Week in Review

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Week in Review

12/23/2023

For the week 12/18-12/22

[Posted 5:00 PM ET, Friday]

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Edition 1,288

Ah, the joys of late-breaking news when you do a column such as mine.  I wrote the following opening late Thursday and early Friday, and then we received a partial conclusion just now.

But I’m keeping it as is….

The Supreme Court won’t be relaxing over the holidays…or at least their clerks won’t be.

Colorado’s Supreme Court ruled that Donald Trump cannot run for president in the state, citing a constitutional insurrection clause, that goes back to 1868.

The court ruled 4-3 that Trump was not an eligible candidate because he had engaged in an insurrection over the Capitol riot nearly three years ago.  The four ruling in favor of course now receiving death threats, because this is who we have become.

“President Trump incited and encouraged the use of violence and lawless action to disrupt the peaceful transfer of power,” the Colorado Supreme Court said.

The move does not stop Trump running in other states and his campaign immediately appealed to the Supreme Court, which given the timetable, really has to act quickly.  Like the Tuesday-Thursday after New Year’s…at least given Colorado’s own timetable for submitting the information to print ballots for their primary, which is March 5th, but there is a Jan. 5th deadline for ballot purposes.

[The Colorado court stayed the effect of its ruling until Jan. 4 to give the former president a chance to appeal.]

It is the first ever use of Section 3 of the Constitution’s 14th Amendment to disqualify a presidential candidate.

The justices wrote in their ruling: “We do not reach these conclusions lightly. We are mindful of the magnitude and weight of the questions now before us.

“We are likewise mindful of our solemn duty to apply the law, without fear or favor, and without being swayed by public reaction to the decisions that the law mandates we reach.”

The decision reverses an earlier one from a Colorado judge, who ruled that the 14th Amendment’s insurrection ban did not apply to presidents because the section did not explicitly mention them.

But the same lower court judge found that Donald Trump had participated in an insurrection.

The Trump campaign lambasted the “completely flawed” ruling and the justices, who were all appointed ty Democratic governors.

Meanwhile, special counsel Jack Smith on Thursday reiterated his request for the Supreme Court to immediately decide whether Trump has presidential immunity from alleged crimes he committed while in office.

“The public interest in a prompt resolution of this case favors an immediate, definitive decision by this Court.  The charges here are of the utmost gravity,” Smith told the justices in a new filing.

The high court is currently considering whether to decide the immunity dispute before a federal appeals court weighs in.  Trump on Wednesday urged the court to not skip over the appeals court, as his whole strategy is about delay, delay, delay.  Smith’s move is an attempt to have the high court intervene to cut this approach short.

Smith said the high court should move swiftly, comparing the issue to a Watergate-era case concerning then-President Nixon.

“Here, the stakes are at least as high, if not higher: the resolution of the question presented is pivotal to whether the former President himself will stand trial – which is scheduled to begin less than three months in the future,” the special counsel said.

While it’s a snap YouGov survey, 54% of respondents either “strongly” or “somewhat” approved of the Colorado Supreme Court’s decision, while 35% said they either “strongly” or “somewhat” disapproved.  Another 12% said they were “not sure” how they felt.

Roughly 84% of Democrats backed the decision, just 24% of Republicans did.

Nearly half of self-described independent voters (48%) approved of the ruling, while 35% said they disapproved.

Editorial / Wall Street Journal

“The decision by four Colorado judges to bar Donald Trump from the state presidential ballot is an ugly turn that augurs nothing but trouble for American law and democracy.  Even if the U.S. Supreme Court overturns the ruling, as it probably will, the Colorado decision will confirm for millions of Americans that Mr. Trump’s opponents will do everything possible to deny them their democratic choice….

“The justices claim the 14th Amendment is ‘self-executing,’ which means that ballot disqualification doesn’t require a conviction in court.  Yet the Senate acquitted Mr. Trump of the impeachment charge of insurrection.  And Mr. Smith, the special counsel, didn’t include insurrection under 18 U.S.C. Section 2383 of the U.S. criminal code in his four-count indictment of Mr. Trump. Does anyone think the hard-bitten Mr. Smith would shy from doing so if he thought he could prove it before a jury? ….

“Dragging the Supreme Court into the presidential race is itself damaging to democracy.  Mr. Smith has already asked the Justices to weigh in on Mr. Trump’s claims of immunity from prosecution.  Whatever the Court decides, and especially if the Justices are divided on either question, half of the country will be angry.  The political left is leading a campaign to delegitimize the Court, and these fraught causes will offer more ammunition to partisans, whatever the legal merits.

“The Colorado disqualification shows how Democrats are determined to make 2024 an election decided by lawyers and courts, not by voters. They seem to believe this is the way finally to banish Donald Trump from politics, but have they been paying attention?

“Their second impeachment didn’t finish him, and four indictments with 91 felony counts have caused GOP voters to rally to his side. This ballot-denial gambit is likely to have a similar effect, and it will now dominate political news up to the Jan. 15 Iowa caucuses. The Colorado Four may think they’re heroes of the resistance, but they’ve given Mr. Trump a great in-kind campaign contribution.

“Democrats believe that Mr. Trump is such a threat to America’s democratic institutions that they’re justified in abusing those institutions themselves.  They’re damaging democracy in the name of trying to save it.”

I would guess the Supreme Court will quickly dismiss the Colorado ruling, but will side with Jack Smith.

It doesn’t help the Trump campaign that the Detroit News obtained an audio recording of a Nov. 17, 2020, phone call in which Donald Trump pressured two Michigan Republican canvassers to withhold their signatures to an official document so as to block the certification of Joe Biden’s victory in the swing state.

Trump, according to the News, told the two they would look “terrible” if they signed the documents, despite the fact that they had already voted to certify the legitimate results.

RNC Chairwoman Ronna McDaniel, also on the call and a native of Michigan, told them: “If you can go home tonight, do not sign it. …We will get you attorneys.”

Trump added: “We’ll take care of that.”

This is exactly the modus operandi employed by Trump against Georgia Secretary of State Brad Raffensperger, and further evidence of a conspiracy, if you’re Jack Smith.

***And then, around 2:30 eastern time, the Supreme Court rejected the request by Smith to fast-track arguments on whether Donald Trump has any immunity from federal prosecution for alleged crimes he committed while in office – a move that will likely delay his trial and a potentially huge win for Trump.

The court did not explain its reasoning and there were no noted dissents.

Smith gambled in asking the justices to take the rare step of skipping a federal appeals court and quickly deciding a fundamental issue in his election subversion case.

Both sides will still have the option of appealing an eventual ruling by the DC Circuit Court of Appeals up to the high court.

Indeed, an expedited review is already underway at the DC Circuit, which has scheduled oral arguments for January 9, with the subversion trial slated to begin on March 4, so the appeals court could rule quickly, in January, but the March date appears to be a pipedream at this point.

The high court’s clerks thus get to celebrate the holidays in normal fashion after all, ditto Bob Cratchit.  Trump can now go for the biggest goose in the local butcher’s window. 

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--When Congress returns to work on Jan. 8, they’ll have less than two weeks to fund parts of the government by Jan. 19.  And then just three additional (scheduled) days with both chambers in session before Feb. 2, when they need to fund all other agencies and avert a government shutdown once again.

But, heading into what will be a frantic few weeks, the House and Senate don’t agree on how much to spend…plus, you have the fight over funding for Ukraine and the border-security issues tied to it.

The Senate left town Wednesday without a resolution on border policy, that it had supposedly been close to an agreement on with the administration, that would have allowed them to act on Ukraine aid.

And…House Speaker Mike Johnson has pledged not to pass another short-term extension.  Instead, he will support a “full year” extension through the end of the 2024 fiscal year (Sept. 30) in order to “refocus Washington on fiscal year 2025.”

But you had the debt ceiling deal, and you get across-the-board government spending cuts if all 12 spending bills aren’t passed by the end of April.

Meanwhile, we’ve had at least three straight days of record border crossings.  It’s a disaster, and the lack of action on the part of the White House for three years is beyond pathetic.

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Israel and Hamas….

--When I went to post last Friday, I was able to briefly include the story of the three hostages tragically being mistakenly killed by the Israel Defense Force, IDF.

But then over the next 24 hours, details emerged that added to the tragedy.  The three were waving a white flag when they were shot, having emerged shirtless from a building with a white flag.

Beyond awful and sad.

The IDF acknowledged that during combat, it had “mistakenly identified 3 Israeli hostages as a threat and as a result, fired toward them and the hostages were killed.”

How were they a threat?

An official said two of the hostages were shot and killed immediately, and the third ran back into the building screaming for help in Hebrew.  A commander ordered troops to cease their fire, but another round of shots then killed the third hostage.  The IDF official said the actions were “against our rules of engagement.”

“This is a difficult and unbearable tragedy,” Israeli Prime Minister Netanyahu said in a post on social media in Hebrew on Friday night, adding that Israel’s goal was to bring all the hostages home safely.

Saturday, Netanyahu said the news “broke my heart, broke the entire nation’s heart.”

Another hostage was killed in Gaza, the Hostages and Missing Persons Families Forum said on Saturday, without providing details.

At least 100 of the original total of about 240 hostages remain in Gaza.

