Week in Review

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Week in Review

12/09/2023

For the week 12/4-12/8

[Posted 5:00 PM ET, Friday]

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Special thanks to longtime supporter Mark R.

Edition 1,286

Republican Senator Lindsey Graham (S.C.) was on CNN’s “State of the Union” with Dana Bash last Sunday, and with fighting having resumed in Gaza, Graham, who is one of the foreign policy voices I respect, was talking about putting more pressure on Iran, because “Hamas doesn’t exist without Iranian help.”

“If Iran felt they were threatened by Hamas’ behavior, they would have Hamas change their behavior. But Israel’s going back to the fight.

“So, here’s the big question.  Vice President Harris has said Israel has a right to defend themselves.  How you do it matters. The secretary of defense said it’d be a strategic failure for Israelis to have killed too many Palestinians.  I don’t want any innocent Palestinians to die, but how do you do this?

“Vice President Harris, tell Israel how to destroy Hamas in a way not to hurt innocent Palestinians, and I will pass it along.  I don’t know how to do this, because Hamas is integrated into the apartments, the schools, and the hospitals.  They have tunnels all over the place.  The reason so many Palestinians are dying…is because Hamas wants them to die.  So if you have got ideas about lessening civilian casualties, let me know….

“But the idea of Hamas still standing when this is over would be the ultimate strategic failure.”

Ms. Bash then asks if Sen. Graham believes too many Palestinian civilians have been killed.

“Well, tell us how to do it differently.

“Yes, what is too many people dying in World War II after Pearl Harbor?  Did the American public worry about how many people were dying to destroy Tokyo and Berlin?

“I know this is not the same, but it’s similar.  I mean, after October 7th, Israel is at total war with Hamas.  What they did, you won’t even show on television, probably because you can’t.

“So, the bottom line here is… No Republican is telling Israel to change your military tactics, because I don’t know how to change them.

“I think the goal of destroying Hamas is important for Israel, really important for the Palestinians. And Hamas is making it impossible for Israel to fight without hurting innocent people.”

Ms. Bash brings up Defense Secretary Lloyd Austin, who said if you drive civilians into the arms of the enemy, you replace a tactical victory with a strategic defeat.  “Does he have a point?” asks Bash.

Graham: “No.  He’s so naïve… How about focusing on protecting our soldiers, men and women, in Syria and Iraq?  Strategic defeat would be inflaming the Palestinians?  They’re already inflamed. They’re taught from the time they’re born to hate the Jews and to kill them.  They’re taught math by, if you have 10 Jews, you kill six, how many would you have left?

“It’s like, this is a tranquil population only inflamed after Israel goes in to defend itself is really naïve.  This is a radicalized population.  I don’t want to kill innocent people, but Israel is fighting not just Hamas, but the infrastructure around Hamas.

“Look what happened to the Israeli hostages when they were presented to the Palestinian people.”

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Hunter Biden was indicted last Thursday on nine federal counts accusing him of evading federal taxes on millions of dollars he has made in his work with foreign companies.

A grand jury in the Central District of California charged Biden with three counts each of evasion of a tax assessment, failure to file and pay taxes, and filing a false or fraudulent tax return, according to the 56-page indictment.  The indictment stems from a special counsel investigation of Biden and is the second against him this year.

Special Counsel David Weiss wrote that Biden “engaged in a four-year scheme to not pay at least $1.4 million in self-assessed federal taxes he owed for tax years 2016 through 2019.”

Biden “spent millions of dollars on an extravagant lifestyle rather than paying his tax bills,” Weiss said.

The charging documents filed in California, where Hunter lives, detail spending on drugs, strippers, luxury hotels and exotic cars, “in short, everything but his taxes,” lead prosecutor Leo Wise wrote.

This past summer, Biden had appeared to be on the verge of a plea deal that would not have led to jail time and in the view of his lawyer at the time would have granted him immunity for potential crimes stemming from his business dealings.  But the deal collapsed, and in September he was indicted on separate charges stemming from his failure to acknowledge his drug use when he purchased a handgun in 2018.

The new indictment also comes as the House prepares to formalize its impeachment inquiry into President Biden, Republicans alleging ‘the big guy’ benefited from his son’s consulting work for companies in Ukraine and China.

So, it’s going to be an interesting Christmas at the Biden household.  The president should announce after the holidays he’s not running for re-election.  Physically, I didn’t think he’d make it through the year. [He still might not.]

It’s the right thing to do for the country, and there is a part of the president who knows he should do it.  The president needs to focus on the job his final 13 months in office.  Needless to say, there are a number of crises confronting him that require his full attention.

But then you’re going to have his daughter and wife, Jill, having their own private conversations.

“What do we do with this guy, he’s fading?”

“I know one thing…I don’t want to have to deal with him.  We have to keep him in the White House as long as possible.”

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We had quite a moment on Tuesday, as the presidents of Harvard, Penn and MIT appeared before a congressional hearing about antisemitism on college campuses.  Republican Representative Elise Stefanik of New York was ready.

Stefanik, the No. 4 Republican, “saw an opportunity to put the academic left on the spot at a moment when antisemitic speech has skyrocketed on college campuses across the country,” as the New York Times’ Annie Karni put it.

“Does calling for the genocide of Jews violate Harvard’s rules on bullying and harassment?’ Stefanik demanded of Claudine Gay, the new president of Harvard University.

“It can be, depending on the context,” Dr. Gay responded.

“What’s the context?” Stefanik shot back.

“Targeted at an individual,” Dr. Gay said.

“It’s targeted at Jewish students, Jewish individuals,” Stefanik said.

Stefanik had asked the same question, phrased the same way, of all three university leaders and received similar equivocating responses.

“If the speech turns into conduct, it can be harassment,” Elizabeth Magill, the president of the University of Pennsylvania, said.

“ ‘Conduct’ meaning committing the act of genocide?” Stefanik said, her voice rising with incredulity.  “The speech is not harassment? This is unacceptable.”

Stefanik went viral.  The fallout at the institutions was immediate, donors threatening to pull their dollars from the schools.  Boards of trustees in emergency meetings, calls, as public criticism rained down on all three.

Thursday, Stefanik said she planned to open a formal congressional investigation into how all three universities address antisemitism and the aftermath of the presidents’ testimony, including discussions with their boards of trustees.

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And then there was Rep. Pramila Jayapal (D-WA), chair of the progressive caucus, who was slammed by both Democrats and Republicans Sunday after calling for “balanced” criticism of the Israel-Hamas war when asked about progressives’ alleged silence over Hamas rapes of Israeli women.

Jayapal quickly condemned the sexual violence against Israeli women by Hamas on Oct. 7 before moving on to note that Israel has killed 15,000 Palestinians during an appearance on the aforementioned “State of the Union” on CNN.

Host Dana Bash said she has noticed that progressive women have largely remained silent on the horrific sexual assaults Hamas committed during its invasion.  The topic was at the forefront of a hearing at the United Nations this week, parts of which I both saw and read, and I have never heard such revolting, horrific, disgusting, vile testimony that churned my stomach, it was so awful…women’s breasts being cut off, broken pelvises from being raped repeatedly.  Sickening, brutal stuff. 

So Jayapal replied to Bash that she didn’t think that accusation was true, that progressive women have remained silent.

“I think we always talk about the impact of war on women in particular…I’ve condemned what Hamas has done.  I’ve condemned the actions absolutely – the rape, of course,” she said before shifting the conversation back to Israel and accusations that it has not been complying with international humanitarian law.

“Morally, I think we cannot say that one war crime deserves another.  That is not what international humanitarian law says,” Jayapal said.

Ms. Bash pushed back at the congresswoman’s deflection.

“With respect, I was just asking you about the women and you turned it back to Israel.  I’m asking you about Hamas,” Bash said.

“I already answered your question, Dana,” Jayapal replied in a heated exchange. “I said it’s horrific and I think that rape is horrific.  Sexual assault is horrific.  I think that it happens in war situations, terrorist organizations like Hamas, obviously are using these as tools.”

“However, I think we have to be balanced about bringing in the outrages against Palestinians,” she added while bringing up the colossal death toll in Gaza.

Bash interjected, acknowledging that the mass casualties are “horrible” and again bringing up the Hamas terrorists’ rapes of young Israeli women.

No doubt, Rep. Jayapal will one day be an Ivy League president.

Hamas must be annihilated and, unfortunately, thousands more Palestinians will be victims too.

It’s all on Hamas.  Creatures of Satan.

I said since Day One that the West was going to lose the information war, just because that’s the way it was going to be.  The West doesn’t control the narrative.  That’s basically what Lindsey Graham is talking about.

