Week in Review

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Week in Review

03/23/2024

For the week 3/18-3/22

[Posted 4:30 PM ET, Friday]

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Edition 1,301

Friday afternoons have been unreal the last few months.  Always some breaking news as I’m preparing to go to post, including a developing story out of Moscow two hours ago of a terrorist attack on a major concert hall on the outskirts of the city.  There appear to be many casualties and the situation is evolving.  But I have personal experience with security, or lack thereof, at such venues in Moscow and I will no doubt have something to say next week when the details emerge.

[Moscow canceled all large-scale sporting, cultural and other public events scheduled for this weekend.]

Also today, in an attempt to avoid a government shutdown at midnight, the House passed a $1.2 trillion spending bill to fund the government through September by a vote of 286-134, with Democrats rallying to provide the support to overcome significant opposition by conservative Republicans.

The legislation to fund agencies including the Pentagon and the Department of Homeland Security was almost derailed with Representative Marjorie Taylor Greene (R-Ga.) beginning the process of potentially calling a snap vote to oust Speaker Mike Johnson.

The bill was then rushed over to the Senate so that they could sign off and send it to President Biden before midnight, but it remained unclear whether senators would agree to quickly take up the legislation.

The package is 1,012 pages, and lumps six spending bills together, and many conservatives in the House accused Johnson of negotiating legislation that amounted to an “atrocious attack on the American people,” as Greene put it.

Just 101 Republicans, fewer than half, supported the bill, meaning Johnson was forced to violate an unwritten rule among House GOP members against bringing up legislation that couldn’t draw support from a majority of the caucus.

Which left it up to Democrats to supply the bulk of the votes.

“Once again, it’s going to be House Democrats that carry necessary legislation for the American people to the finish line,” Rep. Hakeem Jeffries, the Democratic leader, told reporters ahead of the vote.

Republicans did win the inclusion of a number of provisions pertaining to border security, such as funding for 2,000 new Border Patrol agents, while cutting funding for the State Department and foreign aid programs by roughly 6 percent.

But Rep. Andy Biggs of Arizona fumed that the bill was “chock-full of crap” and urged Johnson to be more combative in negotiations with Democrats.

“Doggone it, fight!” Biggs said.  “This is capitulation, this is surrender.” [New York Times]

Meanwhile, aid for Ukraine, as well as Israel and Taiwan, is still on the shelf.  Speaker Johnson has said he would bring it up for a vote once the spending issue is cleaned up, but we’ll see.

Vlad the Impaler is smiling in the Kremlin over the chaos in Washington (though with the terror attack in Moscow, not at this very moment).  Ditto Xi Jinping.

Speaking of Vlad....

Election in Russia....

Russia’s Central Election Commission said Monday that Vladimir Putin won a fifth term with a record number of votes.  The commission said that with nearly 100% of all precincts counted (they were all “counted” back in December when they began playing with the numbers), Putin got 87.29% of the vote.  Central Election Commission chief Ella Pamfilova said that nearly 76 million voters cast their ballots for Putin, his highest vote tally ever.

[Not for nothing, but on 12/9/23 in this space, I said Putin would receive “84%.”]

Putin hailed the overwhelming results as an indication of “trust” and “hope” in him – while critics saw them as another reflection of the preordained nature of the election.

“Of course, we have lots of tasks ahead. But I want to make it clear for everyone: When we were consolidated, no one has ever managed to frighten us, to suppress our will and our self-conscience.  They failed in the past and they will fail in the future,” Putin said at a meeting with volunteers after the polls closed.

Putin said the results proved Russia’s democracy was more transparent than many in the West. 

But of the three other candidates allowed to stand, none of them criticized Putin, let alone criticized the war in Ukraine.

A White House National Security Council spokesperson said: “The elections are obviously not free nor fair given how Mr. Putin has imprisoned political opponents and prevented others from running against him.”

Ukrainian President Volodymyr Zelensky: “These days, the Russian dictator is simulating another election. It is clear to everyone in the world that this figure, as it has already often happened in the course of history, is simply sick for power and is doing everything to rule forever....

“There is no legitimacy in this imitation of elections and there cannot be.  This person should be on trial in The Hague.  That’s what we have to ensure.”

UK Foreign Minister David Cameron: “The polls have closed in Russia, following the illegal holding of elections on Ukrainian territory, a lack of choice for voters and no independent OSCE (Organization for Security and Cooperation in Europe) monitoring. This is not what free and fair elections look like.”  [The next day Cameron said: “Putin removes his political opponents, controls the media, and then crowns himself the winner. This is not democracy.”]

A Polish Foreign Ministry statement: “From March 15-17, 2024, so-called presidential elections took place in Russia.  The voting took place in conditions of extreme repression against society, making it impossible to make a free, democratic choice.”

On the other hand, Chinese President Xi Jinping congratulated Putin, and said Beijing would maintain close communication with Moscow to promote the “no limits” partnership they agreed to in 2022, just before Russia invaded Ukraine.

Saudi Crown Prince Mohammed bin Salman offered his congratulations on Putin’s
“decisive” victory and the Kremlin said the two men expressed readiness on the telephone to pursue their “effective coordination” in the OPEC+ oil producers’ group.

Indian Prime Minister Narendra Modi echoed that message, saying he looked forward to strengthening New Delhi’s “time-tested special and privileged strategic partnership” with Moscow.

I had BBC News on much of Sunday morning, and the coverage of the “Noon against Putin” protests that the late Alexei Navalny, and then his widow, Yulia, called for and it was inspiring seeing the crowds suddenly develop at noon in Russian cities including Moscow and St. Petersburg and in even greater numbers outside many embassies abroad, including Berlin, where Yulia Navalnaya suddenly appeared in a mile-long line.

Some of those in line told reporters they just wanted to see that there were indeed others like them, supporters of Navalny.  We, in the West, as Yulia Navalnaya urged in her op-ed that I quoted last week, must never forget these brave Russians.

Dozens of Russians flocked to Navalny’s grave in Moscow on Sunday to symbolically cast their vote for the late opposition leader.  Tributes were laid at the site, with one reading, “We choose you.”  Various videos appeared online of the touching moments.

A monitoring group OVD-Info said at least 80 Russians were arrested, though there was no repeat of the sporadic attacks on some polling stations, such as tossing dye into ballot boxes, and throwing Molotov cocktails in some instances, that happened on Friday.

Putin had earlier been filmed performing a single keystroke to exercise his democratic right.

“It’s transparent and absolutely objective,” he suggested, “not like in the U.S. with mail-in voting...you can buy a vote for $10.”

Later Sunday, Putin was defiant in addressing supporters.

“No matter how much anybody wanted to suppress us, our will, our consciousness, nobody in history has ever succeeded, they have not succeeded now and they will never succeed.”  All the major “and in some areas grandiose plans” that he set out before the election “will certainly be achieved,” he said.

In a news conference, Monday, Putin was asked about French President Emmanuel Macron’s comments last month that he could not rule out the deployment of ground troops in Ukraine in the future, and Putin quipped: “everything is possible in the modern world.”

“It is clear to everyone, that this will be one step away from a full-scale World War Three.  I think hardly anyone is interested in this,” Putin told reporters.  Putin added, though, that NATO military personnel were present already in Ukraine, saying that Russia had picked up both English and French being spoken on the battlefield.

Putin dismissed U.S. and Western criticism of the election, saying U.S. elections were not democratic and criticizing the use of state power against Donald Trump.  “The whole world is laughing at what is happening there,” Putin said of the U.S.  “It is just a catastrophe – it is not democracy – what on earth is it?”

When asked about the fate of Alexei Navalny, Putin said he had agreed several days before Navalny’s death to swap him.  “I said: ‘I am agreed,’” Putin said about his approval for the prisoner swap. “I had one condition – we exchange him but he never returns.”  Putin added: “But this happens.  That’s life.”

Yulia Navalnaya has accused Putin of killing her husband.  Kremlin spokesman Dmitry Peskov told reporters that claim was simply wrong.

Monday night, at a celebration in Red Square, Putin signaled that the war against Ukraine would continue to dominate his rule and called for unity in bringing the people of eastern Ukraine “back to their home family.”

In a display of nationalistic fervor, at one point Putin brought the three puppet candidates the Kremlin had picked to run against him onto the stage and offered each a turn at the microphone, saying they all took “different approaches” but had “one Motherland.”

On this tenth anniversary of the annexation of Crimea, all three praised Putin for bringing Crimea back to “home port,” as one put it.  Another led a cheer: “To Russia, to our great future and to the president of a great Russia!”

Thursday, Russia staged its first largescale attack on Kyiv in 44 days, and then today, Friday, Moscow launched its largest air strike on Ukrainian energy infrastructure of the war.  I have details on both below.

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This Week in Ukraine....

--Ukraine stepped up shelling of Russian border regions during the election, including the Russian city of Belgorod, where two were killed on Saturday, according to Russian officials.

The Russian Defense Ministry said it had downed 35 Ukrainian drones Saturday night, including four in the Moscow region.

The death toll in Russia’s attack on the port city of Odesa, last Friday, climbed to 21.

--But you also have the attempted attacks by what the Kremlin calls saboteurs in the border regions of Belgorod and Kursk, with a senior Ukrainian intelligence officials saying last week that armed groups he described as Russians opposed to the Kremlin had turned the regions into “active combat zones.”

On Saturday, Kyrylo Budanov, head of Ukraine’s military intelligence directorate, said the groups, the Freedom of Russia Legion, the Siberian Battalion and the Russian Volunteer Corps, were “becoming a force” with unified principles.  The groups were fighting “quite well” and were not going to stop any time soon, he said in a Ukrainian television interview, adding, “We will try to help them to the best of our ability.”

Today, it’s virtually impossible to know just what is really going on in the region.

--Ukraine’s SBU domestic security service said long-range Ukrainian attack drones had hit 12 Russian oil refineries during the war so far.  A few were attacked over the weekend, with seemingly varying degrees of success.  [Ukraine’s GUR military intelligence agency has conducted its own attacks on refineries.]