--Heavy civilian casualties are the cost of Israel’s intense campaign to destroy Hamas and the militants’ urban warfare strategy, Israeli military officials said, in the face of global alarm at the staggering toll from the bombing.

With the Palestinian health ministry saying the death toll was approaching 20,000, with thousands more believed to be trapped under collapsed buildings, 50,000 are injured, with minimal healthcare services working.

Israel’s top war aim is to dismantle Hamas’ military capabilities to prevent further attacks. But the loss of Palestinian life has eroded global support after 10 weeks of bloodshed and Israel faces escalating pressure to scale-back the offensive.

Secretary of Defense Lloyd Austin arrived in Israel on Monday to urge his Israeli counterpart to reduce harm to civilians.  Protecting civilians in Gaza was both “a moral duty and a strategic imperative,” Austin said, warning excessive violence bred resentment that would benefit Hamas and make peaceful coexistence even harder in the long-term.

France, Britain, and Germany on Sunday added their voices to calls for a ceasefire.

But Austin also said he was “not here to dictate timelines or terms.”

His remarks signaled that the U.S. would continue shielding Israel from growing international calls for a cease-fire as the UN Security Council delayed another vote, while Washington said it would keep providing vital military aid.

In an example of the civilian toll, a strike killed 19 people from two local families as they slept at home in the town of Rafah in southern Gaza on Tuesday, including women, children and two babies, Gaza health authorities said.  Asked for comment on the strike, the IDF said it took feasible precautions to mitigate civilian harm under international law.

Senior Hamas official Ghazi Hamad on Sunday said Israel was “indiscriminately bombing schools and tents that house hundreds of thousands of displaced people and hospitals protected by international humanitarian law.”

An Israeli official, a legal adviser to the IDF, said hospitals can become a legitimate military target when they are being used by combatants, which Israel feels they have proved time and time again.

Speaking alongside Austin at a news conference, Israeli Defense Minister Yoav Gallant said Israeli forces operated legally and “to minimize the harm to the civilian population.”

The legal advisor said the air force was carrying out “thousands and thousands of attacks and often attacks that require heavy firepower” to break through tunnels.  “Really tragically that results in a large number of civilian casualties,” said the official, in a briefing with journalists.  The Israeli military asked that the officials not be named for security reasons.  [Reuters]

--Defense Minister Gallant said Tuesday that Israeli forces were entering Hamas’ tunnel network in northern Gaza as part of a “final clearing” of militants from the region.

The IDF said that they had discovered a Hamas command center in Gaza City that sits in the middle of the network of tunnels used to move soldiers, weapons and other supplies.

Gallant said that in southern Gaza, operations will take “months,” including the military’s assault on Khan Younis, the enclave’s second-largest city.  “We will not stop until we reach our goals,” he said.

Israel also said 131 of its soldiers have been killed in the Gaza ground offensive, while the IDF claims to have killed some 7,000 militants, without providing evidence, and blames civilian deaths on Hamas, saying it uses them as human shields when it fights in residential areas.

[As of last weekend, the number of Palestinian fatalities reported in the West Bank hit 291 since Oct. 7, though it wasn’t broken down how many of these were suspected terrorists vs. civilians.]

Despite pleas from the UK, France and Germany, the IDF has not let up, with renewed backing from the United States, Israeli strikes killing at least 28 Palestinians in southern Gaza and troops raiding one of the last functioning hospitals in the north as the country pressed ahead with its offensive on Tuesday.

--Wednesday, Hamas’ top leader, Ismail Haniyeh, arrived in Cairo for talks on the war in Gaza, a sign of resilience by the terrorist group.

The visit came a day after Hamas fired rockets that set off air raid sirens in central Israel, a show of strength during a war that has devasted much of northern Gaza and has driven 85% to 90% of the population from their homes.

Despite a flurry of activity by high-level officials in recent days, mediated by Egypt and Qatar and aimed at instituting another ceasefire and freeing more hostages, the two sides appeared to be far from an agreement.  Hamas said in a statement that Haniyeh would discuss the war with Egyptian officials, without providing more details.

--Palestinian factions reject any talks about prisoner swaps until after Israeli “aggression” is ended, a statement published by Hamas on Thursday said.  “There is a Palestinian national decision that there should be no talk about prisoners or exchange deals except after a full cessation of aggression,” the statement said.  In addition to Hamas, Islamic Jihad is also holding hostages in Gaza.

--The entire 2.3 million population of Gaza is facing crisis levels of hunger and the risk of famine is increasing each day, a UN-backed body said in a report published Thursday.  The proportion of households in Gaza affected by high levels of acute food insecurity is the largest ever recorded globally, according to the Integrated Food Security Phase Classification.  It is estimated 576,000 are at starvation levels.

“It doesn’t get any worse,” said Arif Husain, chief economist for the UN’s World Food Program.  “I have never seen something at the scale that is happening in Gaza. And at this speed.”

Additionally, only nine of Gaza’s 36 health facilities are still partially functioning, all located in the south, according to the World Health Organization.  WHO relief workers Thursday reported “unbearable” scenes in two hospitals they visited: Patients with untreated wounds crying out for water, the few remaining doctors and nurses with zero supplies, and bodies lined up in the courtyard.

--Jordan’s King Abdullah told French President Emmanuel Macron on Thursday that Israel’s “continued aggression” against Gaza would have “catastrophic repercussion” on the region, the palace said in a statement.  King Abdullah also said the world should pressure Israel to end its military campaign in Gaza and lift obstacles to much needed aid.

--According to the Gaza Health Ministry, more than 20,000 people have been killed in the Gaza Strip in the war, pegging the total at 20,057 on Friday.  The figure is higher than the estimated 15,000 Palestinians killed in the violence that followed the 1948 Arab-Israeli war, according to the Palestinian Central Bureau of Statistics.

While Israel disputes the figure, the number doesn’t include the thousands thought to be buried in rubble, while a study out of Johns Hopkins says the toll is higher than 20,000.

--After endless negotiations, the U.S. ambassador to the United Nations said on Thursday night that the United States was ready to support a Security Council resolution that would call for more desperately needed aid to enter the Gaza Strip.

The text dropped an earlier version’s call for the suspension of hostilities, instead calling for “urgent steps” to allow unhindered humanitarian access.  It asks the UN secretary general to appoint a coordinator tasked with “facilitating, coordinating, monitoring and verifying” that aid cargo is humanitarian in nature, who would also be “consulting all relevant parties.”

The resolution then passed today, Friday, 13-0, with Russia and the U.S. abstaining.

--Israel’s casualties in Gaza are up to at least 139 today, another eight soldiers killed in the fight against Hezbollah on the Lebanese border.  [This is as best as I can ascertain, piecing together various late stories.]  Hezbollah has announced a death toll in excess of 120 among its fighters.

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--A New York Times/Siena College poll found voters broadly disapprove of the way President Biden is handling the war, with younger Americans far more critical than older voters of both Israel’s conduct and of the administration’s response to the conflict.

Some 33% approve of Biden’s handling of the Israeli-Palestinian conflict, while 57% disapprove. 

And on the question who do you trust to do a better job in handling the conflict, 38% said Biden, 46% Donald Trump.

Voters between 18 and 29 years old, traditionally a heavily Democratic demographic, jump out.  Nearly three quarters of them disapprove of the way Biden is handling the war in Gaza, and among registered voters, they say they would vote for Trump by 49 percent to 43 percent.  In July, those young voters backed Biden by 10 percentage points.

Overall, registered voters say they favor Donald Trump over Biden in next year’s presidential election by two points, 46 percent to 44 percent.  Biden’s job approval is 37%, similar to all the other surveys and down two points from July.

--A poll conducted by Harris Insights and Analytics and Harvard University’s Center for American Political Studies, found that two-thirds (67%) of young Americans between the ages of 18-24 believe that Jews as a class are oppressors and should be treated as oppressors.

The poll, conducted among about 2,000 registered voters in the U.S., additionally found that more than half (51%) of 18-24 year olds believe that the long-term answer for the Israeli-Palestinian conflict is for “Israel to be ended and given to Hamas and the Palestinians,” although another question on the poll, asking if Israel has the right to exist, found that 69% of the cohort believe that Israel does have the right to exist.

I’m biting my tongue.

Despite the data above, bipartisan support for Israel among Americans in general remains high, according to the poll.  Some 63% of Democrats and 71% of Republicans believe that the U.S. should be supporting Israel in the war against Hamas.

Additionally, 84% of Americans said they believe that the October 7 massacre was a terrorist attack, with almost three-fourths (73%) saying it was genocidal in nature and 73% saying it was not justified by the grievances of Palestinians.

Among Americans between the ages of 18-24, some 73% also said they thought it was a terrorist attack and two-thirds (66%) said it was genocidal in nature, but 60% then said that it could be justified by the grievances of Palestinians.

Additionally, while 81% of all Americans said they support Israel over Hamas, only half of Americans between the ages of 18-24 felt the same.

The majority of Americans (63%) believe that Israel is just trying to defend itself, while the majority of Americans between the ages of 18-24 and between the ages of 25-34 believe that Israel is committing genocide.

In terms of antisemitism in the U.S., three-quarters of respondents said that they think antisemitism is growing in the U.S. and almost two-thirds (65%) said they think discrimination against Muslims is also growing.  Additionally, 68% think that antisemitism is prevalent on university campuses and 76% said Jewish students on campuses are facing harassment over being Jewish.