But we can’t lose our soul.  Our heart.

To the Israeli women, the ones impacted on Oct. 7 and after, to those still alive, I pray that somehow, someday, you find a little peace.  I don’t know how that’s possible, but that’s what prayer is for. 

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Israel and Hamas War…day by day….

--Israel pounded targets in southern Gaza on Saturday, intensifying its renewed offensive following a weeklong true, giving rise to renewed concerns about civilian casualties.

By early Saturday, an estimated 200 Palestinians had been killed since fighting resumed Friday morning, according to the Hamas-run Health Ministry, even as the United States urged Israel to do everything to protect civilians. 

“This is going to be very important going forward,” Secretary of State Blinken said Friday after meetings with Arab foreign ministers in Dubai.  “It’s something we’re going to be looking at very closely.”

Many of Israel’s attacks Saturday were focused on the Khan Younis area in southern Gaza, where the military said it had struck more than 50 Hamas targets with airstrikes, tank fire and its navy.

Israel said it also carried out strikes in the north and hit more than 400 targets in all across the Gaza Strip.

Some 2 million people – almost Gaza’s entire population – are crammed into the territory’s south, where Israel urged people to relocate at the war’s start and has since vowed to extend its ground assault.  Unable to go into north Gaza or neighboring Egypt, their only escape is to move around within the 220-square kilometer (85-square-mile) area.

Israel didn’t help its cause when it released an online map, many not being able to access it for lack of internet service, that divides the Gaza Strip into hundreds of numbered, haphazardly drawn parcels, and asks residents to learn the number of their location in case of an eventual evacuation.

But as the UN office for coordinating humanitarian issues in the Palestinian territory noted in its daily report, “The publication does not specify where people should evacuate to.”

Egypt expressed its concern the renewed offensive could cause Palestinians to try and cross into its territory.

The Israeli military said it now estimated 136 hostages remained after 105 were freed during the truce.

The International Rescue Committee, an aid group operating in Gaza, warned the return of fighting will “wipe out even the minimal relief” provided by the truce and “prove catastrophic for Palestinian civilians.”

--Regarding the remaining hostages, Israel has a 3-person medical committee that has been poring over videos from the Oct. 7 attack for signs of lethal injuries among those abducted and cross-referencing with the testimony of hostages freed during the truce. That can be enough to determine that a hostage has died, even if no doctor has formally pronounced this over his or her body, said an Israeli Health Ministry official who heads the panel.

They are literally going over frame by frame, again and again, to spot any cessation of breathing or other essential reflexes, as reported by Reuters’ Dan Williams on Sunday.  The panel is also looking for rough handling by captors, the reduced chances of them getting adequate medical care in Gaza and the former hostages’ accounts.

The risk of getting it wrong was laid bare in the case of Emily Hand, who went missing Oct. 7 and whose father, Tom, was initially informed “unofficially” that she had been killed, when in fact she was taken hostage and then freed.

--Defense Secretary Austin warned on Saturday that Israel must protect Gaza’s civilian population.  “And if you drive them into the arms of the enemy, you replace a tactical victory with a strategic defeat,’ Austin said. 

The head of Israel’s Mossad intelligence agency told its delegation to return from Qatar, which mediated talks over the pause, after an ‘impasse,’ Prime Minister Netanyahu’s office announced Saturday.  The Israeli military said it was “preparing for the next stage – southern Gaza.”

--The UN said on Sunday about 1.8 million people, or roughly 75 percent of Gaza’s population, are internally displaced, as reported by AFP.

The same day, the Israeli military widened evacuation orders in and around Khan Younis.

Residents said the IDF dropped leaflets ordering residents to move south to Rafah or to a coastal area in the southwest.  “Khan Younis city is a dangerous combat zone,” the leaflets read.

--Tuesday, Israeli forces stormed Khan Younis in what they called the most intense day of combat in five weeks of ground operations, and hospitals struggled to cope with scores of Palestinian dead and wounded.

Israel said its troops – backed by warplanes – had reached the heart of Khan Younis and were surrounding the city.

“We are in the most intense day since the beginning of the ground operation,” the commander of the Israeli military’s Southern Command, General Yaron Finkelman, said in a statement.

He said Israeli forces were also fighting in Jabalia, a large urban refugee camp and Hamas hotbed in northern Gaza near Gaza City, and in another nearby city, Shuja’iyya.

Hamas’ armed wing, the al Qassam Brigades, said its fighters had destroyed or damaged 24 Israeli military vehicles and snipers had killed or wounded eight Israeli soldiers in ongoing clashes in various areas of Khan Younis.

Separately, the head of the Shuhada Al-Aqsa Hospital north of Khan Younis told Reuters at least 45 were killed after airstrikes on houses in Dei al-Balah.  There was no way to verify the claims, or know how many victims, if any, were Hamas fighters.

After days of ordering residents to flee the area, Israeli forces dropped new leaflets on Tuesday with instructions to stay inside shelters and hospitals during the assault.

“Don’t get out.  Going out is dangerous.  You have been warned,” said the leaflets, addressed to residents in districts around Khan Younis.

Lieutenant General Herzi Halevi, chief of Israel’s General Staff, said, “Sixty days after the war began, our forces are now encircling the Khan Younis area. 

“We have secured many Hamas strongholds in the northern Gaza Strip, and now we are operating against its strongholds in the south,” Halevi told a press conference.

The Israelis believe Hamas commanders they aim to eliminate are holed up in part of a vast underground tunnel network in the territory.

--Hamas’ media office said on Tuesday at least 16,248 people including 7,112 children and 4,885 women had been killed in Gaza by Israeli military action since Oct. 7.  Thousands more are missing and feared buried under rubble.

Hamas added there would be no more negotiations or exchange of detainees until Israeli “aggression” against Gaza stopped.

“We’re moving ahead with the second stage now.  A second stage that is going to be difficult militarily,” Israeli government spokesperson Eylon Levy said.

--Jan Egeland, head of the Norwegian Refugee Council, a major humanitarian agency, said the Israeli onslaught in Gaza “can in no way be described as self-defense.”

“There must be also be accountability for this, from political and military leaders as well as those who provided arms and support… The situation in Gaza is a total failure of our shared humanity. The killing must stop,” he said in a statement.

Israel says the blame for civilian casualties largely falls on Hamas fighters for operating in residential areas, including from underground tunnels that can be destroyed only with huge bombs.

The aid group Doctors Without Borders said fuel and medical supplies have reached “critically low levels” at the aforementioned Al-Aqsa Hospital.

“Without electricity, ventilators would cease to function, blood donations would have to stop, the sterilization of surgical instruments would be impossible,” said the aid group’s emergency coordinator in Gaza.

U.S. State Department spokesperson Matthew Miller said at a press briefing Tuesday, “The level of assistance that’s getting in is not sufficient.  It needs to go up, and we’ve made that clear to the government of Israel.”

The president of the International Committee of the Red Cross, Mirjana Spoljaric, called for greater protection of civilians during a visit to Gaza.

“The level of human suffering is intolerable,” she said in a statement Monday.  “It is unacceptable that civilians have no safe place to go in Gaza, and with a military siege in place there is also no adequate humanitarian response currently possible.”

Wednesday, UN Secretary-General Antonio Guterres invoked a rarely used UN article to call for a permanent ceasefire, as Gaza faces “a severe risk of collapse of the humanitarian system.”

Guterres warned that “nowhere is safe in Gaza” in a letter to the president of the UN Security Council.

The secretary-general utilized Article 99 in Chapter XV of the UN Charter which states the UN “may bring to attention of the Security Council any matter which in his opinion, may threaten the maintenance of international peace and security.”

There is nowhere left to hide with hospitals turning into battlegrounds and UNRWA facilities suffering from “overcrowded, undignified, and unhygienic conditions,” according to Guterres.

“Amid constant bombardment by the Israel Defense Forces, and without shelter or the essentials to survive, I expect public order to completely break down soon due to the desperate conditions, rendering even limited humanitarian assistance impossible,” he wrote.

“The situation is fast deteriorating into a catastrophe with potentially irreversible implications for Palestinians as a whole and for peace and security in the region,” Guterres said in the letter.  “Such an outcome must be avoided at all cost.”

--Israeli forces battled Hamas across Gaza on Wednesday.  Much of the north, including large parts of Gaza City, has been completely destroyed, and Palestinians fear the rest of Gaza could suffer a similar fate.

--Israel has assembled a system of large pumps it could use to flood Hamas’ vast network of tunnels under the Gaza Strip with seawater, a tactic that could destroy the tunnels and drive the fighters from their underground refuge but also threaten Gaza’s water supply, U.S. officials said.