“The agency is continuing to implement a strategy to undermine the economic potential of Russia and reduce the flow of petro dollars that the enemy directs to the war,” an SBU spokesman said Sunday.

--A senior Ukrainian official said on Monday that Putin’s idea of creating a buffer zone inside Ukrainian territory was a clear indication that Moscow planned to escalate its war.

Residents of the northeastern city of Kharkiv, less than 20 miles from the Russian border, were defiant despite the threat.  Putin raised the possibility of setting up a buffer zone during a speech on Sunday, a move the Kremlin said would be the only way to protect Russia from Ukrainian attacks.

“This is...a direct manifest statement that the war will only escalate,” presidential aide Mykhailo Podolyak told Reuters in a written statement.  “All this is direct evidence that the Rusisan Federation is not ready to live in modern social and political relations, taking into account the absolute sovereign rights of other countries,” he said.

Putin, at a press conference, was asked whether he though it necessary for Russia to take Ukraine’s Kharkiv region, which borders Belgorod.

One resident of Kharkiv told Reuters on Monday: “I think he (Putin) will choke on his words.  Kharkiv is never going to be a grey zone. Kharkiv is and will be Ukraine.  Let him choke.”

Russia continues to pound Kharkiv and the surrounding region with missiles and drones almost daily for the past few months.

--Kyiv said it hoped to have enough ammunition for its outgunned troops to repel Russian aggression starting from April amid a Czech-led initiative to source shells for supply, Prime Minister Denys Shmyhal said on Tuesday.

Prague located 800,000 artillery rounds in third countries earlier this year to supply to Ukraine and says it raised funds from allies to purchase a first batch of 300,000.  A senior Czech official said the first deliveries were expected by June at the latest.

--The European Union should take 90% of revenues from Russian assets frozen in Europe and transfer them to an EU-run fund that finances weapons for Ukraine, the bloc’s foreign policy chief Josep Borrell proposed on Tuesday.

Borrell told reporters he was submitting a formal proposal to the EU’s 27 member governments ahead of a summit of the bloc’s leaders on Thursday and Friday.  Under Borrell’s plan, the money would go to the European Peace Facility, an off-budget fund that provides military aid to countries outside the EU and has been used mainly for Ukraine.  “If we do that, well, the Russians will not be very happy,” Borrell said.

The amount in question, 3 billion euros ($3.26bn), is not extraordinary, but it’s not insignificant, Borrell said.

But today, Friday, German Chancellor Scholz said the idea of creating a dedicated fund using frozen Russian assets “played no role in discussions” at the summit in terms of how to support Ukraine’s war effort.

--U.S. Defense Secretary Lloyd Austin was in Germany for the latest meeting of the Ukraine Defense Contact Group on Tuesday at Ramstein Air Base.  With current U.S. aid largely dried up, Austin encouraged others present to find “creative, adaptable and sustainable ways” to keep Ukraine afloat after two years of war, a la the above move by the EU.

“At least 315,000 Russian troops have been killed or wounded since Putin’s all-out invasion in February 2022,” Austin said. “Russia has squandered up to $211 billion to equip, deploy, maintain, and sustain its imperial aggression against Ukraine, [and] Putin’s war of choice will cost Russia $1.3 trillion in previously anticipated economic growth through 2026.”

“Ladies and gentlemen, let’s not kid ourselves: Putin will not stop at Ukraine,” said Austin. “So we will continue to stand together to resist Putin’s campaign of conquest. And we will continue to keep the faith with the people of Ukraine.” [Defense One]

--Wednesday, a Russian missile hit an industrial area in Ukraine’s northern city of Kharkiv, killing at least five people and injuring eight, while causing a major fire.  The mayor of Kharkiv said five others were missing.

President Zelensky said the strike underscored the lack of proper air defenses in Kharkiv, Ukraine’s second-largest city, and elsewhere, particularly in northern regions near the Russian border.

“Our partners have these defense systems. And our partners need to understand that air defenses protect lives.”

--As noted above, Russia fired 31 ballistic and cruise missiles at Kyiv before dawn Thursday in the first attack on the capital in 44 days, officials said.  Air defenses shot down all the incoming missiles, though 13 people were injured by falling wreckage, they said.

Ukraine’s air force said Russia launched two ballistic missiles and 29 cruise missiles against Kyiv.

And then today, Ukraine’s energy infrastructure was pummeled, with Russia hitting a vast dam, killing at least five people and leaving more than a million without electricity, Kyiv said.

Seven of Ukraine’s regions faced blackouts, but the government said it was receiving some emergency power supplies from neighboring Poland, Romania and Slovakia.

“Russia is at war against people’s ordinary lives. My condolences to the families and loved one of those killed in this terror,” President Zelensky wrote on Telegram.

Ukraine’s largest dam, the DniproHES in the southern city of Zaporizhzhia, suffered strikes to its hydraulic structures and to the dam itself, the state’s hydropower company said, adding there was no risk of a breach.  But one of those killed was at the dam.

Russia fired 88 missiles and 63 Shahed drones, of which only 37 and 55 were shot down respectively, the Ukrainian air force said of the attacks. That represented a worse ratio than usual that could reflect Moscow’s widespread use of ballistic missiles that are harder to down and also the proximity of the targeted regions to Russian-controlled areas.

“Russian missiles have no delays, unlike aid packages for Ukraine,” Zelensky wrote.  And “Shahed drones have no indecision, unlike some politicians,” he added.  “It is critical to understand the cost of delays and postponed decisions.”

Some 700,000 in Kharkiv region were left without power.

--In an interview with Donald Trump ally and former British politician Nigel Farage, released Tuesday, Trump reiterated that the United States would only help protect NATO members from a future attack by Russia if its European members spent more on defense.

Trump has frequently taken aim at the failure of many of NATO’s 32 members to meet a defense spending target of at least 2% of gross domestic product.  NATO chief Jens Stoltenberg said in February he expected 18 allies to reach the spending target this year.

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Israel-Hamas War....

--Israeli Prime Minister Benjamin Netanyahu said on Sunday he would keep on with the military campaign against Hamas, telling a cabinet meeting that Israel would push into Rafah, the last relatively safe place in crowded Gaza enclave, despite international pressure for Israel to avoid civilian casualties.

“We will operate in Rafah. This will take several weeks, and it will happen,” he said, without clarifying if he meant the assault would last weeks or would begin in weeks.

The prime minister said comments from Senate Majority Leader Chuck Schumer that described him as an obstacle to peace in the Middle East, were “totally inappropriate.”

Last Thursday, Schumer criticized Netanyahu’s government, calling for new elections in a speech on the Senate floor.

Speaking to CNN’s Dana Bash, Sunday, Netanyahu said whether elections were held or not was something “the Israeli government does on its own.”

“It’s inappropriate for (anyone) to go to a sister democracy and try to replace the elected leadership,” he said.

When pressed by Bash if he would commit to holding elections, Netanyahu replied, “we’ll see when we win the war.”

“If we were to have the elections now, before the war is won, resoundingly won, we would have at least six months of national paralysis which means we would lose the war.”

When asked if he was open to a potential deal for the hostages in exchange for a six week pause in fighting, Netanyahu replied:

“Time will tell but Hamas’ outlandish demands...makes that deal a lot more difficult.  But we’re going to keep on trying because we want those hostages back.”

The prime minister continued that military pressure is the “one thing that gets Hamas to give them,” so Israel is going to “continue military pressure and we are going to continue to try to get those hostages out.”

Netanyahu later said after meeting German Chancellor Olaf Scholz in Jerusalem that Israel would not leave civilians trapped in Rafah when the forces begin their assault.

At a joint news conference, Scholz said he had spoken with the Israeli prime minister about the need to provide comprehensive humanitarian aid to the people of Gaza.

“We cannot stand by and watch Palestinians risk starvation,” Scholz said, echoing a call from European Commission President Ursula von der Leyen, who was in Egypt at the same time for talks on a ceasefire deal and more aid for Gaza.

“It is critical to achieve an agreement on a ceasefire rapidly now that frees (Israel’s) hostages and allows more humanitarian aid to reach Gaza,” von der Leyen said after meeting Egyptian President Abdel Fattah al-Sisi.

At the above-noted cabinet meeting, Netanyahu hit out at his allies, saying: “Are your memories that short?  Have you so quickly forgotten October 7, the most horrific massacre of Jews since the Holocaust? Are you so quick to deny Israel the right to defend itself against the Hamas monsters?”

--Israeli forces launched another raid on the Gaza Strip’s largest hospital early Monday, saying Hamas militants had regrouped there and had fired on them from inside the compound, where Palestinian officials say tens of thousands of people have been sheltering.

Rear Adm. Daniel Hagari, the chief Israeli military spokesperson, said the army launched a “high-precision operation” in parts of the medical complex.  He said senior Hamas militants had regrouped there and were directing attacks from the compound.

Israel later said it had killed 20 gunmen.  “Twenty terrorists have been eliminated at the al-Shifa hospital thus far in various engagements, and dozens of apprehended suspects are currently in questioning,” the IDF said in a statement.

The IDF then said on Thursday that security forces had killed approximately 140 terrorists in the area of al-Shifa, as well as arresting around 650 additional suspected terrorists for questioning near the compound.  Curiously, the IDF said that all of the Islamic Jihad operatives in the area quickly surrendered, whereas Hamas’ forces were split into two groups, with one large group also surrendering en masse and one large group continuing to resist.

The UN food agency, meanwhile, said “famine is imminent” in northern Gaza, where over 200,000 people are believed to be experiencing a “catastrophic hunger.”  The World Food Program said a further escalation of the war could push nearly half of Gaza’s population to the brink of starvation.

The army last raided Shifa hospital in November after claiming that Hamas maintained an elaborate command center within and beneath the facility.  The evidence, though, fell short of the earlier claims, and Israel was criticized for recklessly endangering the lives of civilians.

Gaza’s Health Ministry (run by Hamas) said the Israeli army was directing gun and missile fire at a building used for specialized surgeries.  “There are casualties, including deaths and injuries, and it’s impossible to rescue anyone due to the intensity of the fire and targeting of anyone approaching the windows,” the ministry said. 

