Week in Review

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Week in Review

11/19/2022

For the week 11/14-11/18

[Posted 7:00 PM ET, Friday]

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Edition 1,231

Hours after I went to post early last Friday evening, incumbent Democratic Senator Catherine Cortez Masto received a big dump of votes in her Nevada race against GOP challenger Adam Laxalt and the race was declared in her favor on Saturday, 48.9% to 48.0%, a margin of 9,000, and that gave the Democrats a 50-49 edge, so they maintain the majority regardless of whether Herschel Walker or Raphael Warnock win in Georgia in their December runoff, though Democrats have learned with Joe Manchin in their caucus, 51-49 would be much more comfortable.

The House was called for the Republicans on Wednesday and when the final votes are counted, it will be at best a 222-213 margin, probably 221-214.

“This should have been a huge red wave…and yet we still didn’t perform,” said Republican Maryland Gov. Larry Hogan.  “It’s the third election in a row that Donald Trump has cost us the race…I’m tired of losing,” he told CNN on Sunday.

“Commonsense conservatives that focused on talking about issues people cared about, like the economy and crime and education, they did win,” Hogan told Dana Bash.  “But people who tried to relitigate the 2020 election and focused on conspiracy theories and talked about things the voters didn’t care about, they were almost universally rejected.”

It is hoped among some of us Republicans (reminder, I kept my registration) that the election marks the end of the “big lie.”  While many election deniers kept their seats in the House, and a few new ones actually won, many lost races that were winnable.  Pennsylvania saw both the governorship and the Senate go to Democrats over Trump-backed candidates, despite flaws that should have made them beatable.  Ditto Arizona (as discussed in detail below).

Among the issues, abortion did prove to be a vital factor in securing a better performance for some Democrats.  It was supposed to have taken a back seat to the economy and inflation, but 27 percent of voters said abortion was the single most important issue in determining their vote, and those who chose abortion as their top issue broke more than 3 to 1 for Democrats, according to the main national exit poll.

In some states, the impact of abortion was even more pronounced, such as in the Pennsylvania Senate contest, where it was named as the top issue by a plurality of voters.  The 37 percent of Pennsylvanians in that category voted almost 4 to 1 for Democrat John Fetterman over Republican Mehmet Oz.

Voters in five states – California, Kentucky, Michigan, Montana and Vermont – had the chance to weigh in on ballot measures pertaining to abortion, and the pro-abortion rights side prevailed in all five.  An abortion-related ballot measure clearly boosted incumbent Democratic Gov. Gretchen Whitmer in Michigan.

Whitmer was supposed to be vulnerable.  She beat her Republican opponent, Tudor Dixon, by more than 10 points.

Kevin McCarthy won his fellow Republicans’ nomination to serve as House speaker next year, besting far-right Rep. Andy Biggs (Ariz.) in a 188-31 secret ballot vote.  But he will need at least 218 votes to prevail in another vote in January, and he could struggle to reach that number without making big concessions to colleagues upset with the party’s direction.

The disappointing midterm results set off finger-pointing all around and in the Senate, Sen. Rick Scott (Fla.) – the chairman of the National Republican Senatorial Committee – challenged Sen. Mitch McConnell (Ky.) for minority leader, arguing that party leadership has not done enough to lay out its plan for voters.  But McConnell prevailed in a Wednesday vote of Senate Republicans, and he will retain his minority leader post.

Former President Donald Trump’s long-anticipated launch of his 2024 White House campaign set off strong reactions Tuesday, and I’ll detail that below.

But earlier, Trump seethed over the GOP setback in the Senate last Sunday on his Truth Social platform.

“It’s Mitch McConnell’s fault.  Spending money to defeat great Republican candidates instead of backing Blake Masters and others was a big mistake. Giving 4 Trillion Dollars to the Radical Left for the Green New Deal, not infrastructure, was an even bigger mistake.

“He blew the Midterms and everyone despises him and his otherwise lovely wife, Coco Chow!” Trump added about McConnell’s wife, Elain Chao, who served as Trump’s Transportation Secretary.

In the Arizona Senate race, Blake Masters lost 47-51 percent to incumbent Democratic Sen. Mark Kelly (125,000 votes!).  After the race was called late last Friday, Trump claimed the result was a “scam” that could be attributed to “voter fraud” and that acting forces “stole the election,” which he said should be held again.

The Donald, once again, playing the role of Town Jerk.

Meanwhile, House Speaker Nancy Pelosi announced that she was stepping down from her party leadership role and Rep. Hakeem Jeffries (NY) will no doubt become the new Democratic leader, only this time in the minority.

Jeffries, 52, would be the first Black House Democratic leader.  Having observed him over the years, I like him.

Lastly, for now, fears of significant violence or chaos at polling places on Election Day did not materialize.  We are thankful for that.  But the fabric of American public life has become very frayed.

According to exit polls, more than two-thirds of all voters believe democracy in America is either “somewhat threatened” or “very threatened.”

And those voters split down the middle in terms of their voting behavior.

Now, with Republicans running things in the House and looming investigations of President Biden and son Hunter, and then this afternoon’s announcement of a special prosecutor to oversee the Justice Department’s investigation into the presence of classified documents at Mar-a-Lago, as well as key aspects of a separate probe involving the Jan. 6, 2021, insurrection and efforts to undo the 2020 election, we are headed for more chaos and division.

Attorney General Merrick Garland appointed veteran former federal prosecutor Jack Smith as special counsel, who has served most recently as an international war crimes prosecutor at The Hague. Citing Trump’s decision to announce a run for president again, as well as President Biden’s probable announcement to do the same, Garland said, “I have concluded it is in the public interest to appoint a special counsel… It’s the right thing to do.”

Trump responded in an interview on Fox News: “This is a disgrace and only happening because I am leading in every poll in both parties.”

Oh brother. 

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This week in Ukraine….

In a classic case of ‘wait 24 hours,’ a lot of folks jumped to conclusions on word of a missile that landed about 4 miles from the Ukrainian border into Poland, with two farm laborers killed on Tuesday afternoon, local time.

Ukrainian President Volodymyr Zelensky decried the blast: “This is a Russian missile attack on (NATO’s) collective security!  This is a very significant escalation.  We must act.” 

The missile strike prompted President Biden to call an emergency meeting of G-7 and NATO leaders, as a deliberate, hostile attack on NATO member Poland could trigger a collective military response by the alliance.

But addressing reporters from the G20 summit in Indonesia, Biden said it was “unlikely” it was fired from Russia.  Moscow said in a statement from the defense ministry: “Statements by Polish media and officials about ‘Russian’ missiles allegedly falling in the area of the settlement of Przewodow are a deliberate provocation aimed at escalating the situation.”

And by Wednesday morning/afternoon, NATO’s secretary-general said the blast was likely caused by a Ukrainian air defense missile firing at an incoming Russian missile, and ultimately Russia was responsible because it started the war.

Speaking after an emergency meeting of NATO ambassadors, Jens Stoltenberg announced no immediate NATO measures but said a contact group on Ukraine would meet later Wednesday, with the main focus on air defense.

Polish officials said it probably wasn’t necessary to initiate the NATO Article 4 procedure – a formal call for consultations among members of the alliance in the face of a security threat.

President Andrzej Duda said during a press conference, “There is no indication that this was an intentional attack on Poland. …(It) was not a rocket aimed at Poland.  We have no evidence that the rocket was launched by the Russian side, and there is a high probability that the rocket was used by the Ukrainian defense forces.” 

Ukraine maintained there was evidence of a “Russian trace” in the incident, without giving any details.  But Ukraine does still maintain stockpiles of former Soviet and Russian-made weaponry, including the S-300 air-defense missile system.

U.S. Defense Secretary Lloyd Austin said U.S.-provided NASAMS air defense systems have had a 100% success rate in Ukraine intercepting Russian missiles.

By late Wednesday, it seemed a Ukrainian S-300 missile was indeed what went off course and landed just over the border.  President Duda tweeted: “Most likely, it was a Russian-made S-300 missile.”

Secretary-General Stoltenberg said Wednesday: “Let me be clear: This is not Ukraine’s fault. Russia bears ultimate responsibility as it continues its illegal war against Ukraine,” stressing, “Russia must stop this senseless war.”

But the fact is, Tuesday, Russia launched its most extensive missile barrage of the war on civilians and infrastructure, leaving millions without power.

In his evening address Tuesday, President Zelensky said “a total of 90 missiles” were fired at Ukraine” and 70 were shot down.  But the ones that were not downed – in addition to exploding drones – struck Ukraine’s “Energy systems, enterprises, and residential buildings,” the president said.

The Institute for the Study of War described Tuesday’s wave of attacks from Russia as “The largest set of missile strikes against Ukrainian critical infrastructure since the start of the war.”

The ISW added: “The Russian military likely used a substantial portion of its remaining high-precision weapon systems in the coordinated missile strikes,” emphasizing “Ukraine’s increased shoot-down percentage illustrates the improvement in Ukrainian air defenses in the last month, and [Kyiv’s military officials] attributed this improvement to the effectiveness of Western-provided air defense systems.”

The Russian barrage hit 12 electricity power substations and disconnected two of Ukraine’s remaining three nuclear power plants off the national grid, cutting electricity, water, and heat for millions across the country, Zelensky said.  Multiple cities were targeted in the Russian strikes, including Kyiv, Kharkiv in the east, Lviv in the West, and Rivne to the north.

Even portions of neighboring Moldova were affected by the power outages, the country said on Tuesday.

Meanwhile, Russian forces appear to be digging more trenches and defensive positions across select parts of southern Ukraine still occupied by invading troops.  But the retreat continued around Kherson, with civil servants working for the Russian-installed administration in the second-largest city in the region, leaving due to the fighting.

President Zelensky told world leaders at the G20 there will be no let-up in the military campaign to drive out Russian troops after the recapture of Kherson.

“If Russia wants to end this war, let it prove it with actions,” Zelensky said in a video presentation to G20 leaders Tuesday, which he referred to as the “G-19,” since Moscow’s leader did not attend.  “We will not allow Russia to wait, build up its forces, and then start a new series of terror and global destabilization.  It is now necessary and possible to stop the destructive Russian war.”

