banking and broker advisory, declined by 40%.

“Looking ahead, our results should continue to benefit from the rising interest rate environment with growth in net interest income expected to more than offset any further near-term pressure on noninterest income,” said CEO Charlie Scharf.

--Bank of America was fined $225 million on Thursday for mishandling prepaid debit card accounts used by a dozen states to distribute unemployment benefits during the pandemic, and the bank must compensate people for damages, an amount likely to total hundreds of millions more, federal officials said.

Because of a faulty fraud detection program, BofA improperly froze accounts and stymied customers who sought to have them unlocked, cutting people off from desperately needed funds in 2020 and 2021, the Consumer Financial Protection Bureau said.

Separately, Bloomberg News first reported that Bank of America, Citigroup and Goldman Sachs are in talks with regulators about a potential fine for failing to monitor the use of unauthorized messaging apps by their employees for work-related communications.

Morgan Stanley said it recorded a regulatory-related expense of $200 million “concerning the use of unapproved personal devices and the firm’s record-keeping requirements.”

--Boeing said Tuesday it delivered 121 commercial airplanes in Q2, including 103 737s, two 747s, seven 767s and nine 777s.

The Q2 deliveries figures is up from 95 in the previous quarter and 79 a year earlier.

The shares rose sharply in response.

--Delta Airlines shares fell 4% after the company reported second-quarter earnings that missed expectations, spooking investors.

Capacity came in at just 82% of Q2 2019 levels, which, combined with higher selling-related expenses and investments in operational reliability, drove a 22% jump in non-fuel unit cost performance versus 2019, denting earnings.

Nonetheless, Delta still posted its best quarter of profitability since the pandemic began, boasting earnings of $1.44 per share, though this was against estimates of $1.72, with revenue smashing estimates and leaping above pre-pandemic levels by growing 93.9% year-on-year and 10.3% from Q2 2019 to $13.82 billion.

Delta said business travel is recovering nicely, roughly 80% of 2019’s pace, a 25-point improvement versus Q1.

But the airline is facing turbulence with its Q3 guidance, with the sales outlook of +1.5% versus Q3 2019 merely meeting analyst forecasts.

All-in-all, the results were just so-so.

The day before, American Airlines Group said it expects Q2 total revenue to increase about 12% compared with a year earlier, in line with its prior guidance.  It also anticipates reporting pre-tax income of $585 million in the June period when it releases earnings next week.

“It’s a fantastic time for the airline industry.  Travel isn’t just back, it’s moving,” CEO Robert Isom said at the company’s annual meeting of shareholders in June.  “People want to get out there and fly. We’re poised to lead the recovery.”

People are moving, haltingly, while their bags aren’t moving at all.

--United Airlines Holdings Inc. and its pilots union will reopen contract negotiations after pilots objected to elements of a tentative agreement the airline and the union struck last month.

This is not good.  United’s pilots were set to wrap up voting Friday on a deal everyone thought was completed, one that would have included pay raises of more than 14.5% within 18 months.

The delay underscores the difficulty of such negotiations after two years of the Covid-19 pandemic and the upheaval it caused for airline employees.  Pilots at some airlines, aside from higher wages, have been seeking improvements to scheduling practices and other quality-of-life issues, due to what they have described as exhausting schedules.

--Heathrow Airport apologized to passengers caught up in recent travel chaos but warned that more flights could be cancelled.

The UK’s largest airport asked airlines to remove 61 flights from Monday’s schedules, as it seeks to cope with soaring demand and staff shortages.

The government and the aviation regulator wrote to carriers last month telling them to ensure their summer timetables were “deliverable.”

Last week, British Airways said it was cutting 10,300 more short-haul flights between August and the end of October.  Nearly 30,000 flights will have been removed from BA’s schedule between April and October this year.

[Note: In the UK, Britain’s summer-travel period really doesn’t get going until July 22, when state schools break up for the summer.]

I warned long ago about the baggage handler situation in Europe and Wednesday, NBC Nightly News had some photos of the mountains of lost luggage in European airports.

Then Delta Air Lines announced it packed an Airbus A330-200 with 1,000 pieces of luggage…that was it…luggage, not passengers, which was flown from Heathrow to Detroit this week. The luggage belonged to Delta customers who had recently traveled through Heathrow and were separated from their bags because of travel disruptions.

From Detroit, Delta plans to “accelerate movement of the delayed bags,” a spokesman for the airline said.

Enjoy!

--KLM Royal Dutch Airlines said it would cut as many as about 2,000 flights from its schedule to help ease congestion at its main airport, Amsterdam’s Schiphol.  The move amounts to between 10 and 20 return flights a day through Aug. 28

--Spirit Airlines said Wednesday it was moving a special shareholder meeting to vote on its proposed merger with Frontier Group Holdings that had been scheduled for Friday to July 27.

Frontier asked Spirit to move the meeting back from July 15 to give it more time to solicit shareholders as it looks short of winning enough support for its $2.6 billion cash-and-stock offer.

Spirit said it will continue discussions with both Frontier and rival bidder JetBlue.

This whole topic grows most wearisome. 

--TSA checkpoint travel numbers vs. 2019

7/14…88 percent of 2019 levels
7/13…86
7/12…84
7/11…88
7/10…91
7/9…92
7/8…84
7/7…86

Not exactly 100 percent.