There are reportedly 30,000 people sheltering at the hospital, including patients, medical staff and people who have fled their homes seeking safety.

--Some aid did get into northern Gaza on Saturday.  A convoy of 12 trucks arrived in the north carrying supplies to be distributed to the northernmost areas, the media and residents said.  Much of it was flour.  The convoy was secured by Hamas, according to reports.

And a second boat of 240 tons of humanitarian food aid is being prepared, according to World Central Kitchen. The first aid ship into Gaza was offloaded over the weekend.  I didn’t see how effective this mission was. 

It’s very difficult.  There are no functioning ports left in Gaza.

As for President Biden’s declaration that the U.S. plans to establish a separate port in Gaza to receive large aid shipments, such a floating pier could take up to two months and some 1,000 U.S. military personnel to complete, according to the Pentagon.

The first aid shipment by ship was 200 tons, which is the same as the daily average of about 94.5 trucks crossing into Gaza via land as of last month, each carrying about 20 tons of aid – and that’s below the estimated 500 trucks the UN says are needed daily in order to alleviate the suffering.

Yes, one ship was roughly equal to one day of trucks, which was already five times less than what was normal.   And the shipping operation took days to get across from Cypress and at least a day to offload.

But God Bless Jose Andres, World Central Kitchen, and the other international aid groups involved.

--UNICEF said on Sunday over 13,000 children have been killed in Gaza during the Israeli offensive, adding many kids were suffering from severe malnutrition and did not “even have the energy to cry.”

“Thousands more have been injured or we can’t even determine where they are. They may be stuck under rubble... We haven’t seen that rate of death among children in almost any other conflict in the world,” UNICEF Executive Director Catherine Russell told CBS News’ “Face the Nation” on Sunday.  “I’ve been in wards of children who are suffering from severe anemia malnutrition, the whole ward is absolutely quiet.  Because the children, the babies...don’t even have the energy to cry.”

Russell said there were “very great bureaucratic challenges” moving trucks into Gaza for aid and assistance.

--Israel reacted scathingly after European Union foreign policy chief Josep Borrell accused the country on Monday of using starvation as a weapon of war.

“In Gaza we are in a state of famine, affecting thousands of people,” Borrell said.  “Starvation is used as a weapon of war. Israel is provoking famine.”

Israeli Foreign Minister Yisrael Katz said Israel allows extensive humanitarian aid into Gaza by land, air and sea despite Hamas attacks on aid convoys.

“It’s time for EU foreign minister Borrell to stop attacking Israel and recognize our right to self-defense against Hamas’ crimes,” he said.

--The White House confirmed Hamas Leader Marwan Issa, number three or four in the chain of command, died in an Israeli air strike.  Issa would be Hamas’ most senior leader to die since the war began.

Israeli media reported Issa was killed in a strike on a tunnel complex under the Nuseirat refugee camp in central Gaza last week.

Issa was deputy commander of Hamas’ military wing, the Izzedine al-Qassam Brigades, and was considered one of Israel’s most-wanted men.  The European Union linked him directly to the October 7 attack led by the group which killed approximately 1,200 people.  Of the 253 hostages taken that day, 134, both dead and alive, remained in Hamas captivity as of Monday, according to Israel.

Prime Minister Netanyahu said in a video following the attack that targeted Issa, “We are on our way to complete victory... We have already killed number four in the Hamas; three, two, and one are on the way.  We will reach everyone.”

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Wall Street and the Economy

The Federal Open Market Committee maintained the benchmark federal funds rate in a range of 5.25% to 5.5%, the FOMC’s statement after Wednesday’s meeting showed.

“In considering any adjustments to the target range for the federal funds rate, the committee will carefully assess incoming data, the evolving outlook, and the balance of risks,” the FOMC said.  “The committee does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2%.”

The FOMC said recent indicators show that economic activity has been growing at a “solid” pace, while job gains have been strong.  “The committee judges that the risks to achieving its employment and inflation goals are moving into better balance,” it said, reiterating its comments from its Jan. 31 policy decision statement.

Updates to the Summary of Economic Projections still show a 4.6% median expectation for the funds rate at the end of 2024, unchanged from the previous estimate in December and leaving three rate cuts despite concerns that the median would shift up to show only two projected cuts.

There was a large upward adjustment to year-end GDP to 2.1% from 1.4% and an upward adjustment to core personal consumption expenditure prices to 2.6% from 2.4%, as well as a downward adjustment to the unemployment rate projection to 4.0% to 4.1%.

The median funds rate for the end of 2025 was shifted up to 3.9% from 3.6%, suggesting only three cuts next year, compared with the previously projected four reductions.

Speaking at his post meeting press conference, Chair Jerome Powell noted that inflation has cooled considerably from its peak. But, he added, “inflation is still too high, ongoing progress in bringing it down is not assured and the path forward is uncertain.”

“The risks are really two-sided here,” Powell said.  “We’re in a situation where if we ease too much or too soon, we could see inflation come back.  And if we ease too late, we could see unnecessary harm to employment.”

Powell said officials were careful not to overreact to January and February’s hotter-than-expected inflation data.

Recent reports “haven’t really changed the overall story, which is that of inflation moving down gradually on a sometimes-bumpy road,” the chair said. “I don’t think that story has changed. I also don’t think that those readings added to anyone’s confidence that we’re moving closer to that point.”

But... “We will achieve (our goal of 2% inflation),” Powell said.  “Markets believe we will achieve that goal, and they should believe that, because that’s what will happen over time. But we stress over time.”

Chair Powell continued to highlight that officials would like to see more evidence that prices are coming down, but, the ‘money ball’ statement, “it’s still likely in most people’s view that we will achieve that confidence and there will be rate cuts.”

And with that the markets took off, all three major averages finishing at record highs on Wednesday.  The market is back to pricing the first rate cut to be in June.  Of course back in December, it was supposed to be in March.

For the record, four of the 19 officials submitting their economic projects had just one cut or none for 2024.

The Atlanta Fed’s GDPNow barometer for first-quarter growth is at 2.1%.

Freddie Mac’s 30-year fixed-mortgage rate is 6.87%, up 13 basis points on the week.

We had some data on the housing front this week.  February housing starts came in above estimates, a 1.521 million annualized pace, while existing home sales for the month surged 9.5% over January, but were still down 3.3% year-over-year, to a seasonally adjusted annual rate of 4.38 million, according to the National Association of Realtors.  Consensus was for sales to fall 1.3% in February.  The median home price of $384,500 was up 5.7% from a year prior, the eighth consecutive month of year-over-year price gains.

Home sales fell in 2023 to their lowest levels in nearly 30 years, with rising mortgage rates and limited inventory stifling sales.

--The Congressional Budget Office said Wednesday that the federal debt as a share of the economy is poised to hit a record by 2029 and will continue to rise over the next three decades.

In its latest 30-year outlook, the budget office warned that rising debt will pose “significant risks” to the U.S. economic outlook in the coming years, pushing up interest payments to foreign bondholders and slowing economic growth.  By 2054, the cost of interest payments on the debt will double to 6.3 percent of GDP and spending on social safety net programs will account for more than half of the rest of the nation’s outlays.

The debt as a share of GDP is projected to rise to a record 107 percent in 2029 and to 166 percent in 2054.

Of course, long-term forecasts of this kind are virtually impossible, but the 2029 outlook will prove to be fairly accurate.  The CBO also assumes that the 2017 tax cuts that are scheduled to expire in 2025 will sunset at that time, which would result in savings to the government.  But many of those tax changes are likely to be extended and could exacerbate the deficit further.

Europe and Asia

We had February inflation data for the eurozone, courtesy of Eurostat, and the annualized rate came in at 2.6%, down from 2.8% in January.  A year earlier, the rate was 8.5%.  Ex-food and energy, we had 3.3% vs. 3.6% the month prior, and 7.4% a year ago.  So progress continues to be made.

But there was zero reaction in bond yields as it doesn’t seem good enough for the European Central Bank to lower rates just yet, and Europe waited to see what the Fed did.

Headline inflation....

Germany 2.7% (9.3% a year ago); France 3.2%; Italy 0.8% (9.8% a yr. ago); Spain 2.9%; Netherlands 2.7%; Ireland 2.3%.

UK inflation fell to 3.4% in February from 4.0%, the weakest rate of inflation since September 2021.  The Bank of England on Thursday then left its benchmark interest rate unchanged, but noted that the economy is “moving in the right direction” for the BoE to start cutting interest rates, Governor Andrew Bailey said as two of his colleagues dropped their prior vote for a rate hike.  But Bailey, similar to the Fed, and ECB, said he needed more certainty that price pressures in the economy were fully under control.

“We’re not yet at the point where we can cut interest rates, but things are moving in the right direction,” Bailey said in a statement.

Meanwhile, we had flash PMI readings for March in the euro area, courtesy of S&P Global and Hamburg Commercial Bank.

The composite came in at 49.9, a 9-month high and a tick below the key 50 level (growth above, contraction below).

But the manufacturing output figure of 46.8, while an 11-month high, is still putrid, with services at 51.1, a 9-month high.

Germany: manufacturing 42.8; services 49.8
France: mfg. 47.2; services 47.8

UK: mfg. 50.2, 13-month high; services 52.9

Dr. Cyrus de la Rubia, Chief Economist HCB:

“If you were hoping for a recovery in the manufacturing sector in the first quarter, it’s time to throw in the towel.  The March PMI confirmed the clear weakness of this sector, which seems to be dominated by the heavyweight Germany.  Output fell at more or less the same pace as in the first two months of the year, and new orders continued their downward trend unabated.  However, there is a glimmer of hope.  Companies remain optimistic about future production....

“The European Central Bank can take some comfort from the fact that price pressures in the wage-sensitive services sector have not increased further.  Instead, the rise in input costs has softened somewhat, and the same is true of selling prices.”

Turning to China, due to the date of the Lunar New Year holiday changing year to year, the government combines some key economic data for the first two months and this week we had January-February numbers for a few items.

Industrial production was up 7% year-over-year, well above consensus; retail sales up 4.2% Y/Y; and fixed asset investment rose 4.2% Y/Y.  The February unemployment rate was 5.3%.