When asked “if a student calls for the genocide of Jews, should that student be told that they are free to call for genocide or should such students face actions for violating university rules?” more than half (53%) of Americans between the ages of 18-24 said that such a student should be told that they are free to call for genocide.  Among the totality of American respondents, almost three-fourths (74%) said that such a student should face actions for violating university rules.

--A poll from the Washington Institute for Near East Policy, a generally pro-Israel research organization, that surveyed 1,000 Saudis from Nov. 14 to Dec. 6, found that 96 percent of them believe Arab countries should cut all ties with Israel to protest the war in Gaza, posing a significant challenge to the Biden administration’s push for Saudi Arabia to establish diplomatic relations with Israel.

According to the poll, 40 percent of Saudis expressed positive attitudes toward Hamas, compared with 10 percent in a poll several months before the war began.  Only 16 percent of Saudis surveyed said that Hamas should stop calling for the destruction of Israel to accept the creation of Palestinian and Israeli states side by side – the “two-state solution” to the conflict that the Saudi government publicly supports.

The positive views of Hamas that the poll found, while still a minority, are notable given that Saudi citizens can face prosecution for sympathizing with the terrorist group.

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This Week in Ukraine….

--Vladimir Putin dismissed as “complete nonsense” remarks by President Biden that Russia would attack a NATO country if it won the war in Ukraine, adding Russia had no interest in fighting the NATO military alliance.

In a plea to Republicans not to block further military aid earlier this month, Biden warned that if Putin was victorious over Ukraine then the Russian leader would not stop and would attack a NATO country.

“It is complete nonsense – and I think President Biden understands that,” Putin said in an interview published on Sunday by Rossiya state television, adding the president appeared to be trying to justify his own “mistaken policy” on Russia.

“Russia has no reason, no interest – no geopolitical interest, neither economic, political nor military – to fight with NATO countries,” Putin said.

Under Article 5 of the NATO treaty, “the Parties agree that an armed attack against one or more of them in Europe or North America shall be considered an attack against them all.”

Putin said that Finland’s entry into NATO in April would force Russia to “concentrate certain military units” in northern Russia near their border.

Asked about how common ground could be found with the West given the rhetoric on both sides, Putin said: “They will have to find common ground because they will have to reckon with us.”

The West, Vlad said, had failed to understand the extent of the changes ushered in by the 1991 collapse of the Soviet Union, which he said had removed any genuine ideological basis for a confrontation between Russia and the West.

Putin casts the war as part of a much bigger struggle with the United States, which the Kremlin elite says aims to cleave Russia apart, grab its vast natural resources and then turn to settling scores with China.

He also seems to be hoping that relentless military pressure, combined with changing Western political dynamics and a global focus on the Israel-Hamas war, will drain support for Ukraine.

“As far as the Russian leadership is concerned, the confrontation with the West has reached a turning point: The Ukrainian counteroffensive has failed, Russia is more confident than ever, and the cracks in Western solidarity are spreading,” said Tatiana Stanovaya, senior fellow with Carnegie Russia Eurasia Center, in a recent analysis.

Amid the signs of fraying Western support, Russia has ramped up its pressure on Ukrainian forces on several parts of the 1,000-kilometer (620-mile) front line.

Michael Kofman, a military expert with the Carnegie Endowment, said Ukraine’s military needs to reconstitute and regenerate its combat effectiveness, soon.

--Russia and Ukraine each reported dozens of attempted drone attacks, just hours after Hungary vetoed 50 billion euros ($54.5bn) of EU funding to Ukraine.

Ukraine’s air force said Saturday that Ukrainian air defense had shot down 30 out of 31 drones launched overnight against 11 regions of the country.

Russia also said Friday evening that it had thwarted a series of Ukrainian drone attacks.

Russian anti-aircraft units destroyed 32 Ukrainian drones over the Crimean Peninsula, the Russian Defense Ministry said on Telegram. 

Earlier, Russia had said that six drones had been shot down in the Kursk region, which borders Ukraine.

The two sides then launched more drones against each other on Sunday, with the Russian assault reportedly killing one person in Odesa and the Ukrainian strike targeting a Russian military airfield.

Ukraine’s air force said on Sunday morning that it had destroyed 20 drones and a cruise missile that Russia launched overnight.  Nine of the drones were downed over the southern Odesa region, with falling debris starting a fire in a residential house and killing one person.

The Russian defense ministry said in a social media statement that its air defense systems destroyed or intercepted a total of 35 Ukraine-launched drones over Lipetsk, Volgograd and Rostov regions.

Vasily Golubev, the governor of the Rostov region that borders Ukraine in Russia’s southwest corner, said in a statement on the Telegram messaging app that air defense forces repelled “a massive attack” by drones.  Several Russian military bloggers said that one bomber at an airbase in Morozovsk suffered minor damage.  Ukraine was targeting the medium-range Su-34 bombers that use the base.

--The Freedom of Russia Legion, a Ukrainian-based paramilitary group of Russians who oppose President Putin, claimed responsibility on Sunday for a cross-border attack, a few kilometers into Russia’s Belgorod region.  The group, designated as terrorist in Russia, said it had destroyed a platoon stronghold of Russian troops near Trebreno village, without specifying whether it had destroyed infrastructure or killed soldiers, and said it had left mines behind. The report couldn’t be independently verified. But Vyacheslav Gladkov, the governor of Belgorod region, said Trebreno was under fire from Ukraine’s Armed Forces, with no injuries.

--White House national security council spokesperson John Kirby told reporters on Monday that there is only enough authorized funding for one more aid package to Ukraine this year before Congress will be required to greenlight new contributions.

--President Zelensky said on Tuesday he was confident the U.S. would not “betray” his country by withholding crucial wartime funding as it fights off a Russian invasion.

“We are working very hard on this, and I am certain the United States of America will not betray us, and that on which we agreed in the United States will be fulfilled completely,” Zelensky said during a televised briefing in Kyiv on Tuesday.  He added that financial assistance was key to Ukraine’s defense from Moscow’s full-scale attack.

“They should know, our American partners, that we’re waiting for this aid.  They know the details of what it’s needed for, how it will influence (the situation),” he said.

Zelensky also said he expected the European Union to approve a 50-billion euro aid package soon.

--At the same press conference, Zelensky also dismissed suggestions of a rift with army chief Valery Zaluzhny but said he still wants to see “very concrete things” from the military leadership.  His remarks come amid weeks of public speculation about tensions between the two men after Kyiv’s vaunted counteroffensive failed to retake significant parts of Russian-occupied territory.

Zelensky described the military operation as a “very complicated story” involving the collective input of Ukraine’s military leadership.  Zaluzhny wrote in The Economist last month that the 21-month-old war with Russia had reached a stalemate, drawing a rebuke from the president’s office.

Zelensky avoided directly criticizing Zaluzhny, but also did not explicitly extend his full support for the top general.  “I am waiting for very concrete things on the battlefield,” he said of Ukraine’s General Staff.  “The strategy is clear – we have an understanding of our actions.  I want to see details. I think that’s fair.”  Zelensky also said the military had asked for an additional 450,000 to 500,000 people to be mobilized into the army, but that a final decision had not been taken.

--Wednesday, a military analysis from the UK Defense Ministry said Ukraine’s armed forces had taken up more of a defensive posture after their summer counteroffensive failed and as winter sets in.

“In recent weeks, Ukraine has mobilized a concerted effort to improve field fortifications as its forces pivot to a more defensive posture along much of the front line,” the UK said.

The Kremlin’s deep defenses held firm against Ukraine’s months-long assault, which employed Western-supplied weapons but without needed air cover.

Now it’s about artillery, missile and drone strikes as mud and snow hinder troop movements.

“Russia continues local offensive options in several sectors, but individual attacks are rarely above platoon size,” the UK analysis said. “A major Russian breakthrough is unlikely and overall, the front is characterized by stasis.”

--Wednesday and Thursday, dozens of Russian drones targeted Kyiv, damaging apartment buildings and injuring at least two people, Reuters reported Friday.  Over the two nights, the Ukrainian military claimed to have shot down 58 of 63 Shahed drones, according to the Washington-based Institute for the Study of War.  [Defense One]

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--Two court hearings for jailed Russian opposition politician Alexei Navalny that were due to take place on Monday have been postponed until January, court filing showed.  Navalny’s allies, who had been preparing for his expected transfer to a “special regime” colony, the harshest grade in Russia’s prison system, say he has not been seen by his lawyers since Dec. 6 and have raised the alarm about his whereabouts.  Russia’s prison service last weekend said Navalny was being moved to a new prison in another part of the country.

Clearly, Vladimir Putin wants to limit Navalny’s access to his lawyers and contacts at least until the March presidential election.

--Speaking of which, Putin will run as an independent candidate with a wide support base but not on a party ticket, Russian news agencies reported on Saturday, citing his supporters.

Putin will not run as a candidate for the ruling United Russia (UR) party even though he has its complete support but as an independent candidate, Andrei Turchak, a senior UR party official, was cited as saying by RIA news agency.

