Week in Review

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Week in Review

08/05/2023

For the week 7/31-8/4

[Posted 5:30 PM ET, Friday]

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Edition 1,268

Before I get to the Trump indictment and the latest on Hunter (and Joe) Biden, a few big picture items.

I am incredibly dismayed that in a new CNN poll, most Americans oppose Congress authorizing additional funding to support Ukraine in its war with Russia, as the public splits over whether the U.S. has already done enough to assist Ukraine.

Overall, 55% say Congress should not authorize additional funding to support Ukraine vs. 45% who say Congress should authorize such funding.  A poll conducted in the early days of the Russian invasion in late February 2022 found 62% who felt the U.S. should have been doing more.

Not once has Joe Biden given a presidential-type address, especially from the Oval Office, on the topic of Ukraine.  He hasn’t done anything to actually sell the American people on the importance of our involvement…not once!

Instead, he picks the topic of the economy for the only ‘Oval’ of his entire presidency a few months ago.  It’s so pathetic, and sad.  It’s yet another reason why Democrats are idiots not to see that this man shouldn’t be on the first debate stage with Donald Trump, if that is to be the matchup, though you know I’ve long said Biden won’t make it that far…physically.

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I talk about Beijing’s record rainfall below, but 850,000 people in flood control zones in neighboring Hebei province were told to move out of their homes as authorities opened up areas along waterways to help drain record floodwaters in Beijing.

As in 1.8 billion cubic meters of floodwater was diverted to “ease pressure on Beijing and Tianjin.”

As the South China Morning Post reported, Hebei Communist Party boss Ni Yuefeng, inspecting flood relief efforts, said the province should “serve as the capital’s ‘moat.’”

The reason why I’m bringing this up here is because criticism was intense online, including from Hu Xijin, former editor-in-chief of the Communist Party mouthpiece, the Global Times.

“We should not have the mindset of sacrificing anyone for the sake of protecting anyone, or treating one place as a moat for another,” he said on his Weibo account.

Such high-level criticism of, in essence, President Xi Jinping’s regime, is rather unusual, to say the least.  This bears watching.

Many of the 850,000 will have no home to go back to!

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And Americans will soon be forced to learn more about Niger, including where it is on a map.  No one should be surprised if months from now, up to a quarter of the entire African continent is at war with each other, egged on by Russia.  More below.

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Former President Donald J. Trump was indicted on Tuesday in connection with his far-reaching efforts to overturn the 2020 election.

The indictment was filed by Special Counsel Jack Smith in Federal District Court in Washington. It accuses Trump of three conspiracies: one to defraud the United States, a second to obstruct an official government proceeding and a third to deprive people of civil rights provided by federal law or the Constitution.  Mr. Trump is also charged with a fourth count of obstructing an official proceeding. 

Trump appeared before a federal magistrate judge in Washington on Thursday, the third time in four months he has stood to face criminal charges, and pleaded not guilty to the allegations.

“Each of these conspiracies – which built on the widespread mistrust the defendant was creating through pervasive and destabilizing lies about election fraud – targeted a bedrock function of the United States federal government: the nation’s process of collecting, counting and certifying the results of the presidential election,” the indictment said.

“These claims were false, and the defendant knew they were false,” the government said.  “The defendant repeated and widely disseminated them anyway – to make his knowingly false claims appear legitimate, create an intense national atmosphere of mistrust and anger, and erode public faith in the administration of the election.”

It’s an extraordinary moment in U.S. history.

The indictment said Trump had six co-conspirators, and Jack Smith said the investigation was continuing.  Although the indictment did not name those individuals, we know Rudy Giuliani, John Eastman and Sidney Powell are three of them.

The indictment, and any conviction, would not bar Trump from being elected president. The Constitution establishes criteria for eligibility for president, and a clean criminal record is not one of them.

But as noted further below, it is highly unlikely the trial takes place before the election, though many of us hope it does.  A hearing on setting a possible date is Aug. 28.

For his part, Trump wrote on Truth Social: “Why did they wait two and a half years to bring these fake charges, right in the middle of President Trump’s winning campaign for 2024?” he said, calling it “election interference” and comparing the Biden administration to Nazi Germany.

Meanwhile Trump also faces a Georgia criminal investigation alleging interference in the 2020 election.

I get into the responses of some of Trump’s rivals for the Republican presidential nomination down below in the “Random Musings” section.  For now….

