Week in Review

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Week in Review

08/06/2022

For the week 8/1-8/5

[Posted 8:00 PM ET, Friday]

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Edition 1,216

I did not believe House Speaker Nancy Pelosi should have traveled to Taiwan as she did this week given the timing.  With tensions already sky-high between Washington and Beijing, yes, this was poking the bear.  With China’s upcoming critical party congress, where it is expected Xi Jinping will gain an unprecedented third term, Pelosi could have waited until after our mid-term elections, which will be around the time of China’s political maneuvering, while she is still House Speaker, regardless of the results at the polls.  She clearly wanted to do this as a capstone to her career, and it would have been far more appropriate then.

Response was swift, and as part of it, Beijing is halting cooperation with the U.S. in several key areas including climate change, military talks and efforts to combat international crime, as it viewed the visit as a challenge to its claims of sovereignty over Taiwan.  China also announced it was sanctioning Pelosi and her family.

The measures were laid out by China’s foreign ministry on Friday. It said dialogue between U.S. and Chinese defense officials on all the above, including cooperation on returning illegal immigrants, was cancelled.

At last year’s climate summit in Glasgow, China vowed to work “with urgency” with the U.S. to cut emissions.  The two sides were also beginning to cooperate on efforts to fight the trade of illegal drugs such as fentanyl.

China accused Pelosi of “egregious provocations.”

Much more on China’s actions below in the ‘Foreign Affairs’ section.  But what we all should be wondering is how long China keeps up a pseudo economic blockade around Taiwan, and does it get more serious than that.

Editorial / The Economist, Aug. 2…published hours before Speaker Pelosi’s arrival on Taiwan…

“One way to view Nancy Pelosi’s trip to Taiwan is as a bold assertion of principle.  China has taken to bullying countries that maintain even the most innocent ties with the island, which it claims.  Lithuania, population 2.6m, has felt China’s wrath for simply allowing Taiwan to open an office with an official-sounding name in Vilnius, its capital.  Ms. Pelosi, the speaker of America’s House of Representatives, has been threatened, too. China says its army ‘will not sit idly by’ if she visits Taiwan – something she has every right to do, and that Newt Gingrich, her predecessor as speaker, did in 1997.  Perhaps her trip will inspire others to stand up to the bully.

“Another view, though, is that the trip is a symptom of America’s incoherent approach to China – the country’s single most important opponent in the long run.  If so, a trip designed to convey strength risks instead showing up the Biden administration’s confusion and lack of purpose.

“One problem is Ms. Pelosi’s timing.  To be sure, there are moments when America must confront China to make clear that it will assert its interests, press its rights and defend its values. But such moments are often fraught with the risk of escalation.  America should choose them carefully.

“This is a sensitive period for China’s leader, Xi Jinping, who faces big domestic challenges while preparing for a Communist Party congress at which he is expected to secure a third five-year term as the party’s leader, violating recent norms.  Mr. Xi has nurtured an aggressive form of nationalism and linked ‘reunification’ with Taiwan to his goal of ‘national rejuvenation.’  Now is a dangerous time to test his resolve just for the sake of it.

“Another problem is Ms. Pelosi’s apparent lack of coordination with Joe Biden. When asked about her plans, the president cited military officials who thought the trip was ‘not a good idea right now.’  Once it was leaked, he faced only bad options: bless Ms. Pelosi’s travels and risk a confrontation with China; or prevent her from going, caving in to Chinese threats (and opening himself up to Republican criticism).  True, Congress is a separate branch from the executive, but Taiwan policy is too important for turf wars.  In the end Ms. Pelosi has made Mr. Biden look irresolute and lacking in authority.

“Worst, Ms. Pelosi’s trip risks exposing how unsure the administration is of its Taiwan policy.  If, heaven forbid, the visit escalates into an international security crisis, the fault will lie with China.  But the situation will also test Mr. Biden and his team, who are already dealing with the war in Ukraine.  Are they prepared?

“Mr. Biden has vowed more than once to defend Taiwan from invasion, disregarding a long-held position of ‘strategic ambiguity’ under which past presidents purposely avoided definite commitments.  Some in Washington support this new clarity, especially as China grows more confident – and more capable of defeating America in a fight over Taiwan. But after each promise the president’s aides walk it back, turning strategic ambiguity into strategic confusion.

“America is right to want to defend Taiwan from invasion. The country is a pro-Western democracy of 24m people that plays an important role in the global economy, producing the world’s finest computer chips. It is also a pillar of the American-led order in the region. But declaring that intention does little to deter China, which already assumes America would protect the island.  If anything, the drawing of a clear line tells Mr. Xi how far he can go, encouraging the ‘grey zone’ tactics China uses to harass Taiwan… Rather than grandstanding, Mr. Biden should focus on preventing an invasion by improving Taiwan’s military capability….

“The Biden administration rightly notes that Ms. Pelosi’s trip does nothing to change the status quo.  Ms. Pelosi should try to do some good while she is there, by warning against both China forcefully occupying Taiwan and Taiwan embracing independence.  At the same time, she should voice energetic support for her Taiwanese hosts.

“China will respond, possibly with military action that could include sending warplanes over Taiwan or even firing missiles into waters off the island, as well as economic and diplomatic measures to isolate it further.  The Chinese response could play out over weeks and months, if not years.  Over that time, the real test of America’s commitment will not be headline-grabbing visits but whether it helps Taiwan become more resilient.”

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The Biden administration received some terrific economic news today, as the July jobs report showed the U.S. economy added a far-greater-than-expected 528,000 jobs in the month, meaning all the jobs lost in the wake of the pandemic had already been recovered. 

Much more on the economy to follow, but I’m guessing a lot of Americans aren’t exactly dancing around like Old Man Fezziwig just yet.

As an example, appearing on ABC’s “This Week,” pollster Frank Luntz was asked by host Jonathan Karl what the significance of West Virginia Sen. Joe Manchin’s deal with President Biden on a slimmed down Build Back Better would be; specifically, does it give Biden a lifeline when it comes to the midterms.

Luntz: “I have a simple question.  Are Americans better off today than they were two years ago? Are you nervous about filling your tank up with gas? We know that half of Americans can’t do it.  One out of five have returned food when they get to the cashier because they simply can’t afford it, that this is too much about Washington and not about the quality of life for the average individual.  I know that (President Biden) likes to argue whether inflation was transitory, and now he’s arguing over a recession. The fact is this sounds Orwellian.  Don’t argue over the words. If you can’t afford not just what you want but what you need, that is by definition a recession and people are suffering right now.”

Karl: “So you’re saying it’s not a big deal in terms of the impact on the midterms?  This is a major bill.”

Luntz: “But there’s advice to the president which is don’t argue over semantics, that’s my job as a language guy…and it’s really unseemly for the president to be fighting over the definition when people are genuinely suffering out there.”

Luntz, who I met long ago in a hotel bar in New Hampshire and had an interesting conversation with, went on to say…

“But you raise a very good point.  In the polling that was done by Gallup, more people have a negative opinion over the institutions that run this country than ever before, all time lows.

“And it’s not just the White House or Congress, Republican or Democrat. It’s the courts, the Supreme Court.  It’s healthcare.  It’s doctors.  It’s everybody right now.

“And, Jon, at a certain point, this fragile coalition that we call the United States, at a certain point it could come apart.

“I know you made fun of me for being a pessimist – well, sometimes pessimists are correct.

“I am pessimistic.  I’m afraid of credibility and I think we have to tell people the truth, and that’s why I go back to the recession.  Tell the people the truth. If they feel like they’re in a recession, they are.

“Well, it’s fascinating to me to watch Trump endorsing some candidates and Pence endorsing others that you feel like you already have 2024 happening right now.

“Look, it’s the reason why the public believes our democracy is broken, they believe that leadership is broken and, most importantly, they believe that you guys have to get something done, that Republicans and Democrats, it’s the one thing they agree on.”

Consumers aren’t about to start spending more because of a jobs report, and families have been paring back purchases of bigger ticket items for essentials.  Walmart and Best Buy have been telling us that.

Corporations are also not suddenly going to be increasing capital expenditures.

The Federal Reserve will keep tightening and profits are going to decelerate.  Confidence will not improve much, and I firmly believe energy prices will stage a vicious rebound in the near future.

Also, as I alluded to last week, the geopolitical situation is only going to get worse.  I have zero doubt North Korea and Iran will be initiating nuclear weapons tests, sooner than later, and we see what Russia and China are doing.

Just an opinion.

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I get into the significant primary action on Tuesday, including key wins for Donald Trump and the election deniers, down below, but we did have one leading issue, and it was a major victory for abortion rights, as Kansas voters by a 59 to 41 percent margin, rejected an effort to strip away their state’s abortion protections, in the first political test since the Supreme Court overturned Roe v. Wade in June.

For good reason the overwhelming support in a traditionally conservative state bolsters Democrats’ hopes that the historic Supreme Court ruling will animate their voters in what otherwise is going to be a blowout for Republicans.  No matter how you analyze the vote, the fact is turnout for the primary far exceeded other contests in recent years, with around 900,000 Kansans voting, according to an Associated Press estimate, or nearly twice the 473,438 who turned out in the 2018 primary election.

And Trump won the state by nearly 15 points.

As for the issue of election deniers winning their races, first-term Michigan Rep. Peter Meijer, one of 10 Republicans who joined Democrats to vote in favor of impeaching Trump after the Jan. 6, 2021, Capitol attack, lost his race to former Trump administration official John Gibbs.

“I’m proud to have remained true to my principles, even when doing so came at a significant political cost,” Meijer said in a statement.

Gibbs shares Trump’s penchant for conspiracy theories: He parroted Trump’s lies about a stolen election and once spread false claims that Hillary Clinton’s 2016 campaign chair participated in a satanic ritual that involved bodily fluids.

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Meanwhile, the war in Ukraine goes on….

--Saturday / Sunday….

Vladimir Putin signed a new naval doctrine which cast the United States as Russia’s main rival and set out Russia’s global maritime ambitions for crucial areas such as the Arctic and in the Black Sea.

Speaking on Russia’s Navy Day in the former imperial capital of St. Petersburg founded by Tsar Peter the Great, Putin praised Peter for making Russia a great sea power and increasing the global standing of the Russian state.

After inspecting the navy, Putin said in a speech he promised what he touted as Russia’s unique Zircon hypersonic cruise missiles, cautioning that Russia had the military clout to defeat any potential aggressors.

