Week in Review

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Week in Review

08/27/2022

For the week 8/22-8/26

[Posted 8:00 PM ET, Friday]

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Edition 1,219

Federal Reserve Chairman Jerome Powell gave his long-awaited speech on Fed monetary policy at the Fed’s annual Jackson Hole Symposium and despite signs that inflation has slowed from recent 40-year peaks, Powell made it clear the Federal Open Market Committee, when it next meets Sept. 20-21, will not pause its campaign to bring price acceleration back to 2%.

“We are taking forceful and rapid steps to moderate demand so that it comes into better alignment with supply, and to keep inflation expectations anchored.  We will keep at it until we are confident the job is done.”

“Today, by many measures, longer-term inflation expectations appear to remain well anchored,” Powell said.  “That is broadly true of surveys of households, businesses, and forecasters, and of market-based measures as well.  But that is not grounds for complacency, with inflation having run well above our goal for some time.”

Powell conceded that at some point it may be appropriate to slow the pace of rate increases after a pair of 75 basis point hikes at the most recent two meetings, but said the size of the increase at the upcoming Sept. gathering will depend on the data and repeated that another “unusually large increase” may be needed at that point.

The markets, looking past September, have been hoping the Fed would lower rates in 2023 when signs of recession could become apparent, but Fed officials this week squelched such thoughts, saying rates will need to remain high to make sure inflation is under control.

“Restoring price stability will likely require maintaining a restrictive policy stance for some time,” Powell said.  “The historical record cautions strongly against premature loosening policy.”

“While higher interest rates, slower growth, and softer labor market conditions will bring down inflation, they will also bring some pain to households and businesses,” Powell added.  “These are the unfortunate costs of reducing inflation.  But a failure to restore price stability would mean far greater pain.”

The market at first largely sloughed off Powell’s 10:00 a.m. ET comments, having been open for 30 minutes, but then it was down, down, down…the Dow Jones losing 1,008 points in the end.  There has been way too much optimism, as I’ve been noting, though I’ve also been talking about geopolitical risks.  To wit….

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Russian President Vladimir Putin on Thursday ordered a sharp increase in the size of Russia’s armed forces, a reversal of years of efforts by the Kremlin to slim down a bloated military and the latest sign that he is bracing for a long war in Ukraine, where Russia has suffered heavy losses.

This was a decree raising the target number of active-duty service members by about 137,000, to 1.15 million, as of January next year, and ordered the government to set aside money to pay for the increase.

This is not a general mobilization and/or draft, which would have been the signal to the Russian people that Ukraine was more than a “special military operation,” and instead a full-blown war.

That’s an important distinction, and there was little mention of the move on state television.  U.S. officials said Putin’s decision is a signal about just how acute Russia’s problems in Ukraine, including manpower, remain.  U.S. and British military officials estimate Russia has suffered up to 80,000 casualties, including both deaths and injuries.  But Putin’s order is also a sign that after six months of fighting, he has no interest in ending the war. 

Wednesday marked not just 31 years of Ukrainian independence, but also six months since Russia invaded, Feb. 24.  President Volodymyr Zelensky vowed to drive Russian forces out completely.

After days of dire warnings that Moscow could use the anniversary to launch a series of attacks on major cities, the second biggest city, Kharkiv, was under curfew after months of bombardment.

Independence Day celebrations were canceled, and Zelensky used the day to give an emotional speech to his compatriots, saying the attack had revived the nation’s spirit.

“A new nation appeared in the world on Feb. 24 at 4:00 in the morning.  It was not born, but reborn. A nation that did not cry, scream or take fright.  One that did not flee.  Did not give up.  And did not forget,” he said.

Zelensky, speaking in front of Kyiv’s central monument to independence in his trademark combat fatigues, vowed to recapture occupied areas of eastern Ukraine as well as the Crimean Peninsula, which Russia annexed in 2014.

“We will not sit down at the negotiating table out of fear, with a gun pointed at our heads.  For us, the most terrible iron is not missiles, aircraft and tanks, but shackles.  Not trenches, but fetters,” he said.

The United States said it believed Russia would target civilian and government infrastructure in the next few days.  U.S. citizens should leave Ukraine “now” by their own means if it was safe to do so, the U.S. Embassy said.

Russia has made few advances in Ukraine in recent months, after its troops were pushed back from Kyiv in the early weeks of the war.  Ukrainian soldiers on the front line in the east said they were more motivated than their enemy.

Russian Defense Minister Sergei Shoigu told a meeting of defense ministers in Uzbekistan that Russia had deliberately slowed down what it refers to as its “special military operation*” in Ukraine to avoid civilian casualties. 

*Moscow has set jail terms of five years for anyone referring to its actions in Ukraine as an ‘invasion’.

Tuesday evening, Zelensky had warned of the possibility of “repugnant Russian provocations” and on Wednesday, Ukraine’s military urged people to take air raid warnings seriously.

The war has killed thousands of civilians (a UN estimate puts the toll at 5,600, but this doesn’t seem to include Mariupol), forced more than a third of Ukraine’s 41 million people from their homes, left cities in ruins, and shaken the global economy.

Aside from Crimea, Russian forces now occupy areas of the south including the Black Sea and Sea of Azov coasts, and chunks of the eastern Donbas region.

Almost 9,000 Ukrainian military personnel have been killed, the country’s military said this week.  U.S. intelligence estimates 15,000 Russian troops have been killed.  Ukraine’s General Staff put the Russian death toll far, far higher…at 45,000.  It’s impossible to verify the numbers on either side at this point.

Wednesday, President Biden announced a further security package of about $3 billion for Ukraine, bringing the U.S. total to $13 billion.

“Today and every day, we stand with the Ukrainian people to proclaim that the darkness that drives autocracy is no match for the flame of liberty that lights the souls of free people everywhere,” Biden said.

NATO Secretary General Jens Stoltenberg said in a video message: “You can count on NATO’s support. For as long as it takes,” telling Ukrainians they were an inspiration to the world.

In the latest mysterious fire at a Russian military facility, Russian officials said ammunition stored in the south near the border with Ukraine spontaneously combusted on Tuesday.  The governor of the Belgorod region blamed hot weather for the fire, drawing ridicule from Ukraine’s defense ministry on Twitter.

“The five main causes of sudden explosions in Russia are: winter, spring, summer, autumn and smoking,” it said.

Wednesday, Russia did strike with a missile attack on a train station that killed 25 people.  Two of the victims were children, and some of the 25 burnt to death in a train car.  Moscow claimed 200 Ukrainian soldiers died in the attack, which Kyiv said nothing of.

--Fears of intensified Russian attacks followed the killing of Darya Dugina, the daughter of a prominent Russian ultra-nationalist, in a car bombing near Moscow on Saturday.  Moscow blamed the killing on Ukrainian agents, a charge Kyiv denies.

According to Russia’s state-run TASS news agency, “a citizen of Ukraine identified as Natalia Vovk” was allegedly behind the apparent attack, and Russia’s domestic spy service, the FSB, says she fled to Estonia afterward.

The FSB says a “remote-controlled” bomb detonated on Dugina’s Land Cruiser, and shortly afterward the accused and her daughter crossed the border into Estonia. 

Total garbage.

Dugina was the daughter of Alexander Dugin, and initially people suspected the 60-year-old Dugin was the intended target of the bombing – since he reportedly changed cars at the “last minute” ahead of the bombing, according to Russian newspaper Rossiskaya Gazeta.  The BBC reported Dugin is thought to be close to Vladimir Putin, but exactly how close is unclear – despite the breathless headlines that Dugin is “Putin’s brain” and “author of Putin’s Ukraine strategy,” and more.

But others say Dugin was never close to Putin and was never an advisor.  He is an extreme ideologue, a popular poet, a nationalist, with ties to the Russian Orthodox Church, who has indeed been a supporter of the war in Ukraine, and at his daughter’s wake, called for an increased military operation there.

Dugin did tell the BBC in 2014 that war with Ukraine “is inevitable,” and said Crimea should be annexed; both of which happened later that year.

Darya was a commentator on a nationalist RV channel and shared her father’s ideology and support of the war.

Kyiv denied any involvement in the bombing and warned Moscow of a powerful response if it launches its own strikes of retribution.

--Over the weekend, Zelensky warned in a video address: “We have to be aware that this week, Russia may try to do something particularly nasty, particularly cruel.  Such is our enemy.  But Russia has been doing this every week over these last six months, doing terrible and violent things.”

Monday, Zelensky said: “The total number of various cruise missiles that Russia has used against us is approaching 3,500.  It is simply impossible to count the strikes of Russian artillery – there are too many of them, they are too intense.  I am grateful to all our friends, all friends of freedom in different countries of the world, who promote the need to recognize the objective reality and legally define Russia as a terrorist state.

--On the crisis surrounding the Zaporizhzhia nuclear plant in southern Ukraine, International Atomic Energy Agency chief Rafael Grossi said the UN nuclear watchdog hoped to gain access within days if negotiations succeeded.  The United Nations has called for the area to be demilitarized.

Ukrainian officials say Russian troops continue to shell Europe’s largest plant and nearby areas.  U.S. and Ukrainian officials have warned of intensified attacks on civilian infrastructure and government facilities in coming days.

President Zelensky said Thursday that the world narrowly avoided a radiation disaster as the last regular line supplying electricity to the Zaporizhzhia plant was restored hours after being cut, due to the military activity in the area.  He said back-up diesel generators had started to ensure power supply and keep the plant safe.  [But it’s not known how much diesel Russia has available on site.]

Electricity is used for cooling and safety systems.  Nuclear experts have warned of the risk of damage to the plant’s spent nuclear fuel pools or its reactors.  Cuts in power needed to cool the pools could cause a disastrous meltdown.