Zelensky laid out a new 10-step roadmap for peace involving “radiation and nuclear safety,” food and energy security, the release of all prisoners, and an official declaration that all hostilities are officially over.

But Russia hasn’t indicated it is interested in reversing its invasion anytime soon, despite the recent significant setbacks around Kharkiv and Kherson, in the northeast and south.

Instead, Russian Foreign Minister Sergei Lavrov, who was in Bali, insisted that Ukrainian officials are the ones who will not negotiate a peace deal, saying, “We have repeatedly confirmed through our president that we do not refuse to negotiate.  If anyone is refusing to negotiate, it is Ukraine. The longer Zelensky’s team continues to refuse, the harder it will be to reach an agreement.”

You can stop laughing.

Of course, Russian officials continue to allege annexed Ukrainian territory is now part of Russia, including four regions hastily annexed in late September – Donetsk, Luhansk, Kherson, and Zaporizhzhia; and that’s what Ukrainian officials would call a “non-starter” for peace talks.

As for Putin himself, he’s been rather quiet recently, but he said on Tuesday, through state-run media TASS, that the world is awash with “distorted history” and “eroding values.”

“The attempts by some countries to rewrite and turn inside out world history are becoming more aggressive and, by and large, have an obvious goal with respect to our society, which is at least to divide us, to take away our reference points and ultimately to weaken Russia and influence its sovereignty,” Putin reportedly said.

The Pentagon’s take, through a defense official speaking to reporters on Monday: “Since the Russians don’t appear inclined to depart the rest of occupied Ukraine, there’s undoubtedly still tough fighting ahead.  But the liberation of Kherson City is a significant accomplishment and a testament to the grit, determination and tenacity of the Ukrainian people and their armed forces as they fight to defend their nation.”

There have been no public attempts to reconvene peace talks between the two sides since initiatives to bring about a ceasefire in Istanbul during the first weeks of the conflict broke down without progress.

Monday, President Zelensky visited Kherson, the biggest prize his troops have won so far, vowing to press on until Kyiv reclaims control of all its occupied territory.  He said Ukraine had already gathered evidence of at least 400 war crimes committed by Russian troops during their occupation of the city and the region.

“Bodies of dead civilians and servicemen have been found,” Zelensky said in an overnight address.  “The Russian army left behind the same savagery it did in other regions of the country it entered.”  Russia denied its troops target civilians or have committed atrocities. 

One local Kherson resident, 43-year-old Natalia Papernaya, told Reuters on Sunday: Russian soldiers “would approach you in the street and ask if you were Ukrainian or Russian.  If you said Ukrainian, they would take you away.”

Ukraine has been carrying out “stabilization measures” in and around Kherson city following the end of the eight-month occupation by Russian forces.

In a meeting in Istanbul, CIA Director William Burns told his Russian counterpart of consequences should Putin use nuclear weapons, according to the White House.

At the G20, French President Emmanuel Macron said leaders agreed to push Russia towards de-escalation in the Ukraine conflict and expressed hope China could play a bigger mediation role in the coming months.

But Thursday and Friday, Russia continued with its missile blitz, the latest strikes on energy infrastructure leaving 10 million Ukrainians without power, according to President Zelensky Friday.  

The United Nations’ humanitarian office warned of a serious humanitarian crisis this winter. Today, Kyiv city authorities warned that a “complete shutdown” of the capital’s power grid was possible and Ukraine’s prime minister, Denys Shmyhal, said almost half the country’s energy system had been disabled by Russian attacks.

On the battlefront, the Donetsk region has experienced the heaviest fighting of the war so far.  Russian forces were reinforced by troops pulled from Kherson city in the south.

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--The Swedish prosecutor who is leading the investigation into the damage to the Nord Stream 1 and 2 pipelines has confirmed that the incident was sabotage, and said that traces of explosives have been found.

In a statement, prosecutor Mats Ljungqvist said: “Analysis that has now been carried out shows traces of explosives on several of the foreign objects that were found. Advanced analysis work continues in order to be able to draw firmer conclusions about the incident.”  The statement does not name any suspects.

--Russia spoke in favor of extending the Black Sea grain deal at this week’s G20 summit in Bali, as long as more grain was sent to countries in the greatest need.

--Britain’s domestic spy chief said the expulsion of more than 400 suspected Russian spies from across Europe this year has struck the “most significant strategic blow” against Moscow in recent history and taken Vladimir Putin by surprise.

--NATO chief Stoltenberg said “NATO is increasing its presence in the Arctic with more modern capabilities.  This is of course a response to what Russia is doing. They have significantly increased their presence…and therefore we also need greater presence.”

--A Dutch court sentenced two former Russian intelligence agents and a Ukrainian separatist leader (in absentia) to life in prison for the downing of Malaysian Airlines Flight MH17 on July 17, 2014, killing all 298 passengers and crew.  The court also said Russia had “overall control” of the separatist forces in eastern Ukraine at the time.

--It was confirmed U.S. basketball player Brittney Griner has been sent to a Russian penal colony in a remote region about 310 miles southeast of Moscow.

Unless she is freed in a prisoner-swap, Griner could serve up to nine years in incredibly harsh conditions.  This just sucks.  Pray for her.

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Wall Street and the Economy

After last week’s improved news on the inflation front with the report on October consumer prices, Tuesday, we had the producer price release for the month and it, too, was better than expected, 0.2%, and unchanged ex-food and energy.

But year-over-year, while also better than forecast at 8.0% and 6.7% on core, is still 8.0% and 6.7%!

The Federal Reserve, particularly Chair Jerome Powell, has not changed their message.  They will need a series of improving data before they pause, let alone pivot.

That said, there is no doubt that when the Federal Open Market Committee gathers on Dec. 13-14, they will hike the benchmark funds rate 50 basis points, not the 75 of the previous four meetings, and they will reiterate that they need more data, some of which has been strong, like this week’s retail sales report for October, up 1.3%, above expectations, ditto ex-autos, 1.3%.

Prior to the PPI report, on Monday, Fed Vice Chair Lael Brainard signaled the central bank will likely soon slow its interest rate hikes.

“I think it will probably be appropriate soon to move to a slower pace of increases, but I think what’s really important to emphasize is…we have additional work to do.”

“It’s really going to be an exercise on watching the data carefully and trying to assess how much restraint there is and how much additional restraint is going to be necessary, and sustained for how long, and those are the kinds of judgments that lie ahead of us,” Brainard told Bloomberg in an interview.

Thursday, St. Louis Federal Reserve Bank President James Bullard said the Fed may have to raise its benchmark interest rate much higher than it has previously projected to get inflation under control.

The Fed’s key short-term interest rate “has not yet reached a level that could be justified as sufficiently restrictive,” Bullard said.  “To attain a sufficiently restrictive level, the policy rate will need to be increased further.”

Bullard suggested that the rate may have to rise to a level between 5% and 7% in order to quash inflation, though he added that that level could decline if inflation were to cool in the coming months.

Minneapolis Federal Reserve Bank President Neel Kashkari said on Thursday the Fed should not stop hiking rates until it’s clear that inflation has peaked.

“I need to be convinced that inflation has at least stopped climbing, that we’re not falling further behind the curve, before I would advocate stopping the progression of future rate hikes,” he told the Minnesota Chamber of Commerce at an event.  “We’re not there yet.”  Kashkari added that the Fed “cannot be overly persuaded by one month’s data.”

Earlier, Federal Reserve Governor Christopher Waller said the slower pace of consumer price gains in October was a positive sign, but means a slower pace of rate increases, not the end.

“I cannot emphasize enough that one report does not make a trend,” Waller said.  “It is way too early to conclude that inflation is headed sustainably down.”

“Like many others, I hope this report (the CPI) is the beginning of a meaningful and persistent decline in inflation,” Waller said.  “But policymakers cannot act based on hope. I will not be head-faked by one report and will continue to watch the data between now and the December FOMC meeting before deciding on the next step for policy.”

Separately, we had slightly better than expected housing data, with starts for October decreasing a better than expected 4.2% over September at an annualized pace of 1.425 million units.  Building permits were down 2.4%, but also beating expectations.

And existing home sales came in slightly better than forecast for October, though sales fell 5.9% to a 4.43 million seasonally adjusted annual rate from 4.71 million in September.

Total sales fell for the ninth straight month and were down over 28% from a year earlier.

“More potential homebuyers were squeezed out from qualifying for a mortgage in October as mortgage rates climbed higher,” said National Association of Realtors Chief Economist Lawrence Yun. “The impact is greater in expensive areas of the country and in markets that witnessed significant home price gains in recent years.”

Sales of single-family homes were down 6.4% in October, while condominium sales declined by 2%.

The median home price fell to $379,100 from $383,500; but was still up 6.6% from a year ago.

Prospective home buyers did receive some good news on the rate front, as the 30-year fixed-rate mortgage, as reported by Freddie Mac, fell to 6.61% this week from 7.08% a week ago, the biggest weekly decline in more than 40 years.  [The decline in the 10-year Treasury during the reporting period had everything to do with this.]

Put all the above together and the Atlanta Fed’s GDPNow barometer for the fourth quarter is at 4.2%.

Europe and Asia

We had important inflation data for the month of October in the eurozone, 10.6% vs. 9.9% in September (6.4% ex-food and energy).  [Eurostat]

Germany 11.6%, France 7.1%, Italy 12.6%, Spain 7.3%, Netherlands 16.8%.

The inflation rate in the UK was 11.1% for the month, a 41-year high and vs. 10.1% in September, though the Bank of England thinks this is the peak, as recession sinks in, the report on third-quarter GDP revealing a contraction of 0.7% annualized, according to the Office for National Statistics.

We also had a flash reading on third-quarter GDP for the euro area, 0.2% vs. Q2, 2.1% vs. Q3 2021.

Germany 1.1% (Q3 2022 vs. Q3 2021), France 1.0%, Italy 2.6%, Spain 3.8%, Netherlands 3.1%.