On the demographics front, China ended a nine-year streak of declining marriage registrations last year, with the number of newlywed couples rising to 7.68 million, according to data released by the Ministry of Civil Affairs.

This was an increase of 845,000 compared to the number of marriages registered in 2022.  Many young people delayed marriage due to the pandemic.

But overall spending on wedding banquets dropped by 10 to 15 percent year over year in 2023, according to China Wedding Expo.

The marriage rate in China hit an all-time high in 2013, 13.47 million, and had been in decline ever since.

The Bank of Japan, as expected, scrapped the world’s last negative interest rate, ending the most aggressive monetary stimulus program in modern history, hiking its policy rate for the first time since 2007 and the global financial crisis, while also indicating that financial conditions will stay accommodative for now.

The bank’s board voted 7-2 to set a new policy rate range of between 0% and 0.1%, shifting from a -0.1% short-term rate.  The BOJ also scrapped its complex yield curve control program while pledging to continue buying long-term government bonds as needed and ending purchases of exchange-traded funds because they had “fulfilled their roles.”

Officials “assessed the virtuous cycle between wages and prices” and concluded that “the price stability target of 2% would be achieved in a sustainable and stable manner,” the statement read.

The move will make loans more expensive for consumers and businesses, but banks will be able to earn money from lending.

It will also increase Japan’s bill for servicing the national debt, which at around 260 percent of GDP is one of the world’s highest.

But the lack of guidance on any further rate hikes weighed on the yen, with government bond yields edging lower.  The weak currency, however, supported Japanese equites, with the Nikkei 225 reclaiming the 40,000 level and finishing the week at a record 40888.

We had a release on February inflation, 2.8% annualized, 3.2% ex-food and energy which was down from 3.5% prior.

January industrial production was down 1.5% year-over-year, while February exports rose 7.8% Y/Y.

Japan’s flash PMI readings for March showed manufacturing at 48.2, services 54.9.

Street Bytes

--As alluded to above, the major averages hit new highs this week, with the Dow Jones having its best week of the year, +2.0% to 39475 (Thursday’s record high being 39781), and the S&P 500 up 2.3% (it’s record high also set Thursday at 5241), while Nasdaq hit another record close today at 16428, up 2.8% on the week. 

--U.S. Treasury Yields

6-mo. 5.29%  2-yr. 4.60%  10-yr. 4.21%  30-yr. 4.39%

Treasury yields fell on renewed confidence the Fed will be cutting in June.  But next week we have critical data on personal consumption expenditures (PCE) that the Fed will look at closely.

--Oil was essentially unchanged this week, but still above $80 on West Texas Intermediate.

But if you’ve been following the Russia-Ukraine situation and wondering about the potential impact of Ukraine’s strikes on Russian refineries, energy expert Daniel Yergin, who these days is vice chairman of S&P Global, noted the other day that the refineries hit by Ukraine’s drones this week alone account for about 16% of Russian refining capacity, but it’s unclear how severely they were damaged.

Bottom line the impact hasn’t been felt in Moscow, yet, but between the issues in the Red Sea and the Russia-Ukraine war, it all bears watching because at some point it could have an impact on global supply...and thus prices.

[The White House told Ukraine to stop the attacks on Russia’s refineries.  The reason was rather pathetic, though not stated...prices at the pump are rising, which isn’t good for President Biden’s prospects.]

--Nvidia unveiled a new flagship AI chip, the Blackwell B200, as the artificial-intelligence semiconductor powerhouse kicked off the company’s annual developer conference on Monday.  Nvidia’s new chip and software announcements at GTC 2024 will help determine whether the company can maintain its leadership position as the dominant seller of the tools needed to fuel the past year’s frenzy around AI.  Nvidia has about 80% of the AI chip market currently.

The B200 takes two chips the size of Nvidia’s previous offering and binds them together into a single chip. The new chip has 208 billion transistors, more than double the 80 billion on the company’s previous chip.  All of those transistors can access the memory attached to the chip at nearly the same time, improving productivity.  The B200 is said to be 30 times faster than Nvidia’s flagship H100 chip, the success of which has helped drive the incredible rally in the stock price, Nvidia now the third-most valuable company in the world (behind Microsoft and Apple).

Huang said in an interview with CNBC that the successors to H100s would cost between $30,000 and $40,000 – below what some analysts had expected.  Huang later told analysts that he wanted to price new chips to appeal to the widest possible set of customers. The H100 chip costs about $25,000 each, according to estimates.

“Every generation of our market is growing, and we want to make the entire market afford a Blackwell,” he said.

Nvidia is not without rivals, such as AMD, Intel, startups, and even Big Tech’s own chip aspirations threaten to chip away at the market share.  Right now, however, Nvidia’s major customers include Amazon.com, Alphabet’s Google, Meta Platforms, Microsoft, OpenAI, Oracle and Tesla...all of whom are expected to use the new chip.

CEO Jensen Huang also announced partnerships with design software companies Ansys, Cadence and Synopsys.

--Speaking of this new world, Bloomberg reported Apple is in talks to build Google’s Gemini artificial intelligence engine into the iPhone, “setting the stage for a blockbuster agreement that would shake up the AI industry.”  

The negotiations concern Apple being able to license Gemini, Google’s set of generative AI models, to power some new features coming to the iPhone software this year, according to people familiar with the negotiations, who asked not to be identified because the deliberations are private.

If a deal between Apple and Google comes to fruition, it would build upon the two companies’ search partnership.  For years, Google has paid Apple billions of dollars annually to make its search engine the default option in the Safari web browser on the iPhone and other devices. The two parties haven’t decided the terms or branding of an AI agreement or finalized how it would be implemented, the people said.

A deal would give Gemini a distinct advantage with billions of potential users.  But it also shows that Apple probably isn’t as far along with its AI efforts as some might have hoped – and it could draw regulatory scrutiny, as the arrangement between Apple and Google is already under fire in the European Union, which is forcing Apple to make it easier for consumers to change their default search engine away from Google.

Apple holds its annual Worldwide Developers Conference in June, which is when if there was a deal, it would probably be announced.

Or Apple could go with another generative AI provider, like OpenAI.

But then Thursday, the Justice Department joined 16 states and the District of Columbia to file an antitrust lawsuit against Apple.

In the 88-page lawsuit, as reported by the New York Times, “the government argued that Apple had violated antitrust laws with practices that were intended to keep customers reliant on their iPhones and less likely to switch to a competing device.”

The company prevented others, including rivals, from offering applications that compete with Apple products like its digital wallet, which could diminish the value of the iPhone, the government said.  Apple’s policies hurt consumers and smaller companies that compete with some Apple services, in the form of “higher prices and less innovation,” the lawsuit said.

“Each step in Apple’s course of conduct built and reinforced the moat around its smartphone monopoly,” the government said in the lawsuit.

This action caps years of regulatory scrutiny of Apple’s wildly popular suite of devices and services, and takes direct aim at the iPhone, and attacks the way the company has turned the billions of smartphones it has sold since 2007 into the centerpiece of its empire.

By tightly controlling the user experience on iPhones and other devices, the company says this makes its iPhones more secure than other smartphones. But app developers and rival device makers say Apple uses its power to crush competition.

An Apple spokeswoman said the lawsuit “threatens who we are and the principles that set Apple products apart in fiercely competitive markets... It would also set a dangerous precedent, empowering government to take a heavy hand in designing people’s technology.”

The suit is likely to drag on for years before any type of resolution.  In the meantime, it’s not exactly clear what the implications are in the short term.

But as Colin Kass, an antitrust lawyer at Proskauer Rose, told the Times, “This case is about technology.  Can the antitrust laws force a company to redesign its product to make it more compatible with competitors’ products?”

Apple shares fell $7, 4%, on the news.

--Intel is planning a $100 billion spending spree across four U.S. states to build and further expand factories after securing $19.5 billion in federal grants and loans – and it hopes to secure another $25 billion in tax breaks.

The centerpiece of Intel’s five-year spending plan is turning empty fields near Columbus, Ohio, into what CEO Pat Gelsinger described to reporters on Tuesday as “the largest AI chip manufacturing site in the world.”

The Biden administration announced the funds for Intel under the CHIPS Act on Wednesday, sending its shares up 4% early on.

Intel’s plan will also involve revamping sites in New Mexico and Oregon, and expanding operations in Arizona, where longtime rival Taiwan Semiconductor Manufacturing Co. is also building a massive factory that it hopes will receive funding from the administration as part of President Biden’s push to bring advanced semiconductor manufacturing back to the U.S.

For decades, Intel led the world in making the fastest and smallest semiconductors, selling them at a premium price and plowing the profits back into more research and development to stay ahead of the pack.

But Intel lost that manufacturing edge in the 2010s to TSMC and its profit margins plummeted as it cut prices to keep market share with inferior products.

Gelsinger announced a plan in 2021 to return Intel to the No. 1 position, but it needed government support.  So now, with the support, Intel is spending.

Much of the $100 billion will go to buying chipmaking tools from firms such as ASML, Tokyo Electron, Applied Materials, and KLA, among others.

The Ohio site is slated to be online by 2027 or 2028.

But analysts say Intel needs to show that it can compete with its Taiwanese and Korean rivals sooner than later.

Commerce Secretary Gina Raimondo, who as an aside should be at the top of the Democratic ticket for president, said, “We can’t just design chips, we have to make them in America.  It’s an economic security problem.  It’s a national security problem.  And we’re going to change that.”

--Micron Technology Inc., the largest U.S. maker of computer memory chips, reported a surprisingly strong revenue forecast for the current quarter, buoyed by demand for AI hardware, and its shares surged 17% at the open on Thursday.

Fiscal third-quarter revenue will be $6.4 billion to $6.8 billion, the company said in a statement Wednesday after the close.  That compared with an average analyst estimate of $5.99 billion.  Micron will have adjusted earnings of about 45 cents, with analysts at 24 cents.

Micron and its rivals are emerging from one of the worst slumps the memory chip industry has suffered, triggered by weak demand for personal computers and smartphones.  But executives are optimistic about the future as the booming market for AI gear helps chipmakers return to growth and profitability.