Editorial / The Economist

“To store all the accusations against Donald Trump would require a new wing of the Library of Congress.  There are the allegations made against him before he became president, some of which were false.  Then there are the ones from his four years in the White House, which resulted in two impeachments. Since leaving office, he has become the first former president to be indicted on criminal charges.  There is the Manhattan case, which turns on falsifying business records, the Mar-a-Lago case, which concerns the handling of classified documents, and a looming case in Fulton County, Georgia, which is about an attempt to overturn the state’s election result.  You may recall that Mr. Trump also lost a defamation case against a woman who accused him of sexual assault.

“None of these compares to the latest indictment, issued by the prosecutor, Jack Smith, on August 1st.  If proven, it will be the thing that Mr. Trump is remembered for.  Lincoln freed the slaves, Reagan won the cold war, Trump went to prison for trying to steal an election.

“That charge is the most serious political crime it is possible to commit in a democracy. The allegation, laid out in detail, is that he plotted to overturn the 2020 election results, knowing his claims of fraud were false.  Making up evidence, coercing officials and trying to sabotage the constitutional process for certifying election results amounted to a conspiracy against the United States and its voters. In some countries it would be called treason.

“Mr. Trump’s lies, as set out by Mr. Smith, were elaborate.  Mr. Trump said that there were 205,000 more votes than voters in Pennsylvania; that Michigan had seen a ‘suspicious vote dump’; that 30,000 non-citizens had voted in Arizona; that Nevada had seen tens of thousands of fraudulent votes; that voting machines had changed votes from Trump to Biden.  None of it was true.  An adviser to the Trump campaign described it as ‘all just conspiracy shit beamed down from the mothership.’

“In the face of all this, Mr. Trump will make a political defense and a legal one.  The distance between them is notable.  The political defense is to accuse the ‘Biden Crime Family’ of weaponizing the Department of Justice, and to compare the prosecutions to actions taken by Nazi Germany. As the cases proceed through the courts, Mr. Trump and his supporters will attack them, in a bid to portray all parts of the justice system as stooges of the deep state.

“Lots of his supporters would agree with that.  Fresh indictments seem to benefit Mr. Trump politically. He uses them to fundraise, and several of his cowed opponents in the Republican primary see them as another opportunity to demonstrate their fealty to him.  He remains overwhelmingly likely to be the next Republican nominee.

“Legally, the defense may well be that, yes, much of the stuff in the indictment is true.  The question is whether they are a crime.  Under a longstanding convention, the president cannot be prosecuted by the DOJ, and since Mr. Trump was still president until January 20th, 2021, the case should be tossed out.  His team will claim that one of the statutes Mr. Smith relies on, which was introduced after an accounting scandal, is being misused. They will also argue that Mr. Trump genuinely believes he won and that, if he was not lying, he was not a conspirator.

“The legal wrangling could be involved, but that is for the courts to sort through.  Yet, however the case turns out, their role is vital in two further ways. The first is to show that nobody is above the law. Some conservative critics of Mr. Trump argue that, as a candidate, he should never have been prosecuted, because doing so puts courts and voters in a head-on collision. This is backwards.  Prosecuting Mr. Trump, despite all the pain it will bring, is the least bad option for American institutions.  To duck a prosecution because it is politically awkward would be to set a precedent that presidential candidates enjoy impunity.

“The other benefit of the trial is that a courtroom is a place where reality counts.  Mr. Trump has thrived by defining the truth as whatever suits his interests, and then accusing anyone who disagrees with him of treachery.  In court, truth means something different and lies are disqualifying.  There is a value in trying the accusations against Trump and seeing if they convince a jury….

“(But) even with Mr. Smith’s slimmed-down charge sheet, which currently excludes co-conspirators, it will be hard to wrap up such a high-profile case before American voters pick their next president in November 2024. That is because there will be appeals, perhaps all the way to the Supreme Court. The courts may establish some facts, but it will be for voters to decide what to do with them.

“The next phase of the trials of Mr. Trump is therefore political.  That piles a heavy responsibility on those Republican politicians who privately acknowledge that he is unfit to be president. Ever since Mr. Trump entered presidential politics in 2015, his opponents within the Republican Party have hoped that something or someone – primary rivals, the Republican establishment, Robert Mueller, impeachment, Republican donors, the courts, anyone – would spare them the responsibility for condemning Mr. Trump and paying the price by incurring the anger of his voters.  But there is no one else left and the time for them to act is running out.

“They and the rest of America need to be clear-eyed about the danger here. It is not just that the country is heading for an institutional crisis and that, having tried once to steal an election, Mr. Trump may try again and this time perfect the operation.  It is also that Mr. Trump could well win the next election fairly. At which point, Americans will collectively have decided to re-elect a man who does not cleave to the most basic value of a self-governing republic: that the loser of an election willingly surrenders power. What will take place in America over the next year will test the courts and Republican politicians.  It will also be a fundamental test for voters.”

