Week in Review

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Week in Review

08/13/2022

Donald Trump, the DOJ and the Search at Mar-a-Lago

[Posted 8:30 PM ET, Friday]

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Edition 1,217

This afternoon, a federal judge unsealed the search warrant used to enter Donald Trump’s Florida home on Monday.

Prior to the warrant being unsealed, the Wall Street Journal reported that the FBI removed “11 sets of classified documents, including some marked as top secret and meant to be only available in special government facilities.” 

Among the items removed was information about the ‘President of France,’ according to a list of property taken.

“The list includes references to one set of documents marked as ‘Various classified/TS/SCI documents,’ an abbreviation that refers to top-secret/sensitive compartmented information.”

The list doesn’t provide any more details about the substance of the documents, but we learned Trump is being investigated for possible violations of three federal laws including the Espionage Act, obstruction of justice, and the removal of government records.  The Washington Post had reported that some of the documents concerned America’s nuclear weapons program.

Trump’s lawyers argue that the former president used his authority to declassify the material before he left office.  While a president has the power to declassify documents, there are federal regulations that lay out a process for doing so.

I have two overriding dictums at StocksandNews… “wait 24 hours,” and “I don’t suffer fools gladly.”

I always get a kick out of those who badger me when there is a breaking news event such as this one, when all I’m thinking is, we don’t have any facts, we have a guy that has done nothing but lie his entire life, and I’m not about to do much more than give the facts as we know them in the interim as part of the writing of this running history.

And I’m biting my tongue on the following:

Rep. Paul Gosar, who you’ll recall, his own siblings absolutely hate: “We must destroy the FBI.”

Rep. Lauren Boebert: “This is war. Go buy ammo.”

Former Florida Attorney General Pam Bondi, on “Hannity” Thursday night: “They came in with guns blazing!”

No they didn’t!  Great job, Sean, on not correcting Ms. Bondi.

We also learned that the dirtball who tried to breach an FBI field office in Cincinnati and was later gunned down by police on Thursday, Ricky Shiffer, posted to Trump’s Truth Social: “If you don’t hear from me, it is true I tried attacking the FBI.”

Shiffer had posted 374 messages in the past eight days – mostly to echo Trump’s false claims about election fraud and, in the hours after FBI agents searched Trump’s home, call for all-out war.  “Be ready to kill the enemy,” he posted on Tuesday.  “Kill [the FBI] on sight.”

Back to the Mar-a-Lago search, the Justice Department has a longstanding policy against speaking publicly about pending investigations, but Attorney General Merrick Garland took the unusual step of announcing that he’d “personally approved” the search.

Trump said late Thursday he supported the release of documents related to the search, including a copy of the search warrant and a receipt of items that agents took from the property.

On his Truth Social platform, Trump said in a post:

“Not only will I not oppose the release of documents related to the unAmerican, unwarranted, and unnecessary raid and break-in of my home in Palm Beach, Florida, Mar-a-Lago, I am going a step further ENCOURAGING the immediate release of those documents.”

The decision to agree to release the search warrant – something he has had the option of doing on his own since the search took place Monday – heads off a public showdown between Trump’s legal team and AG Garland.

This is just the beginning of an ongoing criminal investigation.  Those drawing sweeping conclusions today may look like idiots later. 

Katy Kay / BBC

“The torrent of outrage from Donald Trump’s supporters on Tuesday has been predictable. Of course they were going to vent their fury after FBI agents searched the former president’s home.

“It plays straight into the narrative Mr. Trump himself perpetuates that he is a victim of a corrupt establishment.  As he likes to say at his rallies, no political leader has ever been treated as badly as he has.  In fact, the FBI search Mr. Trump has called a ‘raid’ is helping to solidify his campaign of grievances against the state….

“Again, as Mr. Trump often says, if he is being persecuted, his supporters, by extension, are also under threat.  He is their guy.  It’s a sentiment I’ve heard repeatedly from Trump voters: ‘In going after him, they are going after us.’”

So Trump immediately used the event to raise funds, and it conveniently forced other Republicans who have voiced differences with the former president to rally around him.  Florida Gov. Ron DeSantis, for one, had to immediately come out to publicly defend Trump, ditto Mike Pence.

The instant outpouring of pro-Trump fervor will encourage him to run again.

Much more down below on this topic.

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Ironically, as there is talk of Trump being in possession of documents pertaining to the U.S. nuclear weapons program, Defense One’s Tara Copp reported that the United States is “furiously” writing a new nuclear deterrence theory that simultaneously faces Russia and China, said the top commander of America’s nuclear arsenal – and needs more Americans working on how to prevent nuclear war.

Officials at U.S. Strategic Command have been responding to how threats from Moscow and Beijing have changed this year, said STRATCOM chief Navy Adm. Chas Richard.

“As Russian forces crossed deep into Ukraine this spring, Richard said he delivered the first-ever real-world commander’s assessment on what it was going to take to avoid nuclear war. But China has further complicated the threat, and the admiral made an unusual request to experts assembled at the Space and Missile Defense Symposium in Huntsville, Alabama, on Thursday:

“ ‘We have to account for three-party [threats],” Richard said.  ‘That is unprecedented in this nation’s history.  We have never faced two peer nuclear-capable opponents at the same time, who have to be deterred differently.’” [Copp]

Richard said institutional expertise on avoiding nuclear war has atrophied, adding “we have to reinvigorate this intellectual effort.  And we can start by rewriting deterrence theory,” which “we’re furiously doing that out at STRATCOM.”

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In Ukraine….

--Saturday / Sunday….

Ukraine’s nuclear agency has called for the biggest atomic power station in Europe to become a demilitarized zone guarded by peacekeepers after the United Nations secretary general described recent shelling at the Russian-occupied site as “suicidal.”

Moscow and Kyiv blamed each other for artillery strikes that damaged radiation sensors, knocked out power lines and injured at least one worker at the Zaporizhzhia plant in partly occupied southeastern Ukraine. 

Ukrainian technicians are still running the plant, which has six nuclear reactors, but it is under the control of Russian troops who Kyiv accuses of mining the site and using at least two of its turbine halls to store armored vehicles, weapons and ammunition.

The International Atomic Energy Agency (IAEA) has warned of “the very real risk of a nuclear disaster” at the plant, and UN Secretary-General Antonio Guterres said he supported the agency’s call for an inspection to be allowed to visit the site to check its safety.

“Any attack om a nuclear plant is a suicidal thing.  I hope that those attacks will end, and at the same time I hope that the IAEA will be able to access the plant,” he said.

Petro Kotin, head of Ukraine’s state nuclear power firm Energoatom, called on “the international community and all our partners…to remove the invaders from the territory of the station and create a demilitarized zone.”

“This time a nuclear catastrophe was miraculously avoided, but miracles cannot last forever,” Energoatom said on Telegram Sunday.

“Since the beginning of the occupation we’ve been saying that a security mission of peacekeepers should be present there, including IAEA experts and other security organizations.  The presence of peacekeepers in this zone – and giving them control of the plant first and then giving back control to the Ukrainian side – would have solved the problem,” he told Ukrainian television.

“There is no such nation in the world that can feel safe when a terrorist state fires at a nuclear plant,” President Zelensky said in an address over the weekend, urging international agencies to hold Russia accountable for the attack.  “God forbid, if something irreparable happens, no one will stop the wind that will spread the radioactive contamination.”

Roughly 500 Russian troops were at the nuclear station, where they have been entrenched for several weeks and are firing rockets at Ukrainian positions across the river, according to Ukrainian officials.

Ukraine relies heavily on nuclear energy, with its 15 functional reactors, six of them in Zaporizhzhia, provide about half of the country’s electricity, according to the IAEA.

--The Associated Press reported: “In a growing challenge to Russia’s grip on occupied areas of southeastern Ukraine, guerrilla forces loyal to Kyiv are killing pro-Moscow officials, blowing up bridges and trains, and helping the Ukrainian military by identifying key targets.

“The spreading resistance has eroded Kremlin control of those areas and threatened its plans to hold referendums in various cities as a move toward annexation by Russia.”

Guerrillas have repeatedly tried to kill the head of the Kherson region’s Russia-backed temporary administration, offering a bounty of about $25,000.  His assistant was shot and killed in his vehicle, and another official was killed by a car bomb.

--Six more ships carrying agricultural cargo held up by the war in Ukraine received authorization Sunday to leave the country’s Black Sea coast as analysts warned that Russia was moving troops and equipment in the direction of the southern port cities to stave off a Ukrainian counteroffensive.

Four of the carriers cleared Sunday to leave Ukraine were transporting more than 219,000 tons of corn.  The fifth was carrying more than 6,600 tons of sunflower oil and the sixth 11,000 tons of soya, the Joint Coordination Center said, the JCC overseeing the international deal intended to get some 20 million tons of grain out of Ukraine to feed millions going hungry in Africa, the Middle East and parts of Asia.

There other cargo ships left last Friday.

But the vessel that left Monday, Aug. 1, with great fanfare as the first under the gain exports deal had its scheduled arrival in Lebanon delayed Sunday, according to a Lebanese Cabinet minister and the Ukraine Embassy.  No cause of the delay was given, but I saw that it was going to Tripoli, not Beirut, and Tripoli isn’t the most stable place, not that Beirut is these days.

--Monday / Tuesday….

Moscow-appointed officials in occupied parts of Zaporizhzhia region announced plans on Monday to hold a referendum on its “reunification” with Russia.

They did not name any date for the event, but Ukrainian President Zelensky said any such “pseudo-referendum” arranged by Moscow and its local collaborators “would close off any possibility of negotiations with Ukraine and the free world, which the Russian side will definitely need at some point.”

--Explosions at a Russian air force base on Crimea triggered an evacuation of local residents as Ukrainian officials vowed to liberate the peninsula, though Kyiv didn’t take responsibility for the blasts.

The blasts could be heard around the area for around an hour on Tuesday afternoon, eyewitnesses told Russian state media.

The Russian Defense Ministry said that the explosions, which came as Ukraine presses on with a counteroffensive aimed at liberating the south of the country from Russian control, were caused by exploding air-force ammunition and there was no shelling of any kind aimed at the base.  Aircraft stationed there were undamaged and there had been no injuries, the ministry said.

An advisor to Zelensky, Mykhailo Podolyak, asked by a local television channel whether Kyiv was responsible, replied: “Of course not.  What do we have to do with this?”

“People who are living under occupation understand that the occupation is coming to an end,” Podolyak said.

Ukrainians greeted the explosions, regardless of their cause, as a sign that Crimea, which Kyiv wants back, was in play after eight years in which they could do little about its loss.

In his Tuesday evening address, President Zelensky said: “This Russian war against Ukraine and against all of free Europe began with Crimea and must end with Crimea – its liberation.”

But the Washington Post and New York Times said that a Ukrainian government official told them that an attack on the Russian base was the work of Ukrainian special forces.  The official didn’t disclose details of how the attack was carried out.

The Ukrainian air force said in a statement that nine Russian military planes were destroyed at the base, which the authorities have said was used by Russia to launch missile strikes against Ukrainian-controlled territory.

--Regarding the Zaporizhzhia nuclear plant, the aforementioned Petro Kotin said it was vital for the Kyiv government to regain control of the plant in time for winter.