Shortly before the speech, he signed a new 55-page naval doctrine, which sets out the broad strategic aims of Russia’s navy, including its ambitions as a “great maritime power” which extend over the entire world.

The main threat to Russia, the doctrine says, is “the strategic policy of the USA to dominate the world’s oceans” and the movement of the NATO military alliance closer towards Russia’s borders.

Russia may use its military force appropriately to the situation in the world’s oceans should other soft power, such as diplomatic and economic tools, be exhausted, the doctrine says, acknowledging that Russia does not have enough navy bases globally.

Russia’s priority was to develop strategic and naval cooperation with India as well as wider cooperation with Iran, Iraq, Saudi Arabia and other states in the region, according to the doctrine.

“Guided by this doctrine, the Russian Federation will firmly and resolutely defend its national interests in the world’s oceans, and having sufficient maritime power will guarantee their security and protection,” the document said.

Putin’s speech did not mention the conflict in Ukraine, but the military doctrine envisages a “comprehensive strengthening of Russia’s geopolitical position” in the Black and Azov seas.

The doctrine also sets out the Arctic Ocean, which the United States has repeatedly said Russia is trying to militarize, as an area of particular importance for Russia.

Russia’s vast 23,400 mile coastline, which stretches from the Sea of Japan to the White Sea, also includes the Black Sea and the Caspian Sea.

--President Zelensky ordered all civilians still living in parts of eastern Donetsk region under Ukrainian control to evacuate.

Speaking during a late-night address from Kyiv, Zelensky warned of an intensification of fighting.

“The more people leave Donetsk region now, the fewer people the Russian army will have time to kill,” he said.

The region has seen heavy clashes amid a slow advance by Russian forces, who already control large parts of it.

Zelensky’s intervention comes as Russia invited UN and Red Cross officials to investigate the deaths of 50 Ukrainian prisoners of war in another part of Donetsk region held by Russian-backed separatists.

As I noted last time, the POWs were killed in unclear circumstances during an attack on a prison, with both sides trading blame.

Moscow says the attack was carried out by Ukraine using a U.S.-made HIMARS artillery system.

Kyiv alleges Russia fired on the facility to cover up evidence of war crimes.

The Red Cross said it hadn’t been invited in as yet.

Moscow’s UK embassy late Friday night tweeted that Ukrainian Azov battalion soldiers deserved a “humiliating death” by hanging.  It is the Azov troops, who fiercely defended the giant Azovstal steelworks before eventually being captured by Russia, who are said to be the victims of the bombing of the prison.

President Zelensky said the Red Cross had a duty to react after the shelling.

“It was a deliberate Russian war crime, a deliberate mass murder of Ukrainian prisoners of war,” he said in a video address.  “There should be a clear legal recognition of Russia as a state sponsor of terrorism.”

The Institute for the Study of War, a think tank based in Washington, said the competing claims and limited information prevented assigning full responsibility for the attack but the “available visual evidence appears to support the Ukrainian claim more than the Russian.”

The U.S. believes it was a “false flag” attack.

--Ukraine said the southern city of Mykolaiv suffered “massive” Russian bombardment Saturday night.  One of Ukraine’s richest men, Oleksiy Vadatursky, and his wife Raisa were killed.  Vadatursky, 74, owned Nibulon, a major agricultural firm.

The mayor of the city called the shelling “probably the strongest of all time.” There was damage to a hotel, a sports complex, two schools and a service station, as well as homes.

Mykolaiv is on the main route to Odesa and has been hit repeatedly.

--In Crimea, Sevastopol’s governor said Ukrainian forces struck the headquarters of Russia’s Black Sea Fleet in the Russian-held port city early on Sunday, wounding five members of staff.

Navy Day festivities there were canceled.

--Gazprom says it has suspended gas supplies to Latvia – the latest EU country to experience such action amid tensions over Ukraine.

The Russian energy giant accused Latvia of violating conditions of purchase, but gave no details of that alleged violation.

Latvia relies on neighboring Russia for natural gas imports, but its government says it does not expect Gazprom’s move to have a major impact.

Gazprom had cut gas deliveries to Europe via the Nord Stream pipeline the prior Wednesday to about 20% of its capacity.

--Deputy Ukrainian Prime Minister Vereshchuk warned that the parts of Donetsk region that remain under Ukrainian control will face severe heating problems this winter because of the extensive destruction of gas mains in the war. She called for a mandatory evacuation of residents of the region before the cold weather sets in.

--Separately, Sunday, Ukraine says it had killed 170 Russian troops in the past 24 hours.  And the military said it destroyed two Russian arms dumps in the Kherson area.

Ukraine has stepped up efforts to push the Russians out of Kherson, a major strategic city in the south.

--Monday / Tuesday….

Russia is repositioning troops to strengthen its hand in southern Ukraine, shifting forces from the front line in northern Donbas, according to the Ukrainian and British militaries, ahead of a planned Ukrainian offensive in the south.

Ukraine’s southern command said Russian battle groups were being deployed near Kryvyi Rih and Zaporizhzhia, southern Ukrainian cities that lie to the north of territory fully controlled by Moscow.

“Now the Russian army is trying to strengthen its positions in the occupied areas of the south of our country, increasing activity in the relevant area,” President Zelensky said in an overnight address.

The U.K.’s Defense Ministry said Russia was reallocating a significant number of troops and likely adjusting its Donbas offensive after failing to make a decisive breakthrough under a plan Moscow has followed since April.  “It has likely identified its Zaporizhzhia front as a vulnerable area in need of reinforcement,” the U.K. Defense Ministry said Monday.  [More on the import of Zaorizhzhiz below.]

--Kyiv’s military chief, Olesky Reznikov, called the most recent addition of Germany Mutliple Launch Rocket System known as MARS II, the “third brother in the Long Hand family,” after the U.S.-donated HIMAARS and the M270 Multiple Launch Rocket System, which both the U.K. and Norway have donated to Ukraine.

Ukraine received four more HIMARS from the U.S., with Reznikov tweeting separately on Monday: “We have proven to be smart operators of this weapons. The sound of the HIMARS volley has become a top hit of this summer at the front line!”

--Monday also saw Ukraine’s first shipment of grain since the invasion started, finally departing the city of Odesa, headed for Lebanon.  The Sierra-Leone-flagged ship, Razoni, is carrying an estimated 26,000 tons of corn as it heads to the Middle East, with a planned arrival sometime Wednesday.  But first, it must stop at Istanbul for inspection by the UN- and Turkey-brokered Joint Coordination Center, which is overseeing this new effort to get Ukraine’s grain to the world’s markets.

Ukraine said 16 other grain ships with 600,000 tons of foodstuffs are waiting to leave ports in and around Odesa in the coming weeks.

But the Ukrainian infrastructure minister said it will be months before grain exports from Odesa and nearby ports return to prewar levels.  Oleksander Kubrakov said he expected only five vessels to set sail in the next two weeks.

--Tuesday, Russian diplomat Alexander Trofimov said the conflict in Ukraine does not warrant Russia’s use of nuclear weapons, but Moscow could decide to use its nuclear arsenal in response to “direct aggression” by NATO countries over the invasion.

Speaking at a nuclear nonproliferation conference at the United Nations, Trofimov rejected “utterly unfounded, detached from reality and unacceptable speculations that Russia allegedly threatens to use nuclear weapons, particularly in Ukraine.”

Within days of Russia’s Feb. 24 invasion, Putin put the country’s deterrence forces – which include nuclear arms – on high alert, citing what he called aggressive statements by NATO leaders and Western economic sanctions against Moscow.

Trofimov, a senior diplomat in the arms control department of Russia’s foreign ministry, said Moscow would only use nuclear weapons in response to weapons of mass destruction or a conventional weapons attack that threatened the existence of the Russian state.

“None of these two hypothetical scenarios is relevant to the situation in Ukraine,” Trofimov said.

However, he accused NATO countries of a “fierce hybrid confrontation” against Russia that now “dangerously balances on the edge of open military clash.”

“Such a move would be able to trigger one of the two emergency scenarios described in our doctrine,” Trofimov said.  “We obviously stand for preventing this, but if Western countries try to test our resolve, Russia will not back down.”

Russia on Tuesday accused the United States of direct involvement in the war.

Moscow said it was responding to comments by a Ukrainian official about the way Kyiv had used U.S.-made and supplied HIMARS launchers based on what the official called excellent satellite imagery and real-time information.

Yeah, well, tough.

--Speaking of which, the U.S. will send Ukraine thousands more 155mm howitzer shells and HIMARS rockets in a new package of military aid, the White House announced.  The $550 million package, which includes 75,000 155mm rounds, will bring the total amount of military aid the Biden administration has provided Ukraine to $8.8 billion.

Ukrainian officials told CNN on Monday that the longer-range HIMARS have allowed them to hit Russian weapons storage sites in Kherson.  The Pentagon has also said the Ukrainians have used HIMARS to strike Russian surface-to-air missile sites.

--Wednesday thru Friday….

The U.S. accused Russia of using Ukraine’s biggest nuclear power plant as a “nuclear shield” by stationing troops there, preventing Ukrainian forces from returning fire and risking a nuclear accident.

Secretary of State Blinken said the U.S. was “deeply concerned” that the Zaporizhzhia plant, which Russia was accused of firing shells dangerously close to in March, was now a Russian military base used to fire on nearby Ukrainian forces.

“Of course the Ukrainians cannot fire back lest there be a terrible accident involving the nuclear plant,” Blinken told reporters after nuclear nonproliferation talks at the UN. 

Russia’s actions went beyond using a “human shield,” Blinken said, calling it a “nuclear shield.”

And then the head of the UN’s nuclear agency said the Zaporizhzhia nuclear plant is “completely out of control.”

“Every principal of nuclear safety has been violated,” the IAEA’s Rafael Grossi told the Associated Press.

Grossi said his team had been ready to visit the plant for the past two months, but has been unable to carry out the mission.

--Wednesday, German Chancellor Olaf Scholz said it could “make sense” to keep the country’s three remaining nuclear power plants open amid concerns over energy supplies from Russia.  The plants had been slated for closure by the end of the year.  Scholz’s comments came as he visited a turbine for the Nord Stream 1 pipeline.  Russia cited problems with the turbine as the cause of reduced gas supplies.  The European Union disputes the argument.

--The first shipment of grain reached Turkey and cleared inspection so it’s on to Lebanon.