“We believe Micron is one of the biggest beneficiaries in the semiconductor industry of the multiyear opportunity enabled by AI,” CEO Sanjay Mehrotra said in a statement.

Mehrotra has promised investors that 2024 will mark a turnaround for the industry and 2025 will see record sales levels.  But Micron will need to make enough ultrafast memory, which works with Nvidia chips to help data center operators develop AI software.

AI-related systems use a type of chip that is new and less of a commodity, which means companies like Micron can charge a much higher price for it.  [High-bandwidth memory, or HBM, chips.]

--United Airlines is assessing recent incidents, like missing panels, that raised safety concerns and taking actions to improve its safety procedures, CEO Scott Kirby said Monday.

In a message to United’s passengers, Kirby said the airline recently experienced several incidents that are all unrelated but underscored the importance of safety.

“I want you to know that these incidents have our attention and have sharpened our focus,” he said.  “Our team is reviewing the details of each case to understand what happened and using those insights to inform our safety training and procedures across all employee groups.”

Pilots will have an extra day of training in May and there are changes being made to the training program for new-hire maintenance technicians.

“You can be confident that every time a United plane pulls away from the gate, everyone on our team is working together to keep you safe on your trip,” Kirby said.

--I noted last week that Airbus had some labor strife, which could impact production at a time when Boeing has its own severe production issues, and all the airlines are scrambling for new planes.

And so this week, Canadian Airbus A220 production workers initiated pressure tactics to slow jet production after voting on Sunday to reject a proposed contract and give strike authorization.

There are 1,300 Montreal-area workers who produce Airbus’ smallest commercial jet in Mirabel, Quebec.

--The CEOs of British Airways owner IAG and Ryanair said on Wednesday that more consolidation of Europe’s airlines is necessary to keep the industry competitive, as the EU weighs a new deal between Germany’s Lufthansa and Italian rival ITA Airways.

“If we don’t allow consolidation in Europe, we will destroy airlines in Europe,” IAG CEO Luis Gallego told an aviation conference.  Ryanair CEO Michael O’Leary said on the same panel that consolidation “does need to be encouraged.”

“(Portugal’s) TAP has only survived through Covid because of the taxpayer,” O’Leary said.  “Aer Lingus was acquired by IAG...those airlines have been much the better and have a more secure future as part of bigger airlines.”

--TSA checkpoint numbers vs. 2023

3/21...109 percent of 2023 levels
3/20...109
3/19...108
3/18...106
3/17...105
3/16...105
3/15...108
3/14...103

--FedEx shares surged 12% at the open Friday after the parcel giant beat estimates for quarterly profit and reported a higher operating margin at Express, its largest unit. The firm also tightened its annual profit forecast and now expects earnings in the range of $17.25 to $18.25 per share, compared to its prior forecast of $17 to $18.50. 

Adjusted profit for the quarter ended Feb. 29 rose to $966 million, or $3.86 per share, topping analysts’ average estimate by a whopping 41 cents.  But sales did decline a sixth consecutive quarter, $21.7 billion, down from $22.2 billion last year.

--Unilever plans to spin off its ice cream unit, Ben & Jerry’s and other brands like Magnum, into a standalone business, as the consumer goods giant unveiled a cost-savings program that will see 7,500 jobs cut globally.

The spin-off will begin immediately and is expected to complete by the end of 2025, the London-listed company said Tuesday.

Unilever is looking to deliver mid-single digit underlying sales growth and modest margin improvement after the split, it said in a statement.

--Nike reported fiscal third-quarter earnings of $1.17 billion, adjusted earnings per share of 98 cents, which beat the Street’s forecast of 69 cents.  Revenue of $12.43 billion also surpassed estimates of $12.28 billion.

But the shares fell 6% as the company warned its revenues in the first half of fiscal 2025 would shrink by a low single-digit percentage as the world’s largest sportswear maker scales back on franchises to save costs.

In December, Nike outlined a $2 billion savings plan, which included reducing the supply of underperforming products and improving its supply chain.

In an earnings call on Thursday, Nike CFO Matthew Friend told investors that the company was cutting back on orders of “classic” shoes such as the Air Force 1, as well as current Pegasus Running shoes, as it shifted its focus to upcoming launches and developing new products.

“It’s not just about a product or an item here and there – it’s about building a robust pipeline of innovation,” CEO John Donahue said on the call.

Nike reported a 3% jump in North America, its largest market, and a 5% rise in Greater China, as heavy promotions on its Jordan shoes attracted customers during the all-important shopping season.

--Shares in Lululemon Athletica cratered 16% after the company said it expects fiscal Q1 earnings of $2.35 to $2.40 a share on revenue of $2.18 billion to $2.20 billion.  Analysts expect EPS of $2.60 on revenue of $2.26 billion.

And the company guided lower for the full year on both earnings and revenue.  Not good.

--General Mills reaffirmed its fiscal 2024 financial guidance Wednesday after delivering a third-quarter beat, aided by higher product prices.

The packaged foods maker said it continues to expect full-year organic (ex-mergers, acquisitions) net sales to range between down 1% and flat.  It also expects adjusted earnings to rise 4% to 5%.

“We continue to navigate an evolving operating environment, including moderating but still positive inflation, changing consumer channel preferences, and stabilizing competitive supply chains,” CEO Jeff Harmening said in prepared remarks.

The Cheerios maker has seen a rise in “value-seeking behaviors” from consumers, impacting the channels they shop and the size of their basket, Harmening said.  [I’m buying generic Cheerios myself.]

Adjusted EPS rose to $1.17 in the quarter through Feb. 25 from $0.97 a year earlier, topping the Street’s view of $1.05. Net sales fell 1% to $5.1 billion, but also beating consensus of $4.97 billion.

--Shares of Chipotle Mexican Grill rose over 3% Wednesday (+7% at one point) after the burrito chain announced a 50-for-1 stock split, the first in the company’s history and one of the biggest splits in NYSE history.

Shareholders still have to approve the move at the company’s annual meeting, slated for June 6.  If the split is approved, the additional shares would be distributed after the close of trading on June 25.  Chipotle would trade on a post-split basis when the market opens the next day.

The stock traded at a record intraday high of $3,024 in early trading following the news, before closing the day at $2,895.

--Social media platform Reddit Inc.’s IPO was wildly successful, up 48% its first day, closing at $50.44 off a $34 offering price.

The performance, as well as that of Astera Labs Inc., an AI-focused semiconductor connectivity company whose shares have soared since its own IPO, is providing a promising market check for other IPO candidates.

--The Environmental Protection Agency on Monday announced a comprehensive ban on asbestos, a carcinogen that kills tens of thousands of Americans every year but is still used in some chlorine bleach, brake pads and other products.

The final rule marks a major expansion of EPA regulations under a landmark 2016 law that overhauled regulations governing tens of thousands of toxic chemicals in everyday products, from household cleaners to clothing and furniture.

Exposure to asbestos is known to cause lung cancer, mesothelioma and other cancers and is linked to more than 40,000 deaths in the U.S. each year.

--Wall Street cash bonuses fell 2% to an average of $176,500 last year as financial firms took a more cautious approach to compensation, according to an estimate by the New York State Comptroller Thomas DiNapoli.

The lower payouts came even as industry profits climbed 1.8% in 2023.

But with more people joining the securities workforce, according to DiNapoli, the industry’s bonus pool stood at $33.8 billion for 2023, broadly in line with 2022.  In 2021, the pool was a record $42.7 billion as capital markets and dealmaking boomed.  The state and city have already budgeted for lower tax revenue from financial workers, the comptroller said.

The securities industry accounts for about 27% of annual state tax collections and 7% for New York City.  The industry employed 198,500 people in 2023, up from 191,600 the prior year, the report showed.

About 1 in 11 jobs in New York City is either directly or indirectly associated with the sector, the comptroller’s report said.

--According to data from the Federal Reserve Bank of New York, American households took on more debt at the end of last year, and some of those loans are increasingly going bad.

Overall U.S. delinquency rates remain below pre-Covid levels, but those for credit cards and auto loans are now higher.  About 8.5% of credit card balances and 7.7% of auto loans moved into delinquency in the fourth quarter, the bank said in a report the other day.

Credit-card balances increased in the fourth quarter to $1.13 trillion, while there’s now $1.61 trillion of auto loans outstanding, both the highest in data back to 2003.  Mortgage debt – the largest category – also hit a fresh record, while student loans were little changed.

--Bitcoin sank to a two-week low as demand for dedicated exchange-traded funds dries up and questions remain on the scope of the Fed’s rate-cutting this year.

It’s funny how demand for U.S. spot-Bitcoin ETFs dried up as quickly as assets first poured in with the launch of the vehicles on Jan. 11.

Foreign Affairs, Part II

China: The People’s Liberation Army (PLA) and state-run media on Sunday accused the United States of threatening global security, days after a Reuters report which found Elon Musk’s SpaceX was building hundreds of spy satellites for a U.S. intelligence agency.

According to Reuters, SpaceX’s Starshield unit is developing the satellite network under a classified $1.8 billion contract with the National Reconnaissance Office (NRO), Reuters citing five sources familiar with the program.

A social media account run by the PLA said the SpaceX program exposed the United States’ “shamelessness and double standards” as Washington accuses Chinese tech companies of threatening U.S. security.

“We urge U.S. companies to not help a villain do evil,” the account (Junzhengping) said on the platform Weibo. “All countries worldwide should be vigilant and protect against new and even bigger security threats created by the U.S. government,” the post said.

Wang Yanan, editor of Aerospace Knowledge, a magazine overseen by the Chinese Communist Party, was quoted in an interview as saying the SpaceX satellite project posed “a challenge to global security and stability,” Wang told the Global Times, a mouthpiece of the CCP.

But neither Junzhengping nor the Global Times mentioned Musk or Tesla, curiously.

The NRO responded to Reuters’ story, acknowledging its mission to develop space-based surveillance systems, but declined to comment on the extent of SpaceX’s involvement.  SpaceX didn’t respond to requests for comment as well.