Each of at least five pumps can draw water from the Mediterranean Sea and move thousands of cubic meters of water per hour into the tunnels, flooding them within weeks.

The Wall Street Journal reported that U.S. officials said they didn’t know how close the Israeli government was to carrying out the plan.

--The IDF has killed about half of Hamas’ midlevel commanders in Gaza, Israeli officials said, as its troops pressed forward Wednesday into the suspected hiding place of the group’s leader in a bid to eliminate its top brass.

Israel has so far failed to assassinate the terrorist group’s senior leadership, which includes Yahya Sinwar, leader of Hamas in Gaza, and Mohammed Deif, the head of the group’s armed wing.  But Israel believes Sinwar and others could be hunkering down in Khan Younis.

Late on Tuesday, Israel’s military then said it killed senior commanders hiding in a tunnel in northern Gaza, impacting the group’s ability to direct operations in that part of the Strip.

--The IDF said Wednesday that it had discovered one of the largest weapons stockpiles ever found in the Gaza Strip, an arsenal containing hundreds of missiles, launchers, long-range rockets, anti-tank missiles, UAVs, and explosives.

The massive weapons cache was located near a hospital and a school, the IDF reported.

--But then IDF Maj.-Gen. Finkelman said in a meeting in southern Gaza with his field commanders that the IDF is continuing to press forward with its invasion of Khan Yunis.

Prime Minister Netanyahu stated that Israeli forces were surrounding the home of Hamas leader Sinwar on Wednesday, just a few hours after reports by Arabic media claimed the same.

“Yesterday I said that our forces can reach anywhere in the Gaza Strip.  Now they are surrounding Sinwar’s house. So his house is not his fortress, and he can escape, but it’s only a matter of time before we get him,” said the prime minister.

--Thursday, there were reports that dozens of Hamas terrorists had surrendered to Israeli forces in northern Gaza, with Local Channel 13 showing images of the surrender.  Channel 13’s reporter estimated that more than a hundred Hamas fighters turned themselves in.

Israel ramped up the fighting in Gaza’s biggest cities, leaving hundreds more Palestinians dead as civilians struggled to find safe refuge amid critical shortages of food and shelter.

Sec. of State Blinken, in his strongest public criticism of Israel’s conduct of the war, said there was a gap between the Israeli government’s declared intentions to protect civilians and the casualties.

“As we stand here almost a week into this campaign into the south…it remains imperative that Israel put a premium on civilian protection,” Blinken told a press conference in Washington.

“And there does remain a gap between…the intent to protect civilians and the actual results that we’re seeing on the ground.”

More than 17,000 Palestinians have been killed, according to the Hamas-controlled Gaza Health Ministry.

The Israeli military on Friday said 92 of its soldiers had been killed since the ground invasion commenced.

--The UN Security Council is meeting on Friday to vote on an immediate ceasefire in Gaza.

Arab states renewed their push, with a draft amended to say both “the Palestinian and Israeli civilian populations must be protected in accordance with international humanitarian law” and to “demand the immediate and unconditional release of all hostages.”

A resolution needs at least nine votes in favor and no vetoes by the five permanent members – the U.S., Russia, China, France or Britain – to be adopted.  The United States does not support any further action by the council at this time.

This just in…the U.S. vetoed the resolution.

--Editorial / Wall Street Journal

“War is back against Hamas, but will the Biden Administration let Israel win?  Secretary of State Antony Blinken delivered the bad news to Jerusalem before the truce ended: He wants Israel on a short leash….

“Mr. Blinken understands that Israel has more to do to defeat Hamas.  ‘Hamas cannot remain in control of Gaza,’ he reiterated at a press conference in Israel [last] Thursday….

“Hamas still rules south Gaza, a base from which it would plot the next massacre, as its leaders have repeatedly pledged to do. That’s why Israel will take the fight south.

“But how should this next phase of the war be waged?  Here, Mr. Blinken is adamant: It must be nothing like the operation in north Gaza.  The Secretary of State said he ‘underscored’ to Prime Minister Benjamin Netanyahu ‘the imperative to the United States that the massive loss of civilian life and displacement of the scale we saw in northern Gaza not be repeated in the south.’ He said Israel must take ‘more effective steps to protect the lives of civilians.’….

“But what should Israel do when Hamas positions itself in those zones?  That’s how it used hospitals and schools in the north. Could Israel attack Hamas in those sanctuaries?

“Mr. Blinken tried to close that door, too.  Protecting civilians ‘means avoiding damage to life-critical infrastructure like hospitals,’ he said.  ‘Intent matters, but so does the result.’

“If Israel must do more to protect civilians but can’t evacuate them and can’t hit Hamas when it hides in key civilian infrastructure and safe zones, how is it to fight at all?....

“During a meeting of Israel’s war cabinet, Mr. Blinken may also have tried to nix a long campaign. When Israel’s Defense Minister told him, ‘The entire Israeli society is united behind the goal of dismantling Hamas, even if it takes months,’ the Israeli press reports that Mr. Blinken pushed back, replying, ‘I don’t think you have the credit for that.’  He means credit with President Biden, as the White House bends to the growing pressure against Israel from the Democratic left.

“The argument that Hamas is an ‘idea,’ and thus war can never defeat it, has also been gaining among U.S. progressives.  As Mr. Blinken tweeted Tuesday, ‘To continue down the path of terror, violence, killing, and war is to give Hamas what they seek.’  By this logic, Hamas would hate nothing more than…to be left in power?  How quickly they forget Oct. 7.

“Israel has a right to defend itself, which it reasonably believes requires destroying Hamas. The terrorist group rejoined again on Thursday when two of its terrorists opened fire, during the truce, at Jewish civilians at a Jerusalem bus stop.  Intent does matter, and blame for civilian deaths in Israel and Gaza resides with the terrorists.

“Israel deserves U.S. support as it topples Hamas, not a repeat of Mr. Biden’s Ukraine treatment: rules, restrictions and hesitations that push a decisive victory further away.  Israelis may find that victory requires calling the President’s bluff.  Turning on Israel in wartime would alienate the much larger pool of pro-Israel American voters.”

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This Week in Ukraine….

--Ukrainian President Volodymyr Zelensky ordered the bolstering of fortifications aimed at holding back Russian forces, signaling a switch to a defensive posture after a monthslong Ukrainian counteroffensive yielded only small gains.

It is the clearest acknowledgement yet that Ukraine faces a hard winter defending the territory it holds, as Russia pursues grinding offensives in the east and northeast.

Zelensky said after meetings with military commanders and soldiers that a major concern was fortifications “on all the main fronts, where we need to dig in, speed up the pace of construction.”  A focus will be in the east and northeast, but also the Kyiv region and the regions bordering Russia and Belarus.

Ukraine’s summer counteroffensive failed because it was unable to secure gains in large part because of the strength of Russia’s own fortifications.

--Meanwhile, Vladimir Putin ordered the country’s military to increase the number of troops by nearly 170,000, to a total of 1.32 million.

It is the second such expansion of the army since 2018.  The previous boost, by 137,000 troops, was ordered by Putin in August 2022.

The Defense Ministry cited what it called “the special military operation” in Ukraine and the expansion of NATO as the reasons for beefing up the army.

NATO’s “joint armed forces are being built up near Russia’s borders and additional air defense systems and strike weapons are being deployed. The potential of NATO’s tactical nuclear forces is being increased,” the statement read.

In October, the UK Defense Ministry tweeted in a regular update that Russia has “likely suffered 150,000-190,000 permanent casualties,” a number that included troops that have been killed and permanently wounded.

--President Zelensky’s chief of staff said on Tuesday that the postponement of U.S. assistance for Kyiv being debated in Congress would create a “big risk” of Ukraine losing the war.

The remarks by Andriy Yermak were some of the frankest yet from a senior Kyiv official as uncertainty swirls over the future of U.S. and European Union aid packages.

If the aid is postponed, “it gives the big risk that we can be in the same position to which we’re located now,” he said, addressing the audience in English. 

“And of course, it makes this very high possibility impossible to continually liberate and give the big risk to lose this war.”

On Monday, White House officials said the U.S. was running out of time and money to help Ukraine fight the war.

Back in October, the administration asked Congress for nearly $106 billion to fund plans for Ukraine, Israel and U.S. border security but the Republican majority in the House rejected the package.

Yermak, in Washington for a second time in a matter of weeks, said Kyiv had a plan for the next year.

“We really have a plan and this plan…includes the military operations…includes diplomatic activity and of course it includes our cooperation in the communications and information,” he said.