But a section of Beirut’s massive port grain silos, shredded in the 2020 explosion, collapsed in a huge cloud of dust on Sunday after a weekslong fire, triggered by grains that had fermented and ignited in the summer heat.  The toppling of these structures sounded like an explosion, kicking up thick gray dust that enveloped the port next to a residential area.

Then Thursday, more of the silo structure collapsed.  It is not known how this impacted the incoming grain shipment, but I know that port area well and it has to be ongoing chaos.

--Ukraine said Russia had started creating a military strike force aimed at President Zelensky’s hometown of Kryvyi Rih, while NATO moved closer to its most significant expansion in decades as the alliance responds to the invasion.

Ukraine’s Southern Command said Russia is probing its lines of defense and seeking to break through and advance northwest toward Mykolaiv, a city under daily bombardment and which Russia tried to take early in the war.

--The U.S. Senate and the Italian parliament approved on Wednesday Finland and Sweden’s accession to NATO.  All 30 member states must ratify the move and this could take up to a year.

Russia has repeatedly warned Finland and Sweden against joining.

--A Russian judge on Thursday handed down an unthinkable nine-year prison sentence for WNBA star Brittney Griner, rejecting the player’s plea for leniency and her apology for “an honest mistake” in bringing less than a gram of cannabis oil into the country in February.

This is outrageous…all Vladimir Putin.

The White House has proposed swapping Russian arms dealer Viktor Bout, aka the “Merchant of Death,” for Griner and former security consultant Paul Whelan.  Whelan is serving a 16-year sentence of hard labor after being convicted of spying in 2020.  He says he was framed.

--Some commentary….

Daniel Yergin and Michael Stoppard / Wall Street Journal

“The second front has opened in the battle for Ukraine – an energy war in Europe. There’s no mystery about Vladimir Putin’s strategy. He laid it out at an economic conference in St. Petersburg in June; high energy prices, which bring hardship as they radiate through the European economy, which will create social turmoil, which will mean that people vote their pained pocketbooks.  This in turn will bring to power populist parties that will, to use his own language, change ‘the elites’ in Europe.

“The ultimate aim is to bring governments to power in Europe that aren’t committed to supporting Ukraine and thus fracture the Western coalition. The strategy is already at work.  Last month a right-wing party pulled out of Italy’s governing coalition, citing ‘the terrible choice’ that Italian families face ‘of paying their electricity bill or buying food.’  This forced the resignation of Prime Minister Mario Draghi, who in June had traveled to Kyiv to affirm Italy’s support for Ukraine.

“This energy war is about current prices but also a countdown to winter.  Will Europe have enough gas to fill its storage caverns and meet the elevated heating needs that come with cold weather?

“In 2021 Russia provided 38% of the European Union’s total gas consumption.  That trade was based on Russia’s (and before that the Soviet Union’s) billing itself as a reliable supplier of gas.  Whatever happened politically wouldn’t affect the flow through the pipeline; it was ‘purely business.’

“No longer….

“Today, Russia, invoking technical reasons, has cut the Nord Stream flow to as little as 20% of normal levels, sending prices up further.  Altogether as of this writing Russia has reduced its pipeline shipments to Europe by more than 70%.  The result is natural gas prices seven or eight times as high as normal for European customers, or the equivalent of $380-a-barrel oil.

“To make up for the shortfalls, Europe’s high prices have been acting like a magnet, pulling in imports of liquefied natural gas that would normally go to other parts of the world.  U.S. LNG exports typically flow mainly to Asia, but this year about two-thirds have gone to Europe.

“Europe is scrambling to secure new supplies.  Germany is fast-tracking LNG import facilities, which it never had before… A flurry of contracts have been signed to underwrite new U.S. LNG development.  But none of these new projects will be ready for this winter – or for the next.  Meantime, Germany is putting mothballed coal plants, slated for permanent shutdown, back in operation to spare gas that otherwise would go into electric generation. (Chancellor Olaf) Scholz, in an about-face this week, said it could ‘make sense’ to continue to operate Germany’s last three nuclear plants instead of shutting them down.

“The situation is likely to worsen in the next few months.  Russia will find more reasons to cut back on deliveries… An economic rebound in China, coming out of Covid lockdowns, or a cold winter in Asia, will set up a struggle with Europe for LNG supplies, which will further drive up prices….

“Europe’s winter natural-gas storage is about 67% filled.  It is the further fill that the Kremlin seeks to disrupt. This energy war will be affected by something distinct from politics.  As was the case with Napoleon’s advance into Russia in 1812 and Germany’s invasion of the Soviet Union in World War II, the outcome will hinge on the severity of the weather.  That is something neither Mr. Putin nor European leaders can control. But one thing on which they can all agree: Winter is coming.”

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Biden Agenda

--It was a good week for President Biden.  He received the economic news he needed, ahead of the midterms, including a continued fall in gasoline prices, now down $0.90 cents, nationally, since the peak on June 14 of $5.01 a gallon. 

Late Thursday, Senate Democrats then agreed to eleventh-hour changes to their marquee economic legislation, clearing the major impediment to pushing one of the president’s paramount election-year priorities through the chamber in coming days.

Sen. Kyrsten Sinema (D-Ariz.), a centrist seen as the pivotal vote in the 50-50 chamber, said in a statement that she had agreed to revamping some of the measure’s tax and energy provisions and was ready to “move forward” on the bill.

Senate Majority Leader Chuck Schumer (D-N.Y.), said he believed his party’s energy, environmental, health and tax compromise “will receive the support of the entire” Democratic membership of the chamber.

Schumer needs unanimity and Vice President Kamala Harris’ tie-breaking vote to move the measure through the Senate over solid opposition from the Republicans, who say the plan’s tax boosts and spending would worsen inflation and damage the economy.

Schumer is expecting the Senate to begin voting on the measure Saturday, after which it would begin its summer recess.  Passage by the House, which will pass it because of the Democrats’ majority, could come next week when the House returns briefly to Washington.

As usual, there are few details of the compromise, and other hurdles remain.  But final congressional approval would complete a rather astounding resurrection of Biden’s wide-ranging domestic goals, though in a far more modest form.

As in his original $3.5 trillion Build Back Better plan is down to about $400 billion.

What’s absurd is that Democrats and the president will be trying to sell the plan as an inflation fighter.  They will also tout how it addresses climate change and increases U.S. energy security.

Sinema said Democrats had agreed to remove a provision raising taxes on “carried interest,” or profits that go to executives of private equity firms.  That’s been a proposal she has long opposed, though it is a favorite of West Virginia’s Joe Manchin and many progressives. 

Instead, the carried interest provision will be replaced by a new excise tax on stock buybacks which will bring in more revenue than the alternative, or so we’re told.

Left unclear was whether changes had been made to the bill’s 15% minimum corporate tax.  That levy, which would apply to around 150 corporations with income exceeding $1 billion, has been strongly opposed by business, including by groups from Sinema’s Arizona.

Bottom line, this bill will change over the coming days.

--President Biden announced that the CIA carried out a drone strike over the weekend in Kabul, Afghanistan, which killed the leader of al-Qaeda, Ayman al-Zawahiri.  The entire U.S. intelligence community that cooperated on this mission deserves tremendous credit and it helps brings some closure to the families of the victims of 9/11.

Zawahiri and Osama bin Laden plotted the attacks together, and he was one of America’s “most wanted terrorists.”

Zawahiri had also masterminded other acts of violence, including the suicide bombing of the USS Cole naval destroyer in Aden in October 2000 which killed 17 U.S. sailors, and the 1998 attacks on the U.S. embassies in Kenya and Tanzania, in which 223 people died.

But the fact that this was carried out in Kabul raises serious questions, which I address below.

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Wall Street and the Economy

Before we get to today’s terrific jobs report, we had better than expected ISM figures on manufacturing for July, 52.8 vs. 53.0 prior, and the service sector, 56.7 vs. 55.3 in June. [50 the dividing line between growth and contraction.]

June factory orders were also better than expected, up 2.0%, while construction spending in the month was worse than forecast, -1.1%, owing to lower residential building.

But then we had the July labor report, 528,000, when the consensus was for more like 250,000, the unemployment rate ticking down to 3.5%, with 471,000 jobs added in the private sector, and 30,000 manufacturing jobs.  June’s number was also revised upward from 372,000 to 398,000.

So as I said last week, despite the two negative quarters of GDP in a row, we aren’t in a recession with such a powerful labor market.

But as Frank Luntz notes, that doesn’t mean a lot of Americans still don’t feel as if they’re in a recession, especially if your rent is up over 10%, and you’re dealing with sky-high food prices, and fuel prices still well over last year’s levels.

It’s just, again, how does this all shake out politically come November, and I would caution we have a long way to go before then.  Energy prices could easily reverse anew, and food prices are showing zero signs of falling in any big way.

As for the Federal Reserve, there was a key component of the jobs data that they will be focused on…average hourly earnings rose a stronger-than-expected 0.5% for the month and are up a substantial 5.2% year-over-year.  That’s good for workers, but it fits into fears of a wage-price spiral and for this reason and more…while we have a ton of economic data beforehand, like next week’s latest readings on inflation, when the Fed’s Open Market Committee next gathers in September (9/20-21), for today, another 75-basis point hike in the benchmark funds rate is back on the table…with 50bps a seeming certainty.

Europe and Asia

We had the PMIs in the eurozone for July, with the EA19 manufacturing figure in slight contraction mode, 49.8, but a 25-month low, and the service sector at 51.2, down from 53.0 in June.

Germany: 49.3 mfg; services 49.7
France: 49.5; 53.2
Italy: 48.5; 48.4
Spain: 48.7; 53.8
Ireland: 51.8; 56.3
Netherlands: 54.5 mfg.

UK: 52.1 mfg; 52.6 services

All of the manufacturing numbers were 25- to 26-month lows, except the Netherlands and Ireland at 20-mo. lows.

Chris Williamson / S&P Global

“The eurozone economic outlook has darkened at the start of the third quarter, with the latest survey data signaling a contraction of GDP in July.  Soaring inflation, rising interest rates and supply worries – notably for energy – have led to the biggest drops in output and demand seen for almost a decade, barring pandemic lockdown months.

“A much hoped-for surge in consumer spending after the easing of pandemic restrictions is being thwarted as households grow increasingly concerned about the rising cost of living, meaning discretionary spending is being diverted to essentials such as food, utility bills and loan repayments. At the same time, business spending is being subdued by increased caution and risk aversion amid the gloomier economic outlook.