Peter Baker / New York Times

“At the core of the United States of America v. Donald J. Trump is no less than the viability of the system constructed during that summer in Philadelphia. Can a sitting president spread lies about an election and try to employ the authority of the government to overturn the will of the voters without consequence? The question would have been unimaginable just a few years ago, but the Trump case raises the kind of specter more familiar in countries with histories of coups and junta and dictators.”

David Remnick / New Yorker

“The indictment comes just days after a poll conducted by the New York Times and Siena College showed that the former president is so far ahead of Ron DeSantis and the rest of the Republican field that it is clear that a large portion of the electorate has decided that multiple criminal indictments current and forthcoming – the 2020 election fraud; the hush-money sex-scandal case, in Manhattan; the election-fraud case, in Georgia; the classified-documents case in Florida – will not dissuade them from voting for Trump. The former President continues to attract millions of supporters who have such antipathy for Biden, for the Democrats, for the ‘corporate media,’ for academia, for all the institutions they see as woke and hostile to their interests, that they interpret Trump’s deviance as defiance, his lies as truthtelling, his fury as their fury.  DeSantis has proved a robotic, even pathetic campaigner; his unwillingness to attack Trump with any directness or conviction has not so much impressed right-wing voters as it has further convinced them he is a humorless pill, a pallid imitation. Trump is their leader and, if need be, in the end, their martyr.  As Nate Cohn put it in his analysis of the Times’ poll, ‘The MAGA base doesn’t support Mr. Trump in spite of his flaws. It supports him because it doesn’t seem to believe he has flaws.’

“Trump’s reaction to the latest indictment closely resembles his reaction to previous indictments and impeachments. It’s a page from ‘1984.’  In a statement on Truth Social, he compared the prosecutors’ case against him to ‘Nazi Germany in the 1930s, the former Soviet Union, and other authoritarian, dictatorial regimes.’  Predicting that justice and truth would, in the end, be served, his campaign’s statement went on to say, ‘The un-American witch hunts will fail and President Trump will be re-elected to the White House so he can save our Country from the abuse, incompetence, and corruption that is running through the veins of our Country at levels never seen before.’”

Peter Baker / New York Times, Part II

“Former President Donald J. Trump now faces 78 felony counts in three different criminal cases, not to mention a slew of civil lawsuits and trials alleging all sorts of wrongdoing. At least in the court of public opinion, though, his defense can be boiled down to three words.

“What about Hunter?

“From Mr. Trump’s team to conservative media to the Republican Party leadership, the reaction to the latest blockbuster indictment accusing the former president of nothing short of trying to subvert democracy focused not on the evidence against him so much as the foibles and scandals of President Biden’s son.

“The real outrage, Mr. Trump’s defenders maintained, is Hunter Biden’s shady business dealings. The Justice Department, they claimed, is only going after the former president to cover up for the current president.  Mr. Trump is a victim persecuted by his enemies, so the argument goes, while Hunter Biden is a one-man crime wave who personifies the Washington swamp.

“The wave of whataboutism from Trump world crested with this week’s indictment but has been building for months, a way of shifting attention from the former president’s kaleidoscopic legal troubles.  The strategy provides the former president’s hard-core base a narrative to embrace that absolves him of any misconduct while muddying the waters enough to cause at least some independents and swing voters to throw up their hands out of a sense that, well, they all do it.”

So speaking of Hunter, his former business partner, Devon Archer, told Congress Monday that Hunter referred to President Biden as “my guy” while connecting his dad to foreign associates nearly two dozen times – as Republicans move closer to starting an impeachment inquiry.

Archer said during a four-hour House Oversight Committee interview that Ukrainian natural gas company Burisma Holdings paid Hunter up to $1 million per year to serve on its board because of his family’s “brand.”

Archer met with then-Vice President Joe Biden in April 2014, within days of joining Burisma’s board alongside Hunter, and told lawmakers that “Burisma would have gone out of business if ‘the brand’ had not been attached to it,” according to a readout from panel Republicans.

“Archer talked about the ‘big guy’ and how Hunter Biden always said, ‘We need to talk to my guy,’ ‘We need to see when my guy is going to be here,’ and those types of things,” Rep. Andy Biggs (R-AZ) told reporters as he left the deposition.