--Twitter wants a lightning-quick trial to resolve its claim that billionaire Elon Musk wrongfully canceled his proposed $44 billion buyout.

Lawyers for the social-media platform say they need only four days in Delaware Chancery Court to prove that the world’s richest man should be forced to honor his agreement and pay $54.20 a share for Twitter. The company hopes to start the non-jury case on Sept. 19.

Unlike some states where it can take years to get a case to trial, Delaware Chancery Court generally moves quicker. Chancery judges – business law experts – are known for being able to parse though the legal thickets of complex merger and acquisition disputes more quickly than other courts. 

The Twitter buyout agreement specifies all legal disputes over the deal must be heard in Delaware, corporate home to more than half of U.S. public companies, including Twitter and Tesla.

Twitter’s letter to Elon Musk said his efforts to abandon his $44 billion takeover is “invalid and wrongful” and that Twitter hasn’t breached any of its obligations.

Musk’s regulatory filing last Friday cited a “Material Adverse Effect,” in arguing that undisclosed information about bots is “fundamental to Twitter’s business and financial performance.”

To escape the deal, Musk move prove the alleged omission amounts to an “unexpected, fundamental, permanent” negative development that can’t be fixed, according to legal experts.  This is highly unlikely.

CNBC’s David Faber made some waves when he suggested Musk could be jailed over the lawsuit he faces from backing out of buying Twitter.

Faber said there has been “no evidence presented thus far in any way to enhance” Musk’s accusations, and now Musk will have to produce evidence in court to prove those claims about Twitter’s supposed lack of transparency.

“Even if you were to prove that there were a high number of bots, you still have to prove that it actually is a material adverse effect,” Faber said.

“If the court forces Musk to buy the company and he says ‘no,’ he won’t comply, then we have a situation where they could put him in jail.”

Musk is in so much trouble with the Feds as well.  We learned of a June 2 letter from the SEC to Musk, wanting more information on a tweet Musk sent out in May in which he said his proposed acquisition of Twitter “cannot move forward,” according to a filing with the regulator made public Thursday.

The government said the May 17 tweet and his use of the word “cannot” was an indicator that the billionaire and his affiliates were not moving forward with the proposed $44 billion acquisition.

But in a 13D filing, there was no mention of any material change, the SEC said. 

“If a material change has occurred, then promptly amend the Schedule 13D,” the SEC said.  “If any other material changes to the facts reported in your schedule 13D occur in the future, you are reminded to promptly amend the Schedule 13D in accordance with Rule 13d-2(a) of Regulation 13D-G.”

You see, Mr. Musk has a problem with following any rules, on anything, at anytime.

Separately, a former Twitter employee told the House committee investigating the Jan. 6, 2021, insurrection that the company gave former President Trump more lenient treatment because it enjoyed the “power” his stature lent to the social network.

Trump had 88 million followers when Twitter “permanently suspended” him two days after the riot, citing fears he could incite further violence.

The former employer, who testified under anonymity, said if Trump had been “any other user on Twitter, he would have been permanently suspended a very long time ago.”

--Shares of casino companies with operations in the gambling enclave of Macau fell after city officials ordered all businesses aside from essential services to shut down for a week in an attempt to tamp down a Covid-19 outbreak.

Las Vegas Sands, which owns several properties in Macau through its subsidiary Sands China, saw its shares decline 6% on the news.  Shares of Wynn Resorts Ltd. also fell 6%.

Before the pandemic, in 2019, Macau supplied nearly 70% of revenue for Las Vegas Sands and Wynn Resorts.

Macau relies on the gambling sector for much of its economic growth and employment so shutting the city down for even a week is painful.

--Taiwan Semiconductor Manufacturing posted a 76.4 percent surge in second-quarter profit on Thursday, the biggest jump in earnings in eight quarters that handily beat market estimates, thanks to red-hot demand for its chips amid a two-year long global shortage.

TSMC, the world’s largest contract chipmaker and a major Apple supplier, said net profit for April-June rose to a record $7.9 billion.

The strong results underscore demand for Apple’s iPhone 13 that continues to sell well despite record global inflation and worries of a looming recession, as well as solid sales of high performance computing (HPC) chips used in 5G networks and artificial intelligence.

Revenue for the quarter climbed 36.6 percent to $18.16 billion.

--Alphabet Inc.’s Google will slow hiring for the rest of the year, CEO Sundar Pichai told employees, making the search giant the latest tech company to either pull back on new hires of trim staff.

Google hired about 10,000 new employees in the second quarter and more who are committed to start this quarter, he added.

Parent company Alphabet reported 163,906 employees as of the end of March, up 17% from a year earlier.

Pichai wrote in the email: “Moving forward, we need to be more entrepreneurial, working with greater urgency, sharper focus, and more hunger than we’ve shown on sunnier days.  In some cases, that means consolidating where investments overlap and streamlining processes.  In other cases, that means pausing deployment and re-deploying resources to higher priority areas.”

Elsewhere, Microsoft Corp. said on Tuesday it would cut a small percentage of its staff.

Earlier, Facebook-parent Meta Platforms Inc.’s head of engineering told managers to identify and push out low performing employees, according to an internal post.  Snap Inc. CEO Evan Spiegel also recently told staff the company would slow hiring, warning that the economy “has definitely deteriorated further and faster than we expected.”