“Some encouragement can be gleaned from the drop in price pressures signaled by the survey, which should feed through to lower inflation in the coming months.  However, this easing of inflation could fail to materialize if energy prices spike higher as we head towards the winter.  Companies are also concerned that energy restrictions may also potentially lead to further constraints on economic activity, leading to new supply problems and fueling further price hikes.”

Separately, industrial producer prices rose 1.1% in the euro area in June over May, but vs. June 2021… +35.8%!

Retail trade in June fell 1.2% from May, down 3.7% from a year ago.

Retail sales were down 8.8% in Germany year-over-year.

Meanwhile, the euro area unemployment for June was 6.6%, unchanged from May and down from 7.9% in June 2021.

Germany 2.8%; France 7.2%; Italy 8.1%; Spain 12.6%; Ireland 4.8%; Netherlands 3.4%; Greece 12.3%.

--The Bank of England raised interest rates by half a percentage point to 1.75%, in response to rising inflation, which the bank now expects to pass 13% (13.3%) this year.  The BOE also predicted a recession. 

It was the largest UK interest-rate hike in more than a quarter of a century; the bank warning inflation will still be 9% a year from now.

Tory rivals Rishi Sunak and Liz Truss, who are battling to replace Prime Minister Boris Johnson, have to deal with the inflation and recession and convince party members they are the best to tackle it.

Turning to Asia…China’s National Bureau of Statistics reported out its official government PMIs for July and manufacturing fell to 49.0 from 50.2, while non-manufacturing came in at 53.8 vs. June’s 54.7.

The private Caixin (small- and medium-sized businesses) manufacturing figure for July was 50.4 vs. June’s 51.7, with services at a solid 55.5 vs. 54.5.

Zhao Qinghe, senior statistician at the NBS, weighed in: “On the whole, the level of economic sentiment in China has fallen somewhat, and the foundation for recovery still needs to be solid.”

In a commentary published on Sunday, state news agency Xinhua warned the country to be “soberly aware that at present, the foundation of China’s economic recovery is still not sound, and it will take painstaking efforts to consolidate the momentum of improvement.”

“Due to the impact of factors beyond expectation such as the complex and severe international environment and the shock of the domestic epidemic situation, China’s economic operation still faces many risks and challenges.”

And you have the mortgage crisis, in an industry that represents about 70% of household wealth, housing.  The real estate crisis that first ensnared developers has taken another turn lately, with hundreds of thousands of homebuyers stopping mortgage payments on halted projects.

Yes, many Chinese hold mortgages on unbuilt properties, and when the developers stopped construction, they still demanded the mortgages be paid.  It’s nuts.

I haven’t seen a more recent figure, but by mid-July, wildcat boycotts spread to over 300 housing projects in about 90 cities, with loans up to $295 billion under threat, according to the South China Morning Post.

In Japan, the manufacturing PMI for July was 52.1, with non-manufacturing down to 50.3 from 54.0.

Importantly, June household (consumer) spending rose a better than expected 3.5% year-over-year, vs. the prior month’s -0.5% pace.

South Korea’s manufacturing number was 49.8, worst since Sept. 2020.

Taiwan’s manufacturing figure for July was 44.6, down from 49.8, and the worst since May 2020, as the pandemic was sweeping the globe.  Current tensions with China don’t help.

Street Bytes

--Stocks finished mixed, barely, as China concerns dominated Monday and Tuesday, with Pelosi’s visit, and then the market seemed to take comfort from the biggest live-fire exercises near, and over, Taiwan in over two decades.  Rather absurd.

On the week, the Dow Jones lost 0.1% to 32803, while the S&P 500 gained 0.4% and Nasdaq 2.1%. 

Nasdaq is up a whopping 19% off its June 16 closing low.

--U.S. Treasury Yields

6-mo. 3.04%  2-yr. 3.24%  10-yr. 2.82%  30-yr. 3.07%

Another incredibly volatile week in the bond market, with the 10-year yield trading down to 2.54% early on before the strong news on the economy and lots of Fed talk that, yes, they were going to keep raising interest rates, took the 10-year up nearly 30 basis points.

The inversion between the 2- and 10-year is a massive warning sign.

--The average cost of a gallon of regular unleaded gasoline sank to $4.11 on Friday, 52 straight days where the price has declined, amid shrinking global demand for oil.

Economic growth has slowed around the world, including in China, while demand data and consumer surveys also suggest Americans are driving less.

The global drop-off in oil demand has led to an improvement in oil supplies, resulting in lower oil and wholesale fuel prices.

This week, crude, as measured by West Texas Intermediate, collapsed nearly $10 to $88.53, the lowest level since before Russia’s invasion of Ukraine.

Separately, on Wednesday, OPEC and its allies agreed to a small increase in oil production following calls by the U.S. and other major consumers for more supply, but the symbolic move is expected to have a minimal impact on crude prices.

In their sixth meeting since Russia invaded Ukraine, sending oil prices soaring, members of the broader alliance, OPEC+, agreed to raise their collective production by 100,000 barrels a day in September, delegates said.

The alliance in June had agreed to boost output by 648,000 barrels a day in July and August.  Before that, OPEC+ rolled out monthly increases of 432,000 barrels a day as part of a plan agreed on last year to raise output to pre-pandemic levels.  That deal ends in August, although many members are producing below their allotted quotas.  Members will continue to coordinate on oil production at least until the end of the year, delegates said Wednesday.

--BP saw second quarter profit soar to $8.45 billion, its highest in 14 years, as strong refining margins and trading prompted it to boost its dividend and spending on new oil and gas production.

“The company is running well and it continues to strengthen.  We have real strategic momentum,” CEO Bernard Looney told Reuters.

Looney, who took office in 2020 with a vow to rapidly shift BP away from fossil fuels to renewables, said that the company will increase its spending on new oil and gas by $500 million.

--Walmart Inc. made waves again when it announced it was cutting hundreds of corporate roles in a restructuring effort, according to people familiar with the matter, a week after the retail giant warned of falling profits.  Around 200 jobs were being cut, the company confirmed, though it said it was investing in other areas.

Last week, Walmart warned its profit would decline in the current quarter and fiscal year because it was having to mark down apparel and other merchandise that has piled up in its stores.  Higher prices for food and fuel were causing U.S. shoppers to pull back on other categories that are more profitable, but now fuel prices have come way down.

--JetBlue Airways Corp. on Tuesday reported an adjusted loss of $0.47 per share, worse than the Street expected, though better than last year’s loss of $0.65 per share in the same quarter. 

The airline posted revenue of $2.44 billion, which also fell short, though was up from $1.5 billion a year ago.

The airline said higher fuel prices and short-term operational investments weighed on the company’s margins, although it anticipates becoming profitable for the first time since the pandemic.

Total operating expenses widened 89% to $2.56 billion year-on-year, including $910 million spent on fuel, up from $336 million a year ago.

Last week, JetBlue finally clinched a deal to acquire Spirit Airlines for at least $3.8 billion, after a tug-of-war with Frontier Airlines for the discount carrier.

--Boeing shares surged after over the weekend, federal regulators cleared the way for Boeing to restart deliveries of its 787 Dreamliner, which were paused more than a year ago because of quality concerns.

Boeing had submitted a plan to the FAA this spring to inspect and repair those issues, which the agency approved late Friday in a major milestone on the path to delivering the planes.

The Dreamliner is a twin-aisle plane commonly used for long international flights and is an important part of Boeing’s fleet.  It appeals to airlines in part because it is more fuel-efficient than older wide-body planes.  Earlier this year, American Airlines said that the delivery freeze had forced it to cut several international routes it had planned to fly this summer.

Boeing has about 120 Dreamliners currently in inventory, though it wasn’t known how quickly they can be cleared to ship to customers.

--British Airways is temporarily halting ticket sales on all domestic and European routes from London Heathrow Airport to cope with passenger restrictions at its primary hub, adding to the fallout from travel disruption seen across the industry this summer.

The suspension of ticket sales at one of Europe’s biggest airlines underscores the challenges confronting the aviation industry this summer.  Faced with a stronger-than-expected surge in demand, the industry is contending with staffing shortages that have led to canceled flights, long lines at security and check-in counters and regular delays to departures.

--TSA checkpoint travel numbers vs. 2019

8/4…87 percent of 2019 levels
8/3…87
8/2…86
8/1…90
7/31…92
7/30…93
7/29…87
7/28…87

--Caterpillar’s second-quarter results improved year-on-year boosted by higher prices and volume, but sales missed analysts’ expectations due to ongoing supply chain troubles and the hit from unfavorable currency conversions.

The heavy equipment manufacturer on Tuesday reported adjusted earnings of $3.18 per share, $1.67 billion, an increase from $2.60 a year earlier, and above the Capital IQ-polled consensus of $3.02. Total sales and revenue climbed 11% to $14.25 billion, but trailed the Street’s view for $14.39 billion.

CEO Jim Umpleby said on an earnings call, “Similar to previous quarters, our top line would have been even stronger, if not for supply chain constraints. We remain focused on executing creative solution to help mitigate our supply chain challenges.”

Sales in the construction industries segment gained 7% to $6.03 billion due to price increases, while resource industries jumped 16% to $2.96 billion on higher sales of aftermarket parts.

Sales in North America rose 18%, while Latin America logged a 27% sales increase.  Sales in Europe, Africa and the Middle East slipped 3% due to the currency impact, while Asia Pacific edged up 3%.

--Advanced Micro Devices reported better-than-expected earnings results Tuesday, but the company forecast less revenue than expected for the September quarter, sending the stock lower in after-hours trading, though it recovered.

AMD cited deteriorating demand in the overall PC market for its guidance.

For the second quarter, the semiconductor company reported adjusted earnings per share of $1.05, compared with the Street’s view of $1.03. Revenue came in at $6.6 billion, above consensus.  But AMD offered a range for current quarter sales that comes to $6.7 billion at the midpoint versus analysts’ estimate for $6.84 billion.

The good news was AMD’s server chip business is thriving, with second-quarter revenue from its data center segment growing 83% year-over-year during the June quarter.  Intel, by comparison, the previous week, reported a 16% Y/Y sales drop for its data-center server unit over the same period.

AMD added its next-generation server chip Genoa is on track to launch later this year and is positioned to take more market share from Intel.

But industry demand for computers has been softening.  Worldwide shipments for personal computers fell 15% in the June quarter from a year earlier, IDC reported last month.

--Starbucks’ quarterly earnings came in ahead of expectations for the first time this fiscal year, sending the coffee seller’s stock higher in late trading.