Tonight, Zelensky said the situation at the plant remains “very risky and dangerous.”

“Any repeat of yesterday’s events, meaning any disconnection of the station from the grid, any action by Russia that could provoke the disconnection of reactors, would once again place the station one step away from a catastrophe,” Zelensky added.

--The UN rights office on Tuesday voiced concerns about plans by Russian-backed authorities to try Ukrainian prisoners of war in Mariupol, possibly within days, saying that such a process could itself amount to a war crime.

“We are very concerned about the manner in which this is being done.  There are pictures in the media of cages being built in Mariupol’s philharmonic hall, really massive cages and apparently the idea is to restrain the prisoners,” a UN spokeswoman, Ravina Shamdasani, told a UN briefing.  “This is not acceptable, this is humiliating,” she said.  Willfully depriving a prisoner of war to the right to a fair trial amounts to a war crime by Russia, she added.

--Russian state-owned energy exporter Gazprom said it would shut down the Nord Stream natural-gas pipeline to Germany for three days of maintenance later this month, Aug. 31-Sept. 2, ratcheting up the pressure on energy-starved Europe.

The unexpected move could complicate efforts by Germany and much of Europe to fill gas reserves ahead of winter in order to stave off widespread rationing that would not only keep its population warm, but keep the economy churning without disruptions.

Moscow has already reduced deliveries over the pipeline to Europe to 20% of its maximum capacity, citing technical issues with its turbines, claims that European officials have dismissed, calling the cuts an economic attack in retaliation for supporting Ukraine.

EU gas storage levels were at 76% as of a week ago, which is solid, with Germany at 78%.  But full storage may not be enough this winter if Russia totally stops the flow.

--In his third visit to Kyiv since the war started, British Prime Minister Boris Johnson, who is leaving office next month, lauded Ukraine for its “indomitable” resistance to Russia’s invasion and that now was not the time to advance a “flimsy plan for negotiation.”

“We also know that if we’re paying in our energy bills for the evils of Vladimir Putin, the people of Ukraine are paying in their blood,” Johnson said.  “And that’s why we know we must stay the course.  Because if Putin were to succeed, then no country on Russia’s perimeter would be safe, and…(that) would be a green light for every autocrat in the world that borders could be changed by force.”

Johnson is due to leave office in less than two weeks, but the two candidates to replace him, Foreign Secretary Liz Truss and former finance minister Rishi Sunak, have both pledged to continue Britain’s support for Ukraine.  Johnson warned against “any creeping attempt to normalize relations with Putin,” especially given growing signs that the Russia offensive was failing and that Putin was racking up what he called colossal losses.

“This is not the time to advance some flimsy plan for negotiation with someone who is simply not interested.  You can’t negotiate with a bear while it’s eating your leg,” Johnson said.

--Moscow is reportedly making preparations to stage referendums in Russian-occupied areas of Ukraine, according to John Kirby, head of communications at the national security council.

Kirby said that holding referendums, however, which would be intended as a prelude to annexation, was proving a challenge to Russian organizers in the face of near-total opposition of Ukraine’s population.

--Belarusian President Alexander Lukashenko said on Friday that his military’s SU-24 warplanes had been modified to carry nuclear weapons and that Minsk would react immediately if the West caused it any problems.  Lukashenko said he had agreed to the move to modernize Belarusian warplanes with Vladimir Putin, the Belta news agency reported.  Belarus, a staunch Russian ally, does not have its own nukes.

Lukashenko appears to be talking about a potential threat from Poland.

--In his Friday evening address, President Zelensky said Ukraine has now exported one million tons of agricultural products from its Black Sea ports under the terms of a grain deal brokered by Turkey and the United Nations.  Forty-four ships had been sent to 15 nations.

--According to a new Reuters/Ipsos online poll published Wednesday, 53% of U.S. residents support Ukraine until Russia withdraws.  Only 18% said they opposed.  Democratic voters were more likely to back the position, with 66% of Democrats in support compared to 51% of Republicans.

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Biden Agenda

President Biden delivered on a campaign promise, a most controversial one, to cancel a portion of the education debt held by millions of Americans.

Biden said he would cancel up to $10,000 in federal student loan debt for borrowers who earn less than $125,000 per year, or under $250,000 for married couples who file jointly.  Those who receive Pell Grants, federal aid for lower-income students, could see up to $20,000 in forgiveness.

While the announcement comes ahead of critical midterm elections and could give Democrats a boost among some voters, it also threatens their standing with those who say it’s not enough – or too much.

Conservatives pounced, calling it fiscally irresponsible and patently unfair to the millions of Americans who never attended college, never borrowed or had paid off their loans.

The White House estimates that nearly 90 percent of the relief will go to people earning less than $75,000 and that roughly 20 million borrowers could have their debt completely canceled.

Biden said in announcing the plan: “I will never apologize for helping working Americans and the middle class, especially not to the same folks who voted for a $2 trillion tax cut that mainly benefited the wealthiest Americans and the biggest corporations,” referring to a Republican tax cut passed under former President Trump.

“President Biden’s student loan socialism is a slap in the face to every family who sacrificed to save for college, every graduate who paid their debt, and every American who chose a certain career path or volunteered to serve in our Armed Forces in order to avoid taking on debt,” Senate Minority Leader Mitch McConnell said Wednesday.

“Biden’s student loan forgiveness plan may win Democrats some votes, but it fuels inflation, foots taxpayers with other people’s financial obligations, [and] is unfair to those who paid their own way,” Sen. Mitt Romney (R-Utah) said.

Former Treasury Secretary Larry Summers tweeted that debt relief “consumes resources that could be better used helping those who did not, for whatever reason, have the chance to attend college.  It will also tend to be inflationary by raising tuitions.”

Jason Furman, who headed the Council of Economic Advisers during the Obama administration, said debt-cancellation would nullify the deflationary powers of the Inflation Reduction Act.

“Pouring roughly half trillion dollars of gasoline on the inflationary fire that is already burning is reckless.  Doing it while going well beyond one campaign promise ($10K of student loan relief) and breaking another (all proposals paid for) is even worse,” Furman tweeted.

The bad joke of it all is that the White House was touting how the Inflation Reduction Act was going to reduce the federal deficit $300 billion over the next decade, which no one believes, but the student loan program would increase the deficit as much as $500 billion, according to Jason Furman.

Editorial / Washington Post

“Under progressive pressure to force grandiose policy changes, President Biden has generally embraced sensible reforms over flashy gimmicks.  But his Wednesday student loan announcement did just the opposite.

“After weeks of anticipation, Mr. Biden announced he will extend the pause on student loan payments until the end of the year. He will also forgive up to $10,000 for those making less than $125,000 a year – and up to $20,000 for Pell Grant recipients under that income threshold.  Both measures are ill-conceived and misdirected.

“The loan pause, which President Donald Trump instituted in March 2020, was an emergency measure at a time when people were struggling to find jobs or had to remain home due to the pandemic. Thankfully, the situation is very different today: The unemployment rate for people with bachelor’s degrees and higher is just 2 percent.  It’s hard to make the case that college graduates are still facing an unprecedented crisis.

“The loan-forgiveness decision is even worse. Widely canceling student loan debt is regressive.  It takes money from the broader tax base, mostly made up of workers who did not go to college, to subsidize the education debt of people with valuable degrees.  Though Mr. Biden’s plan includes an income gap, the threshold does not reflect need or earnings potential, meaning white-collar professionals with high future salaries stand to benefit.  Student loans, moreover, are a poor proxy for household income: An analysis by policy researcher Jason D. Delisle found that, in 2016, students from high-income and low-income families were just as likely to take on debt for their first year in an undergraduate program – and students from high-income families borrowed the largest amounts.

“Mr. Biden’s plan is also expensive – and likely inflationary. The Committee for a Responsible Federal Budget estimates that extending the loan pause to the end of the year would cost $20 billion, while forgiving $10,000 for households making less than $300,000 would cost $230 billion.  Together, these policies would nullify a decade’s worth of deficit reduction from the Inflation Reduction Act.  Moreover, it is unclear that the 1965 Higher Education Act even grants the president the legal authority to take such a sweeping step, given that it was historically understood to permit only more targeted relief.

“True, Mr. Biden did not go as far as many on the left wanted: Democratic lawmakers and activists had urged the White House to cancel up to $50,000 in student load debt, with no income limits.  Mr. Biden was right to rule that out earlier this year – and would have been wise to focus on reforms that help the neediest.

“His proposal to make the income-driven repayment program more generous at least targets a program that scales the help people get with their incomes. But a better approach would focus on expanding Pell Grants and other college finance programs pinpointed to the truly needy.  Mr. Biden’s latest budget proposal called for doubling the maximum awards for Pell Grants by 2029 – a measure that would make college more affordable for low-income families for years to come.  And, as with other worthy programs, Congress and the Biden administration should find a credible way to pay for such an expansion, rather than just adding more to the national tab.

“Mr. Biden’s student loan decision will not do enough to help the most vulnerable Americans.  It will, however, provide a windfall for those who don’t need it – with American taxpayers footing the bill.”

Editorial / Wall Street Journal

“President Biden on Wednesday lamented soaring college costs to justify his sweeping student loan cancellation. Students, he feels your pain. Yet he fails to recognize that the root causes of high costs are federal-loan and student-aid subsidies.

“Like other Great Society programs, federal student loans and grants were initially aimed at helping low-income Americans.  They have since become another all-you-can-eat entitlement.  Its costs grow on autopilot as lawmakers boost subsidies in the name of making higher education more affordable, but in reality doing the opposite….