--Russian oil stopped flowing through a pipeline that feeds countries in Central and Eastern Europe, dealing another blow to a region contending with the loss of vital energy supplies from Russia.

Transneft PJSC, the government-owned oil-pipeline operator, said Tuesday that crude exports through Ukrainian territory had halted on Aug. 4.  It blamed payment difficulties caused by Western sanctions on Moscow and said Ukraine’s pipeline operator had declined to carry crude after it didn’t receive funds.

The move severs supplies through a pipeline that carries oil to Slovakia, Hungary and the Czech Republic and will intensify European efforts to buy crude from non-Russian sources.  The countries are heavily reliant on Russian oil and natural gas and among the most exposed economies in Europe now that those supplies are getting shut off.

--According to the Pentagon’s Colin Kahl, Russia has lost between 70,000 to 80,000 troops to injuries and deaths.  “That number might be a little lower, a little higher, but I think that’s kind of in the ballpark,” he told reporters on Monday.  And that is, in his opinion, “pretty remarkable considering that the Russians have achieved none of Vladimir Putin’s objectives at the beginning of the war.”  Which is to say, “his overall objective was to overrun the entire country, to engage in regime change in Kyiv, to snuff out Ukraine as an independent, sovereign and democratic nation.  None of that has happened.”

How long can Russia keep losing troops? “It’s an interesting question and not one I can answer with a high degree of certainty,” Kahl said.  “Obviously, Russia’s a very large country.  Now, you know, a lot of it would depend, I think, on the political decisions that Vladimir Putin will make ultimately about whether he can continue to recruit and send additional forces to the front, whether he was at some point, you know, willing to engage in national mobilization or some other effort.”

CNN had an extraordinary report from a Russian prison where “murderers,” not other types of hardened criminals, were being recruited to join the army.  Putin does not as yet want to issue a general mobilization because that would be admitting this is far more than a “special military operation.”

Kahl added 3,000 or 4,000 Russian armored vehicles have been destroyed.

--Sanctions are hitting Russia’s aviation industry, which has begun stripping aircraft for spare parts,” Reuters reported Monday from Moscow.  “At least one Russian-made Sukhoi Superjet 100 and a [new] Airbus A350, both operated by Aeroflot, are currently grounded and being disassembled, one source familiar with the matter said.”

--The British military says Russian troops in the east have advanced 10 km in the past 30 days.  That’s around the town of Bakhmut.  “In other Donbas sectors where Russia was attempting to break through, its forces have not gained more than 3 km during this 30-day period; almost certainly significantly less than planned.”

The Brits say, “Russia has not been able to generate capable combat infantry in sufficient numbers to secure more substantial advances.”

Elsewhere: “Russian forces are deploying less-professional occupation forces and increasing pressure on Ukrainian populations in occupied areas,” analysts at the Institute for the Study of War (ISW) wrote in their latest assessment, citing Ukrainian officials.

Ukrainians also allege instances of violent dissent among Russian troops, some of whom reportedly “shot and killed the Chechen deputy commander of a unit in Zaporizhzhia for ethnically motivated reasons.”

The ISW warns: “Russian forces may increasingly deploy low-quality, poorly trained units, like those made up of convicts, to control populations in occupied parts of Ukraine.  Such deployments may reduce the competence of occupation authorities and counter-partisan operations and may increase Ukrainian support for movements that resist Russia’s occupation.”

--Russia said it would suspend American inspections of its nuclear weapons under the New START treaty, and blamed Western sanctions for making the process too difficult.  The treaty is the only remaining nuclear-arms agreement between America and Russia.  It limits the number of weapons they can deploy, and allows each country to inspect the other’s arsenal.  The treaty expires in 2026, though President Biden wants to negotiate a replacement.

--Ukrainian staff at the Zaporizhzhia nuclear plant are “working under the barrels of Russian guns,” Ukraine’s ambassador to the UN’s nuclear watchdog said on Monday.  He called for an international mission to the facility, which was reportedly damaged by Russian shelling over the weekend.

--According to a poll of Russians from Russian newspaper Kommersant, more than 6 in 10 polled think the Ukraine invasion is a success so far, and they’d support taking control of Kyiv.  But at the same time, 65% said they’d approve of an immediate ceasefire; and 52% support continuing the ongoing invasion…as in, the people seem rather conflicted.

Or, they’ll just back whatever Putin does.

--Wednesday thru Friday….

Ukraine on Wednesday accused Russia of exploiting its position in a nuclear power plant it had seized to target a nearby town in a rocket attack that killed at least 13 people and left many others seriously wounded.

The town Ukraine says Russia targeted – Marhanets – is one that Russia has alleged Ukrainian forces have used in the past to shell Russian forces who are holed up at the Zaporizhzhia nuclear plant.

Andriy Yermak, President Zelensky’s chief of staff, accused Russia of launching attacks on Ukrainian towns with impunity from Zaporizhzhia in the knowledge that it was risky for Ukraine to fight back.

Valentyn Reznychenko, governor of Ukraine’s central Dnipropetrovsk region, said on Wednesday that the Russian attack on Marhanets was carried out with 80 Grad rockets.

Then we learned at least eleven were killed in the district of Nikopol.

--Britain, which is helping Ukraine with weapons, intelligence and training, said on Wednesday that it believed Russia had “almost certainly” established a major new ground force to support its war.

The new force, called the 3rd Army Corps, was based in the city of Mulino, east of Moscow, the British Defense Ministry said in a daily intelligence bulletin.

It said it thought Russia would struggle to build up the number of troops it needed however and that the new force was unlikely to play a decisive role in the war.

--Thursday, satellite images of the Russian airbase in Crimea showed eight destroyed fighter planes, thought to have been damaged by explosions reported on Tuesday, while severely damaging the main runway.  Experts agree that this is the single biggest loss for Russia’s air force since World War II.  To say they were caught by surprise with their pants down, with their aircraft carelessly sitting out in the open, would be an understatement.

One of the obvious questions is why were Russia’s sophisticated air defenses not up to the task?

Analysts at the Institute for the Study of War wrote in an assessment that despite persistent public denials that the incident was anything more than an unfortunate accident, “Russian forces at the airbase likely know by now what happened but may not yet understand how or from exactly where Ukrainian forces conducted the attack.”

--Latvia’s parliament unanimously declared Russia a “state sponsor of terrorism,” and asked allied nations to do the same.  Vladimir Putin’s invading forces use “suffering and intimidation as tools in its attempts to demoralize the Ukrainian people and armed forces and paralyze the functioning of the state in order to occupy Ukraine,” the parliamentarians wrote.  Russia’s foreign ministry responded by calling the declaration “primal xenophobia,” and that, “It is necessary to call the ideologues nothing but neo-Nazis.”

--Ukraine further accused Russia of using the Zaporizhzhia nuclear plant as a shield for attacks, and the UN (supported by the U.S.) called for a demilitarized zone.

Ukraine’s nuclear energy company said it had been shelled five times by Russian forces on Thursday, resulting in staff being unable to change shifts.

Russian news agency Tass reported the plant had been fired upon by Ukrainian forces.

--Ukrainian forces are preparing for a battle to free the southern city of Kherson from Russian occupiers, and, if successful, would improve Kyiv’s ability to defend its country, with foreign support.

Ukraine is building forces outside Kherson, even as larger battles continue in the eastern Donbas, under a strategy that suggests growing confidence.  President Zelensky has for weeks repeatedly outlined his goal of retaking Kherson, and Ukrainian troops have openly targeted local bridges and other infrastructure the Russians are using to supply and reinforce the area.

Russia is also strengthening its forces in and around the city.

Mykhailo Podolyak, a Zelensky adviser, said Ukraine won’t engage Russian forces head-on, but rather will chip away at Russian might in the region, he said, inflicting “a thousand bee stings.”

--President Zelensky on Thursday told government officials to stop talking to reporters about Kyiv’s military tactics, saying such remarks were “frankly irresponsible.”

In the wake of the major blasts that wrecked a Russian air base in Crimea, the New York Times and Washington Post cited unidentified officials as saying Ukrainian forces were responsible.

The government in Kyiv, however, declined to say whether it had been behind the explosions.

Zelensky said in an evening address: “War is definitely not the time for vanity and loud statements.  The fewer details you divulge about our defense plans, the better it will be for the implementation of those defense plans.

“If you want to generate loud headlines, that’s one thing – it’s frankly irresponsible. If you want victory for Ukraine, that is another thing, and you should be aware of your responsibility for every word you say about our state’s plans for defense or counter attacks.”

--Some commentary….

George Will / Washington Post

“Fascism’s vitality in the 21st century marks it as the most successful fighting faith from the 20th century. So, it is well to understand fascism’s founder, who 100 years ago this October orchestrated the March on Rome (he arrived there by railroad sleeper car) that propelled him into power at 39, the youngest ruler in the world at that time.  The destroyer of Italy’s parliamentary democracy has a political descendant occupying the Kremlin today.

“Antonio Scurati’s ‘documentary novel’ about Benito Mussolini, ‘M: Son of the Century,’ was published in Italy in 2018, has received Italy’s premier literary award, and has been translated for publication in 46 countries.  It is a long – 761-page – exploration of il Duce’s mind and of this: Fascism does not merely condone violence, it is violence.  Set in Italy’s agony, 1919-1924, the novel bludgeons readers with depictions of the beatings and killings that made Italy resemble a nation without a state.

“Mussolini’s roving bands of Blackshirts, ‘bursting with appetites,’ wielded clubs with precision, ‘bashing both sides of the mouth, both mandibular joints, in order to fracture the jaws.’  And there was ‘the castor oil routine’: ‘You seize a diehard socialist, ram a funnel down his throat, and force him to drink a quart of laxative.  Then you tie him to the hood of a car and drive him through town….’

“Three days after denouncing a massacre by his followers, Mussolini ‘proclaimed a general amnesty for politically motivated blood crimes committed for ‘national ends.’’  This ‘master of exhaustion’ came to power promising to tame his violent followers but instead indulged their addiction to ‘carefree ferocity.’….

“Mussolini was an unimposing 5 feet 6 inches tall – 2 inches shorter than Adolf Hitler, 2 inches taller than Francisco Franco – but was fascism: pure energy in search of occasions for aggression.  As a fascist, he had no precursors; he was, however, a precursor of the performative masculinity of the bare-chested, judo-practicing, stallion-riding Vladimir Putin.

“An essay in last week’s Economist establishes that Putinism is fascism: a simmering stew of grievances and resentments (about post-Soviet diminishment) expressed in the rhetoric of victimhood.  Putin’s regime relies on violence wielded by the state and by state-tolerated assault brigades akin to Mussolini’s militias.  Mussolini’s cult of personality was bound up with restoring the grandeur that was the Roman Empire – or at least tormenting Ethiopia.  The cult of Putin the strong man promises the restoration of a supposed golden age that ended with the Soviet Union’s ignominious collapse.

“As in Mussolini’s Italy, there is in Putin’s Russia what the Economist calls a ‘culture of cruelty’ where ‘domestic abuse is no longer a crime’ and ‘nearly 30% of Russians say torture should be allowed.’

“As the Economist notes, Alexander Yakovlev, a democratic reformer who worked under Mikhail Gorbachev, warned us in the late 1990s: ‘The danger of fascism in Russia is real because since 1917 we have become used to living in a criminal world with a criminal state in charge. Banditry, sanctified by ideology – this wording suits both communists and fascists.’….