Starbucks said it earned 84 cents a share from revenue of $8.15 billion for the third quarter of its fiscal year.  Analysts were looking for earnings of 77 cents from $8.15 billion of revenue.

Net income of $912.9 million fell 21% from the previous year’s period.

Same-store sales were up 3% in the quarter, about in line with expectations, led by double-digit increases internationally.  That figure excludes China, where continuing pandemic-related restrictions led to a 44% decrease in comparable sales.  U.S. comp sales climbed 9%.

Membership in Starbucks’ U.S. rewards programs rose 13% in the U.S. from a year earlier to 27.4 million people.

The better-than-expected profit is a welcome change for the company, particularly as consumers begin shifting back to their pre-pandemic habits.

But the coffee-giant conceded increased employee wages, training and costs for ingredients hurt its store-level profit, though higher prices partially offset the growing costs.  Starbucks said prices are around 5% higher compared with a year ago.

Employees are set to make at least $15 an hour or receive a bump of 3% this year, the company said.

CEO Howard Schultz said that about 75% of U.S. company store sales now come from cold beverages, many of which customers order with added flavors and colors.

On the labor front, the National Labor Relations Board said on Tuesday that it had certified unions at 184 of Starbucks’ 9,000 stores, and recorded failed efforts to unionize at 29 locations.  The NLRB said 54 additional union elections are pending at Starbucks stores.

--Uber Technologies outlined an upbeat core profit outlook for the ongoing quarter as a jump in travel and delivery demand helped push the ride-hailing company’s second-quarter revenue above Wall Street’s estimates.

The company forecasts adjusted earnings before interest, tax, depreciation and amortization of $440 million to $470 million during the July-September period, higher than the consensus.  Uber anticipates gross bookings between $29 billion and $30 billion.

“We continue to benefit from a secular increase in the on-demand transportation of people and things, as well as a shift from retail spend to services spend,” CEO Dara Khosrowshahi said in a statement.  “We intend to continue capitalizing on these growth tailwinds in a profitable manner.”

For the three months ended June 30, revenue more than doubled year on year to $8.07 billion, beating consensus.  Trips were up 24% to 1.87 billion, exceeding pre-pandemic levels, Khosrowshahi said.

“Driver engagement reached another post-pandemic high in (the second quarter), and we saw an acceleration in both active and new driver growth,” he added.  “Against the backdrop of elevated gas prices globally, this is a resounding endorsement of the value drivers continue to see in Uber.”

--Not all auto manufacturers give out monthly sales figures these days, and I no longer am trying to keep up with everyone except quarterly, but I couldn’t help but notice Honda Motor said its U.S. vehicle sales totaled 71,235 units in July, down from 135,542 in the same month a year earlier.

Domestic car sales fell to 20,066 units in July from 51,815 a year ago, while truck sales declined to 51,169 units from 83,727 units over the same period.

I mention the results because I drive by my Honda dealership daily in doing my errands, a place where I have purchased or leased at least 11 straight vehicles over 30+ years (yikes), and I’ve never seen the lot as empty as it’s been; just a sign of the supply chain and logistics constraints the company talked about this week.

--Shares in luxury electric vehicle maker Lucid tanked after it announced it expected to ship 6,000 to 7,000 vehicles in 2022, after it guided in May for 12,000 to 14,000 units.

The company is blaming the supply chain: “Our revised production guidance reflects the extraordinary supply chain and logistics challenges we encountered,” said CEO Peter Rawlinson in the company’s news release.  “We’ve identified the primary bottlenecks, and we are taking appropriate measures.”

Lucid has 37,000 reservations.

--Robinhood said it will cut 23% of its workforce, as the company deals with a weak trading environment and a falloff in crypto trading.  The company had already announced a 9% reduction earlier this year but said that the trading environment has gotten even worse since then.

Robinhood reported a second-quarter loss of 34 cents that exceeded analysts’ expectations for 32 cents, and added just 100,000 net new customer accounts.  It’s monthly active users fell to 14 million, down by 1.9 million from the prior quarter.

The announcement came on the same day that Robinhood was fined $30 million by the New York State Department of Financial Services, which said that the company had failed to oversee its crypto platform to guard against money-laundering and cybersecurity issues.

--Marriott International said demand for travel is holding up and there are no signs yet of cracks beginning to form, even as travelers face surging costs and concerns over economic growth.

“We are not seeing any signs of any demand pullback at this point,” finance chief Leeny Oberg said in an interview with the Journal.  “People want to get out there and travel.”

In the U.S., Americans are seeking out leisure travel after years of deferred trips, she said.  Businesses, too, are setting up trips, either to create in-person connections among remote workforces or to re-establish and firm-up client relationships.

With more than 8,100 properties globally, Marriott reported a roughly 70% jump in second-quarter revenue to $5.34 billion, topping expectations.

Travel to major cities, which lagged behind the recovery in resort destinations earlier this year, is beginning to bounce back.  [The Mets were playing the Nationals in Washington, D.C., this week and Met announcer Gary Cohen gave lots of anecdotal evidence on this comeback.]  Marriott’s hotels in Washington, San Francisco, Los Angeles and New York all saw occupancy in the quarter come in between 76% and 86%, CEO Tony Capuano said on the company’s earnings call.

In the U.S. & Canada, group travel, which has been slower to return than leisure travel, came in just 1% lower than 2019 levels for June.  In the first quarter, group travel in the region was nearly 30% lower than before the pandemic, Capuano said.

--Kellogg on Thursday raised its profit and sales outlook for its fiscal year after second-quarter results exceeded analysts’ expectations, despite a challenging supply and cost environment.

Organic net sales are anticipated to rise 7% to 8%, up from 4% earlier, based on global momentum in snacks and emerging markets, the company said.

Adjusted EPS advanced to $1.18 in the three months ended July 2 from $1.14 a year earlier, while sales increased 8.7% to $3.86 billion, surpassing consensus.

Sales in North America climbed 12% to $2.25 billion, boosted by higher prices, volume growth and a faster-than-expected recovery in the cereal business.  [Your editor has been eating more cereal recently…Special K…I’m hoping for an endorsement contract.]

--Restaurant Brands International second-quarter results surpassed analysts’ estimates as strength in international operations helped shrug off weakness in the U.S., where consumers are grappling with decades-high inflation levels. 

RBI is the parent of Burger King, whose comparable sales grew 10% - driven by an 18% jump in international markets – versus a 4% headline rise expected by analysts.  The fast-food chain’s U.S same-store sales inched 0.4% higher.

Popeyes Louisiana Kitchen’s comp sales slipped 0.1% in the U.S., but the brand’s strength in the rest of the world and a double-digit gain at Tim Hortons Canada helped drive a 9% global advance for the company.

CEO Jose Cil said on an earnings call that American consumers are “feeling a ton of pressure,” like inflation and rising interest rates.

--Average apartment rents rose 9.4%, nationally, in the second quarter compared with Q2 in 2021,according to data firm CoStar Group.  While that is high by historical standards, it is down from the more than 11% annual increases seen the previous two quarters, CoStar said.

CoStar projects that rent growth will continue to slow in the coming months, finishing the year 6.2% higher than last year.

The markets that saw the country’s fastest-growing rents – such as Phoenix, Las Vegas and Tampa, Fla. – are now slowing the fastest.

--U.S. crypto firm Nomad was hit by a $190 million theft, blockchain researchers said on Tuesday, the latest such heist to hit the digital asset sector this year.

San Francisco-based Nomad said it was “aware of the incident” and was investigating.

Nomad, which makes software that connects different blockchains, raised $22 million last week from investors including major U.S. exchange Coinbase Global.

--The New York Times’ Benjamin Mullin had a report on CNN, part of Warner Bros. Discovery, and its plummeting ratings.  The Times notes that S&P Global Market Intelligence puts CNN’s profitability at $956.8 million this year, which would mark the first time since 2016 that the network had dipped below $1 billion in profit.

So the network, and new CNN chairman Chris Licht, is looking for new revenue sources (after jettisoning the streaming venture, CNN+).

CNN’s parent, at the same time, is cracking down on expenses.

On the ratings front, CNN has drawn an average of 639,000 people in prime time this quarter, according to Nielsen, a 27 percent decrease from a year ago.  It trails MSNBC, which is down 23 percent during the same period, and Fox News, where viewership is up about 1 percent.

CNN has spent millions covering the war in Ukraine, and the network is still paying some costs associated with CNN+, such as the salaries of high-profile journalists like Chris Wallace and Audie Cornish, which have also weighed on the bottom line.

The bulk of CNN’s revenue comes from long-term subscription deals with cable companies and from traditional TV advertising revenue, and as Steve Cahall, a senior analyst at Wells Fargo, told the Times, when those advertisers make spending decisions, they are concerned primarily with total audience size.  Kind of simple.

As for parent Warner Bros. Discovery, the stock tumbled 16% today after the company posted disappointing financial results.

The Pandemic

--The Atlantic’s Science writer Katherine J. Wu on where America’s Covid-19 situation sits today.

Wu: “Things are not great… Based on the patterns of cases that we’re seeing, it’s pretty clear that we’re at a very high level, probably comparable to what we were seeing in terms of caseloads this past winter – among the worst caseloads of the pandemic.

“It is true that hospitalization and death rates are down, but the more people you have infected, even a very small percentage can turn into an untenable number of hospitalizations and deaths.  And every infection carries the risk of long Covid, or taking people away from school or work for their family.  And the worrisome thing is, for the past few months, we’ve been at this bizarre plateau in terms of case counts not really coming back down and looking better.”

On the issue of the Biden administration’s messaging:

“I think the main thing is to stop with the vaccine monomania.  Don’t get me wrong: Vaccines are necessary for this response, but not sufficient.  It’s been bizarre to watch the Biden administration say ‘Get boosted right now’ while also loosening guidance around gathering, masking, and distancing, and claiming that America can practically declare independence from the virus.  These things don’t match up.

“We need multiple approaches to reduce transmission. It’s going bonkers right now, and this not a sustainable way to coexist with this virus.  I’m not saying that people need to have mask mandates forever, but when transmission rates are this high, it is a good idea to think about masking, to think about testing more often, paying attention to who is up-to-date on their vaccines and making sure that our approaches are complementing each other. We still have huge issues with access to Paxlovid, access to tests, access to everything. “

--So last weekend, President Biden tested positive again and was diagnosed with a “rebound” case.  As of Friday, he was still in isolation (despite his public appearance on a balcony or patio at the White House).  The case highlights the confusion around guidance from the Centers for Disease Control and Prevention advising people when they should come out of isolation after testing positive for the virus.  The CDC recommends people isolate for at least five days after testing positive and wear a mask for 10 days, but does not require a negative test to end isolation.