--Russia said it has no interest in extending the Black Sea grain deal, RIA reported on Sunday, citing Russia’s agriculture minister Dmitry Patrushev.  He added that to a large extent this is a political decision, but Russia will continue to export its grain, as it has its buyers.

“Our grain export volumes, taking into account the winding down of the grain deal, have by no means fallen, they even slightly increased,” Patrushev said.

Russia withdrew in July from the deal which had allowed Ukraine to safely export grain from its Black Sea ports, but since Russia quit the deal, Ukraine has managed to secure routes.

--China and Russia pledged to defend each other’s interests and “jointly face challenges” amid geopolitical changes, according to a joint communique issued following meetings between their heads of government.

Beijing and Moscow reaffirmed that their bilateral ties would not be affected by any third-party interference and pledged to strengthen coordination within multilateral frameworks after an annual meeting led by Chinese Premier Li Qiang and his Russian counterpart Mikhail Mishustin concluded in Beijing on Wednesday.

The communique stated that Russia reaffirmed its support for “one China” and “opposed any form of independence of Taiwan,” while China said it supported Russia’s territorial integrity and opposed interference in Russia’s internal affairs by external forces.

The communique said China and Russia would continue to jointly face challenges and “firmly support each other in safeguarding their respective core interests.”

--Anti-immigrant sentiment has spread to Ireland since the island took on thousands of Ukrainian refugees after Russia’s invasion of their country and last Saturday, a fire was purposely set at a hotel in Galway that had been earmarked to house 70 asylum seekers.

“What we saw in Galway was deeply sinister,” Minister for Integration Roderic O’Gorman said on RTE Radio’s Morning Ireland program.  “I think people who use the international protection process have a right to be safely accommodated while their application is being adjudicated.”

Much of the building was destroyed.

Ireland, despite its peaceful reputation, has become no different than any other European country, sad to say.  Drug gangs are rampant and combined with anti-immigrant far-right groups were the perpetrators of the awful riots in Dublin you saw a few weeks ago.

O’Gorman said that there was no evidence to link migrants with criminality.  “I think it is really problematic when elected representatives come on to our national airwaves and make these entirely bogus claims.”

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Wall Street and the Economy

There is no current “urgency” for the Federal Reserve to reduce interest rates given the strength of the economy and the need to be sure that inflation will return to the central bank’s 2% target, Atlanta Fed President Raphae Bostic said on Tuesday. Inflation “is going to come down relatively slowly in the next six months, which means that there’s not going to be urgency for us to start to pull off of our restrictive stance,” he said in comments to the Harvard Business School Club of Atlanta.

Bostic, a voting member on the FOMC in 2024, repeated that he expects two quarter-point rate cuts likely in the second half of the year, but emphasized that in the meantime inflation remains too high – and the Fed’s policy path depends on it continuing to slow.

“This economy is far stronger than I would have imagined it would be 12 months ago, and I’m really grateful for that,” Bostic said.  Households and businesses “have been able to absorb a lot.”

So then we had critical inflation data today, the Fed’s preferred personal consumption expenditures figures for November, and the PCE was -0.1%, 2.6% year-over-year, while the key ‘core’ figure was 0.1, 3.2% Y/Y; all four numbers better than expected or right in line.

The core 3.2% is down from a prior revised 3.4% in October.  Exactly what the Fed wants to see, but still not 2%.  When it gets under 3.0%, however, that’s when the Fed can telegraph the first rate cut.

Meanwhile, personal income was 0.4%, consumption 0.2%, both basically in line with expectations.

Durable goods for November came in hotter than forecast, 5.4%, 0.5% ex-transportation.

The other data this week included a final look at third-quarter GDP, and it was surprisingly lowered to 4.9% from a prior 5.2%.

So, the last four quarters….

Q4 2022…2.6%
Q1 2023…2.2%
Q2 2023…2.1%
Q3 2023…4.9%

The current estimate for the fourth quarter from the Atlanta Fed’s GDPNow barometer is 2.3%.

We also had a slew of housing data…some good, some not so good.

November housing starts were far greater than forecast, 1.56 million annualized vs. expectations of 1.36m.

November existing home sales were a little better than consensus, 3.82 million, up 0.8% month-over-month, and breaking a five-month losing streak, but down 7.3% year-over-year.  The median existing home price of $387,600 was up 4% Y/Y.

November new home sales, however, came in far worse than expected, 590,000, the worst since Nov. of 2022.

Meanwhile, Freddie Mac’s 30-year fixed-rate mortgage fell to 6.67% this week, eight straight weeks of declines from the 7.79% peak.

Europe and Asia

We had a release for November inflation for the euro area from Eurostat, 2.4%, down from 2.9% in October.  A year earlier the rate was 10.1%.  Ex-food and energy, core, declined from 5.0% in October to 4.2% last month, which remains the key figure that the European Central Bank has to stay focused on and like the U.S., the UK and Japan, the target is 2%.

Headline inflation….

Germany 2.3%; France 3.9%; Italy 0.6%; Spain 3.3%; Netherlands 1.4%; Ireland 2.5%.

Britain’s annual inflation rate fell sharply to 3.9% in November, down from 4.6% in October and well below expectations.  Good news, but growth in the economy is non-existent.

Turning to Asia…nothing on the data front in China this week, except for a measure of foreign investment into China, which fell to the lowest in nearly four years in November, underlining how geopolitical tensions and a slowing economy have combined to convince foreign companies to slow their expansion.

The level of new foreign capital received by the country was $7.5 billion, down 19.5% from a year earlier, according to Bloomberg calculations on data published by the Ministry of Commerce, the worst number since Feb. 2020, when the Covid pandemic first hit.

Japan reported its trade data for November, with exports down 0.2% year-over-year; imports falling 11.9% Y/Y.

China-bound exports fell again, down for the 12th month in a row.  Exports to the U.S. grew 5.3% on demand for hybrid vehicles and car parts as well as airplanes.  It was the slowest pace in three months.

Meanwhile, Bank of Japan Governor Kazuo Ueda kept investors guessing on when he’ll call time on the world’s last negative interest rate, following a decision to stand-pat on policy after the central bank’s two-day meeting wrapped up Tuesday.  He didn’t rule out policy normalization at any of the gatherings in coming months, while insisting he first needs to see more evidence that the BOJ will achieve its price stability target.

He also added that policymakers were unlikely to give an explicit warning of an impending rate hike, largely discounting the kind of telegraphing sometimes employed by the Federal Reserve and the ECB.

Thursday, we had the November inflation data, 2.8% vs. 3.3% in October, while the core rate, ex-food and energy, was 3.8% vs. 4%, numbers that had to please the BOJ.

Street Bytes

--Despite a little options trade-related hiccup on Wednesday, stocks rose an eighth consecutive week, the longest such streak for the S&P 500 since 2017…2019 for the Dow Jones and Nasdaq.

The Dow Jones finished up 0.2% to 37385, having earlier hit a new closing high of 37557.  The S&P gained 0.8%, one percent from its all-time high, and Nasdaq gained 1.2%.

--The Wall Street Journal had a piece on the stocks known as the Magnificent Seven – Apple, Microsoft, Alphabet, Amazon.com, Nvidia, Tesla and Meta – and as of last Friday, they have collectively risen 75% in 2023, while the other 493 companies in the S&P 500 rose 12%.

These seven stocks now represent about 30% of the S&P 500’s market value, according to Goldman Sachs Global Investment Research.

In 2022, the Magnificent Seven lost 40%, whereas the remaining stocks in the S&P dropped 12%.

This year was helped in a huge way by the artificial-intelligence hype. More on this topic in the coming weeks with yearend data.

--U.S. Treasury Yields

6-mo. 5.25%  2-yr. 4.32%  10-yr. 3.89%  30-yr. 4.05%

The 10-year got down to 3.82%, intraday.   One more week to go in an extraordinary year in the bond pits.

Ironically, the 12/31/22 close on the 10-year was 3.87%!  4.43% on the 2-year.  But, oh, we’ll need Paul Harvey to tell…the rest of the story….

--Angola has decided to leave OPEC because its role in the organization was not relevant and it was not serving the country’s interests, oil minister Diamantino Azavedo said on Thursday.  Angola’s President Joao Lourenco approved the decision to withdraw after a cabinet meeting.

The departure, though, heightened concerns about the organization’s ability to stabilize global prices amidst disputes over oil production quotas.

Crude is on track for its first annual decline since 2020, driven by soaring U.S. production and doubts about OPEC’s capability to tighten the market in the upcoming quarter.  Energy Information Administration data this week confirmed that U.S. daily output reached a record-breaking 13.3 million barrels last week.  In addition, the below described conflict has caused disruptions in international trade, although the impact on oil supply remains limited for now, as the bulk of Middle East crude is exported through the Strait of Hormuz…but not all of it.

--And so…Yemen’s Iran-aligned Houthis make “Street Bytes” because of the economic implications of their recent actions.  They said on Tuesday they would press on with attacks in the Red Sea and could mount a naval operation there roughly every 12 hours, after stepping up missile and drone attacks it began last month against international vessels in response to Israel’s assault on the Gaza Strip.

“As for naval operations, they are in full swing, and perhaps not 12 hours would pass without an operation,” the group’s spokesperson and top negotiator Mohammed Abdelsalam told al Jazeera TV.