“ ‘The engine of fascism,’ the Economist says, ‘does not have a reverse gear. …It will seek to expand both geographically and into people’s private lives.’  As Mussolini, the first fascist, said: ‘Everything within the state, nothing outside the state, nothing against the state.’

“Putin’s regime encourages the public to show support for the Ukraine war by displaying the ‘Z’ sign, which the Economist calls a ‘half-swastika.’  Fascism might flourish more in this century than it did in the previous one.”

George Will doesn’t mention this but the current Brothers of Italy political party in Italy, which as of today could emerge as the largest in parliament in next month’s election, bears some similarities to Mussolini.

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Biden Agenda

--House Democrats, owing to their slim majority, used a party-line 220-207 vote to pass the Democrats’ flagship climate and health care bill late today, after the Senate earlier passed it 51-50, though it is far less than the ambitious plan President Biden and the party envisioned early last year.

That said, it’s still significant.  The legislation will invest nearly $375 billion over the next decade in climate change-fighting strategies including investments in renewable energy production and tax rebates for consumers to buy new or used electric vehicles.  And there’s a Medicare prescription drug benefit, but it doesn’t go into effect for over three years.

Democrats at least have something to take back to their constituents, while Republicans called it a cornucopia of wasteful liberal spending that will raise taxes and families’ living costs.

The Congressional Budget Office, however, estimates that, over the next two years, the “Inflation Reduction Act” is likely to change the inflation rate by less than one tenth of one percent – but it isn’t sure whether the change would be up or down.

The Committee for a Responsible Federal Budget said that over the next five years, the package would reduce the federal budget deficit by a piddling $25 billion – a rounding error in a $23 trillion economy.

So who are the winners and losers in the “Inflation Reduction Act”?

None of the billions in tax increases floated by Democrats a year ago as part of the original Build Back Better monstrosity that were to be on high-earning Americans made it into the final version of the bill.

Private equity fund managers dodged a tax increase that Sen. Joe Manchin wanted, but Sen. Kyrsten Sinema insisted be taken out of the bill.  And the private equity industry earned a carveout for private equity-owned companies in the corporate minimum tax.

Manchin and Sinema come out big winners, amassing huge leverage, as well as securing benefits for their states: Manchin securing an agreement to permit the completion of the Equitrans Midstream Corp.’s Mountain Valley Pipeline, and Sinema gaining $4 billion for drought relief in western states.

Electric carmakers gained an extension of a popular $7,500 per vehicle consumer tax credit for the purchase of electric vehicles, a win for the likes of Tesla and GM.  But to win the backing of Manchin, companies will have to comply with tough new battery and critical minerals sourcing requirements that could render the credits useless for years for many manufacturers.  Plus, new cars that cost more than $55,000 and $80,000 for pickups and SUVs won’t qualify for the credits.

Solar companies and others of that ilk (like hydrogen and fuel cell company Plug Power Inc.) stand to benefit from generous tax credits.  Nuclear reactor operators could see a boon from a $30 billion production tax credit.

Oil and gas companies got a boost, as the bill could mandate more federal oil and gas leases and boosts an existing tax credit for carbon capture.

The final bill caps out-of-pocket costs for seniors’ prescription drugs at $2,000 a year and allows Medicare to negotiate the prices on 10 medications four years from now.

The IRS gets an influx of $80 billion over the next decade to expand its audit capability and upgrade technology systems after years of being underfunded.

Among the losers, Republicans thought they had defeated any version of Build Back Better when Manchin suddenly announced a deal with Majority Leader Chuck Schumer (who is a winner).  It’s a major setback on the policy issue front for the GOP, but it gives them a new issue on the campaign trail.

The pharmaceutical industry is a loser, but drug-makers will likely offset some of their reduced revenue from Medicare negotiations with higher prices for patients with private insurance.

Technology companies will bear the brunt of the 15% minimum tax on financial statement profits and a new levy on stock buybacks.

Those of us in high-tax states like New York, New Jersey and California did not get an expansion of the $10,000 cap on the state and local tax deduction, or SALT.

Sen. Bernie Sanders wanted a $6 trillion package, and ended up with $437 billion*, with the bill excluding all proposals for new social programs, including child care, tuition-free college, housing spending and an expanded child monthly tax credit.

*It’s a bit confusing in that some articles talk about a $433-$437 billion spending package, while others talk about a $740 billion piece of legislation.  The latter figure is the anticipated revenue that would be raised. 

Biden has had a stretch of good news…rapidly falling gas prices (now $3.97 nationally), a big jobs number for July, the Chips Act, this Climate Bill, the takedown of Al-Zawahiri, all big items for the campaign ads. 

And he had the Kansas abortion rights vote that went in his favor, and last year’s Infrastructure legislation.

I just have to add that regarding the Chips bill to juice the semiconductor industry, this is a huge polluter, not only in its massive usage of energy, but its creation of toxic waste.  Kind of ironic given today’s legislation.

--Maureen Dowd / New York Times

“Ruth Bader Ginsburg is a cautionary tale.

“She missed the moment to leave the stage, ignoring friendly nudges from Democrats and entreaties from Obama allies.  She fell in love with her late-in-life image as a hip cultural icon: ‘Notorious R.B.G.,’ the octogenarian cancer survivor who could hold 30-second planks.  She thought she was the indispensable person, and that ended in disaster.  Her death opened the door to the most conservative court in nearly a century.  Her successor, a religious zealot straight out of ‘The Handmaid’s Tale,’ is erasing Justice Ginsburg’s achievements on women’s rights.

“The timing of your exit can determine your place in the history books.

“This is something Joe Biden should keep in mind as he is riding the crest of success.  His inner circle, irritated by stories about concerns over his age and unpopularity, will say this winning streak gives Biden the impetus to run again.

“The opposite is true.  It should give him the confidence to leave, secure in the knowledge that he has made his mark.

“With the help of Chuck and Nancy, President Biden has had a cascade of legislative accomplishments on tech manufacturing, guns, infrastructure – and hopefully soon, climate and prescription drugs – that validate his promises when he ran. There are genuine achievements that Democrats have been chasing for decades, and they will affect generations to come.  On Monday, from the balcony off the Blue Room, he crowed about the drone-killing of the evil Ayman al-Zawahiri, Al Qaeda’s top leader, who helped plan the 9/11 massacres.  On Friday, he came out again to brag about surprising job numbers.

“Defying all expectations, the president has changed the narrative.  Before, the riff was that he was too old school and reliant on his cross-party relationships in the Senate.  Now old school is cool.  The old dude in the aviators has shown he can get things done, often with bipartisan support.

“But this is the moment for Biden to decide if all of this is fuel for a re-election campaign, when he will be 81 (82 on Inauguration Day), or a legacy on which to rest.

“He could leave on a high, knowing that he has delivered on his promises for progress and restored decency to the White House.  He did serve as a balm to the bombastic Donald Trump.  Over the next two years he could get more of what he wants and then step aside.  It would be self-effacing and patriotic, a stark contrast to the self-absorbed and treasonous Trump….

“Biden’s advisers think if you just ignore the age question, it will go away.  But it is already a hot topic in focus groups and an undercurrent in Democratic circles, as lawmakers are pressed to answer whether they think Biden should run again or not.

“These are dangerous times – with inflation hurting us, weather killing us, the Ukraine war grinding, China tensions boiling, women’s rights on the line, and election deniers at CPAC, where Viktor Orban spews fascist bile to a wildly enthusiastic audience.  It might be best to have a president unshackled from the usual political restraints.”

--Editorial / Bloomberg News

“From Day 1, President Joe Biden’s immigration policy has been largely incoherent.  It’s now verging on a crisis.  In June authorities recorded 191,898 apprehensions at the border, after more than 220,000 in May. Would-be migrants have been processed after crossing the southwestern border more than 1.7 million times so far this year, already exceeding last year’s record.  Distinctive catastrophes – such as the deaths of 53 migrants in June in an abandoned tractor-trailer in San Antonio – have only punctuated these grim figures.

“With this influx has come a host of related problems.  Human trafficking has surged.  Huge amounts of illegal weapons and drugs – in particular, fentanyl – have turned up. So far this year, 56 migrants have been flagged by the Terrorist Screening Database, up from 15 last year.  More than 15,000 unaccompanied children were picked up in June alone.  Border-state governors have been sending busloads of asylum seekers to Washington, where social safety nets are fraying. [Ed. more on this last bit below.] ….

“Longer-term, the U.S. needs comprehensive reforms that would pair increased funding for law enforcement and immigration courts with an expanded guest-worker program, which would relieve pressure on the border and ease labor shortages in the agriculture and food-producing industries.  Meanwhile, added investment, public and private, in northern Central America could help stem the violence and poverty that have caused so many to flee in the first place.

“The problems at the southern border are complex but not unsolvable.  They should never have reached this point.  What’s most needed now is leadership.”

---

Wall Street and the Economy

We had some better-than-expected inflation news this week and the markets liked it.

July consumer prices came in unchanged over June, 0.3% ex-food and energy, while the key year over year figures were 8.5%, 5.9% on core.  These last two compared to 9.1%, 5.9% in June, with the high on core being 6.5% in March.

Producer (wholesale) prices for last month were then -0.5% for the month on headline, 0.2% on core, also better than forecast, with the year over year figure 9.8%, and 7.6% ex-food and energy, which compared with June’s 11.3% and 8.2%.

The market took the above and ran with it, soaring 535 points on the Dow Jones Wednesday after the release of the CPI data, though markets were mixed after the PPI Thursday.

So what will the Fed do come its next meeting Sept. 20-21?  50 basis points?  75?

It’s too early.  We will get August inflation figures Sept. 13-14, so the Fed will be waiting for that, as well as all kinds of other data, such as retail sales (Aug. 17 and Sept. 15), gobs of housing numbers, and critically, consumption and personal income figures that will contain the Fed’s preferred inflation benchmark, the personal consumption expenditures index.

What we do know for now is that a core CPI of 5.9% is still way too high.

Editorial / Wall Street Journal

“It’s a sign of how far and fast inflation has risen this year that an increase in prices of 8.5% in July on an annual basis triggered a market rally on Wednesday. That’s down from 9.1% a month ago, and the trend is in the right direction, but one month’s respite is far from the end of this punishing inflation bout.

“The Bureau of Labor Statistics reported Wednesday that the consumer-price index rose not at all in July. That produced the biggest drop in the 12-month inflation rate since price increases took off last year.  And it had President Biden touting ‘zero inflation,’ but hold the confetti.

“The slowdown came largely from volatile energy prices, which had soared in June.  Gasoline prices declined 7.7% from June after peaking at an average of more than $5 a gallon nationwide.  Consumer shock at the gas pump may have contributed to the pullback.  Gasoline inventories rose as drivers each day bought less than during the same period in 2021, according to the Energy Information Administration.  And 2021 was a Covid year.

“But prices continued to rise across much of the rest of the economy. Food prices rose 1.1% in July and are up 10.9% over last year. Groceries that families take home rose even faster at 1.3% for the month, or 13.1% over the past 12 months*.  The hope is that food prices will ebb in coming weeks following the recent decline in commodity prices, but it may take a while since inflation expectations are now built into the supply chain….