Britain: The financial markets here crapped out in September when the administration of Liz Truss released a budget with unfunded tax cuts, and a seeming insensitivity to the plight of the average Brit.  Truss was then replaced by Rishi Sunak as prime minister and Thursday, the government finally released a revised budget with sweeping tax increases and spending cuts, becoming the first major Western economy to start sharply limiting its spending growth after the fiscal stimulus during the pandemic.

Sunak, in announcing the new measures, is trying to convince investors that the UK is serious about eventually taming its rising government debt.  So he’ll be walking a fine line in trying to regain market confidence without cause serious damage to an economy headed towards what could be a lengthy recession.

Chancellor Jeremy Hunt announced $66 billion of spending cuts and tax increases over the next five years, though the bulk of the spending cuts don’t take effect until 2025, after the next UK general election.

But as I noted the other week, the Sunak government has numerous serious labor issues to deal with and postal workers at Britain’s Royal Mail announced they will strike for six days in the run-up to the busy Christmas period in a dispute over pay and conditions, their union said on Thursday.  The workers will strike on Dec. 23 and 24, in addition to Dec. 9, 11, 14 and 15.

So the postal workers join the nurses in planned strikes.  And then today, British civil servants said they are planning for one month of “sustained industrial action” from mid-December in an ongoing pay dispute.

Personally, it’s all about Tiny Tim.  Will he survive the holidays and grow up to be a Premier League star?

Turning to Asia…we had a slew of data in China for October and it wasn’t good.

Retail sales were down 0.5% year-over-year vs. 2.5% in September; industrial production rose 5.0% Y/Y vs. 6.3% prior; and fixed asset investment year-to-date was up 5.8%.  The unemployment rate for last month was 5.5%.

Strict Covid policies continue to weigh on economic activity and while recent moves to ease some Covid curbs have underpinned sentiment in the equity markets, the sour impact on the economy remains.

In Japan, we had a preliminary reading on third-quarter GDP, -0.3% vs. Q2, and -1.2% annualized vs. 4.6% prior.  This was disappointing, a setback for the country’s recovery as Japan begins to adjust to life with looser Covid restrictions.

October exports rose 25.3% but this is against 28.9% prior, while imports surged 53.5%.

Exports were led by the sales of transport equipment and motor vehicles, with exports to the U.S. rising 36.5%, 28.1% to the EU.  On the import side, once again it’s about energy.

Then we had a reading on October inflation, with Japan’s core consumer inflation accelerating to a 40-year high as a weak yen pushed up the cost of imported commodities, which were already surging due to global supply constraints.  The data suggests Japanese firms may be shaking off their deflationary mindset as they gradually raise prices of everything from fuel to food while coming under pressure from cost-push inflation.

The nationwide core CPI, which excludes volatile fresh food but includes energy in Japan, rose 3.6% year-on-year, accelerating from the prior month’s 3.0%.

Despite the figure far exceeding the Bank of Japan’s 2% inflation goal for a seventh straight month, the BOJ will not join the global trend of tightening monetary policy through rate hikes.

If you take out food and energy, as we do, the inflation rate is 2.5%.

Street Bytes

--Stocks finished down, but only marginally so on the Dow Jones, as the market largely ignored recession fears, pinning their hopes once again on a Fed pivot early next year, as well as the FTX scandal.

The Dow fell just 2 points to 33745, while the S&P 500 lost 0.7% and Nasdaq 1.6%.

--U.S. Treasury Yields

6-mo. 4.62%  2-yr. 4.53%  10-yr. 3.83%  30-yr. 3.92%

The spread between the 2-yr. and 10-yr., 70 basis points, is the widest since 1982 and a clear recession signal.

--OPEC lowered its forecast for oil demand growth for the fifth time since April.  The cartel said that demand will increase 2.55 million barrels per day this year, down 100,000 barrels a day from its previous forecast.  It reduced the outlook for next year by the same amount, saying demand in 2023 will only rise by 2.24 million barrels a day.

There are ongoing concerns that faster inflation and rapidly rising interest rates will weigh on the world’s energy needs.  OPEC next meets on Dec. 4.

More than 1 million barrels a day of Russian oil exports are set to be obstructed by Western sanctions that are expected to come into force within weeks, the International Energy Agency said Tuesday, and Moscow will struggle to redirect shipments elsewhere, threatening to further tighten global energy markets.

Russian crude oil exports, including to the European Union, were largely unchanged last month, despite the prospect of an imminent EU ban on Russian crude oil imports and a separate plan to cap prices for Russian crude oil sales.

Russian exports to the EU were 1.5 million barrels a day in October, of which 1.1 million barrels a day will be halted when the bloc’s ban comes into effect on Dec. 5, the IEA said.

It was unclear how much of those supplies Russia would be able to redirect to customers elsewhere in the world, the IEA said.  India, China and Turkey have snapped up discounted Russian crude shipments but buying from those nations has stabilized in recent months, the IEA said.

The IEA said global oil supplies would rise to 100.7 million barrels a day in 2023, 100,000 barrels a day more than it was forecasting last month, but still 700,000 barrels a day short of the world’s expected appetite for oil.

Oil, as measured by West Texas Intermediate, traded down to $78 this week on recession fears, before closing above $80…$80.23.

--With all I’ve been writing about diesel, I got a kick out of an extensive article Wednesday in the Journal titled “Diesel Hits Record Premium Over Gas, Oil.”

The article by Bob Henderson goes on to point that the spread that I’ve been noting in this column for months is about $1.60 vs. 23-25 cents a year ago.

Wholesale diesel, delivered into New York harbor, had only 25 days of diesel in reserve, the lowest since 2008, according to the Energy Information Administration in October.

The war in Ukraine has had an impact, but this only amplified a pre-existing problem.  Last year’s severe weather issues exacerbated the situation, and as Mr. Henderson points out, “there was little drop in demand for the fuel during the pandemic, when millions of sequestered Americans paused driving, while ordering more goods delivered to their homes by truck.”

In recent months companies as diverse as Bath & Body Works, Kroger supermarkets, Hormel Foods and Kellogg have all cited diesel costs as a headwind.  And those costs are passed on to consumers, which can feed inflation, as I’ve been saying ad nauseam.

The low inventory levels on the East Coast shouldn’t be an issue if we have a normal winter, but an especially cold winter could draw down reserves to dangerously low levels, diesel interchangeable with heating oil, which is heavily used in the Northeast, particularly New England.

But more inventory, we’re told, is on the way.  Gulf Coast refiners are scaling up production as they exit maintenance season, French refiners are coming back, and there is a new major refinery in Kuwait that is ramping up.

But we don’t need another situation like we had in Texas last winter.

Stay away, Polar Vortex!

--It was retail week for earnings and Walmart reported strong third quarter profits and revenue as more Americans seek to cut spending in face of high inflation.

Also on Tuesday, Walmart agreed to pay $3.1 billion to settle lawsuits nationwide over the impact of prescriptions in its pharmacies filled for powerful prescription opioid painkillers.  The agreement must still be approved by 43 states to take effect, but company shares jumped 6% on the earnings news.

Walmart lost $1.79 billion for the quarter ended Oct. 31, including the opioid settlement.  Adjusted per share results were a profit of $1.50, handily beating estimates for $1.32.

Sales rose 8.7% to $152.81 billion, also above forecasts for $147.7 billion.

Sales at stores open at least a year rose 8.2%, higher than the 6.5% in the previous quarter.  Online sales rose 16%.

Walmart’s grocery business buoyed earnings and revenue, while the company said customers are watching how they spend and trending down to cheaper items, such as hot dogs and beans, rather than pricier meats, and they are waiting for sales before buying items like TVs and air fryers.

As inflation has run hot, Walmart also found it is getting more high-income shoppers.

Investors were rattled in July when Walmart lowered its profit outlook for the second quarter and year, saying rising prices on food and gas are forcing shoppers to cut back on discretionary items, particularly clothing, that carry higher profit margins.

For fiscal Q4, the company expects sales growth of 3%.  For the full fiscal year, it sees sales growth of 5.5%, up from a 4.5% pace previously projected.

--Target shares plunged 13% Wednesday as an unexpected and potentially ominous pullback in customer spending ahead of the holiday shopping season pushed third quarter profits down 52% after the company was forced to slash prices for Americans who are feeling the squeeze of inflation.

Target cited a sudden pullback in consumer spending in recent weeks that forced it to cut prices on clothing and other goods to entice Americans who are rebalancing budgets with prices for gasoline, rent, food and almost everything else elevated.

The Minneapolis retailer also voiced caution about its sales and profit outlook for the fourth quarter because of trends it has seen recently.

Target said it would be slashing expenses with a goal of saving $2 billion to $3 billion over the next three years. Those cuts will not include layoffs or hiring freezes.

Chairman and CEO Brian Cornell said sales weakened significantly in the weeks leading up to Oct. 29, the end of the most recent quarter, with more customers refusing to pay full price and waiting for sales.  They’re also buying smaller packages and trading down to instore brands.

“It’s an environment where consumers have been stressed,” Cornell said.  “We know they are spending more dollars on food and beverage and household essentials. And as they are shopping for discretionary categories…they are looking for that great deal.”

Cornell said that mindset will continue through the holiday shopping season.

Target has taken a bigger hit than its rival Walmart.  The disappointing quarter follows Target’s nearly 90% tumble in profit in the second quarter and a 52% drop in the first.  In early June, Target warned that it was canceling orders from suppliers and aggressively cutting prices because of a pronounced spending shift by Americans as the pandemic eased.

Target posted net income of $712 million, or $1.54 per share in its fiscal third quarter. That compares with $1.49 billion, or $3.04 per share a year ago.

Revenue rose 3.4% to $26.52 billion compared with the year ago quarter.

Comparable sales increased 2.7%, vs. 12.7% last year.

Interestingly, and rather depressing, Target said that it is seeing theft at its stores grow.  Executives told reporters on a call that the chain booked more than $400 million in losses from theft so far this year.

--Home Depot’s fiscal third-quarter results topped Wall Street’s estimates boosted by higher prices, but transactions declined and the home improvement retailer opted to maintain its full-year outlook.

Net income climbed to $4.24 per share during the quarter ended Oct. 3 from $3.92 a year earlier, the company said, earnings increasing to $4.34 billion.  That was higher than consensus of $4.11. Sales gained 5.6% to $38.87 billion, also exceeding the Street’s view.