--According to a USA TODAY analysis, in July, more than 12,500 Americans died of Covid-19.  Spread over the course of the year, David Dowdy, epidemiologist at the Johns Hopkins Bloomberg School of Public Health, said a bad flu season in the USA could see more than 50,000 deaths.

That doesn’t mean Covid-19 mortality has reached that of flu, he said, as peak flue season lasts only about three months.  Spread over the course of the year, Dowdy said, there would be about four times as many Covid-19 deaths than flu deaths.

“Covid-19 is “like having to live in flu season year round, and that’s not what we do with the flu,” he said.  “If we had to do that with the flu, we’d be instituting more measures than what we do.”

--New York’s rat problem is soaring, and people are blaming outdoor dining, which makes perfect sense. 

According to city data, through July 31 there have been more than 16,000 rat sightings, compared to just under 14,000 in the same time frame last year.  In both 2020 and 2019, there were about 16,000 documented rat sightings for the full year.

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

World…6,432,913
USA…1,058,387
Brazil…679,758
India…526,600
Russia…382,651
Mexico…328,128
Peru…214,480
UK…185,052
Italy…172,904
Indonesia…157,072
France…152,537

Canada…42,681

[Source: worldometers.info]

U.S. daily death tolls…Mon. 228; Tues. 526; Wed. 488; Thurs. 331; Fri. 333.

Foreign Affairs, part II

China: In response to House Speaker Pelosi’s trip to Taiwan on Tuesday and Wednesday, China’s military added a day and a live-fire zone to its previous four-day plan with six danger zones for nearby aircraft and naval vessels, according to Taiwan’s Maritime Post Bureau.  The new plans would make China’s drills “the largest ever around Taiwan,” according to the Japan Times.

Already, China has launched nearly a dozen ballistic missiles (11 Dongfeng series missiles) into the waters around Taiwan, including to the southwest and northeast of the island, according to Taiwan’s military.  In an apparent new first, Japan’s defense ministry said five of those ballistic missiles landed near Hateruma Island, in Japan’s exclusive economic zone (extending 200 nautical miles off the coast).  Four of the missiles flew over Taiwan’s capital city of Taipei, according to the Japan Times, reporting Thursday, as well as Taiwan’s defense ministry; a first.

The People’s Liberation Army (PLA) said it conducted precision strikes.

“The entire live ammunition launch training mission has been successfully completed, and the relevant sea and airspace control has been lifted,” the PLA’s Eastern Theatre Command said.

Chinese defense ministry spokesman Tan Kefei said the drills were clearly targeting collusion between Taiwan and the United States.

“The Chinese military will do what they have said,” Tan said in a statement.  “The collusion between Taiwan and the U.S. will only plunge Taiwan into a deep disaster and bring serious harm to Taiwan compatriots.”

Certainly, the exercises could be a practice for a future invasion.  One Chinese general, Maj. Gen. meng Xiangqing, said nearly as much in a televised interview Wednesday, according to the New York Times.  “It should be said that although this is an exercise resembling actual combat, it can at any time turn into real combat,” he warned.

For now, the short-term blockade of Taiwan seems to be just that, short term.  But next time China could extend it to last weeks, effectively closing off Taiwan’s ports for months or until they get concessions or invade.  This is how an invasion could begin, experts seem to agree.

Analysts also suggested Beijing had backed itself into a corner with its initial heightened rhetoric, and would have to demonstrate a much larger than usual show of force if it didn’t want to lose credibility.

Aside from the missile strikes, People’s Liberation Army (PLA) warplanes flew into Taiwan’s air-identification zone, while several cyberattacks also struck Taiwan, targeting websites of the defense ministry and briefly taking them offline.

For its part, Taiwan said on Thursday it is “preparing for war without seeking war.”

China designated six areas encircling Taiwan, with warnings for all ships and aircraft to avoid the areas. Some of the zones overlap with Taiwan’s territorial waters, and are near key shipping ports.  Taiwan’s defense ministry has accused China of in effect mounting a blockade with its actions.  Flights and ships were still able to arrive in Taiwan, but had reportedly been advised to find alternate routes.

Pelosi, in her visit, said solidarity with Taiwan was “crucial” in facing an increasingly authoritarian China.

“Our delegation came to Taiwan to make unequivocally clear we will not abandon Taiwan, and we are proud of our enduring friendship.”

The Speaker added, as she met with Taiwan’s president, Tsai Ing-wen: “(The U.S.) is committed to the security of Taiwan…but it’s about our shared values of democracy and freedom and how Taiwan has been an example to the world… Whether there are insecurities of the president of China relating to his own political situation I don’t know.”

Ahead of Pelosi’s arrival, Hu Xijin, the prominent former editor-in-chief of the Global Times, a Communist Party mouthpiece, suggested in a since-deleted tweet that Chinese warplanes could “forcibly dispel Pelosi’s plane,” after President Xi told Joe Biden in their phone call last week that “whoever plays with fire will get burned.”

House Speaker Nancy Pelosi / Washington Post

“Our visit – one of several congressional delegations to the island – in no way contradicts the long-standing one-China policy, guided by the Taiwan Relations Act of 1979, the U.S.-China Joint Communiques and the Six Assurances.  The United States continues to oppose unilateral efforts to change the status quo.

‘Our visit is part of our broader trip to the Pacific – including Singapore, Malaysia, South Korea and Japan – focused on mutual security, economic partnership and democratic governance.  Our discussions with our Taiwanese partners will focus on reaffirming our support for the island and promoting our shared interests, including advancing a free and open Indo-Pacific region.  America’s solidarity with Taiwan is more important today than ever – not only to the 23 million people of the island but also to millions of others oppressed and menaced by the PRC….

“The CCP’s (Chinese Communist Party’s) brutal crackdown against Hong Kong’s political freedoms and human rights – even arresting Catholic Cardinal Joseph Zen – cast the promises of ‘one-country, two-systems’ into the dustbin.  In Tibet, the CCP has long led a campaign to erase the Tibetan people’s language, culture, religion and identity.  In Xinjiang, Beijing is perpetrating genocide against Muslim Uyghurs and other minorities.  And throughout the mainland, the CCP continues to target and arrest activists, religious-freedom leaders and others who dare to defy the regime.

“We cannot stand by as the CCP proceeds to threaten Taiwan – and democracy itself.

“Indeed, we take this trip at a time when the world faces a choice between autocracy and democracy.  As Russia wages its premeditated, illegal war against Ukraine, killing thousands of innocents – even children – it is essential that America and our allies make clear that we never give in to autocrats.

“When I led a congressional delegation to Kyiv in April – the highest-level U.S. visit to the besieged nation – I conveyed to President Volodymyr Zelensky that we admired his people’s defense of democracy for Ukraine and for democracy worldwide.

“By traveling to Taiwan, we honor our commitment to democracy: reaffirming that the freedoms of Taiwan – and all democracies – must be respected.”

Editorial / Washington Post

“Successful foreign policy combines high principle with smart, timely execution.  Tuesday’s visit to show solidarity with Taiwan by House Speaker Nancy Pelosi demonstrated the former – but not the latter.  The foreseeable reaction from China, which considers Taiwan a wayward province, is underway – including the announcement of provocative naval live-fire exercises in the island’s territorial waters after Ms. Pelosi’s visit ends.  President Biden must limit the short-term damage and counter a likely increase in long-term Chinese pressure on Taiwan.

“Of course we share Ms. Pelosi’s strong support for democratic Taiwan, her condemnation of the Chinese communist dictatorship and her belief, as she put it in an op-ed for The Post, that ‘it is essential that America and our allies make clear that we never give in to autocrats.’  What we do not comprehend is her insistence on demonstrating her support in this way, at this time, despite warnings – from a president of her own party – that the geopolitical situation is already unsettled enough.  However much the 82-year-old Ms. Pelosi might want a capstone event for her time as speaker – before a likely GOP victory in November ends it – going to Taiwan now, as President Xi Jinping of China is orchestrating his third time, was unwise….

“The top global priority for the United States now is Russia’s war in Ukraine and its accompanying fallout in global food and energy markets.  The Biden administration can ill afford any distractions, much less a repeat of the 1995-96 Taiwan Strait Crisis, which many Americans have forgotten, but which lasted eight months and two days.  It began with Chinese missile firings off Taiwan in retaliation for a symbolic gesture – a visit by Taiwan’s president to Cornell University – and did not ease until after the Clinton administration mounted an enormous deterrent naval deployment.

“China ultimately backed off.  The Biden administration is now in the position of having to hope it can similarly maintain both peace and Taiwan’s territorial integrity against a China that is vastly stronger than it was a quarter-century ago and led not by the cautious Jiang Zemin but by the aggressive Mr. Xi.  U.S. officials, and Ms. Pelosi, have communicated that her trip implies no change to the United States’ one-China policy.  In a deterrent mode, the president has deployed a carrier group east of Taiwan.

“The United States must never sacrifice its principles or cave to Chinese threats.  All the more reason to prepare carefully where and when to confront China. No thanks to Ms. Pelosi, the Biden administration finds itself forced to react and improvise instead.”

Editorial / Wall Street Journal

“House Speaker Nancy Pelosi landed in Taipei without incident Tuesday night, local time, and we can be grateful for that.  But the bigger test will come after the visit, and not only based on what China does in response….

“Those who say this was the ‘wrong’ time to visit can’t tell us when would be a ‘right’ time that Beijing would tolerate. The Biden administration was also smart to have military assets nearby the island in case of trouble.

“On Tuesday Beijing responded with rhetorical fury and unspecified military threats, but no direct military engagement.  That could change in the days ahead, as the core complaint in the Chinese Ministry of Foreign Affairs statement is that the Pelosi visit is an attempt ‘by the Taiwan authorities and the United States to change the status quo’ over the island.

“But if anyone is attempting to change the status quo, it is Chinese President Xi Jinping, who seems intent on unifying Taiwan and China on his watch.  China has agreed in numerous communiques over five decades that any reunification must be peaceful.  But now China is sending every signal that it is willing to retake the island by force if necessary.

“The problem for Mr. Xi is that the more authoritarian he has become at home and abroad, the less the Taiwan people want to join the Mainland.  Mr. Xi’s decision to violate China’s treaty with Britain and crush the autonomy it promised to Hong Kong was a watershed moment in Taiwan.  It turned a majority against the opposition Kuomintang party that wants closer ties to the Mainland.