China has been studying the use of Starlink in Ukraine and has repeatedly warned about the risks it poses to China.  But China is building its own satellite constellations.

Soon there will be so many satellites in space, nighttime will no longer exist.  [OK, that’s a slight exaggeration, but it will impact stargazers.]

Meanwhile, in Hong Kong, the Legislative Council, comprised mostly of Beijing loyalists, passed national security laws targeting “external interference” and the theft of state secrets by an 89-0 margin, thwarting decades of public resistance in a move that critics say will strike a lasting blow to the partial autonomy the city had been promised by China.

The new legislation grants authorities even more powers to crack down on opposition to Beijing and the Hong Kong government, establishing penalties – including life imprisonment – for political crimes like treason and insurrection, which are vaguely defined.

The laws create sizable risks for multinational companies and international groups operating in the financial center, and could impact virtually anyone, but particularly entrepreneurs, diplomats, journalists, and academics.

Many of the opposition figures who might have challenged the legislation have either been jailed (see Jimmy Lai) or have gone into exile, especially after Xi Jinping imposed the first national security law in 2020.  The Hong Kong Democracy Council reports that the territory now has 1,829 political prisoners.

The Wall Street Journal reports that Hong Kong’s secretary for security, Chris Tang, “boasts of a 100% conviction rate in national-security cases.”

Hong Kong’s Beijing-backed leader, John Lee, has said the package of new laws is needed to root out unrest and to fight what he described as Western spying.  With the laws passed (which take effect March 23), Lee has said the government can now focus on the economy.

In a speech to the legislature, Lee said that the new laws would “allow Hong Kong to effectively prevent and put a stop to espionage activities, the conspiracies and traps of intelligence units and the infiltration and damage of enemy forces.”

Steven Tsang, director of the SOAS China Institute in London, in an interview with the New York Times, spoke of the rapid passage of the laws, which were “meant to show people in Hong Kong the government’s resolve and ability to enforce it.  The new national security bill is as much about intimidation as it is about enforcement.”

For John Lee, “the first concern is not how people in Hong Kong or in the rest of the world see this,” Professor Tsang said.  “He is performing for the audience of one – Xi himself.”

Tiffany May and David Pierson / New York Times

“When Hong Kong, a former British colony, was returned to Chinese rule in 1997, it was given a mini-constitution designed to protect civil liberties unknown in mainland China, such as freedom of expression, assembly and the media. But China also insisted on a provision called Article 23, which required Hong Kong to draft a package of internal security laws to replace colonial-era sedition laws.”

Hong Kong officials, though, weren’t successful in passing new security laws. Each attempt was met with mass protests, such as in 2003.

But in the past year, Beijing has essentially demanded Hong Kong enact Article 23 laws.  It helped that China overhauled the electoral system to allow it to stack the legislature with pro-Beijing lawmakers and to exclude those not deemed “patriots.”

Tuesday, State Department deputy spokesperson Vedant Patel said the U.S. believes the new national security bill has the potential to accelerate the closing of a once open society.  Patel said the crimes outlined in the legislation are poorly defined and incredibly vague and that Washington is analyzing the potential risks to U.S. citizens and American interests.  Others, including Britain, the European Union and United Nations have raised similar concerns.

Thursday, China said it is strongly dissatisfied and resolutely opposed to the “denigration and smearing” by the United States of the new security law.  Beijing urged Washington to respect China’s sovereignty, and immediately stop meddling in its internal affairs, the Chinese embassy in the U.S. said in a statement on its website.

The Chinese embassy said the bill “punishes a very small number of criminals who endanger national security and protects the vast majority of law-abiding Hong Kong residents,” adding that normal activities of foreign organizations, enterprises and personnel are fully protected by law.

Don’t count on it.

I’ve been to Hong Kong a number of times and love the place...one of my three favorite cities along with Paris and Vienna.

But it would be a big risk for me to go back.  I certainly wouldn’t be writing columns in my hotel room criticizing Beijing and the ‘new’ Hong Kong, knowing I could easily be spied upon.

As the Wall Street Journal opined following passage of the law: “Enter Hong Kong at your own risk.” [Emphasis mine.]

Separately, Secretary of State Blinken assured the Philippines of U.S. support amid heightened tensions with China.  He reiterated America’s “ironclad” security commitments to the Philippines during a visit to Manila on Tuesday.

Friction has grown between Manila and Beijing over competing claims in the South China Sea.

“These waterways are critical to the Philippines, to its security, to its economy,” Blinken said.  “They’re also critical to the interests of the region, the United States and the world,” he added, speaking at a joint press conference with Philippine Foreign Secretary Enrique Manalo.

“That’s why we stand with the Philippines and stand by our ironclad defense commitments, including under the mutual defense treaty.”

On the issue of Taiwan, Taiwan’s Defense Minister Chiu Kuo-cheng confirmed recently that U.S. troops are indeed conducting training with Taiwan.

“This exchange is for mutual observation, to identify the problems we have, figure out how to improve and to recognize their strengths so we can learn from them,” Chiu told reporters.

The number of U.S. troops is estimated to be as high as 300, up from an initial 30.

Lastly, a new Gallup survey of American attitudes has China as the biggest adversary of the United States, followed by Russia, while Canada and Japan share the highest favorable rating of 83 percent.

In a survey conducted in February, 41 percent of respondents said China when asked to name one country they considered to be their nation’s “greatest enemy today.”  It is the fourth straight year China topped the perceived enemies list, though the number declined from 50 percent in 2023.

Russia and Iran followed at 26 and 9 percent, respectively.  Russia’s number also declined from 32 percent in 2023, but Iran’s jumped up from 2 percent.

Gallup said 5 percent of the roughly 1,000 adults taking part in the survey called the United States its own worst enemy, the highest level recorded since Gallup started asking the question in 2001.

Following Canada and Japan among those named as favorable were Britain, Germany, France and Taiwan, coming in at 82, 79, 78 and 77 percent, respectively.

North Korea: Pyongyang fired at least three short-range missiles on Monday in what analysts said was a calculated move to grab attention as Secretary of State Blinken visited South Korea for talks.

Seoul’s military said the three missiles flew around 186 miles before coming down into the East China Sea (Sea of Japan).

Washington and Seoul wrapped up one of their major annual joint military training exercises last week, prompting angry retorts and live-fire drills from the nuclear-armed North, which always condemns such drills as rehearsals for invasion.

Separately, North Korea tested a solid-fuel engine for its new hypersonic intermediate-range ballistic missile, state media said Wednesday, with Kim Jong Un overseeing the test Tuesday. The new weapon is being touted in the official Korean Central News Agency as a strategic asset comparable in significance to an intercontinental ballistic missile.

Iran: U.S. Central Command (CENTCOM) announced on Monday its “forces successfully engaged and destroyed seven anti-ship missiles, three unmanned aerial vehicles [drones], and three weapons storage containers in Houthi-controlled areas of Yemen in self-defense. It was determined these weapons presented an imminent threat to merchant vessels and U.S. Navy ships in the region.”

The U.S. military and coalition forces destroyed an unmanned aerial vehicle and an unmanned surface vessel launched by the Houthis in the Red Sea on Wednesday. There were no injuries or damage.

CENTCOM also said this week that the Houthis were granting China and Russia safe passage in the Red Sea.  In the case of China for, among other things, buying Iranian oil.

Separately, shipping giant Maersk said Friday it was too early to resume sailings through the Red Sea due to a continued elevated risk level, despite efforts by the U.S. and British-led coalition to keep the waterway safe.

Other shipping companies have resumed sailing.

Pakistan: Islamabad carried out airstrikes Monday inside Afghanistan, the Taliban in Kabul announced, following a weekend of attacks inside Pakistan which the authorities blame on militants based across the border.

A Pakistani security official said Pakistan’s air force hit seven hide-outs of Tehreek-e-Taliban Pakistan in at least three provinces of Afghanistan, so a rather extensive operation.

Since the Taliban takeover of Afghanistan in 2021, there has been a surge in attacks inside Pakistan by the TTP and allied groups, many of them aimed at police and security forces.

The airstrikes came after six militants attacked a military post in North Waziristan, including multiple suicide attacks, Pakistan’s military said.  A casualty toll wasn’t given.

Brazil: Former President Jair Bolsonaro said on Saturday he does not fear being put on trial, a day after a police investigation revealed the far-right politician tried to co-op the country’s military chiefs in a coup plan to overturn his 2022 election defeat.

Bolsonaro did not refer directly to the allegations made by two armed forces commanders that he had summoned them to discuss a possible coup d’etat to prevent leftist President Luiz Inacio Lula da Silva from returning to power.  But evidence mounts of Bolsonaro’s efforts to convince the military to step in.

“I do not fear any judgment, as long as the judges are impartial,” Bolsonaro said at a political rally in Rio to back his candidate for mayor of the city in local elections in the fall.

Last year, Bolsonaro was banned from running for elected office for eight years for abusing his power as president and repeatedly criticizing the country’s electoral system.  He faces possible arrest and a trial by the Supreme Court.

Bolsonaro was then accused Tuesday of fraud on his vaccination records, opening the door to criminal charges.  An investigation by the country’s comptroller general’s office had already found that Bolsonaro’s vaccination records were falsified to show he was vaccinated against Covid-19 in Sao Paulo in July 2021, when he was not in the city.

It is alleged Bolsonaro and his closest aides falsified their vaccination records to travel to the U.S. at the height of the pandemic.

During his tenure, Bolsonaro repeatedly downplayed the importance of immunization and social distancing measures during the pandemic, which killed more than 700,000 people in Brazil.

Random Musings

--Presidential approval ratings....

Gallup:  38% approve of President Biden’s job performance, 59% disapprove, 32% of independents approve (Feb. 1-20).

Rasmussen: 42% approve, 57% disapprove (March 22).

--President Biden’s reelection campaign had $71 million in cash on hand at the end of February, more than double the $33.5 million in former President Trump’s campaign account, as detailed in filings with the Federal Election Commission on Wednesday, when campaigns and some presidential committees had a deadline to file fund-raising and spending reports for February.