A number of container ships are anchored in the Red Sea and others have turned off tracking systems as traders adjust routes and prices in response to the Houthis attacks.

At least a dozen merchant ships have been targeted by the Houthis while passing through the Red Sea, including two on Monday…a chemical/oil tanker motor vessel Swan Atlantic, which was hit by a ballistic missiles; and bulk cargo ship M/V Clara, which reported an unspecified strike nearby but not to the vessel itself.  Both attacks occurred Monday morning, and no one was injured, according to U.S. defense officials at Central Command.

The Houthis have also launched ballistic missiles at Israel, but U.S., Saudi, and Israeli systems downed them all before they reached their targets. The French navy has also shot down likely Houthi-launched drones above the Red Sea over the past several days.

The actions have raised the specter of another bout of disruption to international commerce following the upheaval of the Covid pandemic, and prompted a U.S.-led international force to patrols waters near Yemen.

The Red Sea is linked to the Mediterranean by the Suez Canal, which creates the shortest shipping route between Europe and Asia.  About 12% of world shipping traffic transits the canal, including 10% of the world’s oil, 8% of liquefied natural gas, and 30% of container shipments use the narrow passage of water, according to the Institute of Export and International Trade in London.

Major shippers including Hapag Lloyd, MSC and Maersk, oil major BP and oil tanker group Frontline have said they will be avoiding the Red Sea route and re-routing via southern Africa’s Cape of Good Hope.

The U.S. on Monday announced a 10-nation coalition to counter the attacks from Houthi rebels, including the UK, Bahrain, Canada, France, Italy, Netherlands, Norway, Seychelles, and Spain.

More broadly, higher shipping costs risk undermining the Federal Reserve’s battle against inflation and could put 2024 interest-rate cuts at risk.

The biggest setback could be for China.  That route is most important for goods going between the Far East and Europe.  The country’s economy has been a big disappointment this year, and gumming up supply chains further doesn’t help.

And so late Thursday, Maersk and CMA CGM, two of the world’s largest shipping firms, announced they would impose extra charges after deciding to re-route ships following the attacks, while on Friday, Chinese automaker Geely told Reuters its electric vehicle sales were likely to be hurt by a delay in deliveries to Europe, which bodes ill for other automakers in China as they seek to increase exports to Europe due to overcapacity and weak demand at home.

--The Transportation Department on Monday announced a $140 million fine against Southwest Airlines over last winter’s meltdown that disrupted travel for about two million passengers during the holiday season.

Of the $140 million, Southwest Airlines will pay $35 million to the federal government.  For the remaining amount, the department is giving the airline credit for providing frequent-flier points as an apology to customers affected by the meltdown, and for agreeing to give out tens of millions of dollars in vouchers to customers affected by future delays and cancellations.

“Today’s action sets a new precedent and sends a clear message: If airlines fail their passengers, we will use the full extent of our authority to hold them accountable,” Transportation Secretary Pete Buttigieg said in a statement.  “Taking care of passengers is not just the right thing to do – it’s required, and this penalty should put all airlines on notice to take every step possible to ensure that a meltdown like this never happens again.”

Separately, pilots at Southwest will get about a 50% pay raise over a five-year period in their new contract.  The Southwest Airlines Pilots Association, which represents more than 10,000 pilots at the Dallas-based carrier, also said its board has voted to send the deal to members for a ratification vote.

On Tuesday, the union said it has reached agreement with the company for a $12-billion contract deal.  The hefty pay increase underscores the leverage and bargaining power pilots are enjoying amid an industry-wide shortage.  Pilots at rivals Delta, United and America have all secured similar raises and improvements in working conditions in new contracts this year, which has driven up operating costs at airlines, while encouraging other work groups to demand similar deals.

Southwest pilots will get a 29.15% pay raise immediately after the new contract’s ratification and a hike of 4% each in 2025, 2026 and 2027.

--TSA checkpoint numbers vs. 2019

12/21…103 percent of 2019 levels…2,638,000
12/20…129*
12/19…115
12/18…95
12/17…99
12/16…90
12/15…101
12/14…101

*12/19 and 12/20 were compared to abnormally low 2019 figures, assumed to be weather-related back then, though I’m not positive.

--Japan’s Nippon Steel said on Monday it would buy U.S. Steel in a deal worth $14.9 billion, including debt, months after the steelmaker put itself up for sale.

The per-share offer of $55 represents a premium of about 142% when compared to U.S. Steel’s closing price before the company announced a strategic review process on Aug. 11.  The shares then surged 25% to $49.50 on the news.

Nippon Steel sees the U.S. as a growth market that can help to offset declining demand in Japan, the Nikkei Daily, which earlier reported the deal, said.

U.S. Steel launched a review process after rebuffing a $7.3 billion offer from rival Cleveland-Cliffs Inc.

Pittsburgh-based U.S. Steel’s shares had suffered after several quarters of falling revenue and profit, making it an attractive takeover target for rivals looking to add a maker of steel used by the automobile industry.  U.S. Steel also supplies to the renewable energy industry and stands to benefit from the Inflation Reduction Act, which provides tax credits and other incentives for such projects, something that attracted suitors.

U.S. Steel then said it was seeking approval from the Committee on Foreign Investment in the U.S., or CFIUS, as a condition of the deal with Japan’s Nippon.  Nippon said it would honor all existing collective bargaining agreements with U.S. Steel workers.

So then the politicians called for the government (CFIUS) to deny the merger, questioning the wisdom of allowing an American industrial stalwart to fall into foreign hands.

“Domestic steel production is vital to U.S. national security,” Republican senators J.D. Vance (Ohio), Josh Hawley (Mo.), and Marco Rubio (Fla.) said in a letter to Treasury Secretary Janet Yellen, who chairs CFIUS, the interagency committee that reviews investments on national security grounds.

Sen. Joe Manchin (D-WVA) called the transaction “a major blow to the American steel industry which has been instrumental in making us the superpower of the world.”

Oh puh-leeze.  Some of us are old enough to remember countless periods of financial stress for U.S. Steel.  Japan is not only an ally, a critical one at this stage, but Nippon Steel will strengthen ‘X’ (the original ‘X’, by the way).

This is a mess, politically, for President Biden, however, who has worked hard, rightfully so, to bring Japan closer to the U.S.

The U.S. Steel union wants the company to sell to domestic producer Cleveland-Cliffs.

--Shares in FedEx plunged 12% after the parcel delivery giant reported fiscal second-quarter results that missed the Street’s estimates, FedEx facing demand headwinds, prompting it to forecast a drop in full-year sales.

Adjusted earnings per share increased to $3.99 in the three months ended Nov. 30 from $3.18 a year earlier, but fell short of the Capital IQ-polled consensus of $4.20.  Revenue declined to $22.2 billion from $22.8 billion, trailing the Street’s $22.43bn view.

Revenue at both express and freight operations declined year over year amid volume weakness, FedEx said. 

For fiscal 2024, FedEx is now forecasting a low-single-digit percentage fall in revenue year over year, compared with the prior outlook for sales to be flat.

--General Mills cut its fiscal 2024 organic (ex-acquisitions) sales outlook as its volume recovery slowed, while the packaged food maker’s second-quarter revenue trailed market estimates.

The company now expects organic sales to be down 1% to flat for the full year, compared with its previous guidance for a 3% to 4% increase.

“We’ve revised our topline outlook to account for a slower volume recovery,” CEO Jeff Harmening said in a statement Wednesday.  That slower view stems from a “more cautious” consumer economic outlook and a “faster normalization” of competitive on shelf-availability.

For the three months through Nov. 26, GIS posted earnings per share of $1.25, topping the Street’s view for $1.16.  Sales decreased 2% to $5.14 billion.

North America sales declined to $3.31 billion from $3.37bn in the 2022 quarter, due to lower volume.  Revenue decreased by mid-single digits in the U.S. snacks and morning foods operating divisions.

Pet food sales slid 4% to $569.3 million.

I know when I buy a box of cereal, I’m not paying $5.49 for General Mills’ product when I can get a generic on sale for $2.49.  But that’s me.

GIS shares fell over 3%.

--Apple shares traded a little lower Monday after the company said it would stop selling two versions of its smartwatch in the United States, following the U.S. International Trade Commission’s finding earlier this year that Apple violated patents held by medical technology company Masimo.

The ruling concerns a blood oxygen feature on certain models of the Apple Watch.

“While the review period will not end until December 25, Apple is preemptively taking steps to comply should the ruling stand,” the company said.

For its latest fiscal year, the company reported Apple Watch sales of $19.6 billion, or about 5% of total revenue of $383 billion, according to Visible Alpha.

--Software company Adobe said Monday it was ending its acquisition agreement with design tools maker Figma.

Adobe said in a press release that the termination of the $20 billion merger originally announced in September 2022 was a mutual agreement due to a belief that there was no clear path to receiving regulatory approvals from the European Commission and the UK Competition and Markets Authority.

The UK’s CMA announced in November that it provisionally found the acquisition of Figma by Adobe would “likely harm innovation for software” and eliminate competition between two top competitors.

--China, the world’s top processor of rare earths, banned the export of technology to extract and separate the critical materials on Thursday, the country’s latest step to protect its dominance over several strategic metals.