Hours after Yermak’s remarks, though, President Zelensky canceled plans to make a direct, last-ditch appeal to U.S. senators for tens of billions in emergency military aid. Zelensky was due to speak to senators in a classified briefing via confidential video call, a day before the vote on continuing to fund the war effort.

“Something happened at the last minute,” Sen. Chuck Schumer said, announcing the change in plans without explanation.

Democrats were hoping Zelensky’s remarks would help wear down Republican resistance to a bill that would provide more than $61 billion for Ukraine.

Monday, Office of Management and Budget Director Shalanda Young warned that the U.S. government will be unable to provide any more resources or equipment to Ukraine if Congress fails to appropriate fresh funding by the end of the year.  The Pentagon has used 97 percent of the $62.3 billion it received to help Ukraine.

The New York Times reported Tuesday, however: “Some Pentagon officials have pushed back against claims that military assistance to Ukraine is about to run out, pointing to near-weekly shipments of arms and ammunition worth more than $100 million each.  The nameless officials “added that they expected to make the remaining $4.8 billion in aid authority last through the winter,” according to the Times.

The Defense Department announced another $175 million in military aid to Ukraine on Wednesday, including “air defense capabilities, artillery ammunition, anti-tank weapons,” and more.  [Defense One]

--Wednesday, Senate Republicans blocked a procedural vote to advance a national security bill that includes billions of dollars in Ukraine aid because it includes no changes to border security policy.

Every Senate Republican voted against advancing the resolution.  Sen. Bernie Sanders (I-Vt.), who caucuses with Democrats, opposed the measure over its inclusion of unconditional aid to Israel.

Senate Majority Leader Chuck Schumer said on the Senate floor after the vote that it was “a very sad day.”

“If Ukraine falls, Putin will not stop there.  He will be emboldened. …Western democracy will begin to enter an age of decline if we aren’t willing to defend it,” he continued.  “This Republican Party must get serious.”

Senate Republicans will introduce a counterproposal that includes what they want in border policy.

President Biden accused Republicans of “playing chicken with our national security” as he delivered a speech, again urging them to approve $106 billion to support Ukraine and Israel.

“Republicans in Congress are willing to give Putin the greatest gift you could hope for and abandon our global leadership, not in just Ukraine but beyond that.”

Should the aid package not eventually pass next week, “There will be a sense of shock across the world for anyone that relies on U.S. security guarantees – Tokyo, Seoul, Canberra, let alone Taipei – that you just can’t rely on these Americans because they’re not serious,” said Max Bergmann, a Russia expert at the Center for Strategic and International Studies in Washington and a former U.S. official.

Editorial / Wall Street Journal

“(Schumer) knows better.  A large majority of Senate Republicans support aid for Ukraine, notably minority leader Mitch McConnell.  But their voters also want something done about the surge of migrants that has even big-city Democratic mayors pleading for help.  Republicans rightly see the military aid request as a chance to give Mr. Biden something he wants in return for something they want.  This is how legislating gets done, or at least it used to be.

“All the more so with Republicans holding a narrow majority in the House.  Mike Johnson, the new Speaker, supports weapons for Ukraine.  But he can’t get an aid bill passed without some concessions on immigration….

“The failed vote ought to be a White House reality check.  The Administration is telling everyone that U.S. money for more weapons for Ukraine runs out at the end of this month, and that Vladimir Putin may be marching on Kyiv again if the U.S. doesn’t provide more.

“We don’t doubt it, but the White House seems to think it can jam Republicans to pass military aid by blaming them in advance if it all falls apart.  Democrats are fooling themselves if they believe this.  Support for Ukraine is Mr. Biden’s policy, and the failure will be as much his as that of Republicans in Congress.  The Kremlin and the world will see more evidence of Mr. Biden’s political weakness.  The winners will be Mr. Putin and U.S. adversaries abroad, and Donald Trump at home.

“The way out of this mess is for Mr. Biden to get serious about an immigration compromise. Tell his negotiators to cut a deal with the GOP and then sell it to Democrats and the country as necessary to get his supplemental aid bill through a divided Congress.

“The President may take some short-term heat from his left, but improving border security will help him with swing voters next year by addressing an urgent problem.  He would also avoid the political ignominy of presiding over the collapse of a foreign-policy priority, and perhaps of our allies in Ukraine.

“Mr. Biden campaigned as a pragmatist who could cut bipartisan deals. Well, here we are.  Ukraine and Israel are political emergencies, and the Commander in Chief has to do what it takes to get a deal done.”

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--Russian shelling killed at least three people in Kherson, a city in southern Ukraine, as fierce battles raged across the front lines of the war.  Ukraine also launched an investigation after a video emerged that appeared to show Russian troops killing unarmed Ukrainian prisoners of war.

The footage was apparently filmed by a drone flying over eastern Ukraine, showing two soldiers climbing out of a foxhole as another group of soldiers train their guns on them and then seem to open fire.

“The video shows how a group of people in Russian uniforms shoot from close range two unarmed servicemen in the uniform of the armed forces of Ukraine who surrendered as prisoners,” the Ukrainian prosecutors general’s office said on Sunday.

“The killing of prisoners of war is a gross violation of the Geneva Conventions and is classified as a serious international crime,” it added, noting that the incident was thought to have taken place near the village of Stepove (on the edge of Avdiivka) in the partly occupied Donetsk region.

“They surrendered because they ran out of ammunition,” Vitaliy Barabash, head of the Avdiivka administration, said of the two men who seem to be executed in the video.  “As far as I know, a little later our guys stormed these positions, and all those [Russian soldiers] who were there were killed,” he added.

--As part of a meeting of G7 leaders on Ukraine, the World Bank said it estimated the cost to Ukraine of Russia’s military invasion is $400 billion in damages, thus far.

--The State Department said Tuesday that U.S. negotiators made a fresh offer to Russia in recent weeks to secure the release of detained Americans Evan Gershkovich and Paul Whelan, but Moscow rejected the proposal.

The offer involved trading prisoners, people familiar with the matter said, but they didn’t offer further details.

--In a new first, the U.S. unveiled war crimes charges against four Russia-affiliated military personnel on Wednesday. “The charges include torture, inhumane treatment, and unlawful confinement of a U.S. national in Ukraine following Russia’s full-scale invasion of Ukraine,” the Justice Department said in a news release.

“Today’s indictment – the first ever under the U.S. war crimes statute – makes clear that the FBI will work with the full cooperation of international law enforcement to bring justice to the victims of these atrocities,” FBI Director Christopher Wray said.  At this stage, it seems unlikely the perpetrators will be brought to justice, especially since, “If convicted, the defendants each face a maximum penalty of life in prison,” the Justice Department said.

--Russian lawmakers on Thursday set the date of the country’s 2024 presidential election for March 17, moving Vlad the Impaler a step closer to a fifth term in office.

Putin then said today he would run, making the announcement in the Kremlin after awarding soldiers who had fought in Ukraine with Russia’s highest military honor, the hero of Russia gold star.

Under constitutional reforms he orchestrated, Putin is eligible to seek two more six-year terms after his current one expires next year, potentially allowing him to remain in power until 2036.

Token opposition will be presented to the public, no doubt, under the guise of it being a fair election (wink wink), and I’ll say the final announced percentage will have Putin at 84%.  In fact, election ‘officials’ have already set the percentage Putin will win by, I’m guessing…because that’s how things work in the Soviet Union, err, Russia, boys and girls.

---

Wall Street and the Economy

The yield on the key 10-year Treasury continued to plummet early in the week to 4.12% after fresh data showed that U.S. private-sector hiring unexpectedly slowed in November, the latest piece of data showing that the economy is cooling, leading some traders to ramp up bets that the Federal Reserve is done raising interest rates and will cut them soon.

Meanwhile, falling oil prices, while good for consumers, are also a potential harbinger of a slowing global economy.

So then we had Friday’s jobs report for November, employers adding 199,000 jobs in the month, above consensus of 180,000, with the unemployment rate actually falling to 3.7% from 3.9%.  The increase included approximately 41,000 autoworkers and actors who returned to their jobs after strikes.  Average hourly earnings rose 0.4% and 4.0% year-over-year.

Separately, October factory orders fell 3.6%, greater than expected, and the ISM service sector reading for November was 52.7 (50 the dividing line between growth and contraction).

The Atlanta Fed’s GDPNow barometer for fourth-quarter growth is at 1.2%.

Freddie Mac’s 30-year fixed-rate mortgage declined a sixth consecutive week to 7.03%, down from the peak of 7.79%.

Next week it’s all about the Federal Reserve’s Open Market Committee meeting, Chair Jerome Powell’s comments after, and key inflation data on Tuesday.