“We delivered another solid performance in the third quarter, driven by strength in project-related categories across the business,” CEO Ted Decker said in a statement.  “Our team has done a fantastic job serving our customers while continuing to navigate a challenging and dynamic environment.”

Comparable sales grew 4.3% in the quarter, and advanced 4.5% in the U.S.  But the number of transactions slipped 4.3% to 409.8 million.  The average ticket prices increased 8.8% to $89.67.

But the company left its annual forecasts unchanged, raising concerns about demand heading into the holiday season amid the slowing housing market.

--Lowe’s Cos. Inc.’s shares rose about 3% Wednesday after the company raised its annual profit forecast, encouraged by high prices and steady demand for home improvement products despite decades-high inflation and cooling home prices.

Higher mortgage rates are keeping consumers from buying new homes and instead renovating their existing properties, which has buoyed demand at home improvement chains at a time when spending on paint and tools has slowed from the pandemic peak.

But Lowe’s upbeat earnings forecast was in contrast with rival Home Depot’s.

Lowe’s comp store sales rose 2.2% in the three months to Oct. 28, beating analysts’ forecast of 0.9% growth, thanks to strong demand from contractors and professional builders, and improving demand from do-it-yourself customers who bring in about 75% of Lowe’s total revenue.

Quarterly net sales rose more than 2% to $23.48 billion, while adjusted earnings of $3.27 per share were above expectations.

--Macy’s profits and sales slid in the third quarter as the department store faces a pullback from shoppers stung by inflation.  But it topped Wall Street’s expectations and the New York company raised its earnings outlook, in part due to better credit card revenue.

Macy’s posted net income of $108 million, or 39 cents per share for the three-month period ended Oct. 29.  That compares with $239 million, or 76 cents per share in the year-ago period.  Adjusted earnings came in at 52 cents vs. estimates of 19 cents.

Sales slipped 3.9% to $5.23 billion from $5.44 billion from a year ago.

Comparable sales slipped 2.7%, though up 6% compared with the third quarter of 2019.

Macy’s, which caters to more upscale customers said it saw resilient demand for high-end suits, gowns and beauty products as wealthier shoppers were undeterred by inflation.

Rival Kohl’s Corp., however, withdrew its 2022 sales and profit forecasts, as the company, which caters to more lower-income customers and stocks fewer luxury goods, took a hit from weakening demand due to rising prices.

Macy’s inventory levels were just 4% higher, thanks to heavy discounts to clear the excess stocks of cheaper casual and athleisure apparel.  In contrast, Kohl’s inventories were 34% higher in the third quarter.  “Our middle-income customers continued to purchase fewer items per trip and trade down to value-oriented private brands,” the company said.

--Shares in Micron Technology Inc. fell nearly 7% on Wednesday after the company said it would reduce memory chip supply and make more cuts to its capital spending plan, as the semiconductor firm struggles to clear excess inventory due to a slump in demand.

Micron was the first major chipmaker to sound an alarm about falling demand for personal computers and smartphones earlier this year in the face of decades-high inflation.

Chipmakers and electronics companies, which had been preparing for the pandemic-led demand surge to sustain and had for long struggled with supply constraints, soon found themselves with overstocked inventory.  The broader weakness seeped throughout the industry, and is now affecting all end-markets from personal electronics to data centers to industrial.

But some see this as good as widespread supply and capex cuts typically presage a bottom for the memory industry.

--Chip maker Nvidia provided a revenue forecast for the January quarter slightly below expectations.  The semiconductor company reported adjusted earnings per share of 58 cents for its October quarter, compared with Wall Street’s consensus of 71 cents.  Revenue came in at $5.93 billion, better than expected.

“We are quickly adapting to the macro environment, correcting inventory levels and paving the way for new products,” Jensen Huang, CEO of Nvidia, said in a press release.

But because the company has cut its financial forecasts multiple times over the past several months, blaming a softening economic environment and a sharp slowdown in demand for its gaming graphics cards, the shares rose a bit because the news wasn’t worse.

--Warren Buffett’s Berkshire Hathaway Inc. took a stake of about $5 billion in Taiwan Semiconductor Manufacturing Co., a sign the legendary investor thinks the world’s leading chipmaker has bottomed out after a selloff of more than $250 billion.  The shares surged.

TSMC produces semiconductors for clients like Nvidia Corp. and Qualcomm Inc. and is the exclusive supplier of Apple’s custom Silicon chips.  Apple remains the most valuable single holding in Berkshire’s portfolio.

--Cisco Systems’ fiscal first-quarter results surpassed Wall Street’s estimates as product sales grew, while the tech giant late Wednesday raised its full-year financial outlook.

Adjusted per-share earnings rose to $0.86 during the three months ended Oct. 29 from $0.82 a year earlier.  Revenue gained 6% to $13.63 billion, higher than the Street’s $13.29 billion view.

Product sales rose 8% to $10.25 billion while service revenue saw a slight uptick to $3.39 billion.

Cisco expects 4.5% to 6.5% revenue growth for fiscal 2023.

--These numbers are staggering, but the world’s largest iPhone factory, operated by Apple supplier Foxconn Technology Group, is in need of 100,000 workers to resume full production capacity in the central Chinese city of Zhengzhou, according to China Newsweek, a state-backed weekly magazine.

The company has had trouble finding enough workers to staff the plant since an exodus spurred by a Covid-19 lockdown, the publication reported.

At its peak, the factory had about 300,000 workers. It is now operating in a so-called closed-loop mode, which requires people to live and work on campus.

So then we learned Friday that Foxconn suspended hiring for three days due to limited quarantine capacity.

--Amazon.com Inc. confirmed the New York Times’ report of Monday that it was laying off about 10,000 people in corporate and technology jobs starting as soon as this week.  The cuts are not likely to affect its hundreds of thousands of warehouse workers.

--FedEx Corp.’s freight division is furloughing employees in some U.S. markets as current business conditions are hurting its volumes, the company announced Monday.  The move came barely a week after the company warned of lower-than-expected delivery volumes in the United States as the pandemic-driven e-commerce bubble deflates.

FedEx outlined cost cuts of up to $2.7 billion in September after falling demand hammered first-quarter profit.

--TSA checkpoint numbers vs. 2019

11/17…95 percent of 2019 levels
11/16…95
11/15…99
11/14…98
11/13…102
11/12…103
11/11…95
11/10…92

--Consumer Reports released its latest rankings for the most reliable vehicle types, brands and models based on information from car owners on more than 300,000 vehicles.  The nonprofit research and consumer advocacy organization said top-rated hybrids offer reliability, better fuel economy and lower maintenance costs without giving up acceleration or a ride that is quiet and comfortable.

And so CR said top-performing hybrids include the 2023 Lexus NS, the 2023 Ford Maverick and the 2023 Toyota Corolla.

More than 1 in every 3 prospective buyers (36%) are considering a hybrid as their next car or truck purchase, up from 29% in 2019, according to Consumer Reports.

Models from Tesla Motors, which leads the market in EV sales, continue to have issues with body hardware, steering and suspension, paint and trim and climate system.  The Model 3 has average reliability, while other Tesla models – including the S, Y and X – are below average.

Mercedes-Benz was named Consumer Reports’ least reliable brand for the first time after owners reported electronics issues such as screens that went blank.

Pickup trucks continue to rank toward the bottom for reliability, with only seven of the 17 models in this year’s survey having average or better reliability scores.

The most reliable brands…

1. Toyota
2. Lexus
3. BMW
4. Mazda
5. Honda

18. Ford
19. Tesla
20. Chevrolet
21. GMC
22. Volkswagen
23. Jeep
24. Mercedes-Benz

I remain very happy with my little Honda Civic.  Vrooom….

--On the cryptocurrency front in the wake of FTX’s shock bankruptcy, the price of bitcoin generally traded in a narrow range this week of $16,000 to $17,000.  Prices rallied some Monday and then basically held the level after Binance Holdings CEO Changpeng Zhao announced plans to launch a crypto recovery fund to help industry players facing a liquidity crunch.

But problems are multiplying amid the chaos. Cryptocurrency lender BlockFi is said to be preparing to file for bankruptcy within days.  The mess has even ensnared the billionaire Winklevoss twins.  Their lending partner is suspending redemptions and new loan originations after facing withdrawal requests that exceeded current liquidity.  Gemini trust, founded by Cameron and Tyler Winklevoss, subsequently announced its yield product for retail investors will also halt redemptions.

In court filings Monday, FTX’s bankruptcy could involve “more than one million creditors,” showing the vast reach the second-largest cryptocurrency exchange had before its downfall.

For many retail traders who poured their life savings into digital assets, the collapse of Sam Bankman-Fried’s empire marks the end of the line.  The venture capital firms who gave the wunderkind a pile of money without demanding he establish oversight could bear some responsibility in the end.

And it was kind of ironic that I wrote early last Friday evening about the so-called security surrounding bitcoin and blockchain and Saturday morning we then learned FTX had detected unauthorized access overnight and analysts (Blockchain analytics firms) said hundreds of millions of dollars of assets had been moved from the platform in “suspicious circumstances.”  FTX Chief Executive John J. Ray III said the company was working with law enforcement and regulators to mitigate the problem, and was making “every effort to secure all assets, wherever located.”

Estimates of the outflows from FTX U.S. and FTX International ranged from $473 million to $659 million…cryptoassets “moved out of FTX wallets in suspicious circumstances early this morning,” according to blockchain analytics firm Elliptic.

[But Friday afternoon, the Securities Commission of the Bahamas said it had seized the digital assets and transferred the assets of FTX Digital Markets Ltd. to a digital wallet it controlled for safekeeping.  “Urgent interim regulatory action was necessary to protect the interests of clients and creditors of FDM,” the commission said in a statement.  But it’s not really clear if the Bahamas is acting in good faith…at least that’s my initial read of it.]

John Ray, a restructuring expert, was appointed to take over as CEO.  Thursday, in a filing to the bankruptcy court, Ray, who helped oversee some of the biggest bankruptcies ever, including Enron’s, said despite his 40 years in the business of restructuring companies, he’s never seen anything as bad as FTX.