--UnitedHealth Group raised its full-year 2022 earnings outlook for the second time this year as its second-quarter results topped analysts’ estimates.

“We see tremendous opportunity ahead, and we remain confident in our ability to deliver our long-term 13% to 16% earnings per share growth objective and further advance our mission to help people live healthier lives and to help make the health system work better for everyone,” CEO Andrew Witty said in an earnings call.

UNH!  UNH! roared the masses.  The shares were up nearly 5% on the news.

--PepsiCo on Tuesday reported better-than-expected fiscal second-quarter results despite macroeconomic and geopolitical uncertainties and rising inflation, as the company raised its organic revenue guidance for 2022.

The beverages and snacks company posted adjusted earnings of $1.86 per share, up from $1.72 a year earlier and ahead of analysts consensus.

Revenue for the quarter ended June 11 amounted to $20.23 billion, an increase from $19.22 billion the year before and above the Street’s consensus.

“Our business momentum continued in the second quarter as we delivered 13% organic revenue growth,” PepsiCo said.  “We believe that we are well-positioned to adapt and execute in a challenging operating environment as we hold strong positions in growing, global categories with large, trusted brands that deliver variety, convenience, and value to consumers.”

In North America, the company’s Frito-Lay snack business saw an organic revenue rise of 14%.

PepsiCo now expects organic revenue growth of 10% for fiscal 2022, up from its previous projection of 8%.

Prices on average rose 12% in the quarter, but the company does see a recession is likely and it is worried of the impact on lower-income shoppers.

--Walmart Inc. agreed to buy 4,500 of Canoo Inc.’s forthcoming electric delivery vehicles, as the retail giant looks to boost its e-commerce delivery service with a fleet powered by electricity.

Under the purchase agreement, Walmart has an option to purchase up to 10,000 of Canoo’s all-electric delivery vehicles, called the Lifestyle Delivery Vehicle.

The vans are expected to begin hitting the road next year.

Canoo put its headquarters in Walmart’s hometown of Bentonville, Ark., last year.  The stock nearly doubled at one point in the day on the announcement but was still down 45% for the year.

Only then on Thursday, Canoo shares rose further on word the U.S. Army will take an unspecified number of vans for analysis and demonstration.  So for Canoo, the potential for something big down the road with the military.

--Manhattan apartment rents reached another record high in June, with even more pain to come for prospective tenants as the market heads into its most competitive season.

New leases were signed last month at a median of $4,050, according to appraiser Miller Samuel Inc. and brokerage Douglas Elliman Real Estate, which have tracked the data for more than three decades.  That’s nearly 25% more than a year earlier.  Average rents, a figure that’s more skewed by the most-expensive deals, topped $5,000 for the first time, the firms said.

--Starbucks plans to close 16 stores, among which are six in Los Angeles and six in Seattle, the company’s hometown, because of what it says are safety issues, including drug use and threatening behavior.

There are some questions whether this is really a ‘safety’ issue as opposed to an anti-union move, but let’s wait a few weeks.  No doubt there are some legitimate safety issues in some areas, which are faced by all retailers in those particular neighborhoods. 

--Thousands of leaked files have exposed how Uber courted top politicians, and how far it went to avoid justice.

The Uber Files are a trove of more than 124,000 records, including 83,000 emails and 1,000 other files involving conversations, spanning 2013 to 2017.

They were leaked to the Guardian, and shared with the International Consortium of Investigative Journalists and a number of news organizations.

The records reveal, for the first time, how a $90 million-a-year lobbying and public relations effort recruited friendly politicians to help in its campaign to disrupt Europe’s taxi industry.

While French taxi drivers staged sometimes violent protests in the streets against Uber, Emmanuel Macron was on first name terms with Uber’s controversial boss at the time, Travis Kalanick, and told him he would reform laws in the firm’s favor.

Macron was the economy minister at the time, and he saw Uber as a source of growth and badly needed new jobs, and was keen to help its efforts.

Uber’s ruthless business methods were widely known, but the files, which were leaked by Mark MacGann, a former high-ranking Uber executive and longtime European lobbyist, for the first time give a unique inside view of the lengths it went to in achieving its goals.

Uber says Kalanick’s replacement, Dara Khosrowshahi, was “tasked with transforming every aspect of how Uber operates” and has “installed rigorous controls and compliance necessary to operate as a public company.”

--Marvel’s “Thor: Love and Thunder” took in $143 million in its opening weekend in North America, a franchise best for the popular God of Thunder series, according to studio estimates.

Overall, domestic moviegoers spent an estimated $236 million on theater tickets this weekend, according to Comscore.

Overseas, box office sales for Thor reached $159 million, bringing the movie’s debut worldwide to $302 million.  The film had a reported production budget of $250 million.

The Minion film, “The Rise of Gru,” pulled in $45.5 million in its second weekend, bringing its domestic box office total to $210.1 million.  Its worldwide gross is $399.9 million for Comcast-owned Universal.

Paramount’s “Top Gun: Maverick” picked up $15.5 million in its seventh weekend and has now raked in $597.4 million and thus passed $600 million early this week.  Only 12 films have ever hit that milestone.