Europe and Asia

S&P Global and Hamburg Commercial Bank released the eurozone’s composite PMI for November, 47.6, a 4-month high but still contraction (below 50), with the service sector reading at 48.7 vs. 47.8 in October.

Service sector PMIs:

Germany 49.6
France 45.4
Italy 49.5
Spain 51.0

UK 50.9

Eurostat reported that October retail sales in the eurozone rose 0.1% over September, but were down 1.2% year-over-year.

October producer prices rose 0.2% compared with the month before, but fell 9.4% Y/Y.

Turning to Asia…China’s exports in November grew by 0.5% year-over-year, beating market forecasts for a 1.1% decline and representing the first increase since April, as manufacturers have been cutting prices to attract buyers.  Exports of the much-talked-about rare earths rose 42.6% YY.

Exports to the U.S. rose 7.3% (the first rise since July 2022) and to Taiwan (6.4%), while shrinking to Japan (-8.3%), South Korea (-3.6%) and the EU (-14.5%).

For the first eleven months of the year, exports have fallen 5.2% Y/Y, according to the General Administration of Customs.

China’s imports were down 0.6% Y/Y last month.

Separately, the private Caixin measurement of the service sector economy for November came in at 51.5 vs. 50.4 prior.

And Moody’s Investor Service cut its outlook for Chinese sovereign bonds to negative, underscoring deepening global concerns about the level of debt in the world’s second-largest economy.

China’s usage of fiscal stimulus to support local governments and its spiraling property downturn is posing risks to the nation’s economy, Moody’s said.

China’s finance ministry said the impact of the property downturn is well under control and the nation’s economy “will be highly resilient and has large potential.”

Japan’s November service sector reading was 50.8 vs. 51.6.

October household spending (a key metric here) fell 2.5% year-over-year.

And the final read on third-quarter GDP was -2.9% annualized, -0.7% quarter-over-quarter.

Recent weakness in consumption has emerged as a fresh source of concern for Bank of Japan policymakers who are eyeing an exit from negative interest rates, some say, suggesting that market expectations of an imminent rate hike may be overblown. 

Street Bytes

--Stocks rose a sixth straight week, albeit the gains were slight, as in all of 2 points for the Dow Jones to 36247, the S&P 500 was up 0.2%, and Nasdaq 0.7%.

Still about the soft landing / Fed cutting rates in 2024 scenario.

--U.S. Treasury Yields

 6-mo. 5.38%  2-yr. 4.72%  10-yr. 4.23%  30-yr. 4.31%

The two-year shot up 17 basis points this week, but the 10-year was basically unchanged after its 4.12% bottom (4.11% intraday).

--Crude oil, as measured by West Texas Intermediate, traded below $70 a barrel on Wednesday, the lowest level since early July, as surging U.S. crude exports raised worries about increased global supply and as traders continued to doubt the impact of OPEC cuts.

Data showed that U.S. crude exports are nearing a record 6 million barrels a day, with flows to Europe and Asia showing a steady increase.  Meanwhile, OPEC pumped 27.81 million bpd in November, down by 90K bpd from October, according to Reuters.

Saudi Arabia kept November output close to 9 million bpd, while output from Iran increased.

Russian Deputy Prime Minister Alexander Novak said that OPEC+ stands ready to deepen oil production cuts in the first quarter of 2024 to eliminate “speculation and volatility” if existing actions to reduce output were not enough.

Meanwhile, Vladimir Putin visited Saudi Arabia and the United Arab Emirates this week, shoring up ties to the critical oil producing nations.  He was greeted warmly, actually effusively, which is sick considering there’s an international arrest warrant for him on war crime charges.

Russian state television aired extensive coverage of the Gulf visit, replaying scenes of Putin being greeted by senior officials with prolonged handshakes and smiles and showing his limousine escorted by camels and soldiers on horseback with Russian and Emirati flags draped from posts along his route.

Putin’s welcome in Riyadh was similarly effusive, with Crown Prince Mohammed bin Salman telling the Russian leader that he had “lit up Riyadh” with his presence, in their first face-to-face meeting since October 2019.

“Nothing can prevent the development of our friendly relations,” Putin told the Crown Prince, according to Saudi Arabia’s state media.

That said, Putin and MBS called on Thursday for all OPEC+ members to join an agreement on oil output cuts, saying they were for the good of producers and the broader global economy.

The Kremlin released a joint statement detailing wide-ranging talks between them on oil, OPEC+, the wars in Gaza and Ukraine and even Iran’s nuclear program.

There is talk of an emergency OPEC meeting in a few weeks, as the price of crude slides further.

Lastly, watch Venezuela and President Nicolas Maduro’s power play for neighboring oil-rich Guyana. He told the country’s state-owned firms to begin exploiting oil, gas and mines in a particular region of Guyana that Venezuela is claiming for its own…like two-thirds of Guyana’s land mass.  This week Venezuela held a referendum that Maduro said backed his sovereignty push.

On Thursday, the White House reiterated the United States’ “unwavering support” for Guyana’s sovereignty amid the growing border tensions.

--Exxon Mobil said in an update Wednesday it will target annual project spending of between $22 billion and $27 billion through 2027, largely continuing existing spending and production goals.

The largest U.S. oil producer laid out plans to boost spending on nascent lithium and low carbon businesses by 18% throughout 2027.

The presentation, however, left out details of projected gains from the $60 billion acquisition of Pioneer Natural Resources that is expected to be completed in the first half of 2024.

Company executives also said most profits from its push into energy transition businesses including carbon dioxide abatement and storage and lithium production would come after 2027.  Profits from those units also will depend on government help through regulations and infrastructure.

--Alaska Air Group Inc. said on Sunday it would acquire Hawaiian Holdings Inc. for $1.9 billion, including debt, placing a bet on a troubled airline with lucrative routes as U.S. antitrust regulators fight consolidation in the sector.

Alaska Air said it would pay $18 per share in cash, close to four times Hawaiian’s closing price on Friday.  The whopping premium reflected how battered Hawaiian’s shares were. The Maui wildfires, high fuel costs and jet engine recall issues with some of Hawaiian’s Airbus SE planes contributed to heavy losses and a 65% share price drop in the last 12 months.

‘HA’ shares closed the week below $14, reflecting skepticism the deal will pass antitrust muster as regulators challenge JetBlue Airways’ proposed $3.8 billion acquisition of Spirt Airlines in court.

Antitrust enforcers have been suspicious of mergers between small airlines, despite 80% of the U.S. aviation sector controlled by four players: United, American, Delta and Southwest.

The tie-up with Hawaiian would give Alaska Air control of more than 50% of the market for Hawaii flights.

“This is where people want to come spend time and vacation and have weddings and anniversaries.  This is something that we believe that will remain strong for years to come,” ALK CEO Ben Minicucci said in an interview.

He expressed confidence that regulators would approve the deal by the end of 2024 because the two airlines overlap in just 12 of the 1,400 flights they collectively operate.

--TSA checkpoint numbers vs. 2019

12/7…100 percent of 2019 levels
12/6…99
12/5…96
12/4…102
12/3…101
12/2…106
12/1…101
11/30…100

Rather consistent, I think you’d agree.

--Advanced Micro Devices Inc., taking aim at a burgeoning market dominated by Nvidia Corp., unveiled new so-called accelerator chips that it said will be able to run artificial intelligence software faster than rival products.

The company introduced a long-anticipated lineup called the MI300 at an event Wednesday held in San Jose.  CEO Lisa Su also gave an eye-popping forecast for the size of the AI chip industry, saying it could climb to more than $400 billion in the next four years. That’s more than twice as high as a projection AMD gave in August, showing how rapidly expectations are changing for AI hardware.

The launch is one of the most important in AMD’s history, setting up a showdown with Nvidia.  The chips help develop AI models by bombarding them with data, a task they handle more adeptly than traditional computer processors.

--The battle for AI supremacy further intensified Wednesday with Google’s much anticipated launch of Gemini, the company’s most advanced artificial intelligence software model. A version of the new software is already included in the company’s Bard chatbot, with the most sophisticated version of Gemini set to launch in early 2024.

“I believe the transition we are seeing right now with AI will be the most profound in our lifetimes, far bigger than the shift to mobile or to the web before it,” Google and Alphabet CEO Sundar Pichai said in a post.

--The Wall Street Journal reported today that Apple and its suppliers aim to build more than 50 million iPhones in India annually within the next two to three years, with additional tens of millions of units planned after that, according to people involved.

If the plans are achieved, India would account for a quarter of global iPhone production and take further share toward the end of the decade.  China will remain the largest iPhone producer.