This can be a confusing topic.  The figures do not include data from leadership PACs, super PACs or other associated fundraising or spending.

So, for example, you may have seen that Biden’s reelection campaign raised more than $53 million in February together with the Democratic Party, and that Biden, the DNC and their ‘shared account’ now have $155 million cash on hand, up from $130 million in January.  I didn’t see a combined figure for the Trump campaign.

But significantly, the figures above do not include the $10 million Biden raised after the State of the Union address on March 7 in just the first 24 hours after.

--Donald Trump has so far failed to obtain a bond that would allow him to appeal a $454 million judgment against him in a New York civil fraud case without posting the full amount himself, his lawyers said on Monday.  Trump must either find the cash or post a bond to prevent the state’s authorities from seizing his properties while he appeals Justice Arthur Engoron’s Feb. 16 decision ordering him and co-defendants to pay $464 million* in penalties and interest for misstating property values to dupe lenders and insurers.

*The difference between the $454m and $464m is the disgorgement for sons Eric and Don Jr.

Trump’s attorneys said the defendant had approached 30 surety companies to obtain a bond.  The lawyers asked that Trump be allowed to post a $100 million bond while he appeals the judgment.  A bonding company would be on the hook for any payout if Trump loses his appeal and proves unable to pay.

Trump earlier in the month pasted a $91.6 million bond to cover an $83.3 million defamation verdict for the writer E. Jean Carroll while he appeals.

Tuesday, Trump went off on Justice Engoron in a Truth Social post.

“Any business thinking about moving into New York State is CRAZY!  The level of anger and hostility toward businesses and business people is incredible.  Numerous people have spoken to me about this since the Racist and Politically Corrupt A.G., who ran for office on a platform of ‘I will get Trump’ without knowing anything about me or my business, and her corrupt puppet Judge, Arthur Engoron, who has already been overturned 4 times on this case, a record, started doing a number on me.  Engoron laughed with disdain at the Appellate Division, his superior court, when they handed down a decision which essentially ended most of the case, and he REFUSED TO ABIDE BY IT. This it the first time something like that has ever happened in New York State.  He is a Crazed, Trump Hating, Rogue Judge, has ZERO respect for the Appellate Judges, and has torn apart the Legal System in New York State, making it impossible for outside businesses to want to come there.  Existing businesses will flee!!!”

Trump’s attorneys have argued he shouldn’t have to dispose of his properties in a “fire sale” before the impending date, as getting them back at the same price would be nearly impossible.

“I would be forced to mortgage or sell Great Assets, perhaps at Fire Sale prices, and if and when I win the Appeal, they would be gone. Does that make sense?  WITCH HUNT. ELECTION INTERFERENCE!” the former president posted.

Trump did receive some potentially good news Friday as shareholders of Digital World Acquisition Corporation approved a merger with Trump Media & Technology Group, which on paper pumps more than $300 million into Trump Media, which has all but exhausted its available cash and will allow Truth Social, the company’s flagship digital media platform, to keep operating.

Shares of Trump Media could begin trading under the stock symbol DJT as soon as next week.  Trump’s personal stake will be worth more than $3 billion. [A ridiculous valuation given the asset(s), but it is what it is.]

In terms of the Monday deadline to cover the $454 million penalty, Trump is restricted for six months from selling any of his shares or using them as collateral for a loan, although he could ask the board of the merged company to waive that rule for him.

--Lawyers for Trump urged the U.S. Supreme Court on Tuesday to dismiss an indictment charging the former president with conspiring to overturn the results of the 2020 election, renewing their arguments that he is immune from prosecution for official acts taken in the White House.

While lower courts have rejected such immunity claims twice already, Trump’s lawyers get to press their case before the Supremes when the justices hear arguments on April 25.  The high court’s decision on the matter isn’t likely until late June, which has left special counsel Jack Smith’s criminal case on hold pending the outcome of the appeal.  It just looks very unlikely this case will be held before November’s election.

--In a campaign rally in Ohio on Saturday, Trump predicted a “bloodbath for the whole country” as he discussed placing tariffs on imported cars and foreign competition with the U.S. auto industry, provoking an outcry.

“We’re going to put a 100% tariff on every single car that comes across the line and you’re not going to be able to sell those – if I get elected,” Trump said.  “Now if I don’t get elected, it’s going to be a bloodbath for the whole – that’s going to be the least of it.  It’s going to be a bloodbath for the country.  That’ll be the least of it.  But they’re not going to sell those cars.”

President Biden’s campaign quickly linked the comments to the 2021 assault on the Capitol and other instances of civil unrest during Trump’s presidency.

Biden himself posted on X Sunday: “It’s clear this guy wants another January 6.”

But Trump posted on Truth Social after: “The Fake News Media, and their Democrat Partners in the destruction of our Nation, pretended to be shocked at my use of the word BLOODBATH.  I was simply referring to imports allowed by Crooked Joe Biden, which are killing the automobile industry.”

Elon Musk weighed in: “Legacy media lies,” referring to stories about Trump’s bloodbath line.

Former Vice President Mike Pence, who split with Trump after the Jan. 6 attack and has said he wouldn’t endorse him for president, said in a TV interview Sunday Trump was “clearly talking about the impact of imports devastating the American automotive industry.”

In an interview Tuesday with Nigel Farage, Trump said, “It’s going to be a bloodbath, in the auto industry, because we’re going to lose our whole industry, because this guy’s (Biden) going to all-electric cars, and they’re made in China, that’s where the material is, that’s where the minerals are, that’s where everything is.”

Asked about his immigration policy if he became president again, Trump reiterated he would deport migrants who illegally crossed the U.S.-Mexico border.  “You can come into the country, but you have to come in legally.  They’re here illegally, especially these criminals.  I’m going to deport them.  We’re going to get them out right away,” he said.

But going back to the Ohio rally, Trump did also say, “If we don’t win this election, I don’t think you’re going to have another election in this country.”  And he saluted the Jan. 6 rioters  as “patriots and hostages.”

--Speaking of Mike Pence, he announced last Friday, right after I had posted WIR, that he will not endorse Trump.

“Donald Trump is pursuing and articulating an agenda that is at odds with the conservative agenda that we governed on during our four years, and that is why I cannot in good conscience endorse Donald Trump in this campaign,” Pence told Fox News.

He told Fox he will keep his November vote private but emphasized he will not vote for Joe Biden.

--Donald Trump’s preferred Ohio Senate candidate, businessman Bernie Moreno, prevailed over two more traditional GOP candidates in the state’s primary on Tuesday; Moreno with 50.5% to state-Sen. Matt Dolan’s 32.9% and Ohio Secretary of State Frank LaRose’s 16.6%.

Moreno was the preferred candidate among Democrats to face Democratic incumbent Sherrod Brown, seeing him as the easiest to beat, and a group with ties to Democrats spent millions of dollars boosting his candidacy.

--Maryland Republican senatorial candidate, and former governor, Larry Hogan, held a double-digit lead over two potential Democratic rivals, according to a Washington Post-University of Maryland pol, as current Democratic Sen. Ben Cardin chose not to run for reelection. 

Hogan left office in the deep-blue state with high job-approval ratings and is better known than his competitors, but he faces a crosscurrent Democrats hope to exploit: The poll found Maryland votes said by a 20-point margin that they prefer Democratic control of the U.S. Senate.

Hogan leads Rep. David Trone 49-37 percent, and Prince George’s County Executive Angela Alsobrooks 50-36 percent. 

Hogan has a 64 percent favorable rating in the poll of registered Maryland voters.

Democrats hold a 51-49 voting majority in the Senate, but they are defending more seats than Republicans.

--New Jersey Democratic Sen. Bob Menendez, who is facing federal bribery charges, finally announced he will not run for reelection in his state’s Democratic primary, but he may mount an independent bid for a fourth term.

“Unfortunately the present accusations I am facing – of which I am innocent and will prove so – will not allow me to have that type of dialogue and debate with political opponents that have already made it a cornerstone of their campaign,” he said in a video this week.

“I am hopeful that my exoneration will take place this summer and will allow me to pursue my candidacy as an independent Democrat in the general election.”

The senator is living in a dream world.

--Former Arkansas Gov. Asa Hutchinson, in an op-ed for USA TODAY:

“In terms of history, we all witnessed the violent attack on our national Capitol on Jan. 6, 2021, by those wishing to overturn the last election.  This was not an act of patriots as Trump likes to say, but it was a real threat to democracy.

“When I saw the attack on law enforcement, the rule of law and Congress itself, I said he should never again lead our country or your party.  Remarkably, many Republican leaders made the same point publicly but later made peace with the disgraced former president. To this day, he continues to undermine our democracy by defending the actions of that dark day.

“And when it comes to the future, Trump does not care about the checks and balances in our system of government.  He advocates for an all-powerful executive branch that can ignore Congress and the courts.  I was governor of Arkansas for eight years, and I fully support a strong chief executive.  But I also understand the healthy friction needed with the legislature and the courts to properly restrain government.

“Another important point to make is that I also will not vote for President Joe Biden. Biden’s weak border policies, his poor economic record and his slow growth energy policy do not justify reelection.

“Where do we go from here?  Let me emphasize that I still believe in the principles of the Republican Party – that we can make life better for all Americans, that we must still assert global leadership to promote peace and commerce, and that character matters as we strive to show the next generation the importance of public service.

“So, I am a Republican who won’t be supporting our presumptive nominee. I hope there will be those in the trenches who will push back against this takeover of the Republican Party and who will join the fight to reclaim the future.”

--Former Reagan cabinet member, John Lehman, who served as Navy secretary, 1981-87, in an op-ed for the Wall Street Journal:

“As one of the last senior national-security officials of the Reagan administration still vertical, I must speak.

“It was an honor to serve as Navy secretary. The lessons I learned from the Gipper are still my political North Star.  He taught his staff that we must be clear-eyed about our enemies, and especially our friends.  He showed us how to speak to what makes America great, as well as what needs improvement, but not to tear America down.  Most of all, he implored us to remember that strong relationships across the political divide are a great asset.  Americans may disagree, he believed, but the true enemy lies beyond our shores.