“All of this has pummeled real wages, which will need more than a few good months to catch up with the cost of living.  Workers finally regained some ground in July as inflation-adjusted hourly earnings rose half a percentage point, the first increase since last September.  But real average hourly earnings are still down 3% in the past year.  Add to that a decline in the average workweek since a year ago, and the result is a 3.6% drop in real weekly pay for the average American.

“None of this should delay the Federal Reserve from its appointed anti-inflation rounds.  Investors took the July inflation news as a sign that the central bank can stop its tightening cycle sooner, and a 75-point rate hike in September is no longer discounted in markets.  It’s possible that inflation peaked in June.  But the Fed is better off ignoring these hopeful market expectations, lest it ease up and return to the stop-and-start monetary and inflation gyrations of the 1970s.

“The strong jobs market has given the Fed a rare moment to tighten money before the political clamor builds to stop.  The Fed doesn’t have to get to zero inflation, but getting back down to its target will be hard enough.”

*A United Nations index of world food costs fell almost 9% between June and July, however, the measure is till 13% above where it sat a year ago.  The index tracks export prices for raw goods and excludes retail markups, meaning consumers in many regions are finding themselves paying the same high prices as ever.  Global food giant Nestle SA just pushed through another round of price increases on consumers during the second quarter as its own costs increased.  Conagra Brands Inc., maker of Birds Eye frozen vegetables, said it plans to keep raising prices even if it dents demand.

Separately, the Treasury Department released the budget deficit numbers for July, a $211 billion deficit, above expectations, though a 30% drop from the same month last year, as receipts grew slightly and Covid-19 relief spending fell sharply.

The Treasury said receipts in July grew 3% from a year earlier to $269 billion, while outlays fell 15% to $480 billion.

For the first ten months of fiscal 2022 (which began Oct. 1, 2021), the deficit fell 71% to $726 billion from $2.54 trillion in the prior-year period, which contained the bulk of the spending from President Biden’s $1.9 trillion American Rescue Plan Act.

The Atlanta Fed’s very early GDPNow barometer for third quarter growth is at 2.5%.

Europe and Asia

Only one economic data point for the eurozone this week…June industrial production, which was up by 0.7% compared with May, and 2.4% vs. June 2021.

Britain: GDP contracted by 0.1% in the three months to June, compared with the previous quarter.  The Office for National Statistics attributed most of the decline in services output to a fall in health and social work activities related to Covid-19.  Household consumption fell by 0.2%.  The new GDP numbers signal another blow to Britain’s faltering economy.

The big issue is household energy bills, which could grow from an average annual figure of $2,380 today, already a hefty increase on the prior year, to $5,350 by next April, according to consultancy Cornwall Insight.  Let that sink in.

Needless to say, Britain’s poor are particularly exposed to this price shock, as they spend a bigger share of their budget on energy than the wealthy.  The question of how to protect the poorest households from the energy crunch is dominating the race between Rishi Sunak and Liz Truss to become the next leader of the Conservative Party.

The Tories can “kiss goodbye” to winning the next election if inflation is not brought under control quickly, Sunak has said.

Speaking at a leadership conference, the ex-chancellor, who wants to prioritize rising prices before cutting taxes, seized on a warning by the Bank of England.

Liz Truss said keeping taxes low was the best way to avoid a downturn.  She said the UK should not be “talking itself into a recession.”

The Bank of England warned last week that inflation – currently 9.4% - could peak at more than 13% and stay at “very elevated levels” throughout much of next year, before eventually returning to its 2% target in 2024.

Turning to Asia…China reported out its exports for July and they were better than expected, up 18.0% year over year, thanks to relaxed Covid restraints, with exports to the EU up 23.1% Y/Y and 11.0% to the U.S.  Imports, though, were just 2.3% Y/Y vs. 1.0% in June.

July consumer price inflation was at a 2.7% annualized rate, with producer prices up just 4.2% vs. 6.1% in June, year over year.

And the China Association of Automobile Manufacturers reported that auto sales in China surged 29.7% year on year to 2.42 million units in July, accelerating from a 23.8% rise in the prior month.  It was the second straight month of increase in car sales, boosted by government incentives to support the industry and a recovery in production, again, due to easing Covid restrictions. 

Sales of new energy vehicles, which include pure electric vehicles and plug-in hybrids, jumped 120% from the previous year.  For the first seven months of the year, car sales fell 2% from a year earlier.

Japan saw its producer prices for July rise 8.6% year over year, vs. 9.4% in June.

Street Bytes

--Stocks had another big week, the fourth straight advance for the S&P 500, its longest winning streak since November.  Aided by continuing decent earnings reports, falling inflation expectations and a rising consumer sentiment reading on Friday, the Dow Jones rose 2.9% to 33761, the S&P gained 3.3%, and Nasdaq 3.1%.

With a 2.9% rise on Wednesday, the Nasdaq was back in bull market mode, up more than 20% from its low in mid-June.

Next week we get key earnings reports from the big-box retailers like Walmart, Target and Home Depot.

--U.S. Treasury Yields

6-mo. 3.03%  2-yr. 3.24%  10-yr. 2.84%  30-yr. 3.10%

On the week, Treasuries were virtually unchanged from last Friday, but lots of volatility in between as the bond market weighed the impact of the inflation data on the Fed.

A National Association of Realtors report had housing affordability at its lowest level since 1989, with the typical monthly mortgage payment rising to $1,944 in June, up from $1,297 in January, assuming a 30-year fixed-rate mortgage and a 20% down payment, according to the NAR.

Freddie Mac’s weekly survey has a 30-year fixed-rate at 5.22%, up from 4.99% the prior week, the high being about 6.00% in this cycle. [6.28% on a daily basis.]

--Crude oil prices were influenced somewhat during the week amid positive sentiment surrounding the Iran nuclear talks, though Russian oil supplies were halted to Eastern Europe.  But the Iran talks are a wildcard.  Any agreement would mean Iran could produce more as sanctions are lifted.

That said, many analysts, and yours truly, still see a rough winter, with Ukraine War issues in Europe, demand from China bouncing back, and the end of releases from the Strategic Petroleum Reserve.

On the U.S. inventory front, crude oil stocks were still down 15.4% from a year earlier, and inventories are about 5% below the five-year average for this time of the year.

Thursday, OPEC then said global oil demand will be weaker than expected this year and next as economic growth slows, suggesting the cartel sees little need to increase output.

In its monthly report, OPEC cut its forecasts for global oil demand this year by 260,000 barrels to 100.03 million barrels a day.  It also cut its demand forecasts for 2023 by the same amount to 102.72 million.

For the U.S. economy, OPEC cut its growth forecasts to 1.8% this year from 3% and to 1.7% in 2023 from last month’s 2.1% forecast.  It expects China’s economy, the world’s second largest, to grow by 4.5% this year, 0.6 percentage point less than it forecast in July.

--Public pension plans lost a median 7.9% in the year ended June 30, according to Wilshire Trust Universe Comparison Service data released Tuesday, their worst annual performance since 2009 and a fresh sign of the chronic financial stress facing governments and retirement savers.

But much of the damage occurred in the second quarter, with funds down 8.9% for that three-month period.

Performance in the third quarter has obviously been strong thus far.

--Three state-owned Chinese corporate giants announced plans Friday to remove their shares from the New York Stock Exchange amid a dispute between Washington and Beijing over whether U.S. regulators can see records of their auditors.

PetroChina Ltd., China Life Insurance Ltd. and China Petroleum & Chemical Co. (Sinopec) cited the small trading volume of their shares in New York and said they still would be traded in Hong Kong, which is open to non-Chinese investors.  None mentioned the auditing dispute.

The announcements add to moves seen by some as decoupling or disengagement between the United States and China, due to tensions over technology and security.

U.S. regulators have warned some of China’s biggest companies, including e-commerce giant Alibaba Group, might be forced to leave U.S. exchanges unless Beijing agrees to allow their audit records.

--Boeing finally delivered its first 787 Dreamliner to American Airlines in more than a year after a series of quality problems had paused deliveries of the aircraft.

“The 787 is an important part of American’s fleet and this is the first of nine 787s we expect to receive this year,” American CEO Robert Isom said in an Instagram post.

Deliveries of the 787 had been stopped since June 2021 after quality problems had been found in manufacturing.  There was no grounding of the in-service 787 fleet.

--It was another awful weekend for flight cancellations, with thousands of flights canceled in the U.S., and then some 1,300 on Monday due to both thunderstorms and ongoing staffing shortages.

--TSA checkpoint travel numbers vs. 2019

8/11…89 percent of 2019 levels
8/10…88
8/9…88
8/8…91
8/7…92
8/6…95
8/5…88
8/4…87

--Walt Disney shares jumped after the close on Wednesday as the media and entertainment giant reported better-than-expected earnings and subscriber growth.

The company also said it would raise the price of its Disney+ streaming service starting in December and introduce a cheaper ad-supported tier.

Disney reported fiscal third quarter adjusted earnings of $1.09 a share, compared with analyst expectations for 97 cents a share, according to FactSet. Sales of $21.5 billion were also ahead of estimates for $20.99 billion, up 26%.

Disney+ ended the quarter with 152.1 million subscribers, which was ahead of estimates of 147.69 million.  Total ESPN+ subscribers hit 22.8 million while Hulu subscribers hit 46.2 million.

In the three-month period ended July 2, Disney+ gained 14.4 million new subscribers, nearly all of them from outside North America.

Disney’s three streaming offerings, including ESPN+ and Hulu, are at 221.1 million customers, ahead of Netflix in total customers.  Netflix last month reported it had 220.67 million subscribers.

But during the company’s earnings call, CFO Christine McCarthy said the company expected core Disney+ subscribers between 135 million and 165 million by the end of fiscal 2024.  Its new outlook for Disney+ Hotstar in India is up to 80 million subscribers by the end of fiscal 2024. The combined total, at the top end of both estimates, of 245 million is a cut from a prior range that topped out at 260 million.

The company said its ad-supported Disney+ option will be available for $7.99 a month on Dec. 8, which is the current price of the ad-free tier.  Such subscribers who don’t want ads will need to fork over $10.99.  The price of an ad-free Hulu subscription will also increase to $14.99 a month from $12.99.

While streaming was in focus, Wall Street also wanted to see how inflation is affecting the theme-park segment.  The company said cost inflation, volume growth, and new guest offerings led to higher costs in the parks, experiences, and products segment, which reported revenue of $7.39 billion and an operating profit of $2.19 billion, up from $356 million a year ago.

The media and entertainment distribution division reported revenue of $14.11 billion with operating income of $1.38 billion.

--Elon Musk took advantage of a recent rebound in Tesla’s stock price to sell $6.9 billion worth of shares since the end of last week, according to a series of regulatory filings late on Tuesday.

The sales are the first since Musk sold $8.5 billion of stock in April, shortly after he agreed to a $44 billion deal to buy Twitter, and add to his cash reserves as he faces the social media company’s demands to go through with the purchase.

Concerns that Musk would be forced to liquidate a significant part of his Tesla stake in a falling market have hung over the electric carmaker’s stock price in the weeks following the offer for Twitter, and were only eased after he announced he was scrapping the bid in early July.

The sales disclosed on Tuesday were at an average price of $869, well above the low of $620 that Tesla’s shares hit in May.