--Elon Musk’s SpaceX has initiated discussions about selling insider shares at a price that values the closely held company at $175 billion or more, according to reports.

The most valuable U.S. startup is discussing a tender offer that could range from $500 million to $750 million.  SpaceX is weighing offering shares at about $95 apiece, the people said.

A $175 billion valuation is a premium to the $150 billion valuation the company obtained through a tender offer this summer.  The increase would make SpaceX one of the world’s 75 biggest companies by market capitalization, on par with T-Mobile USA Inc. ($179 billion), Nike Inc. ($177 billion) and China Mobile ($176 billion), according to Bloomberg.

--The United Auto Workers union said on Thursday that more than 1,000 factory workers at Volkswagen’s Chattanooga, Tennessee, assembly plant have signed union authorization cards.

Last week, the UAW said it was launching a first-of-its-kind push to publicly organize the entire nonunion auto sector in the U.S., after winning new record contracts with the Detroit Three automakers.

The UAW, which said 30% of workers at the VW plant had signed cards, has outlined its organizing strategy that says if 30% of workers at a nonunion plant sign cards seeking to join, it would make that public.

If 50% of workers seek to join, the union would hold a rally with UAW President Shawn Fain to tout the effort. At 70% and with an organizing committee in place, the UAW would seek recognition or demand a union representation vote.

Thirteen nonunion automakers across the country employ nearly 150,000 workers at their U.S. assembly plants, about the same number as those employed by the Detroit Three.

--Toll Brothers stock closed at a new high on Wednesday, as did other home builder shares, as the yield on the 10-year Treasury, with which mortgage rates often move, fell to 4.12% from a recent 5.02% high.

But lower rates aren’t the only explanation for the strong performance of companies like Toll Brothers, which beat analyst earnings expectations, including full fiscal-year EPS of $12.36 a share on roughly $10 billion in revenue, vs. the Street’s forecasts of $11.97 and about $9.7bn in revenue. 

Toll Brothers’ top markets in its fiscal fourth quarter included Denver, Boise, southern California, Texas, and the mid-Atlantic region from Atlanta and Boston, CEO Douglas C. Yearly, Jr., said on an investor call.

Mortgage rates’ recent decline is an encouraging sign for the spring selling season, Yearley said.  “With resale inventories at historic lows, buyers continue to be drawn to new homes, and we expect lower rates with lower inflation to add to this already solid demand.”

--Bitcoin busted through $40,000 for the first time since May 2022, surging to more than $44,000, finishing the week at $44,300 (yes, it never closes, but as of 4:00 PM ET).

The world’s biggest cryptocurrency is riding a wave of momentum on broad enthusiasm about U.S. interest rate cuts and as traders bet on the imminent approval of U.S. stock market-traded bitcoin funds.

Other interest-rate sensitive assets, such as gold, have rallied strongly over the last few weeks on the wager the Fed is going to start cutting early in 2024.

At a congressional hearing on Wednesday, JPMorgan CEO Jamie Dimon urged Congress to “close it down” when asked how to tackle crypto’s uses for illegal activity.

But it’s here to stay, despite the collapse of FTX and conviction of its founder Sam Bankman-Fried, Binance’s record $4.3 billion fine for money laundering violations, intense regulatory scrutiny, and all the rest.

--Spotify is preparing to lay off 17% of its workforce or about 1,500 employees, as the company accelerates its profitability push.  It is the company’s third round of layoffs this year.

CEO Daniel Ek, in announcing the cuts, said despite efforts to reduce costs, Spotify is still spending too much money. The audio streaming company has been squeezed by slower economic growth as well as interest-rate increases that have made it more expensive to borrow, he said.

Despite being the largest music streaming platform, Spotify has struggled to be profitable because of the terms of licensing deals it has with record labels and music publishers.  The company has pushed into new areas like podcasting.

Spotify had 226 million paying subscribers at the end of September and is on tract to add 30 million for the full year.  The company previously cut about 200 jobs in June, and another 600 last January.

Spotify shares rose 8% on the news.

--CVS Health, the nation’s largest pharmacy chain with more than 9,000 locations, said on Tuesday that it planned to change the way its pharmacies are paid for the medications they dispense, in an apparent attempt to address widespread criticism from health plans and employers about high drug costs.

The new model, which will go into effect next year, involves a complex corner of the opaque world of drug pricing.  The idea is to pay pharmacies an amount that more closely reflects how much they spend on a medicine and to provide more information about those payments to health plans and employers, which act as payers.

CVS said the new model wouldn’t necessarily translate into savings for consumers, or for health plans and employers, but much more transparency.

CVS’ new model would compensate pharmacies based on how much they paid for a drug.  The model would also build in a set markup and a fee for pharmacy services.

--Dollar General on Thursday logged better-than-expected fiscal third-quarter results buoyed by improving customer demand, while the discount retailer kept its fiscal 2023 outlook unchanged.

The company’s earnings of $1.26, for the three months through Nov. 3, were down from $2.33 a year earlier, but they beat expectations, as sales grew 2.4% to $9.69 billion.

“While we are not satisfied with our financial results for the third quarter, including a significant headwind from inventory shrink [ed. theft], we are pleased with the momentum in some of the underlying sales trends, including positive customer traffic, as well as market share gains in both dollars and units,” CEO Todd Vasos said in a statement.

Full-year guidance is calling for sales to increase between 1.5% and 2.5%, with same-store sales flat to up 1% for fiscal 2023.

--Campbell Soup’s fiscal first-quarter results decreased on a yearly basis, but earnings came in ahead of market expectations, while the food and snack company maintained its full-year outlook.

Adjusted earnings slipped 11% to $0.91 a share for the quarter ended Oct. 29, the company said Wednesday.  The consensus was at $0.88. Sales edged down to $2.52 billion from $2.58 billion a year earlier, matching the Street’s view.

CEO Mark Clouse said in a statement: “We are off to an encouraging start in our important holiday season, and we expect to build momentum for the balance of the fiscal year.”

Sales in the meals and beverages segment fell 4% year on year to $1.4 billion, due to declines in U.S. soup and beverages.  The division’s volume and mix fell 6%, partially offset by net price realization of 2%.  The snacks business logged revenue of $1.11 billion, down from $1.12bn in the 2022 quarter.

Total costs increased to $2.16 billion from $2.14 billion.

The company continues to estimate adjusted EPS for fiscal 2024 to come in between $3.09 and $3.15, with the Street at $3.07.  Sales are set to be down 0.5% to 1.5% up.

Investors liked what they heard and took the stock up 7%.

Your editor has tons of cans of Campbell Soup here at Global HQ, having stored up like a squirrel for winter.  Now if I can just remember where I put them….

--Last Thursday’s debate on Fox News with Gavin Newsom and Ron DeSantis, moderated by Sean Hannity, was viewed by an average 4.75 million viewers, according to Nielsen data, or more than double the November average for “Hannity,” which was 2.3 million viewers.  The figure also accounted for 73% of the viewers watching cable news in the 9 p.m. time slot.

The finale of “The Golden Bachelor” on ABC, was nonetheless the most-watched TV program of the night.

Foreign Affairs, Part II

China: Chinese Foreign Minister Wang Yi called for “major countries” to be fair and impartial in their efforts to cool the situation in the Middle East, as Israel expanded its campaign.

In a telephone call with Secretary of State Antony Blinken, Wang renewed calls for a two-state solution, saying any arrangement concerning the future of Palestine “must reflect the will of the Palestinian people.”

“The top priority is to cease fire and to stop the war as soon as possible,” Wang said, according to a foreign ministry readout.

“At the crossroads of war and peace, major countries must adhere to fairness and justice, uphold objectivity and impartiality, demonstrate calmness and rationality, and make every effort to cool down the situation and prevent larger-scale humanitarian disasters.”

Separately, the Chinese military on Monday said an American combat ship “illegally” entered waters near the Second Thomas Shoal, a disputed South China Sea atoll, and described the U.S. as “the biggest threat to peace and stability” in the heavily trafficked region.

“The United States has deliberately disrupted the South China Sea, seriously violated China’s sovereignty and security, severely undermined regional peace and stability, and seriously violated international law and basic norms governing international relations,” a spokesperson for China’s Southern Theatre command said in a statement. 

A public affairs officer of the U.S. Navy’s 7th Fleet in Yokosuka, Japan, described the ship’s movement as “routine operations” that were “consistent with international law.”

“These operations demonstrate we are committed to upholding a free and open Indo-Pacific region where all nations, large and small, are secure in their sovereignty, can resolve disputes without coercion and have the freedom to navigate and fly consistent with international laws, rules and norms,” the spokesperson said, adding that the U.S. would not be deterred from continuing to work alongside its allies and partners.