“Reagan’s 11th Commandment was ‘Thou shalt not speak ill of another Republican,’ but Donald Trump is no heir to Reagan’s legacy. He is an insult to it.  The Reagan I knew would be appalled that someone as unfit as Mr. Trump had become the GOP’s standard-bearer.  Reagan would also deeply oppose President Biden’s agenda, and he never trusted or cared much for then-Sen. Biden.

“The most fundamental difference between Reagan and Mr. Trump is that Reagan knew America’s friends from its enemies. He would be horrified by the Republican Party’s abandonment of Ukraine at Mr. Trump’s behest. He would recognize Russia’s invasion for what it is: a brutal attempt to reassert its old Soviet dominance on a free people, no matter how many innocents die.  Reagan would recognize that supporting Ukraine is both morally correct and good realpolitik, a chance to bog an adversary down. He would find Mr. Trump’s naked admiration of our enemies incomprehensible and dangerous. The man who told Mikhail Gorbachev to ‘tear down this wall’ wouldn’t understand how an American president could congratulate a Russian dictator for ‘winning’ a sham election. [Ed. Lehman is referring to Trump’s praise after Putin won reelection in 2018] ....

“Mr. Trump’s praise of adversaries is particularly egregious considering the insults he throws at his own country. In his 2017 inauguration speech Mr. Trump spoke of ‘American carnage.’ It is hard to imagine a phrase more out of sync with Reagan’s ‘morning in America.’  Mr. Trump has spent his entire political career deriding the nation he wants to lead.  He called America a ‘Third World country’ and a ‘laughingstock.’  He declared that ‘the American dream is dead.’

“Reagan’s optimism wasn’t merely stylistic. It was substantive. He recognized that a nation that had lost its confidence during the Carter administration needed to be reminded of its greatness.  Mr. Trump, it seems, has no understanding of the importance of speaking to the better angels of our nature....

“Gen. Jim Mattis was right when he described Mr. Trump as ‘the first president in my lifetime who does not try to unite the American people – does not even pretend to try.  Instead, he tries to divide us.’  Mr. Biden is the second such president.

“I am a conservative, however, and the Republican Party has been my philosophical home. With Mr. Trump, it has suffered a break-in from a vandal who refuses to leave.  And since Mr. Biden has turned his platform over to socialist Bernie Sanders, I am wrapped in the No Labels flag.”

There has been no word as yet on a No Labels ticket.  One man, and potentially just this man, could be a game-changer. Ret. Adm. William McRaven.  But I haven’t seen any real stories he’s been approached, let alone whether he’d be interested.  I know Michael Smerconish wants him, and I’m a Smerconish fan.

--Kathleen Parker / Washington Post

“The Kamala (Harris) conundrum comes down to this: She was picked because she was Black and female, a combo tantamount to job security.  Now that she has become a burden to the Democratic ticket, Biden can’t fire her.  He can’t risk alienating his base.  Full stop.  The seriousness of this situation can’t be overstated.  Biden’s diminishing faculties, notwithstanding his relatively successful State of the Union address, and his increasing physical frailty are concerning.

“Every honest person knows he’s not in top form. A recent New York Times poll found that 73 percent of registered voters believe Biden is too old to be the nation’s top executive. This includes 61 percent of those who voted for him in 2020.

“At the start of Biden’s term, I was pulling for Harris to do well.  She had pizazz and a reputation for being a tough prosecutor.  She had moxie and swagger, and she leaned centrist. There was reason for hope: Criticism from California progressives that she wasn’t adequately attuned to racial-justice issues and sided too often with prosecutors likely proved helpful when she was vetted for the VP spot.

“Her performance as second in command has been disappointing, to say the least.  Americans have taken note.  Though Democrats unsurprisingly like her more than Republicans do, a recent analysis by FiveThirtyEight set her average overall approval rating at just 37.2 percent, among the lowest recorded for a vice president.

“There’s no reason to think her ranking would spike were she suddenly promoted to the Oval Office. Instead, most signs point to disaster. This is why I propose with all due respect that Harris step away from the ticket.

“This is not a partisan suggestion.  I said the same about Sarah Palin in 2008 when it became clear, as I wrote, that she was ‘out of her league.’  No one would have blamed Palin for wanting to spend more time with her family, including a new baby, I said.  I ended the column with these words, ‘Do it for your country.’

“Harris could provide her own reasons for moving on.  Perhaps she and Biden could cut a deal for her to become the next attorney general – if he’s reelected.  Biden then could tap someone else with executive experience who could reassure voters that the next vice president would be ready to take the reins should events require it.  Democrats and Republicans alike would be relieved.

“Please, Madame Vice President, do it for your country.”

--A federal appeals court once again blocked a law that makes it a state crime for migrants to illegally cross the border into Texas, hours after the U.S. Supreme Court’s conservative majority allowed the law to take effect while challenges to it continue through the court system.

The U.S. Court of Appeals for the 5th Circuit blocked enforcement of the law, known as S.B.4, ahead of oral arguments scheduled for Wednesday morning.

The law makes it a state crime for migrants to illegally cross the border and allows Texas officials to deport undocumented individuals through Mexico, though Mexico said Tuesday that it would not accept anyone sent back by the state and condemned the law as “encouraging the separation of families, discrimination and racial profiling that violate the human rights of the migrant community.”

The statute was passed last year amid a record surge in border crossings, as part of Republican Gov. Greg Abbott’s push to expand the state’s role in immigration enforcement.

The Supreme Court’s decision drew dissent from the three liberal justices, two of whom said the majority was inviting “further chaos and crisis in immigration enforcement.”

Abbott and other Texas officials have claimed in recent months that their state-led crackdown, Operation Lone Star, is already prompting migrants and smugglers to alter their travel plans and head for Arizona or California instead of Texas.  Southern Arizona and the San Diego area are now the two busiest places along the Mexican border for illegal crossings, according to the latest U.S. enforcement data.

--The UN sounded a “Red Alert” as every major global climate record was broken last year, the World Meteorological Organization (WMO) said on Tuesday, with its chief voicing particular concern about ocean heat and shrinking sea ice.

The UN weather agency said in its annual State of the Global Climate report that average temperatures hit the highest level in 174 years of record-keeping by a clear margin, reaching 1.45 degrees Celsius above pre-industrial levels.  Ocean temperatures also reached the warmest in 65 years of data with over 90% of the seas having experienced heatwave conditions during the year, the WMO said, harming food systems.

“The WMO community is sounding the Red Alert to the world,” said WMO Secretary-General Celeste Saulo.  “What we witnessed in 2023, especially with the unprecedented ocean warmth, glacier retreat and Antarctic sea ice loss, is cause for particular concern.”

El Nino is expected to fuel temperatures in the first few months of this year.

Ocean heat in the North Atlantic was an average 3 degrees Celsius above average in late 2023, the report said.  Many fish species have fled north from this area seeking cooler temperatures.

--A World Health Organization report has just seven countries meeting WHO standards on international air quality in 2023, specifically the limit for harmful fine-particle, or PM2.5, pollution – caused by tiny airborne particles expelled by cars, trucks and industrial processes

Bangladesh, Pakistan, India, Tajikistan and Burkina Faso ranked as the five countries with the most polluted air in 2023, weighted by population, while French Polynesia, Mauritius and Iceland had the least air pollution.

The capital cities with the worst air included New Delhi; Dhaka, Bangladesh; and Baghdad.

--Roni Caryn Rabin / New York Times

“Surgeons in Boston have transplanted a kidney from a genetically engineered pig into an ailing 62-year-old man, the first procedure of its kind.  If successful, the breakthrough offers hope to hundreds of thousands of Americans whose kidneys have failed.

“So far, the signs are promising.

“Kidneys remove waste products and excess fluid from the blood. The new kidney began producing urine shortly after the surgery last weekend and the patient’s condition continues to improve, according to physicians at Massachusetts General Hospital, known as Mass General.  He is already walking the halls of the hospital and may be discharged soon.

“The patient is a Black man, and the procedure may have special significance for Black patients, who suffer high rates of end-stage kidney disease....

“If kidneys from genetically modified animals can be transplanted on a large scale, dialysis ‘will become obsolete,’ said Dr. Leonardo V. Riella, medical director for kidney transplantation at Mass General.  The hospital’s parent organization, Mass General Brigham, developed the transplant program.

“Over 800,000 Americans have kidney failure and require dialysis, a procedure that filters toxins from the blood.  Over 100,000 are on a waiting list to receive a transplanted kidney from a living or dead human donor.”

There are critics.  “Xenotransplantation raises the prospect of still greater exploitation of animals and may introduce new pathogens into human populations, said Kathy Guillermo, senior vice president at People for the Ethical Treatment of Animals.

“ ‘Using pigs as a source of spare parts is dangerous to the human patients, deadly for the animals and may bring about the next pandemic,’ she said.  ‘It’s impossible to eliminate, or even identify, all the viruses that pigs carry. Researchers need to focus on cleaning up the organ donation system and leave the animals alone.’”

The man was identified in the Times article.  I chose not to for this space.

--We wish Catharine, Princess of Wales, well as she shockingly told her nation this afternoon that she has been diagnosed with cancer and has begun chemotherapy.  It’s all about Catherine and Prince William’s three young children and reassuring them their mother will be fine.

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

Pray for Ukraine and the innocent in Gaza.

God bless America.

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Gold $2165...hit $2200 this week, a record.
Oil $80.80

Bitcoin: $63,900 [4:00 PM ET, Friday]

Regular Gas: $3.53; Diesel: $4.06 [$3.43 / $4.27 yr. ago]

Returns for the week 3/18-3/22

Dow Jones  +2.0% [39475]
S&P 500  +2.3%  [5234]
S&P MidCap  +2.3%
Russell 2000  +1.8%
Nasdaq  +2.8%  [16428]

Returns for the period 1/1/24-3/22/24

Dow Jones  +4.7%
S&P 500  +9.7%
S&P MidCap  +7.5%
Russell 2000  +2.4%
Nasdaq  +9.4%

Bulls 60.3
Bears 14.7

Hang in there.

Brian Trumbore

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