“Colleges have responded all too rationally by raising prices and using the free-flowing spigot to increase professors’ salaries, hire more administrators and build Club Med amenities. There’s a dean for everything these days.  Since 1980 the average annual cost to attend four-year public and nonprofit colleges has increased by nine-fold to $22,690 and $51,690, respectively.

“Tuition growth in recent years has moderated as demographic factors have reduced college enrollment and increased competition.  Many small liberal arts schools have closed or merged. But others have adapted by adding expensive graduate programs.

“The average debt for a master’s degree recipient is $71,287; for a doctoral grad it’s $159,625.  Yet the median salary for a Ph.D. is a mere $55,000 in the humanities and $67,250 in social sciences.  Many teach college classes for low pay while highly compensated tenured professors do research, much of which doesn’t add to the sum of human knowledge.

“Colleges have no financial incentive to ensure that their programs impart skills demanded by employers or provide a decent living.  What does it matter to them if an anthropology graduate winds up working as a barista?  Colleges are paid on the front end, and government is now writing off the cost on the back end….

“The best way to reduce costs is to change the financial incentives for colleges.  Former Education Secretary Bill Bennett once suggested that schools be required to take an equity stake of 10% to 20% in student loans….

“House Republicans have proposed limiting federal graduate debt to $100,000, but this is too high.  A better idea: Abolish graduate-school government loans.  Private lenders say the feds have squeezed them from the market.  There’s no reason for Uncle Sam to subsidize advanced degrees; private markets can price credit risk.

“This may mean a student pursuing a master’s in film won’t be able to borrow as much or will have to pay higher interest rates.  But this would have the salutary effect of compelling colleges to reduce prices.  Students in medical and other graduate programs that typically lead to higher earnings won’t have trouble getting private financing….

“Public and nonprofit colleges are like any other business, except they can profit from taxpayer subsidies without accountability.  Mr Biden’s loan write-offs show this system has failed to reduce student costs while enriching an academic elite, and soaking taxpayers.  It’s time for reforms that hold them accountable.”

--According to an NBC News poll, nearly three-quarters of Americans (74%) believe the country is on the wrong track.  Fifty-eight percent believe the country’s best days are in the rearview mirror and 61% say they are so steamed they would be willing to march around for a day with a protest sign.

Asked what the signs would say, Democratic voters chose “women’s rights,” “Abortion rights,” and “prosecute Trump” – while Republicans said they would tote “impeach Biden,” “protect our freedom” and “protect 2nd Amendment” banners.

--President Biden continues to get a break with falling gasoline prices, now $3.86 for regular at the pump, nationally, though diesel has been ticking back up at $5.01, and you should know by now this last figure is all about the prices you pay at the grocery store, for one.

A year ago, the regular / diesel split was $3.14 / $3.27.

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Wall Street and the Economy

Thursday, ahead of Chair Powell’s remarks today, St. Louis Fed President James Bullard said he expects high inflation to be more persistent than many have been expecting and interest rates now are not yet high enough to begin curtailing price pressures.

In an interview with CNBC in Jackson Hole, Bullard repeated he would like the Fed’s benchmark rate to climb from its current 2.25% to 2.50% range to between 3.75% and 4.00% by year end, adding such “front loading” of rate hikes appeals to him because “you show you are serious about inflation fighting.”

“A baseline would probably be that inflation will be more persistent than many on Wall Street expect, and that’s going to be higher for longer and that’s a risk that is underpriced in markets today,” Bullard said.

Another Fed hawk, the most hawkish of all the central bank’s 19 policymakers, Minneapolis Fed President Neel Kashkari, said on Tuesday his biggest fear is that the central bank misreads the extent and persistence of price pressures and will need to deliver even more aggressive rate hikes to control inflation.  Kashkari is expecting the Fed to raise another two full percentage points by the end of next year.

“The big fear that I have in the back of my mid is, if we are wrong and markets are wrong and that this inflation is much more embedded at a much higher level than we appreciate or markets appreciate, then we are going to have to be more aggressive than I anticipate, probably for longer, to bring inflation back down,” Kashkari said.

After Powell spoke, Cleveland Fed President Loretta Mester said she thinks the Fed needs to lift rates above 4% and said she believed Chair Powell delivered a “strong message” about the Fed’s determination to quash inflation. 

“I think we’re going to have to move them up…above 4% and probably need to hold them there next year,” she said.

Prior to Powell’s comments this morning, the Fed received crucial data on personal income and consumer spending for July.  The former was up just 0.2% vs. a forecasted 0.6% and 0.7% prior; while consumption rose only 0.1% vs. the 0.4% expected and 1.1% for June.

But this report contains the critical personal consumption expenditures index that is the Fed’s preferred inflation barometer and it was 6.3% year-over-year, vs. 6.8% in June, but the key core rate, the prime focus of Powell and Co., was 4.6% vs. 4.8% last year.  This is the number the Fed wants to see approach 2%, so a long way to go on this front.

Thursday, we had our second look at second-quarter GDP and it improved slightly to only down 0.6% from an initial -0.9%, but it’s still two negative quarters in a row…the classic definition of recession to some.

The Atlanta Fed’s still early look at Q3 GDP is now 1.6%.

Lastly, July durable goods came in unchanged, up 0.3% ex-transportation, while we had another gloomy reading on the housing sector, as new home sales came in at an annualized pace of just 511,000 for July, a 6 ½-year low, and vs. 585K prior.

Freddie Mac’s 30-year fixed rate mortgage (reported every Thursday) is back up to 5.55%, vs. 5.13% the previous week.

Europe and Asia

Just the flash PMI readings in the eurozone for August this week, and the EA19 composite was 49.2, an 18-month low (50 the dividing line between growth and contraction).

Manufacturing came in at 45.5, services 50.2, a 17-month low.

Germany’s flash manufacturing number for August was 46.4, services 48.2

France, manufacturing 44.4 (27-mo. low), services 51.0 (16-mo. low).

As in basically contraction all around.

In the UK, the flash manufacturing figure for August is 42.4 (27-mo. low), with services at 52.5 (18-mo. low).

[As some of you have noticed, I don’t give the S&P Global figures for the U.S., simply because it’s not nearly as long a data set as the ISM figures are, which I’ve noted basically since Day One of this site.]

Andrew Harker / S&P Global

“The latest PMI data for the eurozone point to an economy in contraction during the third quarter of the year. Cost of living pressures mean that the recovery in the service sector following the lifting of pandemic restrictions has ebbed away, while manufacturing remained mired in contraction in August, seeing another record accumulation of stocks of finished goods as firms were unable to shift products in a falling demand environment.  This glut of inventories suggests little prospect of an improvement in manufacturing production any time soon.

“Declining output is now being seen across a range of sectors, from basic materials and auto firms through to tourism and real estate companies as economic weakness becomes more broad based in nature.

“The rebuilding of workforces following the pandemic is also losing steam, with firms increasingly reluctant to hire additional staff given falling new orders and relatively weak business sentiment.

“Businesses are at least continuing to see weaker rises in their costs, in turn increasing their selling prices at a softer pace.  This should help to feed through to slower consumer price inflation later in the year, although it appears that any alleviation to the inflation situation is coming too late to provide any real support to demand.  The remainder of 2022 is therefore looking to be one of struggle for firms across the eurozone.”

Britain: Today, Britain’s energy regulator Ofgem announced British energy bills will jump 80% to an average of $4,188 a year from October, Ofgem calling it a “crisis” that needed to be tackled by urgent and decisive government intervention.

Ofgem CEO Jonathan Brearley said the rise would have a massive impact on households across Britain, and another increase was likely in January as wholesale gas prices hit record levels driven by Russia cutting supplies to Europe.  Millions of households will tip into fuel poverty – meaning they cannot afford to spend on anything but basics – but also the future of businesses up and down the country.

Britain’s next leader – either Liz Truss or Rishi Sunak – needed to act as soon as they were in office on Sept. 5.  “The response will need to match the scale of the crisis we have before us,” Brearley said.

As for Truss, the frontrunner, she was accused of “playing to the gallery” and risking worsened diplomatic relations with France after she said the “jury’s out” on President Emmanuel Macron.

The UK foreign secretary told Tory members at a leadership conference on Thursday that she was undecided as to whether her counterpart in Paris was “friend or foe.”

That, my friends, is an idiot!  What a freakin’ stupid comment to make, especially in these crisis times in Europe.

Sunak said Macron is a “friend.”

When asked about Truss’ comment, Macron said today, “Britain is a friend of France, I don’t doubt that for a second.”

Turning to Asia…China, nothing on the week in terms of economic data, but the severe drought has closed some car assembly plants and electronics factories in southwestern China owing to lack of power.  Owners of electric cars have been waiting overnight in some spots at charging stations to recharge their vehicles.  Rivers are so low that ships can no longer carry supplies.

The region depends on dams for more than three-quarters of its electricity generation.  The factory shutdowns and logistical delays are hindering China’s efforts to revive its economy just as President Xi Jinping prepares to claim a third term in power this fall.

China was already dealing with strict Covid lockdowns and a slumping real estate market.  Young people are finding it hard to get jobs, while uncertainty over the economic outlook is compelling residents to save instead of spend,   Excuse my Mandarin, but it’s a real shitshow.

We had the flash PMI readings in Japan for August, 48.3 on manufacturing vs. 49.7 in July; services 49.2 vs. 50.3.

Street Bytes

--It wasn’t just today, but the market was dealing with hawkish Fed talk all week and so it should be no surprise the major averages suffered their worst week since mid-June, with the Dow Jones losing 4.2% to 32283, the S&P 500 4.0%, and Nasdaq 4.4%.