“Never in my career have I seen such a complete failure of corporate controls and such a complete absence of trustworthy financial information as occurred here. From compromised systems integrity and faulty regulatory oversight abroad, to the concentration of control in the hands of a very small group of inexperienced, unsophisticated and potentially compromised individuals, this situation is unprecedented.”

The filing paints a chaotic picture of the cryptocurrency company’s finances, accounting and leadership under founder and former CEO Sam Bankman-Fried.  It is Mr. Ray’s first detailed description of the state of FTX and Alameda, the trading arm, since taking over last Friday.

Ray wrote that the company can’t trust prior financial information produced by SBF, particularly quarterly balance sheets that were unaudited.  “I do not have confidence in it and the information,” he wrote.

Even prior audited financial statements were suspect, he said.  Mr. Ray wrote that he had “substantial concerns’ about the audited statements by FTX – which were provided to its venture capital investors – and said the court shouldn’t rely on them.

His team has located about $740 million in cryptocurrencies held by FTX and other companies related to Bankman-Fried.  He called the amount “only a fraction of the digital assets of the FTX Group that they hope to recover.”

Total liabilities are unclear, he wrote, given that the amounts FTX owed customers weren’t reflected in FTX’s financial statements made under SBF.

Ray then alluded to an array of areas he could look to recover funds.  He said there were $372 million in “unauthorized transfers” on the day the company filed for bankruptcy, and he ordered a team of investigators to look into “what may be very substantial transfers of Debtor property in the Case days, weeks and months” before the filing.

He said FTX’s problems included “the use of software to conceal the misuse of customer funds” and “the secret exemption of Alameda from certain aspects of FTX.com’s auto-liquidation protocol.”

The exchange lacked accounting controls and expenses were approved on an internal chat, where “supervisors approved disbursements by responding with personalized emojis.”

And Ray took aim at Bankman-Fried, who Ray said “continues to make erratic and misleading public statements,” he wrote, adding “Bankman-Fried is not employed by the Debtors and does not speak for them.”

So there you have it…the details of this fraud are just beginning to come out, the story of how FTX used customer assets for trading at Alameda without their knowledge.  When Alameda couldn’t meet its obligations, it then spilled over to FTX’s customer base.

Equity brokerages and exchanges regulated by the SEC would never be allowed to use customer assets in that way.  But there is no regulatory body supervising operations of global exchanges like Bahamas-based FTX.

In late developments, the Wall Street Journal is reporting that when FTX raised $420 million from investors in October 2021, $300 million of it went to founder SBF, not for building the business as investors were told.

Zanny Minton Beddoes / Editor-in-chief The Economist

“Over the past week we have been watching the collapse of the crypto universe with grim fascination. Only recently, Sam Bankman-Fried was in the stratosphere.  FTX, his cryptocurrency exchange, then the third-largest, was valued at $32 billion; his own wealth was estimated at $16 billion.  To the gushing venture capitalists of Silicon Valley he was the financial genius who could wow investors while playing video games, destined, perhaps, to become the world’s first trillionaire.

“Today there is nothing left but 1 million furious creditors, dozens of shaky crypto firms and proliferation of regulatory and criminal probes. The more that comes out about the demise of FTX, the more shocking the tale becomes. The exchange’s own terms of service said it would not lend customers’ assets to its trading arm. Yet of $14 billion of such assets, it had reportedly lent $8bn worth to Alameda Research, a trading firm also owned by Mar. Bankman-Fried.  In turn, it accepted as collateral its own digital tokens, which it had conjured out of thin air.  A fatal run on the exchange exposed the gaping hole in its balance sheet. To cap it all, after FTX declared bankruptcy in America, hundreds of millions of dollars mysteriously flowed out of its accounts.

“The high-speed implosion of FTX has dealt a catastrophic blow to an industry with a history of failure and scandals.  Never before has crypto looked so criminal, wasteful and useless.”

--Elon Musk gave Twitter Inc. employees an ultimatum to either commit to the company’s new “hardcore” work environment or leave.  Droves of workers then declined to sign on and opted to quit, putting Twitters operations at risk.

So many employees decided to take severance that it created a cloud of confusion over which people should still have access to company property. Twitter closed its offices until Monday, according to a memo:  “Please continue to comply with company policy by refraining from discussing confidential information on social media, with the press or elsewhere.”

Musk attempted to convince people to stay in the final hours before his deadline.  He also softened his tone on remote work.

“All that is required for approval is that your manager takes responsibility for ensuring that you are making an excellent contribution,” he wrote, adding that staffers should have in-person meetings with their colleagues not less than once per month.

Some employees who were departing speculated that so many were leaving, along with their knowledge of how the product works, that the social network may have trouble fixing problems or updating systems during its normal operations.

--Search giant Google has agreed to a $391.5-million settlement with 40 states to resolve an investigation into how the company tracks users’ locations, state attorneys general announced Monday.

The investigation by the states, which officials said was spurred by a 2018 Associated Press story, found that Google continued to track people’s location data even after they opted out of such tracking.

--As the Wall Street Journal reported: “The big technology companies that drove U.S. office demand for years as they expanded their empires are now canceling leases and flooding business districts with office space as they downsize.”

The likes of Facebook owner Meta Platforms, Lyft, Salesforce.com and other tech companies are shedding office space in San Francisco, Silicon Valley, New York, Austin and elsewhere.

According to real estate services firm CBRE, the tech sector accounted for the largest portion of the leasing that took place during the pandemic (even as leasing was declining overall) as company’s like Alphabet’s Google continued to expand their office footprints during that period.

Now, with the prospect of a recession looming and companies slashing payroll, tech firms find they have too many floors of office space and want to unload big chunks of it.

The national office vacancy rate is 12.5%, up from 9.6% in 2019 and the highest since 2011, according to data firm CoStar Group Inc.  Overall, about 212 million square feet of sublease space is on the market, a record since CoStar started tracking the statistic in 2005.

--Carvana Co. said it will eliminate about 1,500 jobs, adding to the growing list of layoffs across corporate America as the online vehicle dealer grapples with a slowdown in the used-car market.  The cuts amount to about 8% of the company’s workforce.

--In the New York area, transit ridership is increasing and vehicular traffic on some bridges and tunnels has surpassed or approached pre-pandemic highs seen in 2019.

NJ Transit is reporting rail ridership at 70% of pre-pandemic levels, but ridership is higher on midweek trains.

“Many peak hour trains are at or near pre-Covid levels with Tuesday, Wednesday and Thursday ridership the highest,” said NJ Transit CEO Kevin Corbett.

Which is what I observe at the commuter parking lots in the area.  They continue to be relatively crowded Tuesday thru Thursday, and empty Mondays and Fridays, in keeping with employers in New York who are generally asking workers to come in three days a week now.

--Thanksgiving dinner is expected to cost 9.5% to 10.5% more this year, according to the Dept. of Agriculture.

Lower production and higher costs for labor, transportation and items are part of the reason; disease, rough weather and the war in Ukraine are also contributors.

Wholesale turkey prices are at record highs after a difficult year for U.S. flocks. A particularly deadly strain of avian flu has wiped out 49 million turkeys and other poultry in 46 states this year, according to the CDC. 

The wholesale price of a turkey is up 28% from a year ago.

--CNN’s new boss Chris Licht was grilled by employees at a town hall meeting over possible layoffs as the cable news giant is under pressure from corporate parent Warner Bros. Discovery to slash costs amid fierce economic headwinds.

While Licht didn’t specify who would get the ax, he did say that those involved with aspects of CNN who were not part of the network’s “core mission” were most likely to go.

Another round of layoffs is expected next month, raising tensions in the network’s Manhattan headquarters.

--Marvel Studios’ Black Panther: Wakanda Forever raked in $180 million in U.S. and Canadian tickets sales last weekend, a record for November. Overseas ticket sales reached $150 million, for a global total opening weekend of $330 million, according to Walt Disney’s estimates.  [It cost $250 million to produce, the AP reported.]

The original Black Panther starring Chadwick Boseman as King T’Challa/Black Panther, opened in February 2018 with $202 million in ticket sales and went on to gross more than $1.4 billion worldwide, according to Box Office Mojo.

Boseman’s death in August 2020 from colon cancer changed the theme of Wakanda Forever to one of a grieving kingdom T’Challa left behind, so they say, your editor not having seen the first film and probably not seeing this one.

The next blockbuster on the 2022 movie schedule is Disney’s Avatar: The Way of Water, opening Dec. 16.

Speaking of Disney, it announced late last Friday it planned to freeze hiring and cut some jobs as it strives to move the Disney+ streaming service to profitability, according to a memo sent out by CEO Bob Chapek to Disney’s leaders.

The layoffs are said to be small, but Chapek said business travel would be limited and trips would require advance approval, or conducted virtually as much as possible.

--Late today, Elizabeth Holmes was sentenced to more than 11 years in prison following her conviction in January for defrauding investors while running the failed blood testing startup Theranos.

Good.

Foreign Affairs, Part II

China: President Biden and China’s Xi Jinping sat down for their first in-person meeting since Biden became president on the sidelines of the G20 summit in Indonesia.

“There need not be a new Cold War,” Biden told reporters afterward. “And I do not think there is any imminent attempt on the part of China to invade Taiwan, and I made it clear that our policy on Taiwan has not changed at all,” the president said.  “I made it clear that we want to see cross strait issues peacefully resolved.”

In terms of U.S. resolve and leadership on the world stage, Biden said the midterm election results seem to show a stabilizing democracy that’s “ready to play… The Republicans who survived, along with the Democrats, are of the view that we’re gonna stay fully engaged in the world. And that we, in fact, know what we’re about.”

Josh Rogin / Washington Post

“U.S.-China relations are so bad these days that any communication between Washington and Beijing is inevitably hailed as a potential turning point in the ever-worsening relationship. But Monday’s meeting between President Biden and Chinese President Xi Jinping actually serves as a sober reminder of the unfortunate reality that the two superpowers are headed for more confrontation, not less, in the months and years ahead.

“Despite Biden’s oft-repeated belief that ‘all foreign policy is personal,’ there was no substantive progress made in the 3 ½-hour confab.  That’s because the problems in the U.S.-China relationship are structural, not personal.  And although Xi says he wants to improve the atmosphere, his actions tell a different story.