Beijing claims almost all the South China Sea, a key transit point for commercial shipping in an area of immense natural resources.  Parties disputing China’s claims include the Philippines, Vietnam, Indonesia, Malaysia and Brunei.

The Permanent Court of Arbitration in 2016 said China’s claims had no legal basis.

And on the issue of military-to-military ties between Beijing and Washington, which was agreed to between Presidents Biden and Xi in San Francisco, last week I said China’s defense ministry was discussing resuming talks, but then over the weekend, Charles Q. Brown Jr., chairman of the Joint Chiefs of Staff, said at the Reagan National Defense Forum, “I’m standing by.”  As in he’s waiting to hear back from China about resuming ties.

One more on China’s navy. Three Chinese ships were sailing close to Somalia last week and ignored repeated distress calls from a nearby vessel as it came under attack by Somali pirates. The U.S. Navy and allied aircraft did respond, the pirates fled, and were eventually apprehended by the crew of the USS Mason, Pentagon Press Secretary Air Force Brig. Gen. Pat Ryder told reporters.

“Supposedly, those [Chinese] ships are there as part of a counter-piracy mission, but they did not respond,” Ryder said.  “I’m not a lawyer, but under international maritime norms and laws, if there’s a vessel that’s hailing a distress signal, all vessels in the vicinity should – are required to come and help and support,” he said.

North Korea: Kim Jong Un got quite emotional the other day as he discussed a new mission for North Korean women: Have more babies.

Kim acknowledged the nation’s plunging birthrate for the first time publicly at a rare National Conference of Mothers.  Wiping away tears, the dictator, who is a father of three, described mothers as revolutionaries who were on the front lines of rooting out antisocialist behavior and helping the nation prosper.

Households producing “many children” would be given higher priority for housing, food and medical services, as well as unspecified subsidies and preferential treatment, Kim said, according to a state-media report.

“When all mothers clearly understand that it is patriotism to give birth to many children and do so positively,” Kim said, “our cause of building a powerful socialist country can be hastened faster.”

Declining birthrates are a problem for many of the world’s wealthiest countries, including the U.S., much of Western Europe and Asia’s most advanced economies.

South Korea estimates the North’s birthrate at 1.6, with 2.1 the fertility rate needed to maintain the population.

Iran: Yemen’s Iranian-backed Houthi group claimed drone and missile attacks on two Israeli vessels in the Red Sea on Sunday.

An Israeli military spokesman said the two ships had no connection to Israel.  One ship was significantly damaged, the other lightly damaged, according to Israel’s military.  Another cargo ship was targeted by an anti-ship ballistic missile that missed the vessel.

The USS Carney shot down a number of drones that it says were headed in its direction, but it wasn’t clear if the drones were targeting Israel, commercial vessels, or the Carney. 

U.S. Central Command said, “These attacks represent a direct threat to international commerce and maritime security.  We also have reason to believe that these attacks, while launched by the Houthis in Yemen, are fully enabled by Iran.”

But get this…Thursday, Defense Secretary Lloyd Austin called up his Saudi and Israeli counterparts, the Houthis the primary focus of Austin’s chat with Saudi Defense Minister Khalid bin Salman.  Reuters then reported the Saudis allegedly asked the U.S. “to show restraint in responding to attacks by (the) Houthis.”  Recall that the Saudis launched their war in Yemen back in March 2015, and haven’t accomplished anything in the more than eight years since.  The Houthis, meanwhile, have virtually locked down the Yemeni capital of Sana’a and are under zero pressure to relinquish power there.  [Defense One]

The Saudis say they don’t want to see any escalation, but the Saudis also want to profit from their new relationship with Iran!

And there is MBS heaping praise on Vladimir Putin!

To interject a sports note…good luck, Jon Rahm, when the negative publicity starts cascading down on you in the not too distant future (far more than the backlash he is facing today), Rahm having accepted a reported $600 million from the Saudis to jump to the LIV Golf Tour.

Random Musings

--Presidential approval ratings….

Gallup: 37% approve of President Biden’s job performance, 59% disapprove; 27% of independents approve (all-time low) (Nov. 1-21).

Rasmussen: 44% approve; 54% disapprove (Dec. 8).

--A new CNN poll conducted by SSRS finds that Biden’s job approval matches that of Gallup, 37%, the lowest-ever in this survey, with 63% disapproving.  Biden began the year with a 45% approval rating.

The president’s job approval stands at 72% among Democrats and 63% among self-described liberals, down from ratings in the 80s among those groups in January of this year.  Only 48% of Black Americans approve, and 42% of Latino Americans.

A 71% majority of Americans rate economic conditions in the country as poor.

--President Biden told a Boston fundraiser Tuesday that he likely would have retired after a single term of office if former President Trump wasn’t running in next year’s election.

“We’ve got to get it done, not because of me. …If Trump wasn’t running, I’m not sure I’d be running,” the president acknowledged to a group of Democratic donors.  “But we cannot let him win.”

It was a stunning self-assessment of the implications of Biden’s age.

Several polls this year have found that about two out of three voters are concerned about Biden’s mental acuity.  It should be more like 95% are.

Biden later told reporters at the White House that he would not drop out of the race.

“No, not now,” Biden said when asked it he would consider stepping aside if Trump stopped seeking his own second term.  “Look, he is running, and I have to run.”

Asked if he would have run were Trump not in the race, Biden said, “I expect so.”

--Also Tuesday, Donald Trump said he will not become a dictator if he becomes president again except “on day one.”

Trump was asked twice during a televised town hall with Fox News’ Sean Hannity to deny that he would abuse power to seek revenge on political opponents if re-elected.

“No. No.  Other than day one,” Trump said.  He said on the “day one” he would use his presidential powers to close the southern border with Mexico and expand oil drilling.

--Wednesday, we had the final presidential primary debate in Alabama, the field shrunk to four…DeSantis, Haley, Christie and Ramaswamy.  Candidates were required to have 80,000 donors and 6% in two U.S. polls.  Of course, Donald Trump passed.

Haley came under sustained attack as she is the candidate with some momentum, though still far behind Trump.  As noted below, Haley has been receiving praise, and donations, from some high-profile individuals, becoming a target in particular from DeSantis and Ramaswamy.

But Haley handled it well, saying her competitors wished they had attracted the same level of support from big donors and conservative groups such as Americans for Prosperity.

“They’re just jealous,” Haley said.  “I love all the attention, fellas,” she added later.  “Thank you for that.”

The four sparred on foreign policy, Ramaswamy claiming Haley was unable even to name the provinces in eastern Ukraine to which he said she would be willing to send U.S. troops.  [Of course, Haley knew the provinces, Vivek just being his usual self…a POS.]

The attacks on Haley prompted an intervention from Christie, who dismissed Ramaswamy as “the most obnoxious blowhard in America.”

“This is the fourth debate.  The fourth debate that you will be voted in the first 20 minutes as the most obnoxious blowhard in America.”

“This is a smart, accomplished woman,” said the former New Jersey governor of Haley.  “You should stop insulting her… All he knows how to do is insult good people who have committed their lives to public service.”

At one point, Ramaswamy held up a handwritten sign reading “Nikki = corrupt.”

“It’s not worth my time to respond to him,” Haley said.

For his part, DeSantis refused several opportunities to criticize Trump.

Christie warned Trump was “an angry bitter man” bent on retribution, who was “unfit” for office.

Ramaswamy rushed to defend Trump.

But Vivek also aired several conspiracy theories he has espoused on the campaign trail. The 2020 election had been “stolen by Big Tech,” he claimed, while Jan. 6 was an “inside job.”

And he was rather loose with the word “fascist,” talking about “fascism under Biden” and calling Haley a “fascist.”  

--Reid Hoffman, the billionaire co-founder of LinkedIn and a major Democratic donor, recently gave $250,000 to a super PAC supporting the presidential campaign of Nikki Haley.

Hoffman is not changing his party affiliation, but appears to be trying to raise the profile of Haley in an effort to undermine Donald Trump.

--But with all the above, a new Wall Street Journal national poll has Donald Trump leading the field for the Republican primary, 59%, with Haley at 15%, and DeSantis 14%.

Trump’s support in the poll, conducted Nov. 29-Dec. 4, was unchanged from the Journal’s poll four months ago, while Haley has risen seven points and DeSantis has slipped slightly.

A new Monmouth University national poll of Republican and Republican leaning voters has Trump at 58%, with DeSantis receiving 18% and Haley 12%.