With the final unofficial week of summer coming up, and many traders no doubt still taking a break, the focus is really going to be on Friday’s jobs report for August.

--U.S. Treasury Yields

6-mo. 3.21%  2-yr. 3.38%  10-yr. 3.03%  30-yr. 3.19%

--U.S. crude oil stocks, including those in the Strategic Petroleum Reserve, fell by 11.4 million barrels in the week ended Aug. 19, following a decrease of 10.5 million barrels in the previous week.

Excluding inventories in the SPR, commercial crude oil stocks declined by 3.3 million barrels after a 7.1-million-barrel decrease in the previous week, a larger drop than the 2.5-million-barrel decrease expected in a survey compiled by Bloomberg.

Stocks in the SPR fell by 8.1 million in the week after dipping by 3.4 million in the previous week.

Overall crude oil stocks were down 1.3% from the previous week and declined by 17% from a year earlier. Crude oil inventories are about 6% below the five-year average for this time of the year.

Oil prices edged up Tuesday, after Saudi Arabia warned that OPEC could cut output to correct a recent drop in oil futures.  OPEC stands ready to reduce production to correct the recent oil price decline driven by poor futures market liquidity and macro-economic fears, which has ignored extremely tight physical crude supply, OPEC’s leader said on Monday.

Saudi Energy Minister Prince Abdulaziz bin Salman told Bloomberg and other media outlets that OPEC+ has the means and flexibility to deal with challenges.  And OPEC’s rotating president told the Wall Street Journal that the Saudi proposal was “in line with our views and objectives.”

Meanwhile, Europe faces fresh disruption to energy supplies due to damage to a pipeline system bringing oil from Kazakhstan through Russia, adding to concerns over a plunge in gas supplies.

Limiting crude price gains were the ongoing efforts to reach agreement with Iran to revive the 2015 nuclear accord, which could lead to increased Iranian oil production if signed.  Should that happen, OPEC will definitely shift its strategy.

--The IPO market is on pace for its worst year in decades, leaving fledgling companies burning through cash while they wait for the stock market to calm.

Late last year, hundreds of companies were in the final stages to go public, after an 18-month period that was the best-ever for U.S. initial public offerings.  But then came sky-high inflation, rising interest rates and Russia’s invasion of Ukraine, sending shock waves through the stock market.

Only $5.1 billion has been raised through traditional IPOs thus far in 2022, compared with more than $100 billion at this time last year, according to Dealogic data.

The last time levels were this low was 2009, when the U.S. was recovering from the depths of the financial crisis and the IPO market reopened near the end of the year.

--Ford Motor Co. said it will cut a total of 3,000 salaried and contract jobs, mostly in North America and India, as it restructures to catch up with Tesla Inc. in the race to develop software-driven electric vehicles.

Ford CEO Jim Farley has been saying for months that he believed the automaker had too many people, and that not enough of its workforce had the skills required as the industry shifts to electric vehicles and digital services.

“We are eliminating work, as well as reorganizing and simplifying functions throughout the business,” Farley and Ford Chairman Bill Ford wrote in a joint email.

Like other established automakers, Ford has a workforce largely hired to support a traditional combustion technology product lineup. Going forward, Farley has mapped out a strategy for Ford to develop a broad lineup of electric vehicles.  Like Tesla, Ford wants to generate more revenue through services that depend on digital software and connectivity.

Rival General Motors Co. in late 2018 moved to cut 14,000 jobs as it prepared to accelerate its electric vehicle strategy.  Ford, GM and Stellantis’ North American operations will confront a new workforce challenge next year as they begin contract negotiations with the United Auto Workers union, which represents the Detroit automakers’ U.S. factory employees.  UAW leaders have expressed concern that electric vehicles will mean fewer manufacturing jobs, and more jobs dispersed to non-union battery and EV hardware factories.

Separately, Ford said Thursday it is raising the manufacturer’s suggested retail price, or MSRP, of its Mustang Mach-E electric sport utility vehicles, citing higher costs, supply constraints, and changing market conditions.

The new MSRP will be applicable as the company reopens new U.S. orders on Tuesday.  $46,895 for the standard range RWD model and $69,895 for the extended range GT.

Meanwhile, California has moved to ban sales of carbon dioxide-emitting (gasoline-powered) vehicles by 2035, which is fine with Ford and GM.  Ford said in a statement: “We’re committed to building a zero-emissions transportation future that includes everyone, backed by our own investments of more than $50 billion in 2026 in EVs and batteries.”

Ford wants to sell 2 million EVs annually by 2026. GM wants to be selling 1 million EVs in North America by 2025.  Wall Street estimates that by 2025 or 2026, Tesla will be selling more than 3 million cars a year around the globe.

--China and the United States signed an accord granting the U.S. accounting oversight access to Chinese audit data, ending an impasse that has wiped billions of dollars off Chinese stocks with the specter of mass expulsion from New York.

The China Securities Regulatory Commission and the U.S. Public Company Accounting Oversight Board have signed a cooperation agreement on audit cooperation, the two bodies said in separate statements Friday.

--Nearly 290,000 seats have been cut from bank holiday flight schedules in the UK, with Aviation data company Cirium saying around 900 flights due to depart from UK airports between Friday and Tuesday have been removed from schedules since the start of July.

Most of the cancellations were caused by staff shortages across the aviation industry, which has led to caps on operations at airports such as Heathrow and Gatwick.

Cirium said the number of outbound flights over the August bank holiday period is 21% below 2019 levels.

British Airways has made the largest cut since July 1, with nearly 380 departures scrapped.

For travelers in the UK and Ireland, for example, with next Monday off, this is like the last gasp of summer, similar to our Labor Day holiday.

But overall, British Airways is cutting more than 10,000 flights through the rest of the summer and into the winter, owing largely to Heathrow’s cap on departing passengers.

--Pilots at Lufthansa have rejected a wage offer by Germany’s flagship carrier and could go on strike anytime, union VC said on Thursday, as a dispute over pay continues.  They had voted in favor of industrial action last month, threatening further disruption during the summer travel season.

But late words is further talks are going to be held…no strike for now.

--TSA checkpoint travel numbers vs. 2019

8/25…88 percent of 2019 levels
8/24…91
8/23…96
8/22…95
8/21…94
8/20…98
8/19…90
8/18…92

--Toll Brothers was projected to post a year-over-year decline in fiscal Q3 orders, but the 60% drop reported by the company was “much worse” than analysts had expected.

The luxury home builder reported net income of $2.35 per share, up from $1.87 a year earlier and ahead of consensus, while revenue rose from a year earlier to $2.49 billion, though a little shy of expectations.

But the weakness in quarterly orders was broad based, with year-over-year declines ranging from 49% in the MidAtlantic to 73% in the Mountain segment.

Meanwhile, cancellations surged to 13% in fiscal Q3 from 3.1% a year earlier, seemingly due to buyer’s remorse and mortgage rate volatility.

For fiscal 2022, the homebuilder now expects deliveries of 10,000 to 10,300 units, down from its previous estimate of 11,000 to 11,500 units, at an average price of approximately $920,000.

A small Toll Bros. townhouse development is going up near where I live with the homes priced at $1.6 million and up.

--Nvidia provided a revenue forecast for the October quarter that was well below expectations, citing a difficult macroeconomic environment and a rapid fading of demand, the shares falling in response.

The semiconductor company reported adjusted earnings per share of 51 cents for the July quarter, compared with a consensus of 50 cents.  Revenue came in at $6.7 billion, in line with both a negative preannouncement Nvidia issued earlier and analysts’ recently reduced expectations.

But the big news was on the outlook, with the company saying revenue will be in the neighborhood of $5.9 billion, way below current consensus of $6.9 billion.

“We are navigating our supply chain transitions in a challenging macro environment and we will get through this,” said Jensen Huang, founder and CEO of Nvidia, in a release.

Earlier this month, Nvidia had preannounced disappointing results for its fiscal second quarter.  At the time it blamed weaker-than-expected gaming segment sales.

On a conference call to discuss the results, management said Nvidia saw a “sudden slowdown” in demand.

--The Securities and Exchange Commission recently pressed Twitter for more information on how the company identifies spam accounts, adding to scrutiny – stoked by Elon Musk – over the platform’s processes for keeping tabs on its user base.

The SEC’s June 15 query of CEO Parag Agrawal, which wasn’t made public until Wednesday, centered on statements in the company’s latest annual report, where Twitter said spam and bot accounts account for less than 5% of its user base.

Twitter remains on the defense this week over how it tracks and keeps tabs on fake accounts after a whistleblower’s complaint alleged the company didn’t do enough to deal with bot activity on its platform.  Peiter Zatko, former head of security, alleged the company ignored a rash of spam and bot accounts and had “egregious deficiencies” in its defenses against hackers, which could bolster Musk in his attempt to walk away from a $44-billion buyout of the platform.

The SEC demanded in its June letter that Twitter “disclose the methodology used in calculating these figures and the underlying judgments and assumptions used by management.”

Twitter’s lawyers told the SEC on June 22 that the company “already adequately disclosed the methodology” that it uses.  And it said Zatko’s allegations were without merit.

--Cloud-based software company Salesforce reported revenue for the quarter ended July 31 that was in line with expectations, but said it expects Q3 and full-year fiscal year 2023 earnings and revenue that were less than the Street’s current consensus, and the shares fell a bit on the news.

CEO Marc Beniof said: “We see customers becoming more measured in the way they buy. Sales cycles can be stretched…we started seeing this in July.”

--Dell Technologies reported July quarter earnings that topped Wall Street estimates, while noting growing signs that customers are becoming more cautious amid a difficult economic environment.