But in terms of the stocks of theater owners AMC and Cinemark, analysts warn the third quarter may experience a cooling as the front-loaded film slate leaves few potential contenders to drive continued attendance momentum, and as I note above, the Covid subvariant BA.5 is hovering over us.

The Pandemic

--Speaking of which, BA.5 elevates the risk of reinfections and rising case counts, spoiling chances for a summer reprieve from the pandemic across much of the United States, though most Americans will choose to ignore the looming threat and take their chances, and I totally understand.

Covid levels are high in a fifth of U.S. counties, according to the CDC’s metric based on case and hospital data.  BA.5 is estimated to represent nearly two thirds of recent U.S. cases that are averaging more than 100,000 a day, CDC data show, but the number of infections may be roughly six times as high, some virus experts said, in part because so many people are using at-home tests that state health departments largely don’t track.

The Biden administration is urging those eligible to get a booster shot and not wait for potential updated boosters targeting Omicron subvariants due in October.

Getting a booster now “does not preclude your also doing it in the fall,” said Anthony Fauci during a White House briefing.  “If the risk is now, address the current risk.”

Among people ages 50 and older, only 28% who received their first booster dose have gotten a second.

Covid hospitalization rates are going up in Los Angeles County, and local authorities have said they might impose a mask mandate.

New York City has urged people to resume masking in public, indoor settings and around large crowds.

Covid cases have exacerbated staffing issues with the airlines and at the airports.

But with all the above, there is no evidence to suggest BA.5 causes more severe disease, CDC Director Rochelle Walensky said.

--Moderna Inc. said it is developing two potential Covid-19 booster shots targeting BA.5 and other subvariants.

--The FDA cleared Novavax for emergency use as a two-dose Covid vaccine for adults 18 and older.  Wednesday’s authorization “offers adults in the United States who have not yet received a Covid-19 vaccine another option,” FDA Commissioner Dr. Robert Califf said in a statement.

It clears the way for the Novavax product to be the fourth vaccine option in the U.S. at a time when interest in primary vaccines is waning among adults. 

Novavax’s vaccine can be stored at higher temperatures than the mRNA vaccines offered by Pfizer and Moderna, and it’s already been authorized in more than 40 countries, including the UK and Canada.

Covid-19 death tolls, as of early tonight…

World…6,384,206
USA…1,048,618
Brazil…675,145
India…525,604
Russia…381,794
Mexico…326,335
Peru…213,746
UK…181,580
Italy…169,735
Indonesia…156,833
France…150,576

Canada…42,278

[Source: worldometers.info]

U.S. daily death tolls…Mon. 202; Tues. 357; Wed. 477; Thurs. 246; Fri. 181.

Foreign Affairs, part II

China: Beijing has doubled down on its Taiwan position, with a senior diplomat and military chief delivering separate warnings to the United States not to stir up tensions over the self-ruled island.

Foreign Minister Wang Yi said the war in Ukraine should not be used to challenge Beijing’s sovereignty over Taiwan, while General Li Zuocheng, chief of the Central Military Commission’s joint staff department, said any infringement of China’s core interests should expect a counter-attack.

“China will not compromise on issues concerning its core interest.  If someone wants to provoke China, then they would be met with a firm counter-attack from the Chinese people,” Li said in a video call with his U.S. counterpart Mark Milley on Thursday.

According to a statement from China’s defense ministry, Li called for an end to U.S. military ties with the island and the resulting turbulence in China-U.S. relations and instability in the Taiwan Strait.

A statement from the U.S. Joint Chiefs of Staff didn’t mention Taiwan in summarizing the call.

Australian Prime Minister Anthony Albanese has ruled out complying with a list of demands from the Chinese government to improve relations between the two countries, complicating attempts to repair diplomatic ties between Canberra and Beijing.

Speaking at a press conference in Canberra on Monday, Albanese said Australia “doesn’t respond to demands” when asked about a statement by China’s Foreign Minister Wang Yi, who has listed four “actions” by which Australia could improve its relationship with Beijing.

Among those were the need for Australia to view China as a “partner rather than a rival,” seeking common ground “while reserving differences” and not “being controlled by any third party.”

Meanwhile, India is set to become the world’s most populous country next year, overtaking China with its 1.4 billion people, according to UN figures.

But population growth is now at its slowest rate since 1950 and is set to peak, says the UN, around the 2080s at about 10.4bn, though some demographers believe that could happen even sooner.

More than half the growth we will see in the next 30 years will happen in just eight countries – the Democratic Republic of the Congo, Egypt, Ethiopia, India, Nigeria, Pakistan, the Philippines and Tanzania.

At the same time, some of the world’s most developed economies are already seeing population decline as fertility rates fall below 2.1 children per woman, which is known as the “replacement rate.”

China, with one of the lowest fertility rates in the world at 1.15 children per woman, has announced that its population is due to start declining next year – much earlier than previously thought. That is despite the country abandoning its one child policy in 2016 and introducing incentives for couples to have two or more children.

Japan: The governing party and its coalition partner scored a major victory in a parliamentary election Sunday, possibly propelled by sympathy votes in the wake of the assassination of former Prime Minister Shinzo Abe.  With the boost, Prime Minister Fumio Kishida stands to rule without interruption until a scheduled election in 2025.