According to Archer, Burisma owner Mykola Zlochevsky – who allegedly told an FBI informant in 2016 he was “coerced” to pay $10 million in bribes to Hunter and Joe Biden – put intense pressure on Hunter in late 2015 to enlist U.S. support for ousting Ukrainian prosecutor-general Viktor Shokin, who had investigated Burisma, the Republican readout said.

At one point, Hunter Biden, Zlochevsky and Burisma executive Vadym Pozharskyi stepped away and “called DC” about the issue, Archer said.

“This raises concerns that Hunter Biden was in violation of the Foreign Agents Registration Act,” the GOP majority on the Oversight Committee tweeted.

Archer also said Hunter, whose probation-only plea deal for tax fraud linked to his foreign income and an unrelated gun charge collapsed last week, put his father on speakerphone more than 20 times during business meetings to promote “the brand.”

One of the Oversight’s Committee’s top Democrats, Daniel Goldman of New York, said that Archer didn’t provide any information damaging to the president and claimed that Burisma didn’t want Shokin fired as Ukraine’s top prosecutor – which contradicts what Archer reportedly said.

“The witness stated unequivocally that there is no evidence in his possession or his knowledge that Joe Biden ever discussed business with Hunter Biden, Joe Biden ever did anything on behalf of Hunter Biden’s business interests or otherwise never changed official policy in any way shape or form,” Goldman said.

Goldman said that Archer testified Hunter sold “the illusion of access to his father” as he tried to take credit for things that Joe Biden did that Hunter Biden played no role in.

So these are the two sides and how they are spinning Archer’s comments in what was a closed-door session.

Editorial / Wall Street Journal

“Everyone knows Hunter Biden wasn’t selling his expertise in energy markets when he teamed up for lucrative gigs with energy companies from Ukraine and China. But then what was he selling?  The answer, as provided Monday by Hunter’s former business partner Devon Archer, was the Biden ‘brand.’

“Mr. Archer testified behind closed doors…and we await the transcript [emphasis mine] to see his complete testimony. But according to a summary released by Oversight Chairman James Comer, Mr. Archer confirmed that Hunter was promoting the Biden family name and the political access it implied….

“Dan Goldman…says Mr. Archer told the committee that the Bidens never discussed business on those calls, so the testimony was much ado about nothing. But it’s highly unlikely that Hunter wanted to talk with his father about the weather.  He knew what he was selling, and we’ll see what else we learn as the House keeps looking.”

William McGurn / Wall Street Journal

“(Devon Archer’s testimony) doesn’t prove Joe Biden discussed business terms or shared in any profits. But at the very least, it exposes Mr. Biden’s gaslighting of the American people in 2020.”

Time and time again during the debates, Donald Trump brought up Hunter and his relationships and the laptop, and time and time again Biden denied that Hunter did any of the things Trump accused him with, Biden saying Trump’s assertions were “discredited,” “My son did nothing wrong at Burisma,” “That is simply not true,” statements like these.

McGurn:

“In short Mr. Biden wasn’t telling the truth about Hunter during the debates, and there is no way to defend those answers today.  In the runup to next year’s election, we are likely to learn even more as the congressional investigations continue.

“Even the Biden White House recognizes that the president’s blanket denials are no longer credible.  No doubt it’s why press secretary Karine Jean-Pierre recently switched the official party line from ‘the president never discussed his son’s business with him’ to ‘the president has never been in business with him.’

“The real danger for Mr. Biden in the 2024 debates is if the Republican candidate asks him the obvious: ‘Mr. President, we have learned since 2020 that almost everything you claimed about your son’s business overseas the last time you were on this debate stage was untrue.  Why should the American people believe anything you say now?’”

Thursday, the Republican-led Oversight Committee released the full transcript.

Archer testified that Hunter Biden put father Joe on the speaker phone about 20 times to speak with Burisma executives over Archer’s 10-year business partnership.

“There are touch points and contact points that I can’t deny happened,” Archer said, referring to contacts with Biden while he was vice president. “But nothing material was discussed.”  He said some of the things Hunter and Joe Biden discussed on speakerphone were, “Where are you, how’s the weather, how’s the fishing?”

Archer said Hunter spoke to his father every day “and would sometimes make it apparent that he spoke to his dad, and sometimes he put him on speaker.”

Archer, Hunter and other associates also met in person with Joe Biden for dinner at the Washington restaurant Café Milano twice, according to Archer, in 2014 and 2015 (when Joe was Veep).

“It was dinner conversation,” Archer said, telling the committee that no business was discussed at the dinners.