Responding to a tweet asking if he was “done selling,” Musk said “yes,” and added: “In the [hopefully unlikely] event that Twitter forces this deal to close and some equity partners don’t come through, it is important to avoid an emergency sale of Tesla stock.”

The shares finished the week at $900.

Saturday, Musk tweeted his planned $44 billion takeover of Twitter could proceed if the company can confirm some details about how it measures whether user accounts are “spam bots” or real people.

“If Twitter simply provides their method of sampling 100 accounts and how they’re confirmed to be real, the deal should proceed on original terms.  However, if it turns out that their SEC filings are materially false, then it should not.”

Twitter declined comment.  As you know, Twitter has argued in court that Musk is deliberately trying to tank the deal and using the bot question as an excuse because market conditions have deteriorated and the acquisition no longer serves his interests.

--Ford Motor Company said Tuesday that beginning this fall, its F-150 Lightning vehicles built with the standard range battery will have a targeted estimated range of 240 miles, up from 230 miles.  As in whoopty-damn-do.

But…Ford also said it is raising the manufacturer’s suggested retail price on the F-150 Lightning due to “significant material cost increases and other factors.”  The MSRP for the truck now starts at $46,974, up from $39,947 set in May of 2021.

--Rivian, a fledgling electric-vehicle manufacturer, said Thursday that it lost $1.7 billion in the second quarter.

The company said it was continuing to struggle to get enough components to ramp up production to higher levels, but it affirmed its expectation that it would make 25,000 vehicles by the end of the year.

“Supply chain continues to be the limiting factor of our production,” the company said in a statement.  “However, through close partnership with our suppliers we are making progress.”

Rivian said it generated $364 million in revenue from April to June, up from $95 million in the first three months of the year. It also said it had consumer reservations for 98,000 vehicles in the end of June.

--Tyson Foods lowered its sales volume outlook for fiscal 2022, after price increases impacted consumer demand in the fiscal third quarter, while the food company missed quarterly earnings estimates due to rising costs.

The Jimmy Dean sausage maker now expects flat volumes in the full year, compared with 1% to 2% growth previously expected.  The revenue outlook, however, was left unchanged at $52 billion to $54 billion.

The company forecasts the pork segment’s adjusted operating income margin to grow between 3% and 5% during the fiscal year, down from a prior 5% to 7% growth range, an investor presentation showed. The revised outlook reflects demand headwinds and an increase in hog costs.

For the prepared foods and chicken divisions, the company forecasts the full-year margin at the lower end of its prior ranges of 8% to 10% and between 5% and 7%, respectively, CFO Stewart Glendinning said on a call with analysts.

For the three months to July 2, volume fell nearly 2%, driven by declines in pork, chicken and prepared foods. Glendinning said on the call that lower volumes are attributable to supply issues and “a challenging macroeconomic environment impacting consumer demand.”

However, higher chicken and prepared foods’ prices helped boost fiscal third-quarter revenue by 8% annually to $13.5 billion.  Adjusted per-share earnings fell to $1.94 from $2.70 a year earlier, and the shares fell 8%.

--Novavax shares slumped more than 31% Tuesday after the Covid-19 vaccine maker slashed its guidance for 2022 revenue.

Novavax said it expects revenue this year of $2 billion to $2.3 billion, down from previous expectations of $4 billion to $5 billion.

Covax, the international vaccine initiative, has backed away from an order of 350 million doses of the Novavax vaccine because it has received too many vaccines from other companies, CEO Stanley Erck said in an interview.

Pretty simple.  Novavax’s vaccine, while effective, came way too late to the party.

--Johnson & Johnson will stop selling talc-based baby powder globally in 2023, the drugmaker said on Thursday, more than two years after it ended U.S. sales of a product that drew thousands of consumer safety lawsuits.

“As part of a worldwide portfolio assessment, we have made the commercial decision to transition to an all cornstarch-based baby powder portfolio,” it said, adding that cornstarch-based baby powder is already sold in countries around the world.

In 2020, J&J announced that it would stop selling its talc Baby Powder in the U.S. and Canada because demand had fallen in the wake of what it called “misinformation” about the product’s safety amid a barrage of legal challenges.

The company faces about 38,000 lawsuits from consumers and their survivors claiming its talc products caused cancer due to contamination with asbestos, a known carcinogen.

A 2018 Reuters investigation found that J&J knew for decades that asbestos was present in its talc products.  Internal company records, trial testimony and other evidence showed that from at least 1971 to the early 2000, J&J’s raw talc and finished powders sometimes tested positive for small amounts of asbestos.

--Cryptocurrency exchange Coinbase reported a 63 percent decline in revenue in the second quarter and swung to a $1.1 billion loss from a year ago.

Blaming the “fast and furious” crypto downturn, the company said revenue was $808 million, down from $2.2 billion a year earlier.  Its monthly customer total rose to nine million from 8.8 million last year, but was down from 9.2 million in the last quarter. Coinbase also predicted that its user numbers would continue to fall over the next three months.

As part of the industry meltdown, Coinbase’s stock price has fallen about 75 percent since November.

In June, the company laid off 18 percent of its staff, or about 1,100 employees, as Coinbase said it had “over-hired.”

--Shares in Bed Bath & Beyond soared early this week, thanks to the meme trade.  A former meme stock whose shares had fallen to $4.60 on major financial issues at its stores, appeared to have become a favorite of the Reddit investing crowd again.  They closed at $12.80 today.

--Social Security recipients are on pace to receive the biggest raise in more than 40 years for 2023.

The projected cost-of-living adjustment, or COLA for 2023 is 9.6%, according to the Senior Citizens League.  That would raise the average retiree benefit of $1,656 by $158.98, according to the organization.

The Social Security Administration will announce the actual adjustment for 2023 in October, after the release of September inflation data on Oct. 13, based on a calculation that compares the average consumer-price index from the third quarter of 2022 with data from the same period last year.

Last year’s 5.9% COLA was no match for this year’s inflation.

--With the above in mind, Bank of America reported that median rent payments for its customers increased by 7.4% year over year in July, a slight pickup from 7.2% in June.

The Bank of America Institute noted: “With roughly 34% of U.S. households being renters, a sizeable increase in rental prices have squeezed consumer wallets.”

For consumers with annual household income between $51,000 and $100,000, median rent payment soared by 8.3% year over year in July, while the lowest income group of $50,000 and less saw a 7.4% increase, the data showed.

Generationally, Gen Z (or those born after 1996) suffered the largest 16% jump in median rent payment in July from last year, while Baby Boomers (born between 1946 and 1964) only saw a 3% increase, the data showed.

Bank of America also reported that card spending per household increased by 5.3% year over year in July, down from 5.7% in June.

But with the consumer price index at 9.1% in June, and 8.5% in July, inflation-adjusted, or “real,” consumer spending “continues to be under pressure.”

--Staying on the topic of rents, Manhattan rents pushed higher in July, according to new data from brokerage Douglas Elliman. Renters who signed new leases in July paid an average rent of $5,114, while the market-rate prices for apartments in other boroughs soared higher too.

The median – a middle-of-the-pack number that avoids being skewed by luxury listings – also showed gains, climbing to $4,150 in July from $4,050 in June.

--A federal jury in Chicago convicted two former traders of JPMorgan Chase & Co.’s precious metals desk who had been charged with manipulating gold prices, finding they used misleading orders to rig prices.

The convictions cap off a seven-year Justice Department campaign to punish a style of deceptive trading in futures markets known as spoofing.

As the Wall Street Journal’s Dave Michaels explains: “Spoofing is defined as sending orders that traders intend to cancel.  The misleading orders are a ruse to trick the market into thinking supply or demand have changed.  That causes other traders to update their prices, benefiting the spoofer.”

JPMorgan paid $920 million in 2020 to settle regulatory and criminal charges against the bank over the traders’ conduct.

--Eli Lilly & Co., one of Indiana’s largest employers, said the state’s freshly passed restrictions on abortion would force the drug maker to “plan for more employment growth outside our home state.”

A growing list of companies, including Citigroup In., Apple Inc., Bumble Inc. and Levi Strauss & Co., are offering benefits for reproductive-care services in states that have imposed restrictions.  But Indianapolis-based Eli Lilly’s announcement marks a swift escalation by a multinational that employs 10,000 people in Indiana, where the drug maker was founded in 1876.

Lilly said in part: “We are concerned that this law will hinder Lilly’s – and Indiana’s – ability to attract diverse scientific, engineering and business talent from around the world,” according to a statement.  “Given this new law, we will be forced to play for more employment growth outside our home state.”

--Norwegian Cruise Line’s shares surged more than 13% in Wednesday trading, after falling 11% on Tuesday, as the Florida-based cruise line announced Monday that it was eliminating vaccination requirements and loosening Covid-19 testing rules next month.

--Unlike Disney’s solid theme-park results, Six Flags Entertainment saw its shares crater more than 20% after the company reported a sharp Q2 decline in attendance at its parks.

Six Flags said during its earnings call that attendance was down 22% from the same time last year after it eliminated free tickets and raised prices.  Attendance was off 35% through July compared with 2019, which is approximately 10% to 15% below what the company was aiming for, CEO Selim Bassoul told analysts.

Revenue fell 5% to $435.4 million, well short of the Street’s forecast of $518.5 million.  Earnings per share of $0.53 was down from $0.81 a year ago and consensus of $1.01.

--Fox Corp.’s sales rose 5% in the recently ended quarter as the advertising market showed signs of strength despite macroeconomic worries.

The company posted revenue of $3.03 billion for the three months ended June 30, below Wall Street expectations for revenue of $3.05 billion. Fox posted revenue of $2.89 billion a year ago.

The company said advertising revenue rose about 7%, primarily due to stronger pricing and higher ratings at Fox News Media, higher political advertising revenue at the Fox Television Stations and continued growth at its ad-supported streaming service Tubi.

In Fox’s cable network programming business, revenues rose 4%, boosted by advertising strength at Fox News Media.

Overall for the fiscal fourth quarter, Fox posted a profit attributable to stockholders of $306 million, or 55 cents a share, compared with $253 million, or 43 cents a share, a year earlier.

--News Corp. said revenue increased by 7.3% in the latest quarter, thanks to continued strength in advertising and rapid growth at Wall Street Journal parent Dow Jones & Co.

The New York-based media company, whose holdings include the Wall Street Journal, HarperCollins Publishers and news organizations in the U.K. and Australia, reported $2.67 billion in revenue in the quarter ended June 30, the final quarter of its fiscal year.  The company swung to a net profit of $110 million, compared with a loss of $14 million in the year-earlier period, due in part to a higher tax benefit.

News Corp reported faster revenue growth from advertising than from circulation and subscriptions in the quarter, bucking a recent trend among news publishers.  U.S. television networks and news organizations have said in recent days that they are feeling the effects of a slowdown in the advertising market.

The News Corp unit that reported the fastest growth was Dow Jones, the publisher of the Journal, Barron’s and MarketWatch, which posted a 26% rise in revenue of $565 million and a 54% increase in segment earnings to $106 million.

The Journal averaged nearly 3.1 million digital-only subscriptions in the quarter, up roughly 2% from about 3.04 million in the March quarter.  Including print, the Journal averaged 3.75 million subscribers for the period. 