That would allow Kishida to work on long-term policy goals such as national security, his signature but still vague “new capitalism” economic policy, and his party’s long-cherished goal to amend the U.S.-drafted postwar pacifist constitution.

Regarding the investigation into Abe’s assassination, a top police official acknowledged possible security lapses.

The attacker told investigators he acted because he believed rumors that Abe was connected to an organization that he resents, police said.

Iran/Israel: The U.S. reaffirmed that it is prepared to use military force to stop Iran from attaining a nuclear weapon, in the Jerusalem U.S.-Israel Strategic Partnership Joint Declaration President Biden and Israelis Prime Minister Yair Lapid were set to sign after their meeting on Thursday.

The United States stresses in the Jerusalem Declaration “that integral to this pledge” – a commitment to Israel’s security and qualitative military edge – “is the commitment never to allow Iran to acquire a nuclear weapon and that it is prepared to use all elements of its national power to ensure that outcome.”

Following his meeting with Biden, Lapid said that “the only thing that will stop Iran is knowing that if they continue to develop their nuclear program the free world will use force.  The only way to stop them is to put a credible military threat on the table.”

“It should not be a bluff, it should be the real thing,” Lapid stated.  “The Iranian regime must know that if they continue to deceive the world, they will pay a heavy price.”

In their meeting, Lapid told Biden that nuclear talks with Iran cannot continue to be open-ended and must have a deadline.  He also said the Western parties to the 2015 Iran Deal must call the UN Security Council and snap back sanctions on Iran for its nuclear violations.

The declaration came a day after Biden told Israel’s Channel 12 in an interview that the U.S. would use military force against Iran “as a last resort.”

Separately, Israel thanked the U.S. for supporting the Abraham Accords, which the country said are “important to the future of the Middle East region and to the cause of the region’s security, prosperity and peace.”

Saudi Arabia: At a press conference Thursday, President Biden defended his controversial trip to the Kingdom as a broader effort to promote American security interests in the Middle East, deflecting criticism that his visit rewards the Saudi regime and diminishes efforts to advance human rights, as well as ignoring the Saudi leader’s role in the death of Jamal Khashoggi.

“I have never been quiet about talking about human rights. The reason I’m going to Saudi Arabia is much broader, it’s to promote U.S. interests,” Biden said.  “We have an opportunity to reassert what I think we made a mistake of walking away from – our influence in the Middle East.”

Biden never explained what he meant by “walking away from” the region.  Biden was vice president when President Obama pulled U.S. troops from Iraq in 2011.  And while President Trump was criticized for pulling troops out of Syria and using a heavy hand with Middle East partners, the Trump administration gave significant attention to the region.

Republicans are rightfully slamming the trip as a desperate plea for more oil when they argue the administration could invest in American energy producers instead.

Many Democrats were critical of Biden meeting with the crown prince.

And then this afternoon, they met, Biden and MBS exchanging a fist bump.  At a press conference held 11:00 p.m. local time, Biden was asked about the greeting and he laughed, further infuriating human rights advocates.

Biden insisted he had raised the murder of Khashoggi with the crown prince.  “I made my view crystal clear,” the president said.  MBS told Biden he had nothing to do with the murder.

Washington Post publisher Fred Ryan issued a statement calling the fist bump “shameful,” saying it “projected a level of intimacy and comfort that delivers to MBS the unwarranted redemption he has been desperately seeking.”

The meeting for MBS indeed bestowed greater legitimacy on his plans as he seeks the throne, Biden also meeting with 86-year-old King Salman, who has been hospitalized twice this year.

Biden and the administration claimed after the meeting between the president and the crown prince that Saudi Arabia “has committed to support global oil market balancing for sustained economic growth,” as the White House put it in a statement.

What this actually means is anyone’s guess.  OPEC next meets in early August.

Biden told reporters, “I’m doing all I can to increase the supply.  The Saudis share that urgency and based on our discussions today I expect we’ll see further steps in the coming weeks.”

Editorial / Wall Street Journal

“President Biden visits Saudi Arabia this weekend to meet with Gulf Arab leaders, including the Saudi crown prince he once vowed to isolate.  America’s left is giving the President grief for meeting with Mohammed bin Salman, the erstwhile ‘pariah,’ but realpolitik has its demands.  The U.S. needs a better relationship with the Saudis for regional security as much as for oil.

“The trip so far is proving to be good news on more than one front.  On his stop in Israel, Mr. Biden showed little of the hostility toward the Jewish state that so marked President Obama’s tenure.  Mr. Obama and his Secretary of State, John Kerry, wasted years and political capital trying to force a Palestinian-Israel solution that had no chance of happening as long as Hamas and other radicals swear to destroy Israel.  The Biden White House isn’t giving up hope, but it has other priorities.

“One of those, believe it or not, seems to be building on Donald Trump’s 2020 Abraham Accords that marked a breakthrough in diplomatic relations between Israel and some Arab states.  Saudi Arabia hasn’t joined the accords, but events are moving in that direction.  Israel on Thursday approved a diplomatic deal over two islands in the Red Sea that could pave the way for the normalization of Saudi-Israeli relations.  Team Biden has to its credit quietly played a role in the talks.