Again…from the released transcript…Archer told the committee that Hunter Biden never “overtly” told business associates he wanted to use his father for a specific purpose. But he said Hunter sought to prove his worth to Burisma by delivering the Biden family “brand.”  During a later exchange, Archer said, “D.C. was the brand.”

“Given the brand, I think he would look to, you know to get the leverage from it,” Archer said, later adding that Hunter tried to give the “illusion of access to his father.”

Committee Chair Comer, in a statement, said, “Joe Biden was ‘the brand’ that his son sold around the world to enrich the Biden family,” arguing the 20 calls with Hunter Biden and his business associates prove Biden lied when he claimed no knowledge of his son’s business dealings.

On the issue of the termination of Ukrainian prosecutor Viktor Shokin, Archer said he had no reason to believe Joe Biden called for Shokin’s termination for any reason other than to pursue Biden’s anti-corruption policy in Ukraine.  Republicans accuse Joe Biden of calling for Shokin’s removal in exchange for payments to protect Burisma.

Democrats characterized the Archer testimony as a major flop for Republicans’ investigations.

Editorial / Wall Street Journal…following release of the transcript…

“(Devon Archer) further clarified that it was Joe Biden ‘that brought the most value to the brand.’ In other words, Hunter was selling his father’s power in Washington. That is what Burisma was paying for, and it looks like it got its money’s worth.  ‘Burisma would have gone out of business if it didn’t have the brand attached to it,’ Mr. Archer said….

“Mr. Archer also explained how Hunter received $142,300 from Kazakh oligarch Kenes Rakishev to buy an ‘expensive car’ – either a Fisker or a Porsche.  Mr. Rakishev attended a spring 2014 business dinner at Washington’s Café Milano with the Vice President and his son. Also in attendance was Elena Baturina, the wife of Moscow’s mayor, who wired $3.5 million to a company linked to Mr. Archer.  The House Committee says it will provide more details when it releases its next tranche of related financial documents.

“When the public first learned of Hunter’s sleazy deals, Joe Biden denied ever discussing his son’s business with him.  But Mr. Archer has also released a letter from Mr. Biden – on official vice presidential stationary – saying how ‘happy’ he was that Mr. Archer was in business with his son.  The letter was written right after a lunch he and Mr. Archer attended with visiting Chinese President Hu Jintao.

“It’s one thing to develop relationships in office that turn into business opportunities later, the way Jared Kushner, Donald Trump’s son-in-law, did in the Middle East.  It’s another to leverage the office while in office to promote the family business.  As Mr. Archer said, the advantage of the Biden brand is that legally ‘people would be intimidated to mess with them.’

“Whether or not Joe Biden took a dime from these dealings, this is a form of political corruption.  Covered up by the press in 2020, it will be an issue in 2024.  Democrats should worry that as more facts emerge about the Biden mix of politics and business, it could help Mr. Trump neutralize his many legal vulnerabilities.”

And that is exactly what we have today.

For Republicans it’s all about Hunter, and by extension Joe.

For Democrats it’s all about Trump.

I’m one who believes it’s about both of them. 

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This Week in Ukraine….

--What emerged over the weekend is the frankly unreal scene of Wagner Group boss (at least for now), Yevgeny Prigozhin, hailing Niger’s military coup as good news and offering his fighters’ services to bring order.  A voice message on Telegram associated with Wagner said Prigozhin did not claim involvement in the coup, but described it as a moment of long overdue liberation from Western colonizers and made what looked like a pitch for his fighters to help keep order.  The speaker sounded like Prigozhin.

Wagner remains active in Africa, particularly Central African Republic and it does have a presence in Niger.

But the voice message coincided with the publication on Telegram of at least two photos of Prigozhin purporting to show him in St. Petersburg meeting African attendees of a Russia-Africa summit in St. Petersburgh that concluded last Friday; St. Petersburg being the hometown of both Prigozhin and Putin. 

Then in comments to Cameroon-based Afrique Media broadcast over the weekend, Prigozhin lauded the way the Africa summit had gone, praising Putin for forging what he called one-on-one working relationships with African leaders based on trust.

“Russia today offers both…economic relations and security exports, without which Africa today cannot exist,” Prigozhin said.  “The forum went well and we should see the results of it in the near future,” he added, naming Mali, CAR and Niger as countries becoming “more and more independent.”

Just amazing that Prigozhin appears to be back.

--Russia’s Defense Ministry said two drones had crashed in Moscow’s financial district on Sunday after being brought down using radio-electronic equipment.  Air defenses had shot down one more in the air over another area of the city.

“On the morning of 30th July, an attempted terrorist attack by the Kyiv regime using unmanned aerial vehicles against targets in the city of Moscow was foiled,” the ministry said in a statement.