News Corp’s other news publications, which include the New York Post, the Sun and the Times in the U.K. and many papers in Australia, reported a 5.7% increase in revenue to $629 million.

--The Economist Intelligence Unit (EIU) released their Global Livability Index ranking of the top 10 best and 10 worst places to live in the world in 2022.  The index scored 172 cities in five categories: culture, health care, education, infrastructure, and entertainment.

No. 1 best place to live in the world…Vienna, Austria.  Along with Paris, my favorite city.

No. 2. Copenhagen…3. Zurich…4. Calgary…5. Vancouver.

Damascus, Syria is the worst place to live.

--The action romp “Bullet Train,” starring Brad Pitt, arrived with a $30.1 million opening weekend, according to studio estimates Sunday, as the last big movie of Hollywood’s summer recovery landed in theaters.

The debut was solid but unspectacular, given that the movie cost $90 million to make and was propelled by Pitt’s substantial star power.  Movie theaters have no major studio releases on the horizon for the rest of August, and few sure things to look forward to in early fall.

Dow the road, however, we have “Black Panther: Wakanda Forever” and “Avatar 2.”

The Pandemic

--The Centers for Disease Control and Prevention on Thursday loosened many of its recommendations for battling the coronavirus, a strategic shift that puts the onus on individuals, rather than on schools, businesses and other institutions, to limit the spread.

Schools and other institutions will no longer need to screen apparently healthy students and employees as a matter of course.  The CDC is putting less emphasis on social distancing – and the new guidance has dropped the “six-foot” standard.  The quarantine rule for unvaccinated people is gone.  The agency’s focus now is on highly vulnerable populations, and how to protect them – not on the vast majority of people who at this point have some immunity against the virus and are unlikely to become severely ill.

About 42,000 people with Covid are currently hospitalized and the daily death toll is close to 500. But those numbers do not approach the dire figures of last winter, and CDC officials have repeatedly pointed to greater protection against the virus because of high levels of vaccine- and infection-induced immunity, coupled with the rollout of effective treatments that have reduced severe illness.

As we’ve learned, though, we’ll see if we get another wave in the fall and winter.

People who test positive should continue to isolate immediately and stay home for five full days if positive.

--My little town of Summit had 188 cases of Covid that were reported to the regional health authority in July, down from June’s 210, but well above the July 2021 total of 34 cases. 

As in for good reason, I see many of the vulnerable in my community still masking up. 

Covid-19 death tolls, as of tonight….

World…6,451,112
USA…1,062,054
Brazil…681,317
India…526,928
Russia…383,011
Mexico…328,596
Peru…214,818
UK…186,087
Italy…173,853
Indonesia…157,189
France…153,064

Canada…42,901

[Source: worldometers.info]

U.S. daily death toll…Mon. 142; Tues. 476; Wed. 538; Thurs. 397; Fri. 282.

Foreign Affairs, part II

China: Chinese Foreign Minister Wang Yi warned other nations not to follow the “political performance” of the United States on Taiwan.

His latest remarks come as House Speaker Nancy Pelosi defended her trip to the self-ruled island last week and accused Beijing of using the visit as a “pretext” for more aggressive action, after it held days of large-scale military drills around Taiwan.

Wang said politicians in some countries had followed Washington’s lead on Taiwan and were taking the opportunity for “political performance” and acting out of “political self-interest.”

Many European leaders in recent days said they would travel to Taiwan.

The Chinese foreign minister also called on pro-independence forces in Taiwan not to “misjudge the situation and overestimate their ability.”  He said Pelosi’s trip was a political provocation and Beijing needed to take action to defend its sovereignty.

Pelosi said on Wednesday that Beijing’s unprecedented military drills had upended a longstanding status quo in the region.

“What we saw with China is they were trying to establish sort of a new normal, and we just can’t let that happen,” she said, in her first extensive public comments since the trip.  “Their pretext was our visit for them to do what they normally do, intensified.”

She added: “We will not allow China to isolate Taiwan.”

The Chinese military announced on Wednesday that it “successfully completed” various tasks in its recent drills around Taiwan, but warned it would continue regular combat drills against the island.

In a statement, Shi Yi, spokesman for the Eastern Theatre Command, said the command had recently organized a series of joint military operations in the waters and airspace around Taiwan.

In a separate statement, Chinese defense ministry spokesman Tan Kefei said the gesture by Taiwan’s ruling Democratic Progressive Party to push forward an independence agenda through closer ties with foreign nations was propelling Taiwan towards a “disaster.”

“For the well-being of the people of Taiwan, we are willing to strive for the prospect of peaceful reunification with the greatest sincerity and best efforts.  However, the PLA will never leave any space for any form of ‘Taiwan independence’ separatist acts or interference by external forces,” tan said.

China also issued a new “white paper” on Taiwan, made public Wednesday, in which it formally withdrew a promise never to send troops to Taiwan, which is significant because it updates previous Beijing policy articulated in two similar papers published in 1993 and 2000.

Chinese Communist Party officials vow: “We are ready to create vast space for peaceful reunification” with Taiwan.  “We will only be forced to take drastic measures to respond to the provocation of separatist elements or external forces should they ever cross our red lines,” the paper reads.  And any efforts from the island’s troops to defend against Chinese aggression “will end in failure like a mantis trying to stop a chariot.”  [This is supposedly a line from a Chinese fable, which Chinese diplomats have been using in the context of Taiwan for some time.]

What’s in it for Taiwan, in terms of reunification?  “Greater security and dignity” once the island reunifies with the Chinese mainland, according to the text.

The paper said “some forces” in the United States were trying to “use Taiwan as a pawn against China.”

“Left unchecked, it will continue to escalate tension across the strait, further disrupt China-U.S. relations and severely damage the interests of the U.S. itself,” it said.

CCP officials also wrongly allege that “Taiwan has belonged to China since ancient times.”

Taiwan’s Mainland Affairs Council said the new white paper is “full of lies [and] wishful thinking.  Only Taiwan’s 23 million people have the right to decide on the future of Taiwan, and they will never accept an outcome set by an autocratic regime,” the council said in a statement.

China said last weekend that it was severing its lines of communication with the United States on defense, climate, and other diplomatic issues in response to Pelosi’s visit.

Editorial / The Economist

“America and China agree on very little these days.  Yet on the subject of Taiwan, at least in one regard, they are in total harmony. The status quo surround the self-governing island, which China claims and whose thriving democracy America supports, is changing in dangerous ways, say officials on both sides.  War does not look imminent, but the uneasy peace that has held for more than six decades is fragile. Ask them who is at fault, however, and the harmony shatters.

“That much is clear from the crisis triggered this month by a visit to Taiwan by the speaker of America’s House of Representatives, Nancy Pelosi. She was well within her rights, but her trip was provocative.  It infuriated the Chinese Communist Party. One of Ms. Pelosi’s predecessors had visited the island in 1997, but China’s top diplomat claimed that American ‘saboteurs’ had wrecked the status quo.  After Ms. Pelosi left, China fired missiles over the island and carried out live-fire drills that encircled it, as it if were rehearsing for a blockade.

“Since the previous stand-off in 1995-96, America, China and Taiwan have all grown uneasy with the ambiguities and contradictions – the status quo, if you will – on which peace precariously rests.  China, especially, has bared its teeth.  If the world is to avoid war, it urgently needs to strike a new balance….

“No country has done more to wreck the status quo than China.  Whether peace lasts is largely up to President Xi Jinping, its strongman.  He gives ample grounds for pessimism.  As China has grown rich, he has nurtured an ugly, paranoid nationalism, stressing every humiliation it has suffered at the hands of perfidious foreign powers.  He has linked unification with Taiwan to his goal of ‘national rejuvenation’ by 2049.  China’s armed forces have been building the capacity to take the island by force; its navy now has more ships than America’s.  Some generals in Washington think an invasion could occur in the next decade.

“Fortunately, China’s actions in this crisis have been muscular but calibrated – designed to show its anger and might, while avoiding escalation.  Its forces have been deployed so as not to start a war.  America has sent similar signals.  It postponed a routine test launch of an intercontinental ballistic missile. And Ms. Pelosi’s plane took a circuitous route to Taiwan, to avoid flying over Chinese bases in the South China Sea.

“The danger is that China uses the crisis to set new boundaries for its encroachments into what Taiwan considers its airspace and territorial waters. It could also attempt to impose even stricter limits on the island’s dealings with the rest of the world.

“That must not happen.  The task for America and its allies is to resist these efforts without getting into a fight.  America could start by re-establishing norms that held before the crisis.  It should promptly resume military activities around Taiwan, for instance, including transits through the Taiwan Strait and operations in international waters that China claims as its own.  It could continue to expand military exercises with allies, involving them more in contingency planning over Taiwan.  Japan was irked when China fired missiles into its vicinity and has indicated that it could intervene in a war, which would greatly complicate a Chinese invasion.

“The aim is to persuade China that such an invasion is not worth the risk… (But) Taiwan must also show more willingness to defend itself.  Its armed forces have long been plagued by corruption, waste and scandal…

“War is not inevitable. For all Mr. Xi’s ambition, his priority is to keep a grip on power.  If the invasion of Ukraine teaches one lesson, it is that even a supposedly easy victory can turn into a drawn-out struggle, with ruinous consequences at home. America and Taiwan do not have to prove that a Chinese invasion would fail, just cast enough doubt to persuade Mr. Xi to wait.”

North Korea: Kim Jong-un suffered from “fever” during the Covid pandemic, his sister has said – in what appears to be the first suggestion he had the virus.

Kim Yo-jong also blamed South Korea for her country’s outbreak – saying it sent leaflets contaminated with Covid across the border.

South Korea rejected the claim as “groundless.”

Ms. Kim, who I’ve decided is more dangerous than her brother, was speaking as her brother declared victory in the country’s battle against Covid.

In her speech – Ms. Kim – who is a powerful senior official, called South Korea’s leaflets a “crime against humanity,” and cited “the danger of spreading an infectious disease through contacting contaminated objects,” according to state news agency KCNA.

Iran: A senior Iranian diplomat said today that a European Union proposal to revive the 2015 Iran nuclear deal “can be acceptable if it provides assurances” on Tehran’s key demands, the state news agency IRNA said.

The EU said on Monday it had put forward a “final” text following four days of indirect talks between U.S. and Iranian officials in Vienna.

A senior EU official said no more changes could be made to the text, which has been under negotiation for 15 months.  He said he expected a final decision from the parties within a “very, very few weeks.”

IRNA quoted the unidentified Iranian diplomat as saying Tehran was reviewing the proposal.  “Proposals by the EU can be acceptable if they provide Iran with assurance on the issues of safeguards, sanctions and guarantees,” the diplomat said.

Yes, you’ve heard all this before.  Iran is seeking to obtain guarantees that no future U.S. president would renege on the deal if it were revived, as then-President Donald Trump did in 2018 and restored harsh U.S. sanctions on Iran.

But President Biden cannot provide such ironclad assurances because the deal is a political understanding rather than a legally binding treaty.

Speaking at Friday prayers today, a Shiite Muslim cleric who typically echoes the state line, said Tehran insisted on obtaining verifiable guarantees that U.S. sanctions would be lifted under a revived deal, according to Iranian state TV.