“The Saudi visit will be trickier business.  The President is having to defend his meeting with the crown prince, known as MBS, despite what the CIA says was his complicity in the murder of journalist Jamal Khashoggi.  Mr. Biden tried to punish MBS upon taking office, ending support for the Saudi war in Yemen, stopping an arms sale, and firing up new talks with Saudi adversaries in Iran over a nuclear deal.

“Now he’s having to take most of that back as he beseeches the Saudis to expand oil production.  Saudi Arabia is one of the few countries that has excess production capacity, though not enough to cause a big decline in the oil price that is now about $96 a barrel.    The world’s spare oil suppliers these days are the Saudis, Iran and Venezuela, and the Saudis are St. Francis of Assisi in that crowd.

“The other country that could produce more?  The United States.  Mr. Biden wouldn’t need to beg MBS if he shed his climate obsessions and unleashed American oil production.  As it did with the Saudis, Team Biden came to office in 2021 wanting to turn the U.S. oil and gas industry into a pariah.

“That was a catastrophic misjudgment – economically for energy prices, strategically for Europe’s vulnerability to Vladimir Putin, and politically for Democrats as they face angry voters in November.  If Mr. Biden can meet face to face with MBS, why not do the same with U.S. oil and gas executives and promise them new leases on and offshore, faster permits, and an end to the regulatory war on pipelines and the supply of capital?

“In the private talks in Israel and Saudi Arabia, the big issue is Mr. Biden’s continued dream of a new nuclear deal with Iran. His diplomats have been making concessions for 18 months to no good result.  The Saudis and Israelis both understand that Tehran won’t stop seeking a bomb with or without a new deal, and they are wary of new U.S. concessions that would hand Iran tens of billions of dollars to finance more terrorism in the region.

“The fastest way to better relations with the Saudis and other Gulf Arabs is to call an end to the diplomatic dance with Iran and return to Mr. Trump’s maximum pressure campaign.  We don’t expect that, but Mr. Biden has two-and-a-half long years left in his Presidency.  They’ll go better for him and U.S. interests if he makes more concessions to reality along the way.”

Sri Lanka: What a mess.  The prime minister told the military to do “whatever is necessary to restore order” after protesters stormed his office on Wednesday.  Ranil Wickremesinghe was appointed acting president by President Rajapaksa, who fled the country.

But the decision to leave him in charge triggered further protests demanding that the prime minister must also go.

Sri Lanka has been suffering from its worst economic crisis in decades.

Many blame Rajapaksa for the crisis, and see Wickremesinghe, who became prime minister in May, as part of the problem.

Last weekend, protesters occupied the president’s official residence, and then they occupied the prime minister’s office.

Where this all goes from here is anyone’s guess.

Random Musings

--Presidential approval ratings….

Gallup: 41% approve of President Biden’s job performance, 57% disapprove; 36% of independents approve (June 1-20).

Rasmussen: 42% approve of Biden’s performance, 57% disapprove (July 15).

The above noted New York Times/Siena poll gave Biden an abysmal 33% approval rating.

--Aaron Zitner / Wall Street Journal

“Since suffering a stroke two months ago, John Fetterman, the lieutenant governor of Pennsylvania and Democratic nominee for the Senate, has walked as far as 4 miles on local trails, taken family trips to area vacation spots and handled errands such as dropping off his children at day camp, his campaign says.

“What he hasn’t done is appear at public events where voters can get a sense of his stamina, speaking skills and ability to take on his Republican opponent, Mehmet Oz, the physician famous for his TV program ‘The Dr. Oz Show.’

“The state of Mr. Fetterman’s health is one big question hanging over a Senate race widely considered the Democrats’ best chance to pick up a seat now held by the GOP, which would help safeguard the party’s narrow control of the chamber.”

Yup, this is a big one…and it was clear about a month ago that Fetterman’s campaign was in no hurry to put him before the public.

So when will they?  Certainly by Labor Day, and it can’t just be one event, it has to be several in a single day, or three events in three days, that sort of thing.

On the other hand, Dr. Oz has attended more than 40 campaign events since the primary season ended.  But the polls show Fetterman slightly ahead, though call it even.

Among independents, 56% have an unfavorable view of Dr. Oz, compared with 38% who held an unfavorable view of Fetterman, according to a mid-June poll for AARP.

--Meanwhile, down in Georgia, this is what Republican Senate candidate Herschel Walker said about climate change during a recent campaign event:

“Since we don’t control the air, our good air decided to float over to China’s bad air. So when China gets our good air, their bad air got to move. So it moves over to our good air space.  Then – now we got to clean that back up.”

Well, Republicans in Georgia made their bed with this guy, and they assume the former University of Georgia football star, a legend in the state, with Donald Trump’s endorsement, will defeat incumbent Democratic Sen. Raphael Warnock.

A Quinnipiac University poll released end of June had Warnock in front, 54%-44%.

--Editorial / Wall Street Journal

“Donald Trump’s whisperers are saying he may soon announce his plans for President in 2024, and Democrats are keeping their fingers crossed that he does.  Since his surprising victory in 2016, Mr. Trump has been the main cause of Democratic electoral success.

“All the usual signs say this should be an excellent year for Republicans, perhaps an historic one.  Inflation is 8.6% (Ed. now 9.1%), gasoline is $4.50 a gallon, mothers can’t get baby formula, crime is rising, 401(K) values are falling, and rogue nations are on the march around the world.