“The White House set expectations low… The event was pitched as an effort to ‘build a floor’ under the relationship by bolstering high-level communication.  And it’s certainly true that Xi’s isolation from the world for the past three years has raised the risk of misunderstandings. The fact that he’s inhabiting an ever-shrinking bubble – having purged all his critics – means that any opportunity to speak directly to Xi is worth taking.

“ ‘I’m convinced that he understood exactly what I was saying. I understood what he was saying,’ Biden said afterward, rolling out the meager results.  Biden said he was convinced that there was no need for the United States and China to enter into a cold war and he was confident a Chinese invasion of Taiwan was not ‘imminent.’….

“In his comments before the meeting, Xi played into the idea he wanted a détente in the U.S.-China relationship.  He and Biden should ‘bring China-U.S. relations back to the track of healthy and stable growth,’ Xi said.  Predictably, much of Washington praised this supposed thaw, and markets jumped at the prospect of an economic thaw to go with it.

“The problem with this thinking is that it ignores Beijing’s worsening behavior and the fact that Xi wasn’t willing to negotiate on any of the contentious issues.  After his appointment as dictator for life and his consolidation of power, Xi has little incentive to do anything substantial to address U.S. concerns about China’s military aggression toward Taiwan, its mass atrocities against the Uyghurs, its unfair trade practices or any other issue.

“ ‘When Xi Jinping says he wants a better U.S.-China relationship, what he really means is that he wants U.S capitulation on China’s ‘core interests,’’ said Joshua Eisenman, associate professor of politics at the University of Notre Dame’s Keogh School of Global Affairs.  ‘So it’s not that Xi wouldn’t be happy with a better U.S. relationship’ it’s just that the terms he is offering are more a list of demands than areas of actual bilateral cooperation.’

“Even on issues of mutual interest, there was zero give on Beijing’s side.  China has resumed talking about climate change but has not agreed to drop its demand for sanctions to be lifted upfront on its silicon companies for their use of forced labor.  On Iran, North Korea and Russia, Beijing is still intent on undermining U.S. policy.

“And because the United States has no intentions of capitulating to Beijing’s demands that it abandon Taiwan and shut up about its human rights violations, U.S. policy will continue to bump up against Xi’s ‘red lines.’  In fact, both parties in Washington are set to ramp up their efforts to confront China’s actions next year….

“Xi’s professed desire for a reset in U.S.-China relations rings hollow because of his long record of deception on this issue. This is the same Xi who promised President Barack Obama in 2015 that he would not militarize the South China Sea – and then did just that.  This is the same Xi who signed an agreement promising that China would not use cyberespionage for economic aggression.  Fool me once…

“Rather than listen to Xi’s dubious claims, Washington should listen more to U.S. allies and partners in Asia, who want more U.S. economic engagement in the region, and to U.S. military commanders, who are warning that U.S. military deterrence in the Pacific is eroding as China’s military footprint quickly expands.

“As for handling Xi, it makes complete sense to keep the lines of communication open, in the hope that Beijing will someday be ready to really negotiate in a way that responds to the international community’s concerns about its actions.  Talking is great, but only if we are clear-eyed about the character and intentions of the dictator across the table.”

And what does the other side say.  Following are some comments from the Chinese Communist Party mouthpiece, The Global Times, following the meeting between Xi and Biden.

“Quite a few public opinions have noticed that the venue for this meeting is the Chinese delegation’s residence in Bali, and the hotel where the U.S. delegation is staying is about 10 minutes’ drive away. Furthermore, this meeting was proposed by the U.S.  In fact, it is not difficult to find that each time the continuous deterioration of China-U.S. relations happens, it is due to the unilateral provocation by the U.S.

“As the saying goes, ‘whoever starts the trouble should end it.’  Only if the U.S. takes the right attitude and practical actions can China-U.S. relations return to the right track….

“China-U.S. relations cannot deteriorate any further. In dealing with the huge and complicated bilateral relationship, it is impossible to solve all problems with just one meeting….

“We hope that the conclusion of this meeting will become a new starting point for broader communication between China and the U.S., as well as a starting point for the two to seek pragmatic cooperation through communication. China maintains continuity and stability in its U.S. policy, and has always called on the U.S. to meet China halfway, which is not only in the fundamental interests of the two countries and the two peoples, but also the common expectation of the international community.  The goal of handling China-U.S. relations well should not only be to avoid conflicts.”

But as the editorial says, in Beijing’s eyes it’s about the U.S. taking the right attitude and practical actions.  As in, stop criticizing us, let us take Taiwan, and don’t bitch about human rights.

Meanwhile, I see the Covid-19 case numbers come in over my news feed every evening (as the figures are released in the morning in China) and there is little doubt they have been increasing, kind of substantially in some areas, so the idea that President Xi Jinping is suddenly going to reopen the country and relax all restrictions is laughable.

The southern city of Guangzhou is setting up makeshift hospitals and quarantine sites with capacity for nearly 250,000 beds for Covid infections, officials said this Thursday, as cases across the country hit their highest level since April.

Guangzhou, a manufacturing hub that is home to 19 million people, is currently battling China’s largest outbreak, with new daily infections rising to a level not seen since Shanghai’s outbreak earlier this year.

But there have been videos of large protests in Guangzhou over the restrictions in some districts.

China has been loosening some restrictions related to mass-testing and quarantine for overseas arrivals, but the moves have been minimal and experts warn that full reopening requires a massive vaccination booster effort, and would also need a change in messaging in a country where Covid remains widely feared despite overall case numbers being low by global standards.

And this is what I mean by my statement that talk of opening up makes no sense.  It does to you or me, but not when you think about the past government rhetoric. If case numbers are rising, Beijing can’t just suddenly tell the people everything is alright.

North Korea: Pyongyang fired an intercontinental ballistic missile Friday that landed near Japanese waters in its second major weapons test* this month that showed a potential ability to launch nuclear strikes on all of the U.S. mainland.

*Second of an ICBM…separate from the scores of short- and intermediate-range ballistic missiles that have been launched.

South Korea’s Joint Chiefs of Staff detected the launch from North Korea’s capital region and Japan said it appeared to fly on a high trajectory and land west of its island of Hokkaido.

According to South Korean and Japanese estimates, the missile flew 6,000-6,100 kilometers (3,600-3,790 miles) at a maximum altitude of 620 miles.

Japanese Defense Minister Yasukazu Hamada said that depending on the weight of a potential warhead, the missile had a range exceeding 15,000 kilometers (9,320 miles), “in which case it could cover the entire mainland United States.”

The White House said the launch “needlessly raises tensions” and shows that North Korea is prioritizing unlawful weapons programs over the wellbeing of its people.

In comments at a meeting in Bangkok, Japanese Prime Minister Fumio Kishida called the launch “utterly unacceptable,” saying the missile fell inside Japan’s exclusive economic zone west of Hokkaido.

The United States immediately held joint air exercises with both Japan and South Korea.

Iran: France and Britain accused Iran of threatening their nationals on Wednesday after the Islamic Republic said French intelligence agents had been arrested during anti-government protests.  Tehran accuses Western adversaries of stoking the nationwide unrest ignited by the Sept. 16 death of young Iranian Kurdish woman Mahsa Amini whom morality police had arrested for allegedly flouting the Islamic dress code.

“People of other nationalities were arrested in the riots, some of whom played a big role,” Interior Minister Ahmad Vahidi told state TV on Wednesday.  “There were elements from the French intelligence agency and they will be dealt with according to the law.”

At the G20 summit in Indonesia, French President Emmanuel Macron told reporters Iran was being increasingly aggressive “with its unacceptable hostage-taking.”

“I urge Iran to return to calm and a spirit of cooperation. I call on it to respect regional stability and also French citizens,” he added.  Paris says seven French nationals are detained in Iran.  Robert Malley, the U.S. special envoy on Iran, said in Paris that it was time for countries to coordinate their response to citizens being detained in Iran for the purpose of “hostage-taking as bargaining chips and for political reasons.”

Britain’s domestic spy agency head, Ken McCallum (MI5), said Iran’s intelligence services have tried on at least 10 occasions to kidnap or even kill British nationals or individuals based in the United Kingdom regarded by Tehran as a threat.

Also on Wednesday, Iran’s judiciary sentenced to death three anti-government protesters in Tehran on various charges such as “corruption on earth” and “waging war on God,” Iranian state media reported.  The three can appeal.

According to state media, of thousands arrested in Tehran and Karaj cities for taking part in protests, up to 19 face the death penalty.

But Iran is worried that the two-month-old protests are becoming increasingly violent, with the regime believing dozens, or hundreds, of Kurdish activists have crossed from Iraq into Iran and that these “separatists” are involved in mobilizing the opposition.

The total number of deaths during the protests has hit 348, according to Harana, a human rights agency, with 14,000+ arrests, though the figures are impossible to verify.

Separately, Washington’s special envoy for Iran, Robert Malley, said Iran’s crackdown on protesters and the sale of drones has turned the United States’ focus away from reviving a nuclear deal.

Speaking to reporters in Paris, Malley insisted that the United States would leave the door open to resume diplomacy “when and if” the time came, but for now Washington would continue a policy of sanctions and pressure.

Turkey: Police detained a suspect who is believed to have planted the bomb that exploded on a bustling pedestrian avenue in Istanbul, Turkey’s interior minister said Monday, adding that initial findings indicate that Kurdish militants were responsible for the deadly attack.

Six people were killed and several dozen others were wounded in Sunday’s explosion on a popular thoroughfare lined with shops and restaurants that leads to the iconic Taksim Square (I know it well).

It was a shocking reminder of the past when such attacks were common.

--Presidential approval ratings….

Gallup: 40% approve of President Biden’s job performance, 56% disapprove; 39% of independents approve (Oct. 3-20).

Rasmussen: 46% approve of Biden’s performance, 53% disapprove (Nov. 18).