Rare earths are a group of 17 metals used to make magnets that turn power into motion for use in electric vehicles, wind turbines and electronics.  The ban is expected to have the biggest impact in so-called “heavy rare earths,” used in electric vehicle motors, medical devices and weaponry, where China has a virtual monopoly on refining.

Western countries are rather frantically trying to launch their own rare earth processing operations.  China accounts for nearly 90% of global refined output, having mastered the extraction process to refine the strategic minerals.  Western companies have to deal not just with technical complexities but also pollution concerns.

--Chinese regulators also announced on Friday a wide range of rules aimed at curbing spending and rewards that encourage video games, dealing a blow to the world’s biggest games market, sending shares of the likes of Tencent Holdings, the world’s biggest gaming company, plunging 16% at one point.

The new rules set spending limits for online games, and the games will now be banned from giving players rewards if they log in every day, if they spend on the game for the first time or if they spend several times on the game consecutively.

--Micron Technology late Wednesday posted a smaller-than-projected fiscal first-quarter loss, while its revenue surpassed Wall Street’s estimates amid higher pricing, with the shares rising  7% at the opening Thursday.

The memory and storage product maker’s adjusted per-share loss grew to $0.95 during the three months ended Nov. 30 from $0.04 a year earlier, but came in better than the $1.01 consensus loss.  Revenue rose to $4.73 billion from $4.09 billion, topping the Street’s $4.63bn forecast.

The company also issued guidance for the fiscal second quarter that exceeded expectations.  The company expects “pricing to continue to strengthen” through the 2024 calendar year, which should see improved margins and financial performance, CEO Sanjay Mehrotra said in a statement.

--Nike shares plunged 11% after the company said it was seeking $2 billion in savings over the next three years by streamlining operations, as it missed quarterly sales estimates due to a weak North American wholesale business and feeble recovery in China.

Nike CFO Matthew Friend said the sportswear giant was looking ahead “to a softer second-half revenue outlook.”

Nike’s wholesale revenue fell 2% to $7.1 billion in the fiscal second quarter.

Sales in Greater China rose 4% in the second quarter, slowing slightly from the 5% increase seen in the first quarter, signaling demand was yet to stabilize in the market.

North America revenue was down 4%.

The company posted total revenue of $13.39 billion in the quarter, missing analysts’ estimates of $13.43 billion.

While the report wasn’t awful, the shares had rallied 15% since mid-November, so the Street was expecting much more than it received from the company.  It didn’t help that CFO Friend said, “We are seeing indications of more cautious consumer behavior around the world.”

--Carnival shares rose a bit after it posted stronger-than-expected improvements in fiscal fourth-quarter results on strong demand and a robust pricing environment, that the cruise line operator said has continued into fiscal 2024, which allowed CCL to up its guidance.

Revenue rose to $5.4 billion for the three months ended Nov. 30 from $3.84 billion a year ago and topped consensus of $5.28bn.  Passenger ticket revenue climbed to $3.51 billion from $2.27 billion a year ago, and onboard revenue increased to $1.89 billion from $1.57 billion year over year.

Adjusted earnings came in at a loss of $0.07 per share, better than the $0.85 loss it reported in the same period last year and the Street’s consensus view of a $0.13 loss.

--Travel within Europe in the busy holiday season is exceeding 2022 levels, despite security warnings from authorities around Europe as consumers remain determined to enjoy holidays, prolonging the post-pandemic travel boom.

Christmas markets and popular tourist cities such as Munich and Paris have been bustling, slated to climb 22% within the European Union and Britain above 2022 levels.  I know years ago when I went to Cologne and Berlin for the markets, I had a blast.  [And I saw Knut the polar bear at the Berlin Zoo!  Knut was no longer the cutie that captivated the world for a spell.]

But the security warnings not only remain in place (two Islamist attacks in France and Belgium in October killed three people), other countries recently raised their alert levels.

There has been a slight spike in ticket cancellations over the Christmas period between Dec. 21 and 31, according to travel data firm ForwardKeys.

[The Czech minister for interior affairs said Thursday regarding the tragic school shooting in Prague that killed 14, that investigators do not suspect a link to any extremist ideology or groups.]

--Musician Kid Rock said his boycott of Bud Light is over.  Last week, he spoke with Tucker Carlson, saying that while Anheuser-Busch InBev deserved the “black eye” it got for its marketing campaign with transgender influencer Dylan Mulvaney, he felt there was no need to keep avoiding the brand.  While noting that he hoped other companies took note of consumers’ displeasure, Kid Rock explained that after many months of lower sales, “I don’t think the punishment that they’ve been getting at this point fits the crime.”

This matters because Kid Rock was one of the first and loudest figures calling for a boycott of Bud Light, and many other conservative voices then joined in, making Bud Light one of the first major targets of the so-called anti-woke crowd.

The whole situation was compounded by AB InBev’s mishandling of the controversy, and the result was that Bud Light lost its crown as the nation’s favorite beer as sales fell.

Foreign Affairs, Part II

China: The top generals of China and the United States spoke by video Thursday, ending a 16-month break in communications at the militaries’ highest levels.  Air Force Gen. CQ Brown Jr., chairman of the Joint Chiefs of Staff, and Gen. Liu Zhenli of the People’s Liberation Army’s Joint Staff Department, discussed global and regional security issues, according to the Pentagon.

Satellite photos appear to show China is upgrading its first nuclear-test base for new weapons tests.  “All the evidence points to China making preparations that would let it resume nuclear tests,” Tong Zhao, a nuclear expert at the Carnegie Endowment for International Peace, told the New York Times.

A 5.9-magnitude earthquake that struck China overnight on Monday killed more than 120 people and injured more than 500 others, officials and state media said Tuesday. The quake damaged 15,000 houses and knocked out water, electricity and transportation links in some parts of the region.

Like much of China, the region is enduring record-breaking cold for this time of year, temps below zero Fahrenheit where the epicenter was, which is hampering rescue efforts as people have been forced to start bonfires to stay warm.

The hardest hit, Gansu Province, is one of China’s poorest areas.

Meanwhile, the trial of Jimmy Lai, a media magnate accused of violating Hong Kong’s draconian national-security law by “colluding with foreign forces,” opened.  Lai launched and ran Apple Daily, a popular pro-democracy paper shut down in 2021.  He was denied his choice of lawyer and trial by jury.  The three years he has already spent behind bars could become life imprisonment if he is found guilty, as seems likely.

At the same time, Secretary of State Antony Blinken denounced the Hong Kong government for publishing what he called a “bounty list” of pro-democracy activists living overseas, including a U.S. citizen.

“We reject this attempt to threaten and harass those advocating for freedom and democracy,” Blinken said last weekend.

The Hong Kong police said that they had put five individuals who had “absconded overseas” onto a wanted list, with a 1 million Hong Kong dollar, or $128,000, reward offered for information about them and their cases.

Following the widespread pro-democracy protests in 2019, Beijing imposed the national security law, cut the number of elected legislators and disqualified lawmakers it deemed unpatriotic, effectively eliminating any political opposition in the body.  The law criminalizes vaguely worded acts such as secession, subversion and foreign collusion.

In a statement, Blinken said that the ‘list of cash awards’ displayed a “disregard for international norms and human rights in Hong Kong and the deterioration of that city’s once proud tradition of respecting the rule of law.”

“We strongly oppose any efforts to intimidate and silence individuals who choose to make the United States their home,” he added.

Mao Ning, a Chinese Foreign Ministry spokesperson, said to reporters last Friday that “We strongly deplore and firmly oppose certain countries’ flagrant slandering against the national security law for Hong Kong and interference in the rule of law.” [Frances Vinall / Washington Post]

Back to Jimmy Lai….

Editorial / Wall Street Journal

“Chinese officials and state media for years targeted Lai with fierce criticism.  Last week, the country’s foreign ministry described him as ‘one of the most notorious anti-China elements bent on destabilizing Hong Kong and a mastermind of the riots that took place in Hong Kong.’

“ ‘If you put it in a ranking, they hate him more than anyone else,’ said Victoria Hui, an associate professor of political science at the University of Notre Dame….

“Lai is accused of using his newspaper, media interviews and posts on Twitter, now known as X, to call for sanctions on Hong Kong and Chinese government officials for the clampdown that followed the protests.  Prosecutors also allege he helped fund an ad campaign in international newspapers to rally support for such a move.

“The national security law, which went into effect at the end of June 2020, criminalized appeals for foreign sanctions and various forms of dissent.  Some 285 people have been arrested under the law, while more than 10,000 people were arrested in connection with the 2019 protests.  Many members of the city’s pro-democracy opposition are in jail or have left the city.

“Sebastien Lai, the media mogul’s youngest son who now lives in Taipei, said his father – a British passport holder – was willing to face the risk of imprisonment to encourage others who shared his beliefs.

“ ‘Dad staying in Hong Kong is really proof that this intangible thing called liberty is a thing that people yearn for,’ he said.  ‘You can call it Western values, but it’s not really, in the sense that it’s not something that only people in the West want or deserve.’….

“In August 2020, the U.S. levied sanctions on several Chinese political figures and local leaders involved in the national security crackdown including John Lee, who is now the city’s chief executive.