For its fiscal second quarter, Dell posted revenue of $26.4 billion, up 9% from one year ago and consistent with the company’s target range.  Earnings of $1.68 were slightly above consensus.

But while Dell reported 9% growth in its Client Solutions Group, which primarily sells personal computers, with commercial revenue up 15% in the quarter, while consumer revenue was down 9%, consistent with recent signs of weakness at companies like Intel, Micron Technology and Nvidia.  Growth in the group slowed from 17% in the April quarter, and 26% in the January quarter.

CFO Tom Sweet said that “the demand environment slowed” during the course of the quarter, particularly in the PC business.  “We saw a decline in PC demand as we went through the quarter,” he said, with higher average prices being a partial offset.

Gartner estimates that PC shipments industrywide will drop 9.5% in 2022.

--Department store Nordstrom lowered its full-year outlook, a sign that even higher-income shoppers have pulled back their purchases.

Shares of the company fell sharply in response, as adjusted earnings and revenue of 81 cents a share and $4.09 billion beat expectations, with inventories up less than 10%, compared with a 12% gain in sales, a key comparison these days.

But the company now expects full-year revenue to climb between 5% and 7%, down from a prior range of 6% to 8% and earnings for the full year between $2.30 and $2.60, well off an earlier forecast of $3.20 to $3.50.

The consumer landscape has changed for Nordstrom and other retailers.  In May, Nordstrom’s first-quarter results were robust and its outlook came in ahead of expectations.  Now, many retailers are warning of lower profits, including Macy’s.

--Speaking of which, Macy’s cut its guidance earlier in the week, even as it topped Wall Street expectations as it faces a glut of unsold inventory that has afflicted almost the entire retail sector.

The department store earned $275 million, or 99 cents per share, in the three-month period that ended July 30, which beat consensus of 86 cents.

Sales slipped roughly 1% to $5.6 billion, stronger than anticipated.  Same-store sales fell 2.8% at the namesake Macy’s stores, but rose 5.8% at upscale Bloomingdale’s.  [Overall, comp sales fell 1.5%.] Online sales fell 5%.

The company now expects 2022 revenue of $24.34 billion to $24.58 billion, slightly below previous guidance, with full-year adjusted EPS of $4.00 to $4.20, compared with a prior forecasts of $4.53 to $4.95.

The company is cutting prices on seasonal goods, private label and pandemic-related merchandise like casual wear and home furnishings to clear it.

Shoppers, faced with four-decade high inflation, are trading down to cheaper brands, looking for discounts, and making fewer visits to stores.

Kohl’s last week slashed its sales and profit expectations for the year, and both Target and Walmart also said that shoppers are cutting back and sticking to essentials.

Soaring prices have forced families to become more cautious, cutting back on new clothing, electronics, furniture and almost everything else that is not absolutely necessary. And the spending habits of Americans have shifted faster than anyone expected this year as the pandemic eased.  After being cooped up at home, they seemed to shift almost overnight to spending outside of stores, choosing instead to go to restaurants, shows or to travel.

That uncertainty has made it difficult for retailers to figure out what is coming as the holiday season approaches.

As for Macy’s, it said its outlook for the rest of the year is based on the “continued deterioration of consumer discretionary spending” and high levels of inventory, both at Macy’s and at other stores.  Macy’s anticipates more price cuts and the need to “liquidate aged inventory” as the holiday season approaches.

--Dick’s Sporting Goods reported fiscal Q2 adjusted earnings of $3.68 per share, down from $5.08 a year earlier, which was better than consensus of $3.56.

Net sales for the quarter ended July 30 were $3.11 billion, down from $3.27 billion a year ago.

For fiscal 2022, the company expects adjusted EPS in a range of $10 to $12, up from a previous outlook of $9.15 to $11.70, with comparable sales expected to decline in a range of 6% to 2%, compared with the prior forecast of an 8% to 2% decrease.

The company said in a statement: “We are very pleased with our second quarter results, and with our sales up 38% versus Q2 2019, the Dick’s Sporting Goods consumer has held up quite well.  Our inventory is healthy and well-positioned, and we are excited about our assortment for the back-to-school season.   We are raising our full year 2022 outlook, which continues to incorporate an appropriate level of caution given today’s uncertain macroeconomic environment.”

--Dollar Tree (or as us shoppers say these days, “$1.25 Tree”), slashed its earnings outlook for fiscal 2022 after its second-quarter missed Street expectations.

The discount retailer now expects per-share earnings of between $7.10 and $7.40 for the year, down from its previous estimate of $7.80 to $8.20. The Street is $7.90.  The company said it continues to expect to generate a mid-single-digit comparable-store sales growth for the year.

For the third quarter, the company expects EPS of $1.05 to $1.20 on sales of $6.75 billion to $6.87 billion.  The Street is anticipating EPS of $1.52 and $6.91 billion in revenue.

“Competitive pricing at Family Dollar will, over the long term, enhance our sales productivity and profitability, and ultimately our opportunity to accelerate store growth,” CEO Mike Witynski said in a statement.

Comparable store net sales rose 7.5% at Dollar Tree stores, while rising just 2% at Family Dollar.

DLTR shares fell 10% Thursday on the news.

--Shares in Peloton Interactive Inc. fell heavily (again) after forecasting fiscal first-quarter revenue below estimates following a large quarterly loss, further frustrating investors looking for progress in the company’s efforts to revive sagging sales of its fitness equipment.  Shares have tumbled more than 60% this year

During pandemic lockdowns, Peloton’s $1,400+ exercise bikes and treadmills were all the rage among fitness enthusiasts.  The company hit a peak market valuation of nearly $50 billion in early 2021, while revenue more than doubled.  But demand soon nosedived as gyms reopened following vaccinations.

Wednesday, Peloton announced it would start selling its fitness equipment on Amazon.com in the United States, which fueled a brief rally in the shares.

The company, which in May warned of a cash-crunch, expects first-quarter sales to be in the range of $625 million to $650 million, below estimates of $783.28 million.

--Petco Health and Wellness Co. said sales of pet food remains strong, but sales of supplies and “companion animals” – its catchall term for birds, fish, reptiles and other small animals it sells – fell 9% in the second quarter.  Meanwhile, sales of consumables like pet food and cat litter, as well as grooming and other services, continued to rise at double-digit percentage rates, boosted by the millions of new pets added to homes during the pandemic.

The trends are resulting in the slowest sales growth since the retailer went public in early 2021.  Wednesday, Petco reported second quarter sales growth of just 3%, decelerating from 4.3% in the first quarter, after double-digit increases in each quarter since its initial public offering.  It cut its outlook for the year following the results.

“We’re in a different space than we were 90 days ago, and we believe that our guidance reflects what we currently see in the market,” CFO Brian LaRose said on an analyst call.

--Bed Bath & Beyond Inc. selected asset manager Sixth Street Partners to supply new financing, as doubts remain among vendors and some investors about the company’s lukewarm turnaround prospects.

A loan deal would help refill the company’s coffers and give confidence to vendors that Bed Bath & Beyond can pay its bills.  The business has sought to stretch payments to some vendors, which have been pulling credit to the company in recent weeks amid mounting doubts that it could pay them back and a shortage of credit insurance.

--The University of Texas’ 2.1 million acres in the Permian Basin are minting $6 million a day for its endowment.  With most university endowments dumping their oil and gas investments, U of T’s endowment could overtake Harvard’s as the richest in US. Higher Education. As Nelson of “The Simpsons” would say, “Ha Ha.”

--Crypto hackers have already stolen $1.9 billion worth of cryptocurrency during the first seven months of 2022, a 37% increase from the same time period last year, according to a report from Chainalysis, a blockchain data platform.

The first week of August had several hacks already, like a $190 million hack of Nomad, a cross-chain bridge, and a hack of $5 million from several Solana wallets.

--Julian Robertson, the billionaire founder of Tiger Management and a sponsor to several other hedge funds, died. He was 90.

Robertson launched Tiger Management with $8.8 million in 1980, and it swelled to be a multi-billion-dollar hedge fund before closing in 2000.  His own net worth was estimated to be $4 billion, according to the Bloomberg Billionaires Index.

But more than Robertson’s personal investing success, he was credited for mentoring a new generation of hedge fund managers who learned to trade from Robertson at Tiger and then went on to launch their own hedge funds.  The so-called ‘Tiger Cubs’ include Chase Coleman of Tiger Global Management, John Griffin of Blue Ridge Capital, Lee Ainslie of Maverick Capital, Andreas Halvorsen of Viking Global Investors, and Stephen Mandel of Lone Pine Capital.  After closing his fund, Robertson went on to seed this new generation of hedge fund managers in exchange for some of their profits.

Robertson’s investing tactics included investing in good and bad times and never committing more than 5% of capital to a single investment.

Robertson was born in Salisbury, North Carolina, and attended UNC at Chapel Hill, going on to become CEO of Kidder Peabody’s asset management firm, before launching Tiger Management.  His Tiger Foundation supports low-income New Yorkers and their families and has provided more than $250 million in grants to organizations that strive to break the cycle of poverty.

--HBO’s “House of the Dragon” scored nearly 10 million viewers in the U.S. on Sunday, including yours truly, setting a viewership record for the debut of an HBO original series.

The original “Game of Thrones” steadily grew into HBO’s biggest series ever, ending after eight seasons in May 2019 with an enormous audience – its finale drew more than 19 million viewers – though the story’s ending fell short of expectations for some of its most ardent fans.  [My complaint was the ‘lighting’ was literally too dark.]

--I am pumped to try McDonald’s new Chicken Big Mac, which is going on sale for a limited time at select Miami area locations, last I saw, but hopefully goes nationwide soon after.

McDonald’s has been testing it out at locations in the U.K.