Separately, it said it had also successfully thwarted an overnight attack on Crimea, by 25 Ukrainian drones which it said it had either shot down or forced to crash.  No one was hurt, the ministry said.

--Former Russian President Dmitry Medvedev, who has more than once raised the specter of the use of nuclear weapons in the war, said on Sunday that Moscow would have to use a nuclear weapon if Kyiv’s ongoing counteroffensive was a success.  Medvedev said in a message on his social media accounts that Russia would be forced to fall back on its own nuclear doctrine in such a scenario.

“Imagine if the…offensive, which is backed by NATO, was a success and they tore off a part of our land then we would be forced to use a nuclear weapon according to the rules of a decree from the president of Russia.  There would simply be no other option. So our enemies should pray for our warriors’ (success). They are making sure that a global nuclear fire is not ignited,” he said.

Medvedev, deputy chairman of Russian’s Security Council, appeared to be referring to part of Russia’s nuclear doctrine which sets out that nuclear weapons can be used in response to aggression against Russia carried out using conventional weapons which threatens the existence of the Russian state.

--A senior Ukrainian official reported heavy fighting in the northeast of the country on Sunday, with Kyiv’s forces holding their lines and making gains in some areas. Russia’s military said it had halted Ukrainian forces in the northeast.

President Zelensky described Sunday as “a good day, a powerful day” at the front, near Bakhmut, where Ukrainian forces say they are retaking ground lost when Russian forces took the city in May.

Russian forces then launched the latest in a series of night-time air attacks, hitting Kharkiv, while two were killed in the northern town of Sumy on Saturday.  Saturday, two were killed in a missile strike on the city of Zaporizhzhia.

--A Russian missile strike on the southern Ukrainian city of Kryvyi Rih on Monday killed at least six people, including a 10-year-old girl and her mother, and wounded dozens of others, Ukrainian officials said.

A video posted by President Zelensky showed smoke billowing from a gaping hole smashed in the side of a nine-story residential building, and another four-story building almost leveled.  Zelensky grew up in the steel-producing city with a pre-war population of more than 600,000.  “This terror will not frighten us or break us. We are working and saving our people,” he said on Telegram.

Kherson, now a frontline city in southern Ukraine after being liberated from Russian forces in November, was struck at least twice, two killed, at least ten wounded.

--Russian authorities early Tuesday accused Kyiv of yet another attack on Moscow and its surroundings with drones, one of which hit a building in the capital that was damaged by a drone just days earlier on Sunday.

Russian officials have claimed that the intensified attacks on the capital region reflect failures in Ukraine’s counteroffensive, while President Zelensky said over the weekend that “the war is gradually coming back to Russian territory – to its symbolic centers,” but stopped short of taking responsibility for the attacks.

The Russian Defense Ministry said in the early hours of Tuesday that it shot down two Ukrainian drones outside Moscow and jammed another, sending it crashing into a skyscraper in the city’s business district and damaging the building’s façade.

--Russia hit port infrastructure in southern Ukraine with Shahed drones near the border with NATO member Romania overnight Wednesday, damaging a grain elevator and causing a fire at facilities that transport Ukraine’s grain exports.  Since leaving the grain deal that allowed Ukraine to export through the city of Odesa, Russian has hammered the country’s ports.  Since July 17, Russia has fired dozens of drone and missiles at Odesa and the region’s river ports, used as alternative routes.

Wednesday’s attacks hit the area of the Danube River, which forms part of the Ukraine-Romania border.

Ukraine’s air force intercepted 23 drones over the country overnight, mostly in Odesa and Kyiv.  All 10 drones fired at Kyiv were intercepted, according to officials there.

“Russian terrorists have once again targeted ports, grain facilities and global food security,” President Zelensky posted Wednesday morning on Telegram.  “The world must respond.”

[Reminder, the Black Sea handled about 95% of Ukrainian grain exports before Russia’s invasion, and the Danube River was the only other route to ship it, but the Russian strikes raise questions as to how much longer that route will remain viable, which is a disincentive to keep planting fields already threatened by missiles and strewn with explosive mines.  Corn and wheat production in agriculture-dependent Ukraine is down nearly 40% this year from prewar levels, analysts say.]

--Poland announced it was sending even more troops to its border with Belarus and has summoned the country’s envoy in Warsaw to protest what it described as the violation of its airspace by two Belarusian helicopters on Tuesday.

Tensions continue to escalate after Wagner Group forces moved into Belarus.  Polish Prime Minister Marawiecki warned on Saturday that some of the fighters may attempt to infiltrate his country alongside illegal migrants.