The Iowa caucuses are coming up Jan. 15.

--Former GOP Rep. Liz Cheney is promoting her new book, “Oath and Honor: A Memoir and a Warning”… a warning to the country about a potential second Trump term.

Cheney is condemning her party for, as she says, choosing Donald Trump over the Constitution.  Just like Trump didn’t hide his plan to overturn the 2020 election, Cheney argues we know what he will do if he wins the White House in 2024 – weaponize the Justice Department and make plans to purge the civil service, including the FBI, among other things.

“He’s told us what he will do,” Cheney said on “CBS Sunday Morning,” warning that the checks that kept Trump from overturning the 2020 election might not hold again.

“People who say, ‘Well, if he’s elected, it’s not that dangerous, because we have all of these checks and balances,’ don’t fully understand the extent to which Republicans in Congress today have been co-opted.  [Ed. Robert Kagan’s point in his extensive essay that I quoted from last WIR.]  One of the things that we see happening today is sort of a sleepwalking into dictatorship in the United States,” Cheney said.

Separately, in an interview with the Washington Post:

“Several years ago, I would not have contemplated a third-party run.”  But, Cheney said, “I happen to think democracy is at risk at home, obviously, as a result of Donald Trump’s continued grip on the Republican Party, and I think democracy is at risk internationally as well.”

When asked how she would define her political platform if she were to run for president, Cheney said she believes that the country must elect a commander in chief who will abide by the Constitution, respect the rule of law and maintain America’s commitment to defending freedom abroad.  She cited Trump’s threats to pull out of the NATO alliance and the refusal of many House Republicans to commit more U.S. aid to Ukraine as examples of grave threats to America’s security interests.

The obstacles confronting a third-party candidacy this late in the stage are formidable, but Cheney said she will make a decision in early 2024.

--Former House Speaker Kevin McCarthy announced on Wednesday that he will retire at the end of 2023, saying his “work is only getting started” in recruiting other Republicans to run for Congress.

McCarthy, in an op-ed for the Wall Street Journal, wrote that 17 years after first running for office to serve California in the House he had “decided to depart the House at the end of this year to serve America in new ways.”

“I will continue to recruit our country’s best and brightest to run for elected office. The Republican Party is expanding every day, and I am committed to lending my experience to support the next generation of leaders.”

Whatever.

Republicans’ margin in the House come early next year will depend on the special elections for the seats of Democratic Rep. Brian Higgins of New York and Gop Rep. Bill Johnson of Ohio, and the outcome of the election to replace George Santos on February 13.  Johnson is expected to leave in the first quarter of 2024.  Higgins is slated to leave sometime in February.

House Republicans would go down to a thin two-vote margin with either the Johnson departure, or if the seat vacated by the expulsion of Santos is filled by a Democrat.  But that margin could revert back to a three-seat vote margin when Higgins leaves.

Another leading Republican congressman, Patrick McHenry of North Carolina, announced plans Tuesday to retire at the conclusion of the 2024 session.

This was startling, because McHenry had announced he planned to run for his 11th term on Oct. 31.

--Senator Tommy Tuberville (R-Ala.), announced on Tuesday that he would lift his blockade of nearly all the military promotions he had delayed for months in protest of a Pentagon policy ensuring abortion access for service members.

Tuberville said he had lifted his holds on about 440 military promotions.  “Everybody but the 10 or 11 four-stars,” he said.  “Those will continue.”

Tuberville said he decided to lift the blockade after senators hatched a plan to temporarily go around the chamber’s rules to allow confirmation of almost all military nominees as a bloc.

“It’s been a long fight,” he told reporters.  “We fought hard.  We did the right thing for the unborn and for our military, fighting back against execute overreach.”

In a single stroke, the Senate then approved about 425 promotions.

--The House voted 214-191 to censure New York Democratic Rep. Jamaal Bowman for triggering a fire alarm in one of the U.S. Capitol office buildings when the chamber was in session.  There were a few Democrats who went along with Republicans.

This amazing a-hole deserved it.  But, of course, Squad member Rep. Ayanna Pressley (D-Mass.) said, “This censure is just the latest in this chamber’s racist history of telling Black men that they don’t belong in Congress.”

--New York City Mayor Eric Adams’ approval rating has plummeted to just 28% in a Quinnipiac University poll, the lowest ever recorded for a Big Apple mayor since Quinnipiac began querying Gotham voters a quarter century ago.

New York’s massive migrant crisis and a federal campaign probe have led to a nine-point drop from the already low 37% he racked up in February.

Only 35% of fellow Democrats overall said he’s doing a good job, while 49% disapproved.

--European Union scientists said on Wednesday that 2023 would be the warmest year on record, as global mean temperatures for the first 11 months of the year hit the highest level on record, 1.46C above the 1850-1900 average.

The record comes as governments are in marathon negotiations on whether to, for the first time, phase out the use of CO2-emitting coal, oil and gas, the main source of warming emissions, at the Cop28 summit in Dubai.

The temperature for the January-November period was 0.13C higher than the average for the same period in 2016, currently the warmest calendar year on record, the Copernicus Climate Change Service said.

November 2023 was the warmest November on record globally, with an average surface air temperature of 14.22C, 0.85C above the 1991-2020 average for November and 0.32C above the previous warmest November, in 2020, Copernicus said.

A separate report from more than 200 researchers on climate change says the world is in danger of crossing five “tipping points” that reductions in greenhouse gas emissions won’t reverse anytime soon.  It means humanity is at an inflection point between two potential futures.

First, the mass death of warm-water coral reefs is now likely given current levels of warming, while four other processes – the collapse of Greenland and West Antarctic ice sheets, disruption of the North Atlantic subpolar circulation and abrupt thawing of permafrost regions – are considered possible.

But while the topic is warmth, large parts of Europe this week started the 2023-24 winter season off with an abundance of snow and cold, a stark contrast from last year, which was abnormally warm and snowless.

In Munich, Germany’s third-largest city, a storm last weekend dropped nearly a foot and a half of snow, setting a December record.  It was also the city’s largest snowstorm since early March 2006 and among the biggest of any month on record.

Hundreds of flights were canceled in Munich, with major issues across many European airports.

Cumbria, in northwestern England, was hit with up to a foot of snow.

But wait…there’s more!

Temperatures in parts of Siberia plummeted to minus 50 degrees Celsius (minus 58F) while blizzards blanketed Moscow in record snowfall.  Temps in the capital aren’t expected to rise about 21F the next two weeks.

--Taylor Swift was TIME’s “Person of the Year.”

--Finally, a Botticelli masterpiece reported missing for over half a century was found hiding in plain sight: hanging in an Italian family’s home.

The Carabinieri Command for the Protection of Cultural Heritage traced the lost painting to a home in a town near Naples, according to CNN.

The portrait of the Virgin Mary and child was commissioned by the Roman Catholic Church in 1470 from artist Sandro Botticelli.

The painting, one of Botticelli’s last, is worth $109 million.

The artwork had previously been housed at a church but after an earthquake damaged it, the painting was entrusted to a local family, which passed it down from generation to generation.

Authorities inspected the residence 50 years ago, but the commander of the cultural heritage unit said: “Since then, inexplicably, the painting had been forgotten by the authorities.”

Everyone in town seemed to know the family had it, but it somehow got added to the cultural ministry’s list of missing art.

The painting is in poor condition, and it will take a year to restore while authorities determine if it was passed down properly or if it ended up in the wrong hands. Eventually it will be displayed to the public.

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

U.S. and Japanese teams were able to locate the remains of five additional crew members from the original crew of eight of the Osprey CV-22 mishap near Yakushima, Japan, on Nov. 29.  The Pentagon has now grounded all Ospreys, allowing for a “thorough investigation to determine causal factors and recommendations to ensure the Air Force CV-22 fleet returns to flight operations,” the Air Force said this week.

Pray for Ukraine, Israel and the innocent in Gaza.

God bless America.

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Gold $2019
Oil $71.20

Regular Gas: $3.18; Diesel: $4.14 [$3.32 / $5.00 yr. ago]

Returns for the week 12/4-12/8

Dow Jones  +0.01%  [36247]
S&P 500  +0.2%  [4604]
S&P MidCap  +0.2%
Russell 2000  +1.0%
Nasdaq  +0.7%  [14403]

Returns for the period 1/1/23-12/8/23

Dow Jones +9.3%
S&P 500  +19.9%
S&P MidCap  +8.3%
Russell 2000  +6.8%
Nasdaq  +37.6%

Bulls 55.1
Bears 21.7

Hang in there.

Happy Hanukkah, to my Jewish friends…and readers!

Brian Trumbore

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