The Pandemic

--Pfizer’s Covid pill appears to provide little or no benefit for younger adults, while still reducing the risk of hospitalization and death for high-risk seniors, according to a large study published Wednesday.

The results from a 109,000-patient Israeli study are likely to renew questions about the U.S. government’s use of Paxlovid, which has become the go-to treatment for Covid-19 due to its at-home convenience.  The Biden administration has spent more than $10 billion purchasing the drug and making it available at thousands of pharmacies through its test-and-treat initiative.

The researchers found that Paxlovid reduced hospitalizations among people 65 and older by roughly 75% when given shortly after infection.  That’s consistent with earlier results used to authorize the drug in the U.S. and other nations.

But people between the ages of 40 and 65 saw no measurable benefit, according to the analysis of medical records.

The study has limitations due to its design, which didn’t include a control group – the gold standard for medical research.

But the fact the vast majority of people already have some protection against the virus due to vaccination or prior infection, greatly reduces their risks of severe Covid-19 complications.  The Centers for Disease Control and Prevention recently estimated that 95% of Americans 16 and older have acquired some level of immunity against the virus.

For now, though, Paxlovid is an important tool for people at the highest risk, such as seniors and those with compromised immune systems. 

Pfizer earlier this summer reported a separate study of Paxlovid in healthy adults – vaccinated and unvaccinated – failed to show a significant benefit, but those results have not yet been published in a medical journal.

--First Lady Jill Biden tested positive in a rebound case of Covid but was not experiencing any symptoms, while President Biden continued to test negative.  He had tested positive in a rebound case as well.  Both took Paxlovid.

--Meanwhile, Pfizer asked U.S. regulators Monday to authorize its combination Covid-19 vaccine that adds protection against Omicron subvariants, a key step toward opening a fall booster campaign.

The Food and Drug Administration ordered vaccine makers to tweak their shots to target the BA.4 and BA.5 strains that are better than ever at dodging immunity from earlier vaccination or infection.

If the FDA quickly clears the updated shots made by Pfizer and its partner BioNTech, boosters could be offered within weeks.

The U.S. has a contract to buy 105 million doses of the updated vaccine as soon as health authorities greenlight them, and the company said doses are ready to ship.

--Oh, and Moderna is suing Pfizer and its German partner BioNTech for patent infringement in the development of the first Covid-19 vaccine approved in the United States, alleging they copied technology that Moderna developed years before the pandemic.

Moderna CEO Stephane Bancel said in a statement: “We are filing these lawsuits to protect the innovative mRNA technology platform that we pioneered, investing billions of dollars in creating, and patented during the decade preceding the Covid-19 pandemic.”

The lawsuit, which seeks undetermined monetary damages, was filed in U.S. District Court in Massachusetts.

Moderna’s Covid vaccine is currently its lone commercial product.

--Dr. Anthony Fauci, the nation’s top infectious disease experts, is departing the federal government in December after more than five decades of service.  He was a leader in the federal response to HIV/AIDS and other infectious diseases even before the coronavirus hit.  He was also an early backer of the mRNA technology that became the platforms for two Covid vaccines.

Needless to say, as he became the face of the government response to Covid-19 as it hit in early 2020, he ended up becoming a lightning rod, clashing with then President Trump and his officials when Fauci urged continued public caution.  He then became the subject of political attacks and death threats and was granted a special security detail.

As the Wall Street Journal editorialized:

“The uncertainties of the pandemic’s course weren’t his fault, but the certainty of his policy prescriptions certainly was….

“We know now that states that locked down fared no better, and sometimes worse, than those that didn’t. We also know that the vaccines, while invaluable against serious disease, don’t prevent the spread of Covid – even after multiple boosters.  More honest candor would have been better for America’s trust in public-health authorities….

“(Fauci’s) legacy will be that millions of Americans will never trust government health experts in the same way again.”

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

World…6,484,848
USA…1,068,771
Brazil…683,397
India…527,556
Russia…383,910
Mexico…329,289
Peru…215,514
UK…187,761
Italy…175,226
Indonesia…157,478
France…153,857

Canada…43,505

[source: worldometers.info]

U.S. daily death toll…Mon. 163; Tues. 431; Wed. 477; Thurs. 347; Fri. 267.

Foreign Affairs, part II

China: Tidbits….

--The U.S. government said on Thursday it will suspend 26 China-bound flights from the United States by four Chinese carriers in response to the Chinese government’s decision to suspend some U.S. carrier flights over Covid-19 cases.

The U.S. Dept. of Transportation cited the recent cancellation of 26 American Airlines, Delta and United Airlines flights over Covid-19 cases.

The suspensions include 19 China-bound flights from Los Angeles and 7 China Eastern Flights from New York.

The Chinese Embassy in Washington’s spokesperson said the USDOT action was “extremely irresponsible” and “groundlessly suspended Chinese airline flights.”

--Taiwan’s government proposed a record-high military budget with a 14 percent increase from the previous year to boost its defense against mainland China.

The figure passed by the government’s highest administrative body, the Executive Yuan, is $90 billion for 2023.

--Six former senior executives of the now-defunct Apple Daily newspaper will admit collusion under Hong Kong’s national security law, the High Court has heard, while their jailed ex-boss Jimmy Lai Chee-ying will stand trial without a jury after pleading not guilty to the charges.

Lai, 74, was charged alongside the six former employees of the opposition-friendly, tabloid-style paper with conspiracy to collude with foreign forces, which is punishable by up to life in prison, with a minimum term of 10 years in serious cases.  Specifically, Lai faces a charge of colluding with foreign forces for allegedly attracting foreign sanctions through its commentaries and activities on social media.  The other six will be sentenced later.

North / South Korea: South Korea’s President Yoon Suk-yeol ordered an update of the military’s operational plans to address North Korea’s growing nuclear and missile threats, his office said.  Yoon gave the instructions at his first visit to a military bunker in the capital Seoul that would serve as a command post in the event of a war.  His visit coincided with the start on Monday of military drills by the armed forces of South Korea and the United States that are the largest in years.

Yoon highlighted that his year’s drills were conducted under a changed scenario and the operational plans reflect North Korea’s evolving threats.  “We need to urgently prepare measures to guarantee the lives and property of our people, including updating the operational plans against North Korea’s nuclear and missile threats that are becoming a reality,” Yoon told military commanders during the visit.

Yoon has ordered the commanders to speed up plans to set up the so-called “Kill Chain” system, designed to launch preemptive strikes against the North’s missiles and possibly its senior leadership if an imminent attack is detected.

Iran: David Ignatius/ Washington Post

“Beware the emerging Tehran-Moscow alliance: Russia has begun using Iranian-made drones in the Ukraine war and Iran has offered to share its financial networks to help Russia evade sanctions, according to Western intelligence officials.

“For Russia, struggling to maintain momentum in Ukraine after six months of brutal conflict, the new Iranian assistance could be a game-changer, the intelligence officials warn.  ‘This is not just a tactical alliance,’ explained one official. With China and India refusing to sell weapons to Russia, Iran could become an essential pipeline for weapons and money.

“ ‘They know all the tricks in the book,’ in terms of evading sanctions, the intelligence officials said of Iran.  Iran can tap its existing infrastructure network of shell companies and other financial institutions in this sanctions-busting campaign.  Iranian financial aid for Russia would be even easier if sanctions against Tehran are lifted as part of a renewal of the 2015 Iran nuclear deal, the intelligence officials warned.

“To bolster Russia’s depleted weapons inventory, Iran has begun delivering ‘hundreds’ of suicide drones, according to the intelligence officials. These drones would probably be part of the ‘Shahed’ series, about the size of a U.S. Predator, which Iran has used successfully in Iraq and Syria.

“U.S.-Iran tensions have been escalating sharply, even as the two countries appear to be nearing a deal to revive the nuclear agreement.  Iranian-backed proxies staged a complex drone strike Aug. 15 on a U.S. base in al-Tanf, in southern Syria.  No Americans were killed or wounded.  But it was a bold attack, and the U.S. Central Command announced Tuesday that the United States had retaliated with ‘precision airstrikes’ on a base near Deir-ez-Zor used by groups associated with Iran’s Islamic Revolutionary Guard Corps….

“The Biden administration has been warning for more than a month about the danger that Iran would supply drones to Russia. …Iran promptly assured Ukraine’s foreign minister that the U.S. reports were false.

“The Russians have, in fact, been rushing to put the Iranian drones over the battlefield.”

Russia and Iran have been expanding economic ties as well as building a framework for evading sanctions.

Ignatius:

“The budding Moscow-Tehran alliance adds a new obstacle to renewing the 2015 nuclear agreement.  U.S. officials remain convinced that its limits on Iranian enrichment would bolster the security of both the United States and Israel.  But Tehran has demanded concessions, outside the framework of the agreement, that the Biden administration has so far refused to make.

“The most important Iranian demand is that the United States press the International Atomic Energy Agency in Vienna to halt its investigation of undeclared nuclear sites.  ‘No deal will be implemented before the IAEA Board of Governors PERMANENTLY closes the false accusations file,’ a spokesman for the Iranian negotiating team tweeted Tuesday.

“IAEA Director General Rafael Grossi had said the day before that his agency wouldn’t halt the probe unless Iran cooperated.  ‘Give us the necessary answers, people and places so we can clarify the many things needed for clarification,’ Grossi said.

“The U.S. apparently isn’t willing to budge on the IAEA investigation issue….

“Russia’s drone deal with Iran is a sign of how serious Moscow’s weapons-supply problems have become after six months of war in Ukraine. Intelligence officials say that Moscow was initially hesitant to reach out to Tehran, whose leaders it mistrusts and whose nuclear ambitions it has consistently opposed. Russia likes to think that it’s a superpower that doesn’t need help from a troublesome neighbor.