“Hong Kong and Chinese authorities have bristled at criticism over the Lai case.  When his supporters abroad marked his 1,000th day in custody and cast his jailing as unjust, the Hong Kong government called their remarks ‘blatant political interference’ and warned that any statements attempting to obstruct the course of justice could be considered criminal contempt of court.”

Back on October 28, 2020, Jimmy Lai wrote some of the following for an op-ed in the Washington Post:

“Christianity teaches that God, the Father, sent Jesus to suffer for our sins.  (Chinese President Xi Jinping) offers a morally perverse substitute, asking the Chinese people to suffer for him in revolutionary glory.

“Who is this man to ask such a thing of the people he leads?  The answer is familiar. He is a dictator, and dictators sooner or later forget that they are mere humans, imagining themselves as taking God’s place. This is why communism, though atheist, will never be godless.

“But if the gods of communism are false ones, the suffering they ask – and impose – is all too real.  Liu Xiaobo was awarded the 2010 Nobel Peace Prize for promoting democracy in China and was rewarded in his homeland by dying in prison seven years later.  Tibetans are routinely jailed and suppressed, and more than 1 million Muslim Uighurs languish in labor camps in the Xinjiang territory, subjected to a genocidal campaign by the Chinese Communist Party.

“My fellow citizens of Hong Kong – who are experiencing the oppression of the new national security law as the noose tightens on any hope of democratic reform – would remind you that the suffering is not limited to China’s hinterlands.

“All of these efforts reflect the aims of a dictator intent on depriving citizens’ their individuality, the better to allow the CCP to exert control.  One tool in this effort is keeping people in ignorance – hence the online Great Firewall of China. Access to information is denied, and entertainment from movies to video games is sanitized to suit the CCP, while free speech and open expression are outright banned.

“Recently, a Beijing-based reporter from the West said to me: China has its own culture and thousands of years of history. Its moral values cannot be reconciled with those of the West. Is it any surprise to find we have conflicts?

“I thought: How terribly sad that a Westerner assumes Chinese people are somehow incapable of desiring freedom.  Say this for Xi: He at least knows it isn’t true – otherwise he wouldn’t have to spend so much time and energy suppressing his people’s desires.

“Yes, people are all different. But regardless of their history and culture, human beings yearn to be free, to improve their lot by pursuing knowledge and exercising the liberty to create, to achieve, to contribute.

“My fellow Chinese share that yearning.  They don’t want a new communist god who revels in their suffering. They have lived through this before, with Mao, and know the human wreckage that will follow.

“The West must wake up to the true nature of the New Cold War: It isn’t about fighting over intellectual-property theft; it is about China using its size and wealth to challenge the moral principles that have made the West a beacon of freedom.”

Lastly, NBC News reported that President Xi warned Joe Biden last month at their summit in San Francisco that he intends to end Taiwan’s decades-long de facto independence – peacefully, if possible.

Xi told Biden that “Beijing will reunify Taiwan with mainland China but that the timing has not yet been decided,” NBC reported, citing three current and former U.S. officials briefed on the meeting.

The White House didn’t deny the exchange.

The big election in Taiwan is Jan. 13.

North Korea: Pyongyang said on Tuesday it had launched a Hwasong-18 intercontinental ballistic missile (ICBM) on Monday as a drill to confirm the war readiness of its nuclear deterrence force in the face of mounting hostility by the United States, according to state news agency KCNA, which said Kim Jong Un watched the launch.

The missile reached an altitude of 4,050 miles, flying 623 miles and accurately hitting the intended target, KCNA said.  Kim said the launch sends “a clear signal to the hostile forces, who have fanned up their reckless military confrontation hysteria” against the North throughout the year, KCNA said.

The agency said the drill “displayed the DPRK’s will for toughest counteraction, and its overwhelming strength.” [DPRK being short for the Democratic People’s Republic of Korea.]

South Korea and Japan said on Monday the North had fired an ICBM with a range* to hit anywhere in the United States (if you flatten out the trajectory), after it condemned a U.S. military show of force including the arrival of an aircraft carrier and nuclear-powered submarine in South Korea as “war” moves.

*9,300 miles.

South Korea said the missile was a solid-fuel Hwasong-18 ICBM.  The launch also came less than 12 hours after the North fired a short-range ballistic missile Sunday night, flying about 350 miles and falling into the ocean.

Separately, North Korea said it will work with China on regional peace and stability as a senior delegation visited Beijing.

Deputy foreign minister Pak Myong-ho told top Chinese diplomat Wang Yi on Monday his country would continue to deepen ties with China to “safeguard common interests” hours after it launched its fifth ICBM this year.

“The DPRK will continue to strengthen multilateral cooperation with China to safeguard common interests and maintain regional peace and stability,” Pak said, according to the Chinese foreign ministry.

In a response to the U.S.-South Korea meeting on Sunday, the North Korean defense ministry said it was “an open declaration on nuclear confrontation to make…use of nuclear weapons against the DPRK” and threatened “pre-emptive and deadly counteraction” in response.

Earlier, the United States warned Pyongyang that any nuclear attack would lead to the end of the regime.

Sudan: The Rapid Support Forces took control of Wad Madani, Sudan’s second biggest city.  Fighting between the paramilitary group and the national army, which has killed more than 10,000 people since April, has led an estimated 250,000 to 300,000 refugees to flee El Gezira state, with thousands of others having taken refuge in Wad Madani.  Many have now fled towards the south. The RSF have in recent weeks gained territory in several areas.

Venezuela: President Nicolas Maduro’s government freed at least 20 opposition-linked prisoners and 10 Americans in exchange for the U.S. release of a Maduro ally, we learned on Wednesday.  The ally is Colombian businessman Alex Saab, who was granted clemency by President Biden and sent back to Venezuela, according to officials.

U.S. prosecutors had accused Saab of siphoning off some $350 million from Venezuela via the United States in a scheme that involved bribing Venezuelan government officials.  He denies the charge.

As part of the deal, all six Americans who were classified by the U.S. as wrongfully detained in Venezuela were released, U.S. officials said.  Venezuela also returned to the United States fugitive Malaysian businessman Leonard Glenn Francis, known as “Fat Leonard,” who is implicated in a U.S. Navy bribery case. 

Francis pleaded guilty in 2015 to what was eventually revealed to have been a $35 million bribery conspiracy involving several U.S. Navy officers spanning 2004 until his arrest in 2013.  Weeks before his sentencing in 2022, he cut off his ankle tracking bracelet and fled the country for Venezuela, where he was later detained trying to fly to Russia.

Francis earned the nickname “Fat Leonard” due to his 6-foot-2, 350-pound frame.  For nearly a decade, he bribed Navy officials to steer contracts to him using millions of dollars in cash, prostitutes, Cuban cigars, Kobe beef (Mmmm…oops, sorry), and more.

The White House has said in recent weeks that it expected to see progress on prisoner releases in order to continue with energy sanctions relief for Caracas, unveiled in October in response to an agreement by the Venezuelan government to hold fair elections in 2024.

Argentina: The nation’s new libertarian president Javier Milei unveiled a sweeping emergency decree on Wednesday that mandated more than 300 measures to deregulate the country’s economy.

The decree strikes down major regulations covering Argentina’s housing rental market, export customs arrangements, land ownership, food retailers and more. It also modifies rules for the airline, healthcare, pharmaceuticals, and tourism sectors to encourage competition.  Employee severance packages will be cut and the trial period for new employees extended.

The new rules also change the legal statuses of the country’s state-owned companies, which include an airline, media companies and energy group YPF, allowing them to be privatized.

“Today we are taking our first step to end Argentina’s model of decline,” Milei said in a pre-recorded broadcast.  “I have signed an emergency decree to start to unpick the oppressive institutional and legal framework that has destroyed our country.”

Milei promised during the campaign to blow up the economy and to start anew.  He warned endlessly there would be pain.  But now he will face inevitable clashes with the country’s powerful labor unions, and thousands hit the streets to protest.

Hungary:  Parliament passed a law “protecting national sovereignty” that gives the government “draconian tools,” the U.S. State Department said Wednesday.  The law “equips the Hungarian government with draconian tools that can be used to intimidate and punish those with views not shared by the ruling party,” the State Department said in a statement.  The ruling Fidesz party says the law will defend against undue political interference by foreign persons or groups.

France: The government crisis continues over the immigration issue.  President Emmanuel Macron originally sought to take tough measures on migration while keeping France open to foreign workers who could help the economy in sectors struggling to fill jobs.

His interior minister Gerald Darmanin argued the government had to take tough measures on immigration to stem the rise of Marine Le Pen’s anti-immigration far-right National Rally party, which is now the single biggest opposition party in parliament and polling in first position ahead of next year’s European elections.

But after I noted last week Macron had lost the debate, a compromise was drawn up by a special parliamentary committee and, as a result, Macron’s centrist government put forward a much tougher, right-wing Bill, which among other things introduced migration quotas, reduced access to welfare benefits, and made it harder for foreign-nationals’ children born in France to become French…and it passed.

And Marine Le Pen claimed it was an “ideological victory” for her own anti-immigration platform, with scores of Macron’s centrist grouping voting against the bill or abstaining.  The far-right MP Edwige Diaz described the Bill as “incontestably inspired by Marine Le Pen.”

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: 46% approve*, 53% disapprove (Dec. 15). *This one is clearly an outlier.