--Editorial / Wall Street Journal

“The saying goes that Nancy Pelosi ruled the House of Representatives with an iron fist in a velvet globe, but it was more like an iron fist in an iron globe.  After two decades of corralling Democrats, often against their will, Speaker Pelosi says she’ll return to the rank and file next year.  Republicans who disagree with Mrs. Pelosi on practically everything can still learn from her how to effectively wield power….

“At her best, Mrs. Pelosi believes in American freedom and has no illusions about U.S. adversaries. This year she visited Ukraine and Taiwan, and she didn’t back down from the latter trip despite heavy pressure from China.

“At her worst, Mrs. Pelosi is a petty partisan. Recall the 2020 State of the Union, when she tore up President Trump’s speech while he was standing in front of her.  She put allies like Rep. Adam Schiff in charge of the Intelligence Committee and let him make wild claims about Trump-Russia collusion when it was politically useful.  She insisted on impeaching Mr. Trump twice, though both times it strengthened him with GOP partisans.

“Yet there’s no denying that Mrs. Pelosi has been an effective House leader, the most powerful Speaker in decades.  Were Republicans paying attention?  In last week’s elections, the GOP regained the House, but its new majority will be as small as Mrs. Pelosi’s current one.  The narrow margin next year calls for a strong Speaker and Republican unity.  If the GP wants to convince the electorate to give it a real mandate in 2024, it needs to show it can govern.

“Instead the old circular firing squad may be forming.  This week Kevin McCarthy won a party vote to be nominated as Speaker, 188-31, but he needs 218 votes in January….

“Speaker John Boehner resigned in 2015 amid a fight over whether Republicans should try to defund Planned Parenthood by passing a continuous resolution that would have died in the Senate or on President Obama’s desk. The GOP then held 247 seats.

“Mr. McCarthy’s majority will be 222 at most.  That number was enough for Mrs. Pelosi to avoid pointless brinkmanship over the past two years and pass an ambitious agenda for Mr. Biden. Mr. McCarthy and Republicans could learn from the example.”

Speaker Pelosi had some of the following words in her announcement Thursday from the House floor:

“In this room, our colleagues across history have abolished slavery; granted women the right to vote; established Social Security and Medicare; offered a hand to the weak, care to the sick, education to the young and hope to the many.

“Indeed, it is here, under the gaze of our patriarch, George Washington, in the people’s House, that we have done the people’s work.

“My colleagues, I stand before you as speaker of the House, as a wife, a mother, a grandmother, a devout Catholic, a proud Democrat and a patriotic American, a citizen of the greatest republic in the history of the world – which President Lincoln called the last best hope on Earth.  Indeed, in the words attributed to another of our colleagues, the legendary Daniel Webster, he said: ‘Hold on, my friends, to the Constitution of your country and the government established under it.  Miracles do not cluster. That which has happened but once in 6,000 years cannot be expected to happen often.’

“Indeed, American democracy is majestic.  But it is fragile.  Many of us here have witnessed its fragility firsthand, tragically in this chamber. And so democracy must be forever defended from forces that wish it harm….

“In this House, we begin each day with a prayer and pledge to the flag.  And every day I am in awe of the majestic miracle that is American democracy.  As we participate in a hallmark of our republic, the peaceful orderly transition from one Congress to the next, let us consider the words of, again, President Lincoln, spoken during one of America’s darkest hours.  He called upon us to come together, to swell the chorus of the union, when once again touched as surely they will be by the better angels of our nature. That again is the task at hand.

“A new day is dawning on the horizon, and I look forward, always forward, to the unfolding story of our nation, a story of light and love, of patriotism and progress, of many becoming one.  And always an unfinished mission to make the dreams of today the reality of tomorrow.”

--Trump World

In a totally pathetic, immensely boring, one-hour plus announcement in front of a lame crowd of bootlickers (I watched the entire speech on C-Span), Donald Trump announced he was running for president again.

Melania joined him on stage at the end of it, but there was no Ivanka, who issued a statement after saying she was not going to be part of the campaign and essentially wanted nothing to do with politics.  It was surprising, though, that Don Jr. was not there.

Trump is trying to steal a march on potential rivals for the Republican nomination, but there’s no need for a Ron DeSantis, Mike Pence or Glenn Youngkin to announce before the spring…certainly not before the new year.

The conservative publication National Review, which opposed Trump during the 2016 GOP primary, posted an editorial headlined simply “No” and leading with an eye-catching quote purportedly by one of the most famous French Enlightenment philosophers.

“To paraphrase Voltaire after he attended an orgy, once was an experiment, twice would be perverse,” began the piece, which went on to describe the former president as “bruised” by recent election defeats, as well as “monumentally selfish [and] morally and electorally compromised.”

Editorial / Los Angeles Times

“Don’t misunderstand what Donald Trump means when he says he’s running for president again, as he did Tuesday evening.

“He doesn’t mean that he will present his case to the American people in 2024 in the expectation that a majority of them will choose him, as they have never done before – not in 2016, when he lost the popular vote but won the electoral college, nor in 2020, when he lost both.

“He doesn’t mean that he puts his faith in American democracy, election integrity, the laws of presidential succession or any other institution that is coterminous with the nation itself. He doesn’t mean he plans to abide by any of those things.

“That would be what pretty much any other candidate would mean.  But not Trump.

“The ex-president has demonstrated unmistakably that he intends to take the office by hook or by crook, by denying the validity of any vote against him, by lying to his armed and angry rabble, by pressuring state election officials, state legislatures and federal courts to lie, cheat and otherwise betray the American people and their democracy.

“He means that winning office, for him, need not mean being elected to it, but merely attaining it, even by coup if that’s what it takes.

“That’s not hyperbole, or mere opinion. It’s not simply a hunch of a worry.  It’s a fact, verified by his shocking and unprecedented actions and statements following his Nov. 3, 2020, defeat. It’s inherent in his blatantly false claims that ballots two years ago were lost, stolen or fraudulently cast.  It’s documented in his attempt to obstruct Congress in certifying his election loss by calling on his vice president to break the law, and by summoning his own supporters to Washington to march on the Capitol to thwart the ceremonial count. It’s clear by his rapt attention to the televised deadly invasion of the Capitol after his speech whipping up the mob, and his failure, for more than three hours, to call on the insurrectionists to stand down.

“It’s evident by his role in adding Jan. 6, 2021, to the list of unforgettable dates – Dec. 7, 1941, and Sept. 11, 2001 – on which the nation’s laws, democracy and freedom were imperiled.

“And it’s obvious by his refusal, even now, to acknowledge that he lost the 2020 election or that he tried to sabotage the will of the people.

“Hoping he might suddenly play by the rules, abide by the law and acknowledge the truth is absurd.  He’s the same man he was two years ago.  He doesn’t deny it.

“The danger that he poses is not that the American people will say yes to his latest candidacy, but that when they once again say no he will once again do whatever he can to subvert their decision.

“He has enough true believers, hopelessly lost in blind supplication, to help him inflict mortal danger on the republic.  It is stunning to hear self-proclaimed patriots and prophets call for military intervention to overturn their hero’s prior defeat. That is the stuff of fascist dictatorship….

“It is tempting to pull up a seat to watch Trump be defeated and his cult dismantled by former acolytes like Gov. Ron DeSantis of Florida….

“But because Trump’s past and possible future paths to power are paved with lies and sedition, not legitimate election victory, it matters little that he has never won a majority of American votes and is unlikely to ever do so.  His declaration of candidacy should be treated as the pealing of bells, warning the people of danger in their midst.”

George T. Conway III / Washington Post

“He was always going to run. Absent incarceration or interment, and perhaps only the latter, he inevitably would seek the presidency again. His narcissism, his megalomania, his delicate yet illimitable ego, would have it no other way.

“Donald Trump craves the power. Even more, he craves the attention. And more than ever – after an unprecedented two impeachments, a humiliating reelection defeat that he can’t even admit, and amid multiple criminal investigations and civil suits – he seeks vengeance.  The l’etat c’est moi president who apparently tried to sic the IRS on his enemies (and perhaps succeeded), and who tried to extort Ukraine into smearing Joe Biden, can’t wait to get back on the job.

“Trump won’t succeed, as his successive losses of the House, Senate, presidency and last week’s midterm results show.  Too many Americans would crawl on broken glass to vote against him, no matter who his general election opponent may be.  They have seen enough.

“That goes also for many Republicans, particularly the sophisticated ones.  Their views were succinctly stated by Mark Thiessen just the other day: ‘Mr. President, it is not in your interest to run in 2024.  If you do, you will likely lose.  And you will destroy what remains of your legacy in the process.  Please, don’t do it,’ Thiessen begged.

“Legacy?  Trump has none, other than his impeachments and the stain of Jan. 6, 2021.  He’ll never be remembered for much else.  Historians will perpetually rank him as among the worst – if not the worst – in the presidential pantheon.  As they should, befitting a man who, despite having sworn an oath to preserve, protect and defend the Constitution of the United States, did his level best to destroy it.

“Trump can’t ruin a legacy he doesn’t have, but he could easily wreck something else: the Republican Party. Which is why so many in the GOP are, at long last, so alarmed. And why Rupert Murdoch’s media empire, the right-wing donor class and so many Republican Party operatives seek an alternative.  Florida Gov. Ron DeSantis, they hope, will save the day.

“That’s unlikely.  DeSantis is popular, to be sure, and won a victory last Tuesday far exceeding anything Trump could ever achieve.  But the problem is that the GOP is no longer just a political party – it’s something of a cult.

“One Republican pollster taxonomizes the party thusly: Ten percent are ‘Never Trumpers,’ who have long despised Trump.  (This might be high, because of people like me who re-registered as independents to escape the cult.)  As many as 50 percent could be considered ‘Maybe Trumpers,’ Republicans who voted for Trump twice, but are exhausted by him and would love to support someone else.  That leaves 40 percent, the ‘Always Trumpers’ – the cultish voters who will never abandon him, even if he shoots someone on Fifth Avenue, or at the Capitol, or anywhere else.

“The math means Trump can only be bested for the GOP nomination in a contest that’s one-on-one from the outset.  Given the delegate rules, 40 percent could be enough to win a multicandidate race….