“ ‘It shows a lot of desperation on the Russians’ part that they’re dependent on the Iranians here,’ the senior administration official said.

“Right now, struggling to match the flow of weapons from the United States and its NATO allies into Ukraine, Russia can’t afford to be so picky. That serves a short-term need.  But it puts Russia in an even more isolated and dangerous place.”

---

At week’s end, it does not appear Iran has backed down on its demands on the nuclear talks, as rumored earlier. And shadowing efforts to revive the pact have been threats by Israel to attack Iranian nuclear installations if it deems diplomacy ultimately futile in containing Tehran’s atomic abilities and potential.

Iran has warned it would hit back hard if it were attacked.

Israeli Prime Minister Yair Lapid said on Wednesday that “on the table right now is a bad deal” which would give Tehran $100 billion a year to destabilize the Middle East.  “In our eyes, it does not meet the standards set by President Biden himself: preventing Iran from becoming a nuclear state.”

Somalia: Al-Qaeda-linked militants, Al-Shabaab, launched a siege at a hotel in the capital of Mogadishu, and when Somali forces finally ended it, at least 20 were killed and scores wounded after a 30-hour battle.  The militants had blasted and shot their way into the Hayat Hotel on Friday evening. The hotel is popular with lawmakers and other government officials.

One member of Somalia’s federal parliament told Bloomberg that 11 members of his immediate family died in the attack.  All the terrorists, at least seven, were killed.

Al-Shabaab has been fighting to topple the Somali government for more than 10 years.  It wants to establish its own rule based on a strict interpretation of Islamic law.

Pakistan: Former prime minister Imran Khan was charged under the country’s antiterrorism act on Sunday, in a major escalation of tensions between the country’s current government and its former leader that threatens to set off a new round of public unrest and turmoil.

Khan, the former cricket star who was ousted from power in a no-confidence vote in April, gave an impassioned speech to hundreds of supporters at a rally in the capital, Islamabad, condemning the recent arrest of one of his top aides and threatening senior police officers and a judge involved in the case.

“We will not spare you,” Khan said, vowing to file legal cases against them.

Khan has not yet been arrested and despite his ouster has remained a powerful force in Pakistani politics.  His party has been faring well in local elections, but as Khan fights to make a comeback, he and his supporters face a mounting crackdown aimed at curtailing his party’s electoral success.

Random Musings

--Presidential approval ratings….

Gallup: New numbers! 44% approve of President Biden’s job performance, 53% disapprove; 40% of independents approve (Aug. 1-23).  The previous split a month ago was 38-59, 32% independents.

The 44% approval is the best for Biden since Aug. 2021, ditto the 40% among independents.

Rasmussen: 44% approve of Biden’s performance, 54% disapprove (Aug. 26).  [Exact same as last week.]

A new Reuters/Ipsos poll completed on Tuesday found that 41% of Americans approve of Biden’s job performance, his first time above 40% since early June.  Biden’s lowest rating in this survey was 36% - in four weekly polls in May, June and July, rivaling the lows of predecessor Donald Trump, who bottomed at 33% in Dec. 2017.

This week’s poll showed 78% of Democrats approved of Biden, up from 69% in early July.

Biden’s overall approval rating has been below 50% since August of last year (think Afghanistan).

The aforementioned NBC News survey gave Biden a 42% approval rating, 55% disapproval.

--Republican Sen. Minority Mitch McConnell gave Republicans only a 50-50 chance of taking back control of the Senate.  But as long as the GOP takes back the House, they can bring Biden’s legislative agenda to a halt and launch potentially politically damaging investigations.

--In Tuesday’s primaries….

Florida Democrats chose a former Republican governor of the state, Charlie Crist, as their champion in the race to unseat the incumbent Republican, Ron DeSantis.

Democrats also opted for Rep. Val Demings as their challenger for the Senate, facing off against Marco Rubio.

Most opinion polls today show both DeSantis and Rubio leading Crist and Demings by several points to double digits, according to FiveThirtyEight.com.

In an unusual intraparty contest in New York, House Democrat Jerry Nadler easily defeated fellow Democratic incumbent Carolyn Maloney, ending her 30-year career in Congress in a redrawn district that pitted the two longtime politicians against each other.  Nadler, who chairs the House Judiciary Committee, won with 55.8% of the vote, vs. 24.2% for Maloney, who chairs the House Oversight Committee.

Dan Goldman, lead counsel in the first impeachment hearing of former president Donald Trump, was declared the winner of the Democratic primary in New York’s 10th Congressional District, a seat covering southern Manhattan, including Wall Street and Brooklyn, and which has a wealthy and liberal constituency.

Assemblywoman Yuh-Line-Niou, a progressive, has not conceded even as the Associated Press called it for Goldman.  Rep. Mondaire Jones, a congressman from the New York City suburbs who moved to the area to run, finished third in the primary.

Also in New York in a special election for an open House seat, the 19th Congressional District which includes the Catskill Mountains and part of the Hudson Valley, Democrat Pat Ryan and Republican Marc Molinaro squared off in a preview of the November midterm.

Ryan, focusing on abortion rights, emerged victorious.

--Trump World

The Justice Department Friday released a heavily blacked-out document explaining the justification for the FBI search (hardly a “raid,” as Trump and his acolytes say) at Mar-a-Lago.

The extensively redacted 38-page document offers scant new details about an ongoing criminal investigation that has brought fresh legal peril to Trump as he prepares another potential presidential run.

But it does start out: “The government is conducting a criminal investigation concerning the improper removal and storage of classified information in unauthorized spaces, as well as the unlawful concealment or removal of government records.”

“Of most significant concern was that highly classified records were unfoldered, intermixed with other records, and otherwise unproperly [sic] identified,” an unidentified FBI special agent says.

“There is also probable cause to believe that additional documents…remain at the PREMISES,” the special agent writes in the affidavit.  “There is also probable cause to believe that evidence of obstruction will be found at the PREMISES.”

The unredacted portions, of the affidavit that were released do not explain how the feds discovered that additional top secret records remained at Mar-a-Lago or why they believed the probe was being obstructed.

“A preliminary triage of the documents with classification markings revealed the following approximate numbers: 184 unique documents bearing classification markings, including 67 documents marked as CONFIDENTIAL, 92 documents marked as SECRET, and 25 documents marked as TOP SECRET,” the agent says.

Some of the documents appeared to have Trump’s handwritten notes on them.

The feds say “several witnesses” could be put in danger by premature release of their identities, suggesting there could be several leaks within Trump’s loyal inner circle.

Donald Trump responded on Truth Social: “Affidavit heavily redacted!!! Nothing mentioned on ‘Nuclear,’ a total public relations subterfuge by the FBI & DOJ, or our close working relationship regarding document turnover – WE GAVE THEM MUCH.  Judge Bruce Reinhart should NEVER have allowed the Break-In of my home.”  “WITCH HUNT!!!”

Meanwhile, as reported by the Wall Street Journal: “Boxes recovered from Donald Trump’s Florida home in January contained more than 700 pages of classified material, including documents marked as extremely sensitive, according to correspondence between the National Archives and the former president’s legal team.

“The letter, written by Acting Archivist of the United States Debra Steidel Wall and dated May 10, shows that months before the Aug. 8 Federal Bureau of Investigation search at Mar-a-Lago, the intelligence community and the Justice Department had become alarmed by Mr. Trump’s handling of presidential records, which by law are the property of the government.

“In her letter to Mr. Trump’s lawyers, Ms. Wall said the National Archives and Records Administration (NARA) would allow the FBI to access 15 boxes transferred from Mar-a-Lago to the archives in January. She wrote that those boxes contained more than 100 documents with classification markings, comprising some 700 pages.”

Trump, who has dismissed the document battle as politically motivated, reacted Tuesday on Truth Social, focusing on references in the letter to the Biden administration’s involvement.

“The White House stated strongly that they were NOT INVOLVED, and knew absolutely nothing about, the political Witch Hunt going on with me, & that they didn’t know anything at al about the Break-In of Mar-a-Lago,” Trump wrote.  “This was strongly reiterated again & again. WRONG!”

The letter indicates that the White House left it up to NARA to decide on Mr. Trump’s privilege claim.

“The Counsel to the President has informed me that, in light of the particular circumstances presented here, President Biden defers to my determination, in consultation with the Assistant Attorney General for the Office of Legal Counsel, regarding whether or not I should uphold the former President’s purported ‘protective assertion of executive privilege,’” Ms. Wall wrote, adding that she determined not to do so.

WSJ: “Mr. Trump said he declassified broad sets of records, but there is no documentation of that.  He filed a lawsuit Monday seeking the appointment of a special master to review the materials seized by the FBI and asked a judge to order investigators to immediately stop examining the items.”

According to Politico: “U.S. officials in the national security community expressed shock and concern at the former president’s cavalier treatment of classified material.  One official, who spoke on condition of anonymity to discuss a sensitive topic, said they were astonished at the ‘recklessness’ of the move.

“It’s an ‘affront’ to ‘those people who’ve spent their lives protecting and enforcing a rules-based order only to have someone come along and use his special access to unlawfully collect and retain highly classified documents,’ the person said.

“It can take up to a decade to declassify certain information, said one former defense official who still holds a security clearance, so the fact that Trump took hundreds of pages of classified material is ‘one of the worst things I’ve ever heard.’

“ ‘There’s no gray area here.  I’m just appalled,’ the person said.

Separately, according to the Washington Post, “Sensitive election system files obtained by attorneys working to overturn President Trump’s 2020 defeat were shared with election deniers, conspiracy theorists and right-wing commentators.