“The polls show some 75 % of the public thinks the country is moving in the wrong direction.  President Biden’s job approval rating is under 38% in the Real Clear Politics composite index, and 33% in the latest Siena/New York Times survey.  That’s Mariana Trench depth for presidents, and it typically signals a midterm rout for the party in power.

“This all means that if the record of Mr. Biden and Democrats in Congress is the dominant issue in November, the GOP should regain control of the House and Senate.  To put it more starkly, less than four months before Election Day it would take surprising events or political malpractice for the GOP to lose.

“Enter Mr. Trump, who may announce his presidential candidacy before the midterms, which we can’t recall a major candidate doing. The former president’s advisers say he may do this so soon because he doesn’t like the attention other potential candidates are getting.

“That’s especially true of Florida Gov. Ron DeSantis, who seems poised to win his re-election campaign by “a lot,” as Mr. Trump might say. Mr. Trump would like to pre-empt the field, freeze GOP donors, and show his dominance over the GOP in 2022 with an eye on 2024.

“That would thrill Democrats, who are eager to change the subject from inflation and the Biden record.  They timed their Jan. 6 committee hearings for mid-2022 to remind everyone about Mr. Trump’s behavior and wrap him around GOP candidates.

“That won’t matter in safe GOP districts, but it could work in the swing House districts and states where Democrats won their majority in 2018 as suburban voters wanted a check on Mr. Trump’s chaotic governance.  If the main issue in November is GOP fealty to Mr. Trump’s claims that the 2020 election was stolen, Democrats might have a chance to hold Congress.  Republicans would have to play defense rather than focus on the Biden-Nancy Pelosi-Chuck Schumer record.

“This is what cost the GOP the two Georgia Senate seats in January 2021 as Mr. Trump dampened GOP turnout by telling voters the presidential race was stolen… Mr. Trump is in danger of repeating the Georgia mistake by focusing almost entirely on the last election rather than this one.”

The Washington Post said Trump will jump into the race in September.

--The January 6 committee raised the question of witness tampering as it wrapped up its public hearing on Tuesday, revealing that Donald Trump had attempted to contact a person who was talking to the panel about its investigation of the former president and the 2021 attack on the Capitol.

The person Trump tried to contact declined to answer or respond to his call, Rep. Liz Cheney said.  Instead the person alerted their lawyer who contacted the committee.

The disclosure by Cheney was not the first time the panel has raised concerns about witnesses being contacted by Trump’s team in ways that at least create the appearance of inappropriate influence.

The hearing was the seventh for the Jan. 6 committee, with this session revealing details of an “unhinged” late night meeting at the White House with Trump’s outside lawyers suggesting the military seize state voting machines in a last-ditch effort to pursue his false claims of voter fraud before the defeated president summoned a mob to the Capitol.

The panel featured new video testimony from Pat Cipollone, Trump’s former White House counsel, recalling the explosive meeting at the White House, and calling the plan to seize the machines a “terrible idea.”

“That’s not how we do things in the United States,” Cipollone testified.

Next week, we are told, the committee will wrap things up with what will be a retelling, minute-by-minute, of the events of Jan. 6…in primetime.

Few votes are being changed thus far by the committee’s work to date, but any slight change away from Donald Trump redounds to the benefit of Gov. DeSantis and those who may choose to take on the former president in the primaries.

--Speaking of which, in a new New York Times/Siena College poll released Tuesday, Trump led a hypothetical 2024 GOP field with 49%, followed by Gov. DeSantis with 25%.  No other potential candidate – including Texas Sen. Ted Cruz, former Vice President Mike Pence and former UN Ambassador Nikki Haley – received double-digits.

All told, however, nearly half of those who said they plan to vote in the 2024 Republican primary preferred a candidate other than Trump.

And among those who voted for Trump in 2020 and had a “very” favorable opinion of each of the contenders – effectively a measure of passion from the party base – Trump (46%) and DeSantis (44%) had almost identical numbers.

But not only does DeSantis have a $100 million war chest for his 2022 reelection race for governor, most of which he will retain after he wins, a recent poll from the University of New Hampshire showed DeSantis at 39% to Trump’s 37% in the state’s Republican primary – a virtual dead heat.  In October 2021, the same poll had Trump leading DeSantis 43% to 18% in the Granite State.

--A government watchdog accused the U.S. Secret Service of erasing texts from Jan. 5 and 6, 2021, after the head of the Department of Homeland Security’s Office of Inspector General, Joseph Cuffari, wrote to the leaders of the House and Senate Homeland Security committees indicating that the text messages have vanished and that efforts to investigate the Jan. 6 attack were being hindered.

Cuffari wrote in a letter dated Wednesday and obtained by the Washington Post that the text messages were erased as part of a device-replacement program.”

Cuffari emphasized that the erasures came “after” the Office of Inspector General requested copies of the text messages for its own investigation, and signaled that they were part of a pattern of DHS resistance to his inquiries.  Staff members are required by law to surrender records for audit.

--I saw in the Winston-Salem Journal that Donald Trump’s scheduled appearance Friday in Greensboro was postponed, no reason given, and that the tickets, “which are nonrefundable,” may be used at any American Freedom Tour event in America.