“We insist on getting the necessary guarantees, the lifting of sanctions and verification, and if this is achieved, then our negotiating team will tell the people that sanctions have been lifted thanks to your resistance and power,” Kazem Seddiqi said at prayers in Tehran, according to state TV.

Washington has said it is ready to quickly reach an agreement to restore the deal on the basis of the EU proposals.

The 2015 pact seemed near revival in March.  But 11 months of indirect talks between Tehran and the Biden administration in Vienna were thrown into disarray chiefly over Iran’s insistence that Washington remove its elite Revolutionary Guards Corps from the U.S. Foreign Terrorist Organizations list.

So what happened?  Wednesday, the United States charged a Revolutionary Guards member with plotting to kill John Bolton, a national security adviser to Donald Trump, though Washington said it did not believe the charges should affect the nuclear talks.

U.S. officials said Shahram Poursafi, a member of the IRGC, was in Iran and wanted over the alleged plot.

They said Poursafi was likely seeking revenge for the U.S. strike that killed Qasem Soleimani, Iran’s most powerful military commander.

The Department of Justice, in announcing the charges, said Poursafi, aka Mehdi Rezayi, had “attempted to pay individuals in the United States $300,000 to carry out the murder in Washington, D.C. or Maryland.”

For his part, Bolton urged the Biden administration to cease negotiations with Iran.

“I do think it’s important for people to understand that this plot, this effort to kill me…and I’m certainly not alone in this, they’re after plenty of people, including average citizens, not just former government employees – that shows the real nature of the regime,” Bolton told Yahoo News in an interview Thursday.

“I wouldn’t restart the nuclear talks,” Bolton said.  “To me, going back in the deal is a huge strategic mistake for the United States. So what I would do would be to terminate discussions.  I don’t think you’re ever going to achieve peace and security in the Middle East as long as the current regime in Tehran is in power.  So my policy would be removing the regime.”

He said this could be done by exploiting factions and rivalries inside the regime’s military and leadership.

Random Musing

--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: 45% approve of Biden’s performance, 53% disapprove (Aug. 12).

--Five Senate races that could determine the balance of power:

Wisconsin: Sen. Ron Johnson (R) vs. Lt. Gov. Mandela Barnes (D)
Pennsylvania: Dr. Mehmet Oz (R) vs. Lt. Gov. John Fetterman (D)
Nevada: Adam Laxalt (R) vs. Sen. Catherine Cortez Masto (D)
Georgia: Herschel Walker (R) vs. Sen. Raphael Warnock (D)
Arizona: Blake Masters (R) vs. Sen. Mark Kelly (D)

Joe Biden won all five of the above states.

Even Senate Republican leader Mitch McConnell tempered expectations during a recent appearance on Fox News: “I think it’s going to be very tight,” he said.  “I think when this Senate race smoke clears, we’re likely to have a very, very close Senate still, with us up slightly or the Democrats up slightly.”

--Next Tuesday, Aug. 16, is the Wyoming congressional primary where Liz Cheney, whose campaign I contributed to, will lose to Trump-backed candidate Harriet Hageman.  Such are the times we live in…that a classic conservative Republican, Cheney, will lose to a total idiot. 

--Trump World

The Wall Street Journal reported Wednesday that after the June 3 joint Justice Department and FBI visit at Mar-a-Lago to discuss boxes with government records sitting in a basement storage room along with suits, sweaters and golf shoes, the FBI days later sent a note asking that a stronger lock be installed on the storage room door.  That was it.

“In the following weeks, however, someone familiar with the stored papers told investigators there may be still more classified documents at the private club after the National Archives retrieved 15 boxes earlier in the year, people familiar with the matter said.  And Justice Department officials had doubts that the Trump team was being truthful regarding what material remained at the property, one person said.  Newsweek earlier reported on the source of the FBI’s information.

“Two months later, two dozen Federal Bureau of Investigation agents were back at Mar-a-Lago with a warrant predicated on convincing a federal magistrate judge that there was evidence a crime may have been committed.  After hours at the property, the agents took the boxes away in a Ryder truck.”

And so now we wait for information on what the Justice Department was seeking.

The warrant, signed by a judge in Palm Beach County who immediately was under threat by Trump supporters, apparently refers to the Presidential Records Act and possible violation of law over handling of classified information, according to Christina Bobb, a lawyer for Trump.

The warrant hasn’t been made public by Trump nor has the inventory of documents retrieved by the government.

The agents on Monday were dressed in plainclothes and told not to take any weapons.  They reportedly targeted three rooms – a bedroom, an office and a storage room.  The agents went undetected for much of the day until a Florida political blogger tweeted about it and then Trump issued a statement saying his home was “under siege, raided, and occupied by a large group of FBI.”

But this is just one of Trump’s legal issues.

The Justice Department has been conducting a widening investigation into the Jan. 6 insurrection at the Capitol.

The DOJ has reportedly expanded its criminal probe to examine Trump himself and his pressure campaign on Vice President Mike Pence to deny the results of the election.

The Manhattan district attorney’s investigators have been probing the Trump Organization and top company executives since 2019.

Fulton County, Georgia, District Attorney Fani Willis launched a probe into Trump and his political allies after Georgia Secretary of State Brad Raffensperger taped a call of him demanding he “find” enough votes to overtake Biden.

Wednesday, FBI Director Christopher A. Wray had strong words for supporters of Donald Trump who have been using violent rhetoric over the agency’s search, calling threats circulating online against federal agents and the Justice Department “deplorable and dangerous.”

“I’m always concerned about threats to law enforcement,” Wray said. “Violence against law enforcement is not the answer, no matter who you’re upset with.”

On Gab – a social media site popular with white supremacists and antisemites – a user going by the name of Stephen said he was awaiting “the call” to mount an armed revolution.

“All it takes is one call. And millions will arm up and take back this country.  It will be over in less than 2 weeks,” the post said.

Another Gab poster implored others: “Let’s get this started! This unelected, illegitimate regime crossed the line with their GESTAPO raid!  It is long past time the lib socialist filth were cleansed from American society!”

Editorial / Washington Post

“ ‘Lock her up, lock her up.’

“Donald Trump’s supporters lobbed this rallying cry at Hillary Clinton in 2016 – hoping for the imprisonment of a political opponent for allegedly mishandling classified material.  Now, however, some of the same people appear to believe that even a rule-of-law investigation of Mr. Trump for a possible violation of the same set of rules is out of order.

“The FBI executed a search warrant at Mr. Trump’s Mar-a-Lago residence in Florida this week as part of what The Post reports is an investigation into the potential mishandling of White House documents.  The National Archives discovered about seven months ago that the former president had taken more than a dozen boxes of files with him when he left office, some of them marked ‘top secret’ – and suspected, it seems that the documents he handed over to investigators this spring represented only a portion of the trove.  Republicans are proclaiming outrage over the search, arguing that no president has ever been subjected to such a proceeding.  They may be right. But then, no modern president has been the subject of as many and varied investigations as Mr. Trump – who invoked his Fifth Amendment protection against self-incrimination in one of them on Wednesday.

“Of course, criminal investigations of presidents shouldn’t be undertaken lightly. The warrant in this case isn’t public; even if it were, only a sealed affidavit could tell the full story about the evidentiary basis for the search. The improper retention of records is a serious offense that shouldn’t be dismissed, but it is so far unclear whether Mr. Trump’s retention of these records constituted a violation of national security, a threat to democracy, or any other grave abuse.  Attorney General Merrick Garland, then, finds himself in a tricky position: He may eventually be summoned before GOP-controlled congressional committees and ordered to explain himself for allowing the FBI’s actions – a job that will prove more difficult if the inquiry doesn’t lead to criminal charges or evidence of major wrongdoing.

“For now, the prudent reaction to the search would be to await its tangible results. Instead, Republicans are behaving with gross irresponsibility: from talk show hosts urging violence that seems all-too-possible after the events of Jan. 6, 2021, to Sen, Rick Scott (R-Fla.) and former Trump strategist Stephen K. Bannon comparing the FBI to the Gestapo, to House Minority Leader Kevin McCarthy (R-Calif.) declaring the Justice Department is ‘an intolerable state of weaponized politicization.’  This rhetoric is disturbing and dangerous – not to mention hypocritical.  In fact, it is Mr. Trump’s administration and acolytes who sought to weaponize the Justice Department, and it is they who today are attempting to turn what to all appearances is a legitimate inquiry into a political circus.”

Editorial / Wall Street Journal

“Monday’s unannounced Federal Bureau of Investigation search of Donald Trump’s Mar-a-Lago home isn’t a moment for anyone to cheer. The Justice Department is unleashing political furies it can’t control and may not understand, and the risks for the department and the country are as great as they are for Mr. Trump.

“As everyone knows by now, an FBI law-enforcement action of this kind against a former American President is unprecedented.  Monday’s search needed a judicial warrant in service of probable cause in a criminal probe. The Justice Department has provided few details beyond what has been leaked to reporters, so it is hard to judge what the FBI was looking for.

“The media leaks say the search is related to potential mishandling of classified documents or violations of the Presidential Records Act. If that is true, then the raid looks like prosecutorial overkill and a bad mistake. Documents disputes are typically settled in negotiation, and that is how Mr. Trump’s disagreement with the National Archives had been proceeding.

“Mr. Trump has already returned 15 boxes of documents, but the National Archives wants to know if the former President retained classified material he shouldn’t have. This is what appears to have triggered the FBI search, but it’s far from clear why this couldn’t be settled cooperatively, or at most with a subpoena….

“Unless Mr. Trump’s offense involves a serious risk to national security, half of America may see the Trump search as an example of unequal justice.

“This may not be the full FBI story.  Multiple media reports suggest that Justice has opened a grand jury probe into the events of Jan. 6, 2021, and Mr. Trump may be a target of that investigation. The House committee investigating Jan. 6 has been cheering for a prosecution, and the political and media pressure is intense on Attorney General Merrick Garland to indict Mr. Trump.  The FBI search may be a fishing expedition to find evidence related to Jan. 6.

“On the public evidence so far, a Jan. 6 indictment would be a legal stretch. Political responsibility isn’t the same as criminal liability.  In our view, the evidence would have to show that Mr. Trump was criminally complicit in that day’s violence at the Capitol.

“Given its inherently political nature, the burden of proof is especially high for indicting a former President, all the more so for an Administration of the opposition party. The evidence had better be overwhelming – not merely enough to convince a 12-person jury in the District of Columbia, but enough to convince a majority of the American public.

“Then there is the fraught history between Mr. Trump and the FBI and Justice.  The Russia collusion probe was a fiasco of FBI abuse of process and public deception. Current FBI director Christopher Wray was Mr. Trump’s choice to succeed the disastrous James Comey, but the bureau still has a serious credibility problem.

“That the Mar-a-Lago raid occurred only about 90 days from a national election also increases the political suspicion. Democrats want to keep Mr. Trump front and center in the midterm campaign, which is why the Jan. 6 committee is continuing into the autumn.

“Anyone who thinks an indictment and trial of Mr. Trump would go smoothly is in for a rude surprise.  Millions of his supporters will see this as vindication of his charges against the ‘deep state,’ and who knows how they will respond.  Has Mr. Garland considered all of this?