“A Georgia computer forensics firm hired by the attorneys placed the files on a server, where company records show they were downloaded dozens of times.  Among the downloaders were accounts associated with a Texas meteorologist who has appeared on Sean Hannity’s radio dhow; a podcaster who suggested political enemies should be executed; a former pro-surfer who pushed disproved theories that the 2020 election was manipulated; and a self-described former ‘seduction and pickup coach’ who claims to also have been a hacker.

“Plaintiffs in a long-running federal lawsuit over the security of Georgia’s voting systems obtained the new records from the company, Atlanta-based Sullivan Strickler, under a subpoena to one of its executives.  The records include contracts between the firm and Trump-allied attorneys, notably Sidney Powell. The data files are described as copies of components from election systems in Coffee County, Ga., and Antrim County, Mich.

“A series of data leaks and alleged breaches of local elections offices since 2020 has prompted criminal investigations and fueled concerns among some security experts that public disclosure of information collected from voting systems could be exploited by hackers and other people seeking to manipulate future elections.

“Access to U.S. voting system software and other components is tightly regulated, and the government classifies those systems as ‘critical infrastructure.’  The new batch of records shows for the first time how the files copied from election systems were distributed to people in multiple states.”

David Ignatius / Washington Post

“To the catalogue of Donald Trump’s malign personality traits, add one that might be called ‘document narcissism.’  According to the New York Times, Trump insists he has a right to keep classified documents because they’re ‘mine.’

“Trump’s lawyers are right to be worried about the Justice Department’s criminal investigation of the former president’s retention of classified documents at his Mar-a-Lago estate.  That’s not because the probe is ‘overbroad’ and ‘political,’ as Trump’s lawyers claimed in an overheated motion on Monday – but because it is very specific and based on multiple ‘confidential witnesses,’ as the federal magistrate who approved the search warrant just affirmed.

“This case reflects the central nightmare of the Trump post-presidency.  He seems to believe, in the words of the French King Louis XIV, ‘L’etat, c’est moi,’ meaning: “I am the state.”  Trump’s stationary still bears the presidential seal.  He still appears to covet the permanent power of a leader like China’s Xi Jinping, of whom he said in 2018: ‘He’s now president for life. …Maybe we’ll have to give that a shot someday.’

“Trump at Mar-a-Lago is like Lear in angry exile.  He has left the throne, but imagines that he can keep its privileges.  He rages at enemies and broods over his lost realm.  The Times article portrayed him rummaging last year through boxes of classified documents, relics of former power, before deciding what to return to the National Archives.

“A former Trump administration official who knows him well likens Trump’s retention of classified documents to ‘a toddler who takes a toy and sees how much the other kid is upset and decides, I’m going to take it anyway.  The more someone wants to take it back, the more he wants to keep it.’

“Trump’s presidency was a war against what he imagined was a ‘deep state’ of FBI agents, intelligence officials and Justice Department lawyers conspiring to smear him and block his election and reelection.  In the words of his lawyers’ motion, these antagonists behaved with ‘complete disdain and bias against President Trump and his supporters, while they were entrusted with probing the farcical Russian collusion claims.’

“A field commander in Trump’s battles against the intelligence community has been a former congressional staffer named Kash Patel, now one of Trump’s representatives in dealing with the National Archives. I profiled Patel’s role as Trump’s advocate against the intelligence agencies last year, and again recently.  After bringing Patel to his National Security Council staff in 2019, Trump wanted to make him deputy FBI director, then deputy CIA director.

“ ‘Trump also had the idea of making Patel a Special Assistant for White House Oversight – a position that would seek to expose the deep state’ in the White House entourage, said Charles Kupperman, a former deputy national security adviser, who was in the room with Trump when he made the proposal in 2019.  When Kupperman and White House counsel Pat Cipollone objected, Trump relented, the official said….

“Trump’s notion of supreme personal power – his document narcissism – might have caught up with him in the Mar-a-Lago search.  His problem isn’t simply with the Biden Justice Department, but with informants who are presumably within his own circle….

“No wonder Trump’s lawyers filed a motion designed to slow things down, portraying the case as a political vendetta and aimed at slowing the review of documents.  They simply ignored the gravity of the charges – calling the search ‘a shockingly aggressive move’ against ‘the clear frontrunner’ in 2024, ‘should he decide to run.’

“The Trump lawyers asked for a ‘special master’ to sift the evidence, and that might be a useful way to tamp down public concern about bias. But the Trump team’s own chronology confirms the former president’s slow compliance with document requests.  Initially, he even resisted letting the FBI review the 15 boxes of documents he had sent to the National Archives in January, which included some codeword, ‘Special Access Program’ documents, the government’s most sensitive secrets, according to a May 10 letter from the acting archivist.  The Aug. 8 FBI search turned up more than a dozen additional boxes, including 11 sets of highly classified material.

“Whatever those documents contain, (U.S. Magistrate Judge Bruce E.) Reinhart* shared Justice’s worry that they weren’t being given back promptly or securely held.

“Trump’s motion also cites the veiled threat he sent to Attorney General Merrick Garland: ‘President Trump wants the Attorney General to know that he has been hearing from people all over the country about the raid. If there was one word to describe their mood, it is ‘angry.’  The heat is building up. The pressure is building up.’

“Trump concluded with a seemingly generous offer: ‘Whatever I can do to take the heat down, to bring the pressure down, just let us know.’

“The answer is simple: Stop denigrating the rule of law.  Respect it.”

*As another example of how pathetic our country has become, Phil W. passed along a bit from Religion News Service on how threats against Reinhart from Trump supporters, including a massive social media attack against him after he signed off on the search warrant, led the synagogue where he is a member to cancel services.

Threats grew so intense, Reinhart’s official bio was removed from the U.S. District Court Southern District of Florida’s website.

One online user on the notorious imageboard 4chan wrote of Reinhart: “That is a k***. And a pedophile… He should be tried for treason and executed.”

--A new Yahoo News/YouGov poll shows that if Liz Cheney were to run for president as an independent in 2024, she could single-handedly swing the election to Trump.

Yes, this is a very early exercise, and I do not believe Biden is running, but the poll found that if it were a one-on-one rematch between Biden and Trump – Biden would lead by 4 points among registered voters, 46% to 42%.

But in a three-way race with Cheney on the ballot as an independent, Trump would vault to an 8-point lead over Biden, 40% to 32%, with Cheney at 11%.  The problem for Biden is that nearly all of Cheney’s votes come at his expense – and there are enough of them, in theory, to put Trump over the top.

Well, I’m the classic example.  I voted for Biden over Trump in 2020, and all things being equal in 2024, I’d vote for Cheney over Biden, but, again, no way this is what we are faced with.

--The Uvalde, Texas, school board on Wednesday fired the school district’s embattled police chief, Pete Arredondo, for his much-criticized handling of the shooting rampage that killed 19 children and two teachers in the city three months ago.

--South Korea has again recorded the world’s lowest fertility rate with the number sinking to a new low.  The rate in the country first dropped lower than one child per woman in 2018.

But on Wednesday, figures released by the government showed the figure had dropped to 0.81, vs. the average rate across the world’s most advanced economies of 1.6 children.

Countries need at least two children per couple – a 2.1 rate – to keep their population at the same size, without migration.

South Korea needs to call in U.S. celebrity TV host Nick Cannon, who announced he is expecting a 10th child with model Brittany Bell, their third.  He’s had his prior kids through four other women, including Mariah Carey, if my count is right.

And that’s your celebrity minute….

--A European Union agency, the European Drought Observatory, said the continent faces its worst drought in 500 years, affecting 47% of the union’s landmass.  Riverine shipping hydropower and agriculture all remain under severe strain in many parts.  And it doesn’t help when you have equal droughts in the U.S., Britain and China.

--As alluded to above, about half of China’s landmass is reeling under the most severe drought and longest sustained period of extreme high temperatures in six decades, with no respite seen for at least a week.

Water levels in the nation’s longest river, the Yangtze, are at a record low, halting shipping over vast sections of the key waterway, while those at its biggest freshwater lake Poyang are down by 75 percent, the lowest since records began in 1951.

Heatwaves in central and eastern China, some of the most densely populated parts of the country, are also beating records, with sustained temperatures of over 40 degrees Celsius (104 F.) for a month.

The hit to the agriculture sector is severe.

--In the U.S., the Dallas, Texas, area received 9- to 15-inches of rain in literally hours, following one of the worst six-month droughts in history.  The rain was the normal amount for eight months.

Jackson, Mississippi, received 10 inches in three days, with massive flooding.

Flooding in Pakistan has killed well over 900.

--Count me in as a fan of Finnish Prime Minister Sanna Marin.  Just sayin’….

--The images of Jupiter revealed this week from the James Webb Space Telescope, pictures taken in July, are phenomenal, showing auroras, giant storms, moons and rings surrounding Jupiter in detail that astronomers have described as “incredible.”

As Pig Pen might say, “Kind of makes you want to treat Jupiter with a little more respect.”

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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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Gold $1750
Oil $92.97

Regular gas: $3.86, nationally; Diesel: $5.01 [$3.14 / $3.27 yr. ago]

Returns for the week 8/22-8/26

Dow Jones  -4.2%  [32283]
S&P 500  -4.0%  [4057]
S&P MidCap  -3.0%
Russell 2000  -2.9%
Nasdaq  -4.4%  [12141]

Returns for the period 1/1/22-8/26/22

Dow Jones  -11.2%
S&P 500  -14.9%
S&P MidCap  -12.0%
Russell 2000  -15.4%
Nasdaq  -22.4%

Bulls 45.1
Bears 29.6

Hang in there.

Brian Trumbore

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