“China’s reaction to the Pelosi visit should concentrate minds in Taipei and the U.S. about moving urgently to buttress the island’s defenses.  Arms deliveries need to move faster, and of the kind that would do the most to deter a potential invasion. The U.S. and its allies also need to prepare in case China begins to employ a strategy of gradual economic strangulation or quarantine.

“This will require creative thinking and fortitude because China is making its intentions all too clear.  The Taiwan crisis looms.”

Editorial / New York Post

“At a time of global American retreat, it’s refreshing to see some real toughness in foreign policy: House Speaker Nancy Pelosi’s trip to Taiwan.

“She landed on the island Tuesday, brushing aside a campaign of threats from Beijing, Chinese plane movements against Taiwanese airspace and cyberattacks on key Taiwanese government websites and the country’s largest airport.

“That’s good news for our ally and for the larger American project.

“Simply going ahead with the visit is powerful defiance of Xi’s murderous, hegemonic ambitions and a resounding restatement of (in Pelosi’s words) ‘America’s unwavering commitment to supporting Taiwan’s vibrant democracy.’

“And the Taiwanese people know it….

“Beijing, naturally, called the visit ‘a major political provocation’ as it threatened to encircle the country with troops for live-fire exercises.

“On the contrary: It’s a move both morally and strategically necessary….

“If only Biden hadn’t suggested ‘it’s not a good idea right now.’ This was simply siding with free people against a tyranny’s bluster.

“As the speaker wrote in a Washington Post op-ed concurrent with her trip, ‘America’s solidarity with Taiwan is more important today than ever – not only to the 23 million people of the island but also to millions of others oppressed and menaced by the PRC.’

“Amen.”

Iran: Officials are now speaking openly about something long denied by Tehran as it enriches uranium at its closest-ever levels to weapons-grade:  The Islamic Republic is ready to build an atomic weapon at will.

Negotiators from the U.S. and European Union, along with representatives from Russia and China, are holding last-ditch talks in Vienna this weekend to revive Tehran’s tattered nuclear deal amid the new pressure, as analysts warn, Iran could reach a point like North Korea did some 20 years ago where it decides having the ultimate weapon outweighs any further international sanctions.

Last month, Kamal Kharrazi, an adviser to Supreme Leader Ayatollah Ali Khamenei, told Al-Jazeera: “In a few days we were able to enrich uranium up to 60% and we can easily produce 90% enriched uranium. …Iran has the technical means to produce a nuclear bomb but there has been no decision by Iran to build one.”

The Islamic Revolutionary Guard Corps (IRGC) recently published a video on its Telegram channel titled “When Will Iran’s Sleeping Nuclear Warheads Awaken.”  The short video declares that Iran’s regime will develop nuclear weapons in a rapid-fire period of time “if the U.S. or the Zionist regime make any stupid mistakes.”

Per Iran International, the video states that Iran’s ballistic missiles have the capability of “turning New York into hellish ruins,” in an ostensible reference to Iran’s space program.

“The nuclear facilities of Fordow have been built deep under mountains of Iran and are protected against trench-busting bombs and even nuclear explosion…all infrastructures required for nuclear breakout have been prepared in it,” the video said.

The news organization paraphrased the video as stating that “the facilities at Natanz may be highly vulnerable to a possible attack by Western powers and Israel but Fordow will immediately assume war footing and begin the nuclear breakout project within a short time if Natanz comes under missile attack.”

EU foreign-policy chief Josep Borrell, who chairs the negotiations, last week said that he had circulated a final draft text to the parties and that a decision was needed quickly on whether Iran and the U.S. would accept it.  There was no more room to craft compromises on the text, he said.

The Western official said that an agreement would need to be found by this weekend.  If negotiators reach a consensus, foreign ministers would then be called upon to come to Vienna to approve it, the person said.

The U.S. special envoy for Iran, Robert Malley, said “expectations are in check” ahead of the meeting.

A final agreement has proved elusive on several key points, including an Iranian demand that Washington lift terror sanctions on Iran’s elite military Revolutionary Guards Corp.  President Biden has vowed not to do so.

Iran has supposedly agreed to set aside its demand to remove the U.S. terror listing on the IRGC, but it is still calling for stronger guarantees that Washington won’t abandon the pact again or reimpose sanctions on Tehran.

Afghanistan: The drone that killed Ayman al-Zawahiri in Kabul Sunday morning also struck a humiliating blow for the Taliban regime, after it had hosted the al-Qaeda leader in the heart of the capital for months but failed to keep him safe.

Just as the Taliban was preparing to celebrate its first year in power later this month, the attack has sparked a nationalistic backlash against the regime at home and taunting comments on social media for revenge against the United States.

Now, some Afghan and American analysts said, the drone strike may harden Taliban attitudes and push the regime toward an open embrace of the extremist forces it pledged to renounce in its 2020 peace deal with the United States.

A Taliban spokesman described the U.S. operation as a clear violation of international principles – but did not mention Zawahiri.

Editorial / Washington Post

“Twenty-one years ago, nearly 3,000 Americans lost their lives by death from the air – passenger jets hijacked and turned into missiles on 9/11.  On Sunday morning, a mastermind and architect of that terrible day stood on a third-floor balcony in an upscale district of Kabul and death visited from the air. The targeted assassination by the CIA of Ayman al-Zawahiri closes a chapter in the long pursuit of Osama bin Laden’s partner in terrorism.  But it also offered a sobering and grim suggestion of what the present and future hold just one year after the Taliban returned to rule in Afghanistan.

“Zawahiri was traced to a safehouse in the Afghan capital, where he lived with his family. According to a senior administration official who briefed reporters, once he entered the house, he didn’t leave again, but he was spotted by the CIA on the balcony.  The intelligence agencies built a model of the house and took it to the White House Situation Room for meetings with President Biden, emphasizing a plan to take out Zawahiri without harming civilians.  The officials said that Hellfire missiles killed Zawahiri and no one else, an operation entirely without American boots on the ground, fulfilling a pledge Mr. Biden made a year ago amid the chaotic withdrawal of U.S. forces from Afghanistan that counterrorism efforts would remain vigilant, over-the-horizon and effective.

“But what was Zawahiri doing on Afghan soil in the first place, sheltered in a building owned by a top aide to senior Taliban leader and interior minister Sirajuddin Haqqani?  This indicates the terrorist chief had Taliban protection… How many more al-Qaeda operatives are nestled in Kabul’s residential districts?  After the attacks of Sept. 11, 2001, the U.S. goal was to deny al-Qaeda a haven in Afghanistan.  Now, it is back – and seemingly safe.  This was a blatant violation of the Doha agreement that led to last year’s withdrawal, under which the Taliban pledged to neither cooperate with international terrorist groups nor host them or their individual members.

“Zawahiri’s presence is another sign – among many – that the new Taliban regime is no better and is perhaps worse than the one that ruled during the 1990s.  The economy is in free fall.  Upon the exit of the United States last year, the Taliban vowed that, within interpretation of sharia law, there would not be discrimination against women, which was brutal and rampant before.  But in action, the Taliban has removed women from key decision-making bodies, banned women from acting in films, stopped some 850,000 Afghan girls from attending secondary school, and imposed on women the requirement for a male family escort, among other measures, according to a recent United Nations report. Women are again being beaten for not having a male escort and ordered to wear all-encompassing clothes that reveal only their eyes.

“This is what Mr. Biden’s disorderly withdrawal has wrought, the return of a Taliban that presents old risks and will certainly bring new dangers to the people of Afghanistan and beyond.  At least in the case of Zawahiri, justice was done.”

Separately, there have been reports over the past few months that terrorists of all stripes have been flooding back into Afghanistan.

Kosovo / Serbia: Russia’s Foreign Ministry said Kosovo was working with the U.S. and European Union to threaten its Serbian minority, conjuring up memories of the Balkan conflicts of the 1990s, particularly the 1999 Kosovo War, when the U.S. mobilized NATO and the international community to drive Serbia out of its southwestern neighbor.

This was a defining moment for a younger Vladimir Putin, with some theorizing that he has long wanted revenge on the West for what it did in 1999.  The war in Kosovo was the height of U.S. power and hegemony in the 1990s, when it was doing humanitarian intervention and acting as a global policeman.

Serbia was on high alert Sunday night following a border episode, which Russia accused the U.S. and EU of provocations.

“The decision of the ‘authorities’ in Pristina [capital of Kosovo] to start applying unreasonable discriminatory ‘rules’ on the forced replacement of personal documents and numbers of local Serbs from August 1 is another step towards the expulsion of the Serbian population from Kosovo,” Foreign Ministry Director Maria Zakharova said, according to Izvestia.

“Kosovar leaders know that the Serbs will not remain indifferent when it comes to a direct attack on their freedoms, and they deliberately escalate in order to launch a military scenario,” she said.  “Of course, Belgrade is also at the forefront of the attack, which the West wants to additionally ‘neutralize’ with Kosovo Albanian hands.”

Gunfire was reported near the border.  After the Kosovo War, many Serbs fled the country, but a sizable minority remained, and they remain to this day.

Kosovo, which declared independence from Serbia in 2008, has been recognized by more than 100 countries, including Israel in 2020, followed by normalization procedures in 2021.

The current crisis on the border may stem from attempts by Kosovar authorities not to recognize documents held by Serbs and to stop the use of license plates used by the Serb minority.

Serbian President Aleksandar Vucic has condemned the Kosovo government over this issue in the past.  Pristina’s goal is to “expel Serbs, especially from the north of Kosovo…,” he said, comparing this to the expulsion of Serbs from Croatia in 1995 during Operation Storm.

Putin, who came to power in the wake of the 1999 conflict, still remembers the confrontation between Russia and NATO forces over Pristina International Airport on June 12, 1999. The defeat of Serbia by U.S. forces in that year was humiliating for Moscow, which had wanted to save face at Pristina.

So does Serbia want a new war?

Random Musings

--Presidential approval ratings….

Gallup: 38% approve of President Biden’s job performance, 59% disapprove; 32% of independents approve (July 5-26).  Worst #s of the Biden presidency.

Rasmussen: 43% approve of Biden’s performance, 55% disapprove (Aug. 5).

--The aforementioned Kansas result on abortion suggested that anger over the Supreme Court’s June decision could help Democrats to galvanize voters at a time when many Americans are blaming President Biden’s administration for soaring gasoline and food prices, though the former has come down sharply.