“Worse in the long term is the precedent being set and the payback it is likely to inspire.  Once the Rubicon of prosecuting a former President has been crossed – especially if the alleged offense and evidence are less than compelling – every future President will be a target.  William Barr, Mr. Trump’s second AG, wisely resisted pressure to indict political actors without a very strong case.  The next Republican AG will not be as scrupulous.

“Democrats may also be wrong in their calculation about how a prosecution would affect Mr. Trump’s future.  The FBI search alone makes it more likely that Mr. Trump will run again for President, if only to vindicate himself.  He will run as a martyr, and even Republicans who want to turn the page on the former President may be repelled by what they see as a political prosecution.

“All of this risks compounding the baleful pattern of the last six years.  Mr. Trump is accused of violating political norms – sometimes fairly, sometimes not – and the left violates norms in response.  Polarization increases, and public faith in institutions and the peaceful settlement of political difference erodes further.

“The FBI search on Mr. Trump suggests that Mr. Garland may be committed to pursuing and indicting Mr. Trump.  If so, he is taking the country on a perilous road. There is much ruin in a nation, but no one should want to test the limits of that ruin in America.”

The Journal then editorialized further Thursday night, after Merrick Garland defended the FBI’s search of Trump’s residence and said he personally signed off on it:

“By sanctioning the Mar-a-Lago search, Mr. Garland has broken a political norm that has stood for 232 years. He had better have enough evidence to justify it in the end, or he will have unleashed political forces and a legal precedent that Democrats as much as Donald Trump may come to regret.”

---

Former Vice President Mike Pence, who has sought to distance himself, a bit, from Trump, called on the attorney general to give “a full accounting” of why the search warrant was carried out.

“I share the deep concern of millions of Americans over the unprecedented search of the personal residence of President Trump,” Pence tweeted.

“No former President of the United States has ever been subject to a raid of their personal residence in American history,” Pence wrote.  Merrick Garland “must give a full accounting to the American people as to why this action was taken and he must do so immediately.”

House GOP leader Kevin McCarthy told AG Garland: “Preserve your documents and clear your calendar.”

“I’ve had enough,” McCarthy said, adding the Justice Department has reached “an intolerable state of weaponized politicization.”

White House spokeswoman Karine Jean-Pierre told reporters on Tuesday that President Biden was given no advance notice by the FBI of the raid, and that he “learned about this from public reports.”

“The president was not briefed and was not aware of it.  No one at the White House was given a heads-up,” she said.

---

The former president invoked the Fifth Amendment and wouldn’t answer questions under oath in the New York attorney general’s long-running civil investigation into his business dealings, Trump said in a statement Wednesday.

Trump said he “declined to answer the questions under the rights and privileges afforded to every citizen under the United States Constitution.”

“I once asked, ‘If you’re innocent, why are you taking the Fifth Amendment?’  Now I know the answer to that question,” the statement said.  “When your family, your company, and all the people in your orbit have become the targets of an unfounded politically motivated Witch Hunt supported by lawyers, prosecutors and the Fake News Media, you have no choice.”

Writing beforehand on Truth Social, his social media platform, Trump wrote: “My great company, and myself, are being attacked from all sides.  Banana Republic!”

---

I watched all one hour and 55 minutes of Donald Trump’s speech at CPAC last Saturday, except the first ten.  I then pulled up the transcript and that’s where I learned in the beginning, talking about former White House doctor Ronnie Jackson, now Congressman Jackson, Trump pointed him out in the audience.

“He was a great doctor. He was an Admiral, a doctor, and now he’s a congressman.

“I said, ‘Which is the best if you had your choice?’ And he sort of indicated doctor, because he loved looking at my body.  It was so strong and powerful.  How often?  But he said I’m the healthiest president that’s ever lived.  I was the healthiest. I said, ‘I like this guy.’”

[While working as the White House doctor, Jackson drank on the job, made sexually inappropriate comments and was generally tyrannical, according to a Department of Defense report released earlier this year.]

Trump also said Saturday….

“When I was in China, and until the plague came in, I had a very good relationship with President Xi.  We made a great trade deal for our manufacturers and farmers. But after the plague, I don’t even talk about that deal.  Too much damage done. But I had a great relationship with President Xi of China. Strong man.  You could go all over Hollywood, you couldn’t get an actor to play the role of President Xi.  He’s a great guy in many respects, but he’s not too in love with our country.  I can tell you that….”

Trump won 69 percent of a presidential straw poll at CPAC, topping Florida Republican Gov. Ron DeSantis, who took 24 percent.  Trump also had a 99 percent approval rating among CPAC voters.

Election integrity was voted the most important issue for CPAC attendees, followed by border security.

--Trump once asked why American generals weren’t more like Nazis, according to a report in the New Yorker from Susan Glasser and Peter Baker, an excerpt from their upcoming book, “The Divider: Trump in the White House, 2017-2021.  Trump and his then-chief of staff John Kelly once had this exchange:

“You fucking generals, why can’t you be like German generals?”

“Which generals?” Kelly asked.

“The German generals in World War II,” Trump responded.

“You do know that they tried to kill Hitler three times and almost pulled it off?” Kelly said.

Trump refused to believe Kelly: “No, no, no, they were totally loyal to him,” he replied.  “In his version of history,” Glasser and Baker write, “the generals of the Third Reich had been completely subservient to Hitler; this was the model he wanted for his military.”

Tom Nichols / The Atlantic

“Let us leave aside the problem that Donald Trump might be the most intellectually limited and willfully ignorant man ever to sit in the Oval Office.  Still, we must ask: Nazis?

“Donald Trump’s role models for the men and women of the finest military of the most successful democracy on Earth were…who? Wilhelm Keitel, or Alfred Jodl, both of whom were hanged at Nuremberg?  Wilhelm Canaris or Friedrich Olbricht, who were also executed – but by the Nazis for plotting to kill Hitler? Trump has a simplistic belief that the Nazis were effective, efficient and loyal….

“We should not console ourselves that Trump failed in this effort.  It’s too easy, now, to say that ‘the system worked’ or the ‘guardrails held.’  Glasser and Baker point out that Trump, almost from his first days in office, started searching for ‘his generals,’ the men – always men – whose loyalty would transcend trifling documents such as the Constitution of the United States. This is how Trump’s administration ended up infested with people such as Michael Flynn, Anthony Tata, and Douglas Macgregor – all retired military officers, political extremists, and crackpots.  Fortunately, Trump failed to find senior officers still in uniform who would bend to his wishes – but mostly, it seems, because he ran out of time.

“Trump will continue his war on the FBI as part of his ongoing struggle against democracy and the rule of law. But his attempt to corrupt the U.S. military – which, in the event of a national crisis, foreign or domestic, is the final line of defense for our system of government – was a vastly more dangerous gambit, and one we should not forget in the midst of the current scrum.”

In another conversation from the book, Trump reportedly told Kelly he didn’t want any injured veterans to be part of an Independence Day parade he was planning.

“Look, I don’t want any wounded guys in the parade,” Trump said.  “This doesn’t look good for me.”  He explained with distaste that at the Bastille Day parade there had been several formations of injured veterans, including wheelchair-bound soldiers who had lost limbs in battle.

Kelly could not believe what he was hearing.  “Those are the heroes,” he told Trump.  “In our society, there’s only one group of people who are more heroic than they are – and they are buried over in Arlington.”  Kelly did not mention that his own son Robert, a lieutenant killed in action in Afghanistan, was among the dead interred there.

“I don’t want them,” Trump repeated.  “It doesn’t look good for me.”

--New York City’s Education Department is facing a logistical nightmare with the start of a new school year fast approaching: registering potentially thousands of recently-arrived asylum-seeking kids for school in less than a month.

City officials estimate more than 4,000 migrants from Central and South America have sought refuge in New York and filled city homeless shelters in recent weeks – many on buses sent by Texas Gov. Greg Abbott.

Schools in New York open Sept. 8, and the city needs to identify, enroll, and secure additional services for hundreds, maybe thousands, of newcomers with no knowledge of U.S. schools, unstable housing and limited English proficiency.

--The polio virus has been found in New York City’s wastewater in another sign that the disease, which hadn’t been seen in the U.S. in a decade, is quietly spreading among unvaccinated people, health officials said Friday.

“The risk to New Yorkers is real but the defense is so simple – get vaccinated against polio,” New York City Health Commissioner Dr. Ashwin Vasan said in a statement.  As in vaccinate your children. The disease is entirely preventable.

--At least eight people were killed in massive flooding in South Korea’s capital of Seoul, following the highest rate of rainfall in 80 years, Korea’s meteorological agency said.

Some of the victims lived in semi-basement apartments known as banjiha.

--Europe’s drought grows worse, with large sections of Italy’s River Po dried up, revealing an unexploded World War II bomb in one area.

France’s longest river, the Loire, is also drying up.  As of Wednesday, at least 120 municipalities in France had no running water. 

It is the country’s worst recorded drought, and the dry conditions are continuing.  Ditto in Spain, and Germany’s Rhine River is drying up in parts, with major economic implications.

Experts believe this could be the worst drought in these parts of Europe in 500 years.

--Flash flooding at Death Valley National Park triggered by historic rainfall last weekend buried cars, forced officials to close all roads in and out of the park and stranded about 1,000 people.

Nearly an entire year’s worth of rain, at least 1.7 inches, fell in one morning.  The park’s average annual rainfall is 1.9 inches.

--The official death toll in Kentucky’s flood disaster has hit 39.

--Salman Rushdie, the author whose writing led to death threats from Iran in the 1980s, was attacked and stabbed as he was about to give a lecture in western New York.

Rushdie, 75, was flown to hospital and his condition is not good as I go to post.

The attack occurred at the Chautauqua Institution, a summer retreat of sorts where folks go for spiritual renewal and enrichment that includes an extensive lecture series.  I have some very good friends who are there now and when they arrive, they largely go offline for a few months, and then I learn later about it when they return to New Jersey in another week or so.

It was in 1989 that Ayatollah Khomeini issued a fatwa against Rushdie, calling for his death.  He still has a bounty on his head in the Muslim world.

Rushdie eschewed large security teams and long-time Chautauqua residents called into the question the sparse security for the event.  As in it seems there was a single state trooper assigned to him.  That trooper made the arrest, with help from audience members, and while there are no confirmed details on the 24-year-old suspect from New Jersey, early reports are disturbing.

--We note the passing of the great chronicler of American history, David McCullough, who died at the age of 89 at his home in Hingham, Mass.

Beginning with a history of “The Johnstown Flood,” published in 1968, McCullough rapidly established himself as a historian with a gift for animating history.

Over a career spanning more than five decades, McCullough turned out hugely popular tomes on subjects such as the building of the Panama Canal and the Brooklyn Bridge.

He won two Pulitzer Prizes for his biographies of two underappreciated presidents, John Adams and Harry S. Truman.

McCullough often collaborated with filmmaker Ken Burns and narrated Burns’ Emmy Award-winning documentary series “The Civil War.”

“He’s had a profound influence on all I’ve done because he taught me how to tell a story,” Burns told an audience in 2015.

“History matters. That’s what I’ve tried to convey,” McCullough told the Patriot Ledger of Quincy, Mass., in 2017.  “It’s essential to understand our nation’s story, the good and the bad, the  high accomplishments and the skulduggery. And so much of our story has yet to be told.”

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

Pray for Ukraine.

God bless America.

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Hang in there.

Brian Trumbore

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