At least 100 Wagner forces have moved close to the Suwalki Gap, a strategic stretch of Polish territory situated between Belarus and Kaliningrad, a Russian territory separated from the mainland, which as I’ve noted many times is a major flashpoint, Russia no doubt having nukes there.

Prime Minister Morawiecki told reporters that Wagner’s moves are “certainly a step towards a further hybrid attack on Polish territory.”

--Kyiv defended itself against the eighth consecutive nightly drone attack early on Thursday morning, officials said.  Fifteen ‘Shahed’ drones.

Serhiy Popko, head of the Kyiv Regional Military Administration, wrote on Telegram: “Eight consecutive attacks of barrage ammunition ‘Shahed’ on Kyiv. And again, like yesterday – a massive attack.  Air defense forces and means on the approach to Kyiv detected and destroyed almost one and a half dozen air targets – this latest air alarm in the capital lasted exactly 3 hours. It became the 820th for Kyiv since the beginning of the full-scale invasion.”

Russia claimed it downed six drones in the Kaluga region, 120 miles from Moscow.

--The European Union warned developing countries that Russia is offering cheap grain “to create new dependence by exacerbating economic vulnerabilities and global food insecurity,” according to a report from Reuters.

--Russia accused Ukraine early Friday of attacking its Black Sea navy base in the port of Novorossiysk with sea drones.

The attack on Novorossiysk is the first time a commercial Russian port has been targeted in the 18-month war.  The city is a major port on the Black Sea and hosts a naval base, shipbuilding yards and an oil terminal (which handles 2% of the world’s oil supply). It is a key port for Russian exports.

Novorossiysk is just across the water from Crimea, where Russia’s Defense Ministry said it thwarted another attack by Ukraine overnight, taking down 13 drones.

The Defense Ministry said it destroyed two Ukrainian sea drones.

But Ukraine said it hit a Russian naval ship in Novorossiysk, the Olenegorsky Gornyak, and that it suffered a serious breach.  Ukraine told the BBC a sea drone carrying 992 lb. of dynamite hit the ship.  Russia made no mention of any damage in its report of the incident.

A video sent to the BBC by a source with Ukraine’s security service appears to show the drone approaching a ship thought to be the vessel in question.

A second video appeared to show the vessel, which is a landing ship with around 100 Russian servicemen on board, listing heavily and being towed to shore.

How good are the Ukrainians at adapting the latest technology to the fight?  It is estimated the sea drones had traveled 460 miles from their likely launch area.  This is awesome.  Slava Ukraini!

--The International Atomic Energy Agency was “finally” granted access to areas of the Russian-held Zaporizhzhia nuclear power plant in Ukraine that it first requested a month ago “and has found no mines or explosives on the rooftops of Unit 3 and Unit 4 reactor buildings and the turbine halls…after having been given access yesterday (Thurs.) afternoon,” the IAEA said.

--At least 20,000 Ukrainians have lost one or more limbs since the start of the war, the Wall Street Journal reported Tuesday citing doctors’ estimates.  [That number could be as high as 50,000 Ukrainians.]  “By comparison, 67,000 Germans and 41,000 Britons had to have amputations during the course of World War I,” which lasted considerably longer and featured less advanced healthcare practices than are common more than a century later.

“Such numbers reflect how Russia wages the war, with heavy use of mines and artillery, missile and drone attacks targeting soldiers and civilians alike,” the Journal writes.  Still, said one soldier, “This war is horrendous and now I, too, am crippled…But I don’t regret it.”

“Each of us already has such a big lump of internal pain that we can no longer cry,” Deputy Defense Minister Maliar wrote Monday on social media.  ‘And every missile strike is a reason for healthy rage to return all our territories and become a strong, in the military sense, state,” she added.

---

--Bernard-Henri Levy / Wall Street Journal

“I knew Rwanda in the time of the genocide against the Tutsi.  I covered the wars in Angola, Eritrea and Burundi. I mobilized against the genocide in Darfur and the massacres in the Nuba mountains, for Christians persecuted in Nigeria and for the antiapartheid militants of South Africa. I stood on the side of the Algerian people when the Islamist groups were killing them off, and I supported the democratic aspirations of Libyan civil society….

“I have a message to Africa – one inspired by friendship, respect and my history of supporting your fight for justice and your hopes: There is, on large parts of your continent – especially its sub-Saharan zone – a strange, shameful and potentially tragic blindness regarding the war against Ukraine.