--In a CBS News/YouGov poll of likely New Hampshire Republican primary goers, Donald Trump’s lead over Nikki Haley has shrunk to 15 points, 44% for Trump, Haley up to 29%, following her endorsement by Gov. Chris Sununu.  Ron DeSantis is at 11% and Chris Christie 10%.

A separate CBS/YouGov survey of likely Republican caucus goers in Iowa had Trump at a whopping 58%, DeSantis 22%, Haley 13%.

--A Fox News national poll of Republican and Republican-leaning voters has Donald Trump at 69%, DeSantis 12%, and Haley 9%.

When looking at all voters, by a 32-point margin they feel they have been hurt rather than helped by President Biden’s economic policies, and 78% say the economy is in bad shape, worse by 9 points since Biden took office (69%).

The survey finds 68% of voters feel unhappy with how things are going in the country, up from 53% since early in Biden’s term.  Much of that 15-point rise in dissatisfaction comes from a 27-point increase among Democrats – climbing to 47%, up from 20% in 2021.

--A new Quinnipiac University national survey had Donald Trump at 67% among Republican and Republican leaning voters, with 11% each for DeSantis and Haley, 4% for Vivek Ramaswamy, and 3% for Chris Christie.

This is both Trump’s and Haley’s highest levels of support since the Quinnipiac Poll started national surveys on the 2024 GOP presidential primary race in February 2023 and this is DeSantis’ lowest score of the year.  In February, he received 36% support!

President Biden receives 75% support among Democratic and Democratic leaning voters, Marianne Williamson 13%, and Rep. Dean Phillips 5%.  Only 40% say they are firmly set on their choice for the Democratic nomination no matter what happens leading up to the Democratic primary.

In a hypothetical general election matchup, Biden and Trump are in a virtual dead heat, with 47% supporting Biden, and 46% Trump.

Democrats support Biden, 94-5; Republicans support Trump, 93-4.

But…if you add in Robert F. Kennedy, Jr., Biden receives 38%, Trump 36%, and Kennedy 22%.

If you make it a five-way race with Cornel West and Jill Stein, Trump receives 38%, Biden 36%, RFK 16%, and West and Stein 3% each.

Biden gets a 38% overall approval rating, 58% disapproving.

On the Israel-Gaza war, 34% approve of Biden’s handling of it, 54% disapprove, with 11% offering no opinion.

On the situation at the Mexican border: 27% approve, 63% disapprove.

On the economy: 39% approve, 56% disapprove.

--Trump approvingly quoted Vladimir Putin and Viktor Orban of Hungary, in a speech in Durham, N.H. on Saturday, and then reiterated much of the rhetoric throughout the week.  He also reprised dehumanizing language targeting immigrants that some experts in extremism have compared to Hitler’s fixation on blood purity.

And he used the term “hostages” to describe people charged with violent crimes in the Jan. 6, 2021, attack at the Capitol.

Trump quoted Putin criticizing the criminal charges against Trump, Putin agreeing in the quotation with Trump’s own attempts to portray the prosecutions as politically motivated.

“It shows the rottenness of the American political system, which cannot pretend to teach others about democracy,” Trump quoted Putin saying in the speech.  Trump added: “They’re all laughing at us.”

Trump went on to align himself with Orban, the Hungarian prime minister who often acts in an autocratic fashion, controlling the media and changing the country’s constitution.

In the speech, Trump repeated his inflammatory language against undocumented immigrants, by accusing them of “poisoning the blood of our country” – a phrase critics have condemned as reminiscent of Hitler in his book “Mein Kampf,” in which he told Germans to “care for the purity of their own blood” by eliminating Jews.

Trump later said in the week he has never read “Mein Kampf.” 

But a 1990 Vanity Fair interview with the late Ivana Trump has resurfaced and in it, Ivana says Trump kept a copy of “My New Order,” a collection of Hitler speeches, at his bedside.

Trump spokesman Steven Cheung said that Trump “gave a great speech and knocked it out of the park” last Saturday in Durham, N.H.

Separately, three years ago Trump predicted that if Joe Biden won the White House, the stock market would crash, and now it’s at record highs.  So, on Sunday, Trump said the market was just making “rich people richer.”

--Republican Texas Gov. Greg Abbott on Monday approved sweeping new powers that allow police to arrest migrants who illegally cross the U.S. border and give local judges authority to order them to leave the country, testing the limits of how far a state can go to enforce immigration laws.

Opponents have called the measure the most dramatic attempt by a state to police immigration since a 2010 Arizona law – denounced by critics as the “Show Me Your Papers” bill – that was largely struck down by the U.S. Supreme Court.  Immigration enforcement is a federal responsibility, and Texas’ law is also likely to face swift legal challenges.

The act, which takes effect in March, allows any Texas law enforcement officer to arrest people who are suspected of entering the country illegally.  Once in custody, they could either agree to a Texas judge’s order to leave the U.S. or be prosecuted on misdemeanor charges of illegal entry.  Migrants who don’t leave could face arrest again under more serious felony charges.

The law comes amid the struggle between the White House and the Senate to reach a deal on border security.

Texas Republicans have increasingly challenged the government’s authority over immigration.  Texas has bused more than 65,000 migrants to cities across America since August 2022 and recently installed razor wire along the banks of the Rio Grande.

Tuesday, civil rights organizations, such as the American Civil Liberties Union, filed a lawsuit challenging the new law.

--Rudy Giuliani filed for bankruptcy on Thursday, just days after he was ordered to pay $148 million to two former Georgia election workers he falsely accused of fraud.

--The Vatican on Monday issued formal, definitive permission for Catholic priests to bless same-sex couples, as long as these benedictions are kept separate from marriage, a decree that amounts to an about-face after decades of discord between the LBGTQ+ community and the Catholic Church, which has long said any nod to their unions would be tantamount to blessing sin.

The document issued Monday, following papal review and approval, says that blessings of same-sex couples should not suggest even the trappings of sacramental marriage, but it offers guidelines for offering benedictions to people in same-sex relationships and explicitly gives permission to “ordained ministers” to conduct such blessings.

--Iceland has been on edge for weeks, waiting for a volcano just an hour from the capital, Reykjavik, to explode and Monday night it erupted, in spectacular fashion, but at least for now the lava spewing from it appeared to be flowing away from the only nearby town, Grindavik, whose residents were evacuated around Nov. 10.  By later in the day on Tuesday, the intensity was dropping, and the government said flights were unlikely to be affected at nearby Keflavik International Airport, quashing international travel concerns lingering after chaos that resulted from the ash cloud caused by an eruption on the island in 2010.  But the eruption could go on for months, or it could just stop.

Luckily the lava is flowing into an area where there was little infrastructure.

For the residents of Grindavik, however, there is no going home for Christmas.  The lava can shift and it depends where the openings are.

Residents were allowed to check on their homes briefly on Thursday as the lava flows had continued to diminish and no volcanic activity was visible, but the Icelandic Metrological Office said in a statement Thursday that it was too early to declare the eruption over, and they pretty much reiterated the same just now.

--Finally, from Kenneth G. Pringle / Barron’s:

“On Dec. 23, 1823, an anonymous poem about a ‘jolly old elf’ with a ‘sleigh full of toys’ was published in the Troy, N.Y., Sentinel. Christmas has never been the same since.

“ ‘A Visit From St. Nicholas,’ commonly known as ‘The Night Before Christmas’ and later attributed to Clement Clarke Moore, distilled Christian and pagan traditions down into a new, modern holiday.  Its embodiment was Santa Claus. Its chief beneficiary, besides children, was American business.

“Today, as we near the bicentennial, the holiday season accounts for nearly a fifth of U.S. annual retail sales, and more for sellers of clothes, toys and other prime gift items.  The end-of-year trade is crucial to industries like airlines, hotels, manufacturing and shipping, as well as to thousands of seasonal workers. The U.S. economy is centered on the holidays….

“A new holiday entered the calendar in the 1980s: Black Friday.  The day after Thanksgiving had long marked the start of the shopping season, but Black Friday became an event, with massive sales that had crowds lining up in the middle of the night….

“Yes, Virginia, there is a Santa Claus, millions of them, in fact. They exist as certainly as love and generosity and devotion exist, and as long as the credit cards hold out.”

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

Pray for Ukraine, Israel and the innocent in Gaza.

God bless America.

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Gold $2065
Oil $73.62

Regular Gas: $3.12; Diesel: $4.03 [$3.10 / $4.70 yr. ago]

Returns for the week 12/18-12/22

Dow Jones  +0.2%  [37385]
S&P 500  +0.8%  [4754]
S&P MidCap  +1.5%
Russell 2000  +2.5%
Nasdaq  +1.2%  [14992]

Returns for the period 1/1/23-12/22/23

Dow Jones  +12.8%
S&P 500  +23.8%
S&P MidCap  +14.7%
Russell 2000  +15.5%
Nasdaq  +43.3%

Bulls 56.9
Bears 18.1

Merry Christmas!  Travel safe.

I’ll be on NoradSanta.org Christmas Eve to see if Santa is bringing me a six-pack of Coors Light.

I have a terrific annual Christmas Special on my Bar Chat link that I will be posting by 6:00 p.m. Sunday, after the early NFL games.  Check it out.

God bless us, everyone.

Brian Trumbore

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