But at the same time, in the key battleground state of Arizona, state Rep. Mark Finchem won the Republican nomination for secretary of state, a position that would give him enormous sway over the conduct of elections should he prevail against his Democratic opponent in November.

Finchem was present at Trump’s Jan. 6, 2021, speech that preceded the attack on the Capitol and has continued to assert that the former president won the 2020 election.

In Michigan, Tudor Dixon, a conservative commentator who has echoed Trump’s election claims, won the Republican nomination for governor and will face Democratic Governor Gretchen Whitmer in one of the most high-profile races this November, which will also revolve around abortion rights.

Kansas Attorney General Derek Schmidt, endorsed by Trump, secured the Republican nomination for governor.  He will face Democratic Governor Laura Kelly in November in what is expected to be a close race.

Blake Masters, a former tech executive who has backed Trump’s false fraud claims, secured the Republican nomination in the Arizona Senate race, and will face Sen. Mark Kelly, seen as one of the most vulnerable Democratic incumbents.  Masters, aside from having Trump’s endorsement, has the backing of tech billionaire Peter Thiel.

Arizona voters were picking between Trump-backed gubernatorial candidate Kari Lake and Karrin Taylor Robson, who has the backing of Mike Pence, and Lake won it by less than 3 percentage points, last I saw.

Lake, a former news anchor, echoes Trump’s election falsehoods and has said she would not have certified Biden’s statewide victory in 2020. At a last campaign stop, Lake claimed without evidence that fraud has already occurred during early voting, suggesting she may not accept a defeat.

Together with Mark Finchem, the two would sign off on elections results if they win in November, and have both advocated drastic changes to voting in Arizona.

Arizona Secretary of State Katie Hobbs, who built a national profile by vociferously denying Trump’s allegations, easily won the Democratic gubernatorial nomination.

Republican Arizona House Speaker Rusty Bowers lost his bid for a state Senate seat after refusing former President Trump’s pleas to help overturn the 2020 election results and testifying before Congress about the efforts.

Bowers was trying to move to the state Senate because of term limits but faced an opponent in Tuesday’s GOP primary who criticized him for refusing to help Trump or go along with a contentious 2021 “audit” that Republican leaders in the Senate commissioned.

Appearing on ABC’s “This Week” last Sunday, prior to the primary, host Jonathan Karl asked Bowers what it’s like to have the former president, “call you a rhino coward and say you disgraced yourself and disgraced the State of Arizona?”

Bowers: “I have thought at times someone born how he was and raised how he was, he has no idea what a hard life is, and what people have to go through in the real world.  He has no idea what courage is.”

Karl: “How do you explain the hold that he has, though, on Republicans, including a lot of Republican leaders right here in Arizona?”

Bowers: “Yes.  They rule by thuggery and intimidation. So, you know, they found a niche, they found a way, and it’s fear and people can use fear, demagogues like to use fear as a weapon, and they weaponize everything and we all know it.  But it’s – that’s not leadership to me, to use thuggery.”

Karl: “Liz Cheney said that the reality that we face today as Republicans is we have to choose to be loyal to Donald Trump or to be loyal to the Constitution, and you can’t be both, and that’s the choice the Republicans faced.  I mean, that’s the choice you faced.”

Bowers: “Definitely and forcefully so… You will come to us or we will punish you and that’s the kind of attitude of that particular group.  If you want to base a party and an authority and move people to solve problems, you can’t base it on a lie.  Ultimately that falls apart.”

In Missouri, Attorney General Eric Schmitt won the Republican nomination for U.S. Senate, boosting his party’s chances of holding the seat after scandal-hit former Governor Eric Greitens finished well behind.

As noted above, one of only 10 House Republicans who voted to impeach Trump following the Capitol attack, Rep. Peter Meijer of Michigan, lost to far-right challenger John Gibbs.

Gibbs, backed by Trump, was the beneficiary of Democratic advertising during the
Republican primary, part of a risky and highly controversial strategy to try to elevate more vulnerable Republican candidates in swing districts even as party leaders warn they pose a danger to democracy.

Two other Washington state Republicans who voted to impeach Trump, Jamie Herrera Beutler and Dan Newhouse, appear to have survived their open primaries and will square off against Democratic candidates in the fall. [But full results in both races aren’t in as yet.]

--As of last weekend, it had been 100 days since Donald Trump was interviewed on Fox News.  Florida Republican Gov. Ron DeSantis is the new favored figure on the network.

Last week, both the Rupert Murdoch owned New York Post and Wall Street Journal issued blistering editorials on Trump’s behavior during the Jan. 6, 2021, riot at the Capitol.

This week saw pieces in both the New York Times and Washington Post on how Murdoch appears to have clearly tired of Trump, ditto his son Lachlan, the chief executive, as they listen to the likes of Sen. Mitch McConnell, the minority leader, who have expressed to the Murdochs the potential harm Trump could cause to the party’s chances in upcoming elections, especially its odds of taking control of the Senate.

The Murdochs’ discomfort with Trump is all about his refusal to accept his election loss, according to the Times and Washington Post.

But if Trump announces he is running for president, or if he is indicted, then he will warrant more coverage.

--Rep. Jackie Walorski, a 58-year-old Indiana Republican who served in Congress for almost a decade, died along with two of her staffers in a head-on car collision in northern Indiana on Wednesday afternoon.

The crash, which killed four and left no survivors, took place about 12:32 p.m. local time on State Route 19, said the Elkhart County Sheriff’s Office.

Officials said the crash occurred when a northbound auto carrying only a driver drifted from its lane and collided with the southbound SUV carrying Walorski.  The driver of the other car was pronounced dead.

The staffers, Zachery Potts and Emma Thomson, were 27- and 28-years-old. 

--Conspiracy theorist Alex Jones said Wednesday that he now understands it was irresponsible of him to declare the Sandy Hook Elementary School massacre a hoax and that he now believes it was “100% real,” a day after the parents of a 6-year-old boy killed in the attack testified about the suffering, death threats and harassment they’ve endured because of what Jones has trumpeted on his media platforms.

“It was…especially since I’ve met the parents.  It’s 100% real,” Jones testified at his trial to determine how much he owes for defaming the parents of the 6-year-old who was among the 20 students and six educators killed in the 2012 attack at the school in Newtown, Connecticut.

But the parents who sued Jones said a day earlier that an apology wouldn’t be enough and that the Infowars host needed to be held accountable for repeatedly spreading falsehoods about the attack.  They were seeking at least $150 million, and the jury awarded them $4.1 million. 

Punitive damages were then weighed Friday…and we just learned the jury awarded another $45.2 million, which will be reduced due to caps.

Neil Heslin, whose son Jesse was killed at Sandy Hook, took the witness stand Tuesday, as well as mother Scarlett Lewis, and told of how they had feared for their lives and have been confronted by strangers at home and on the street.  Heslin said his home and car have been shot at.  The jury heard a death threat sent via telephone message to another Sandy Hook family.

All because of Alex Jones.

I watched a lot of the coverage of this trial, and whatever Jones is forced to pay the parents, that’s not enough.  Here’s hoping one of the worst people on the planet rots in hell.

Until then, however, Jones will continue to spread his lies on his show, raise money, sell t-shirts and make a fortune, which an expert on the stand today put at $130 million to $270m.

--Pope Francis acknowledged Saturday that he can no longer travel like he used to because of his strained knee ligaments, saying his weeklong Canadian pilgrimage was “a bit of a test” that showed he needs to slow down and one day possibly retire.

Speaking to reporters while traveling home from northern Nunavut, the 85-year-old Francis stressed that he hadn’t thought about resigning but said “the door is open” and there was nothing wrong with a pope stepping down.

“It’s not strange.  It’s not a catastrophe.  You can change the pope,” he said while sitting in an airplane wheelchair during a 45-minute news conference.

--Near-record amounts of seaweed are smothering Caribbean coasts from Puerto Rico to Barbados, killing fish and other wildlife, choking tourism and releasing stinky, noxious gases.

More than 24 million tons of sargassum blanketed the Atlantic in June, shattering the all-time record, set in 2018, by 20%, according to the University of South Florida’s Optical Oceanography Lab.  And unusually large amounts of the brown algae have drifted into the Caribbean Sea.

Scientists don’t know for sure why sargassum levels in the region are so high, but the UN’s Caribbean Environment Program said possible factors include a rise in water temperatures as a result of climate change, and nitrogen-laden fertilizer and sewage that nourish the algae.

“This year has been the worst year on record,” said Lisa Krimsky, a university researcher with Florida Sea Grant, a program aimed at protecting the coast. “It is absolutely devastating for the region.”

Large masses of seaweed essentially smother seagrass, coral and sponges, she said.

The French island of Guadeloupe issued a health alert in late July, due to high levels of hydrogen sulfide gas emanating from the huge rotting clumps of seaweed.  The gas smells like rotten eggs.

The U.S. Virgin Islands warned last month of unusually high amounts of sargassum clogging machinery at a desalination plant near St. Croix that is struggling to produce water and meet demand amid a drought.

--In a tragic example of how lightning can be dangerous, a Wisconsin couple died and two were injured critically following a lightning strike across the street from the White House on Thursday night.

The couple, ages 75 and 76, and the other victims were riding out a storm under a tree, according to law enforcement.  Officers with the Secret Service and U.S. Park Police witnessed the strike and ran over to render first aid.

Late today, we learned the death toll was now three.

--Seattle had a record of six straight days of the mercury topping 90.

--My state of New Jersey is in the midst of a major drought.  Only 0.55 inches of rain fell in Newark in July, breaking the old record of 0.84 inches set in 1932. 

--Despite the slow start to the hurricane season, NOAA still warns it will be an above average one.  It only takes one big one to make it a memorable year, for all the wrong reasons.

---

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

Pray for Ukraine.

God bless America.

---

Gold $1792
Oil $88.53

Regular gas: $4.11, nationally; Diesel $5.19 [$3.19 / $3.29 a year ago]

Returns for the week 8/1-8/5

Dow Jones  -0.1%  [32803]
S&P 500  +0.4%  [4145]
S&P MidCap  -0.3%
Russell 2000  +1.9%
Nasdaq  +2.1%

Returns for the period 1/1/22-8/5/22

Dow Jones  -9.7%
S&P 500  -13.0%
S&P MidCap  -11.9%
Russell 2000  -14.4%
Nasdaq  -19.1%

Bulls 41.1
Bears 30.1

Hang in there.

Brian Trumbore

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