So ticket prices “ranged from $9 for a spot in an overflow room to $3,995 or more for seating closer to the stage, though the venue was not announced when tickets went on sale.”

$3,995 for a ticket to see Donald Trump…and it’s nonrefundable.

As P.T. Barnum used to say, “There’s a sucker born every minute.” 

--Over the weekend, Trump at a “Save America” rally called Tesla CEO Elon Musk a “bullshit artist” after he pulled out of his deal to buy Tesla.

“One of our highest priorities under a Republican Congress will be to stop left-wing censorship and to restore free speech in America,” Trump said.  “And go out, by the way while I’m here and sign up now, for Truth Social.  It’s hot as a pistol and you see that I called that one, right?  Elon. Elon!”

“Elon is not going to buy Twitter.  Where did you hear that before?  From me,” Trump quipped.

Trump is pissed that Musk said he might support Gov. DeSantis.

The shell company merging with Trump’s Truth Social remains under federal investigation.

--The Trump family suffered a loss on Thursday when the former president’s ex-wife Ivana died after a fall at her New York townhome, the medical examiner tonight calling the death an accident.  She was 73.

Donald Trump shared the death of his former spouse on Truth Social.

She was the mother of Don Jr., Eric and Ivanka.  The family called Ivana “an incredible woman,” as well as “a force in business, a world-class athlete, a radiant beauty, and caring mother and friend.”

For a time, Donald and Ivana were New York’s power couple.

--We received more distressing video from Robb Elementary School in Uvalde, Texas, and the mass shooting on May 24 that claimed the lives of 19 children and two teachers.

In video obtained by the Austin American-Statesman, we see the first responding officers approach the classroom just three minutes after more than 100 bullets were fired, when Salvador Ramos fought them off with a short burst, sending the officers scrambling in retreat.

Then, they waited. And waited. Even after multiple children inside the classroom called 911 and begged for help, heavily armed cops and many backup officers were seen standing in the hallway.

Forty-eight minutes after he entered the building, Ramos fired four more gunshots.  Several cops responded by approaching the classroom door. But they didn’t enter.

Finally, 77 minutes after Ramos entered the building, the cops launched a chaotic, Border Patrol-led breach of the classroom and fatally shot the teenager.

One officer is shown reaching for the hand sanitizer in the hallway at one point.  All the while, children were bleeding to death.

--According to a report from the CDC, more than 80 percent of urine samples drawn from children and adults in a U.S. study contained a weedkilling chemical linked to cancer, a finding scientists have called “disturbing” and “concerning.”

The 2,310 urine samples were taken from a group of Americans intended to be representative of the U.S. population, with 1,885 laced with detectable traces of glyphosate.  This is the active ingredient in herbicides sold around the world, including the widely used Roundup brand.  Almost a third of the participants were children ranging from six to 18.

Academics and private researchers have been noting high levels of glyphosate in analyses of human urine samples for years.  But the CDC has only recently started examining the extent of human exposure to the herbicide in the U.S., and its work comes at a time of mounting concerns and controversy over how pesticides in food and water impact human and environmental health.

--Europe is experiencing another record heatwave, with even Ireland looking at temps in the low- to mid-80s, which there I can tell you feels like mid-90s over here.

The Portuguese government has declared an eight-day state of alert due to a high risk of wildfires, while the UK’s climate office has warned the heat could pose a risk to life in areas where air conditioning has never been necessary, ditto Ireland.

Ireland’s top meteorologist, Paul Downes, said that while extremely hot weather does occur within natural climate variability “the kinds of temperature extremes we are seeing in Europe are directly influenced by climate change.”

“June 2022 was Europe’s 2nd warmest on record, and the USA’s warmest.  The eight hottest Junes on record globally all occurred in the last eight years.”

--Finally, after years of delays, a 930,000-mile trip into space and months of speculation over what the James Webb Space Telescope’s first pictures might reveal, NASA on Tuesday released the first complete set of images captured by the $10 billion observatory and they met, nay, exceeded, expectations.

Sweeping scenes of stars in their infancy and in their final gasps, and views of the cosmos and the majestic objects in it.

“Every dot of light we see here is an individual star, not unlike our sun.  And many of these likely also have planets,” NASA astrophysicist Amber Straughn said while introducing an image of the Carina Nebula, a multihued landscape of gas and nascent stars.

“It just reminds me that our sun and our planets and, ultimately, us were formed out of the same kind of stuff that we see here,” she said.  “We humans really are connected to the universe. We’re made of the same stuff in this beautiful landscape.”

No doubt, in the next ten years we will find something extraordinary that unites the world in wonder, even if for a fleeting moment.

---

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

Pray for Ukraine.

God bless America.

---

Gold $1706
Oil $97.57

Returns for the week 7/11-7/15

Dow Jones  -0.2%  [31288]
S&P 500  -0.9%  [3863]
S&P MidCap  -0.7%
Russell 2000  -1.4%
Nasdaq  -1.6%  [11452]

Returns for the period 1/1/22-7/15/22

Dow Jones  -13.9%
S&P 500  -18.9%
S&P MidCap  -18.9%
Russell 2000  -22.3%
Nasdaq  -26.8%

Bulls 32.4
Bears 36.6

Hang in there.

Brian Trumbore

  

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