[Separately]

“(Trump) thinks running for president, and the specter of violence from his fringiest supporters, will protect him from the prosecutors.  If he’s indicted, he promises ‘problems in this country the likes of which perhaps we’ve never seen before.’  And he’ll make good on that promise: As Sen. Mitch McConnell said last year, Trump was ‘determined’ to ‘torch our institutions on the way out’ in January 2021, merely because he lost an election.

“So just imagine what Trump would do to stay out of jail.”

Rich Lowry / New York Post

“If Republicans haven’t noticed it already, their underperformance in the midterms offers yet another opportunity to realize what matters most to Donald Trump.

“What goal of the GOP was advanced by having candidates devoted to Trump’s ‘Stop the Steal’ gospel?

“How did it contribute to the party to have Trump attacking one of its candidates, Colorado Republican Joe O’Dea, who was trying to make a blue state competitive?  Or to insult the Senate minority leader and his wife?

“How did it help to have Trump teasing his potential presidential bid in the days before the election?

“In what world was it helpful or appropriate for Trump to come up with a derisive nickname for a rising star in the party, Florida Gov. Ron DeSantis, immediately before the election and then threaten him with damaging revelations?

“In all these instances, of course, Trump was thinking only of himself.  Republicans have looked past his selfishness in the belief that he is the GOP’s unique electoral savior, a view that was dubious when he was at his height and is less convincing now.

“You nominate FDR for a third time after he’s won the first two times (and wash, rinse and repeat).  You make a romantic icon of a promising young leader cut down in his prime, like JFK.  You revere the two-term presidents, like Ronald Reagan and Barack Obama, who went out on high notes.

“It’s passing strange to become similarly devoted to a political figure who barely won a fluky presidential election, then lost a winnable reelection bid, before dragging the country through a bonkers attempt to overturn the result, with the episode ending in futility and bloodshed.”

Editorial / Wall Street Journal

“If anyone needs more evidence that ‘Stop the Steal’ was a loser for the GOP this year, the party’s Arizona wipeout is definitive.  On Monday Kari Lake joined the list of Republicans in the Grand Canyon State who ran on the stolen 2020 election and lost.

“Ms. Lake, a former TV news anchor, had all the sparkling charisma that Donald Trump’s other favorite candidates lacked. She loved telling off journalists. She called 2020 ‘a corrupt, stolen election,’ and she repeated that line to the bitter end.  As Mr. Trump bragged in a phone call captured on tape: ‘If they say, ‘How is your family?’ she says, ‘The election was rigged and stolen.’

“But she lost, 49.65 to 50.4%, according to the latest data.  The Democratic gubernatorial nominee, Katie Hobbs, ran an uninspiring campaign and went all in for the teachers union.  She still won.  As a reminder of how winnable Arizona should be for Republicans, Gov. Doug Ducey was re-elected in 2018 by 14 points and is finishing a highly successful second term that includes statewide school choice and a 2.5% flat tax….

“Mark Finchem, the Trump-endorsed Republican candidate for Secretary of State, essentially made himself a walking referendum on 2020 fraud theories.  He lost, 47.5% to 52.4%.

“Blake Masters, the Trump-endorsed Republican candidate for Senate, said in an early ad: ‘I think Trump won.’  After he captured the GOP nomination, he tried to pivot by decrying the influence of Big Tech, while saying he saw no evidence of fraudulent vote totals.  That earned him a debasing rebuke from Mr. Trump.  Mr. Masters lost, 46.5% to 51.4%....

“Notably, however, the GOP wipeout didn’t go all the way down the ballot: Republican state Treasurer Kimberly Yee sailed to re-election, 55.6% to 44.4%.  Curious, yes.  Mr. Trump might retort that this race was relatively low profile, and the Treasurer’s office has been Republican for decades.  On the other hand, doesn’t that make it a proxy for generic GOP support?

“Look at the raw totals. Ms. Yee won roughly 115,000 more votes than Ms. Lake….

“Many Republican voters simply don’t like being fed Trump baloney about the 2020 election.  Or if baloney is too mild a word, there’s always ‘horse----,’ which is what Arizona’s sitting Attorney General, Republican Mark Brnovich, recently called the mass fraud claims.  Among other investigations, his office tracked down 282 purportedly dead voters, he wrote this summer, many of whom were ‘very surprised to learn they were allegedly deceased.’

“Mr. Brnovich ran for Senate this year, but was outflanked by Mr. Masters in the primary. If he had been the nominee, he might have won last week. But he refused to pretend the 2020 election was stolen by some shadowy conspiracy that eluded law enforcement and normal standards of proof.  ‘We as prosecutors deal in facts and evidence, and I’m not like the clowns that throw stuff against the all and see what sticks,’ Mr. Brnovich told ’60 Minutes’ in October.  ‘It’s like a giant grift in some ways.’

“Nearly everywhere in competitive races last week, Mr. Trump’s endorsed candidates went down in pyrotechnics.  But the flameout of an awkward eccentric, such as Doug Mastriano in Pennsylvania or Don Bolduc in New Hampshire, only says so much.  Kari Lake is a telegenic fraud theorist straight out of Mar-a-Lago casting, running in a historically red state, in a year with an unpopular Democratic President and 8% inflation.

“If Ms. Lake couldn’t win on ‘Stop the Steal’ in 2022, it’s hard to see how anyone else can pull it off.  Maybe at last the 2020 election is over.”

[Ms. Lake, as of this writing, refuses to concede.]

--The Biden administration declared Thursday that the high office held by Saudi crown prince, Mohammad bin Salman, should shield him from lawsuits for his role in the killing of U.S.-based journalist Jamal Khashoggi, a turnaround from Biden’s passionate campaign-trail denunciations of MBS over the brutal slaying of the Washington Post columnist.

The request is nonbinding and a judge will have the ultimate say on whether to grant the immunity.  But it immediately angered human rights activists and many U.S. lawmakers, as well as Khashoggi’s fiancée, Hatice Cengiz, and DAWN (Democracy for the Arab World Now), who had sued the crown prince, his top aides and others in Washington federal court over their alleged roles in Khashoggi’s killing.  Saudi Arabia says the prince had no direct role in the slaying.

“It’s beyond ironic that President Biden has singlehandedly assured MBS can escape accountability when it was President Biden who promised the American people he would do everything to hold him accountable,” DAWN’s head, Sarah Leah Whitson, said in a statement.

--U.S. Rep. Karen Bass defeated developer Rick Caruso, 53-47 percent, to become the next mayor of Los Angeles on Wednesday, making her the first Black woman to hold the post as City Hall contends with an out-of-control homeless crisis, rising crime rates and multiple scandals that have shaken trust in government.

---

--Good news on the pandemic front.  The new Covid variants like BA.5 and BQ.1.1 have proved more evasive of antibodies than earlier variants, but regarding the latter, Professor Eric Topol points out, “worry about this highly immune evasive” variant “has not played out” with a significant wave of new cases.  New York state, which is experiencing the nation’s highest level of BQ.1.1 infections, has not seen a parallel rise in hospitalizations.

As an editorial in the Washington Post put it:

“This could signal the pandemic has reached the phase in which infections still spread, but do not claim such an enormous toll as did the omicron and delta waves.  One reason could be that new variants have simply evolved to cause less severe illness. Another explanation is the population has finally erected an immunity wall to keep the virus at bay, the cumulative result of natural infection, vaccination and other treatments.”

But at the same time we’ve had an intense season of respiratory ailments and the uptake of the new bivalent vaccine booster is alarmingly low: Only 10.1 percent of the eligible U.S. population, and only 26.9 percent of the vulnerable public over 65 years old.

This week, a holiday cruise ship carrying about 800 passengers with Covid-19 docked in Sydney, Australia.  The Majestic Princess, with 4,600 passengers and crew, had sailed from New Zealand.

But all cases were either asymptomatic or mildly symptomatic.

Not like at the start of the outbreak in early 2020, when the Ruby Princess cruise ship had a Covid outbreak, where at least 900 people tested positive and 28 died.

--It’s been a terrible time for some of our nation’s campuses.  I saw where four North Carolina State students have committed suicide just this semester (and a fifth died in an auto accident).

And we had the tragedy at the University of Virginia, where a student, and former football player, shot and killed three current football players and wounded a fourth (as well as a fifth student), as a group of about 25 students was returning from Washington, D.C., to see a play.

And then we have this murder mystery in Moscow, Idaho, home of the University of Idaho, which I went to roughly 10 years ago to see a football game, where four students living in an off-campus apartment were stabbed to death after a night of partying in town.  No suspect as yet.

--NASA’s new moon rocket finally blasted off on its debut flight with three test dummies aboard Wednesday, bringing the U.S. a big step closer to posting astronauts back on the lunar surface for the first time since the end of the Apollo program 50 years ago.

The mission, Artemis I, is a 26-day make-or-break shakedown of the rocket and the crew capsule, which will return to Earth with a Pacific splashdown Dec. 11.

After years of delays and billions in cost overruns, the Space Launch System rocket thundered skyward in the middle of the night from the Kennedy Space Center, the largest, most powerful rocket ever.

--This week, the world’s population hit an estimated 8 billion people, according to a United Nations projection, with much of the growth coming from developing nations in Africa.

Over the next three decades, the West African nation of Nigeria’s population is expected to soar from 216 million this year to 375 million, which will make Nigeria the fourth-most populous country in the world after India, China and the United States.

As they used to say on “Hee Haw,” “Saa-lute!”  [Not really…Nigeria doesn’t need another 160 million people.  Good gawd.]

---

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

Pray for Ukraine.

God bless America.

---

Gold $1751
Oil $80.23

Regular Gas: $3.70; Diesel: $5.33 [$3.41-$3.64 yr. ago]

Returns for the week 11/14-11/18

Dow Jones  -0.01%  [33745…down 2 points]
S&P 500  -0.7%  [3965]
S&P MidCap  -0.8%
Russell 2000  -1.7%
Nasdaq  -1.6%  [11146]

Returns for the period 1/1/22-11/18/22

Dow Jones  -7.1%
S&P 500  -16.8%
S&P MidCap  -11.7%
Russell 2000  -17.6%
Nasdaq  -28.8%

Bulls 38.6
Bears 32.9

Have a blessed Thanksgiving.  Safe travels.

Brian Trumbore

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