“I was in Odesa in July, when 17 of your leaders arrived in St. Petersburg for the second Russia-Africa summit. There, the president of Burundi expressed his concern over ‘Western interference’ and the ‘iniquity’ of ‘sanctions inflicted on Russia.’ Vladimir Putin seemed to barely believe it himself; the divine surprise of a blank check for his war against Ukraine by a representative of what Franz Fanon called the wretched of the earth.

“Since the first sanctions vote at the United Nations, on March 2, 2022, many African countries have taken a course of at best abstention and neutrality, and at worst alliance with the murderous Russian regime.

“This attitude is incomprehensible.  Of course no one ignores that you depend on Russian wheat no less than Ukrainian wheat.  But how can you fail to see that the general export blockade has only one culprit – the man who bombs Odesa’s silos, who unilaterally reneges on the grain agreement signed in July 2022, and who launched this senseless, imperial, bloody war?

“Your position is ultimately suicidal. In your refusal to see the reality and in accepting the lies of Mr. Putin’s propaganda, you tie yourself to a man who isn’t your friend.

“Russia is pillaging Sudanese gold, Nigerian uranium and Burkinabe cotton. At the height of the pandemic, Russia sold you the leftovers of their bad vaccines at inflated prices. Russia ridicules your youth by inviting young South Africans to ‘observe’ the phony referendums on annexing territories taken from Ukraine, making them salute these ‘great and wonderful polls.’

“And the Wagner Group – responsible for mass crimes in the Central African Republic, innumerable torture in Mali, and perhaps last week’s coup d’etat in Niger that is taking down the democratically elected government of President Mohamed Bazoum. By what gruesome logic can it be seen as an instrument of a ‘fair and democratic multipolar world order’ determined to fight against ‘neocolonialism,’ as Mr. Putin said at the summit?

“My African friends, Russia definitely isn’t your friend.  In each of your countries where you open your arms wide to Russia, it reproduces the most atrocious of what the French, English, Belgian, Portuguese and German colonizers did before you chased them out.

“Russia’s anti-Western rhetoric and incessant harping on yesterday’s imperialism is a crude distraction that shouldn’t fool you and that has no other effect but to hide the imperialism that Russia practices today.

“This blindness is unworthy of Africa’s history.  You can’t have fought so many wars of liberation only to turn your back on a country, Ukraine, who is taking the same path and shaking free of its chains in turn.

“May the memory of your illustrious pioneers inspire you… Ahmed Sekou Toure and Julius Nyerere would never have let themselves be humiliated by a Russian leader trying, for his own gain, to resuscitate the worst colonial practices.

“Today’s Africa is the continent of the future and has grand historical responsibilities on the world stage.  Its place is alongside the Ukrainians.”

Lastly, jailed Russian opposition leader Alexei Navalny had an extra 19 years added to his jail term on Friday in a criminal case that he and his supporters said had been trumped up to keep him behind bars and out of politics for even longer.

Navalny, 47, Putin’s fiercest domestic critic, is already serving sentences totaling 11 ½ years on fraud and other charges that he says are also bogus.

Journalists were not allowed into today’s hearing, held at his IK-6 penal colony, about 145 miles east of Moscow.  Reuters reported the audio feed from the court was so poor that it was practically impossible to make out what the judge was saying.

Freakin’ Russian bastards.

---

Wall Street and the Economy

We had a slew of important economic data this week, leading up to today’s key jobs report.

The ISM reading on manufacturing for July came in at 46.4 vs. 46.0 prior (50 the dividing line between growth and contraction), while the service sector reading was 52.7 vs. 53.9 in June.  So not great, but signs of slowing which the Fed wants to see.

The Chicago area PMI for July was 42.8 for last month, rather putrid, but up from 41.5.

June factory orders were stronger than expected, up 2.3%.

So today’s employment report for the month of July showed 187,000 jobs were created, lower than the 200,000 expected, with the prior month revised down to 185,000 from 209,000.  Numbers the Fed, again, likes to see.

Average hourly earnings, though, came in at 0.4% and 4.4%, year-over-year, both higher than forecast so the Fed wouldn’t like that.

The unemployment rate ticked down to 3.5%.

The Atlanta Fed’s GDPNow very early barometer for third-quarter growth is at 3.9%.

Freddie Mac’s 30-year fixed-rate mortgage was at 6.90% this week.

But as I noted the other week, consumers most feel inflation through the gas pump and the national price for regular is at $3.83 today, up from $3.52 a month ago.  This impacts consumption.  [The price at the pump down the block from me is at $3.89, up from $3.69 a month earlier.]

Meanwhile, Tuesday evening, Fitch Ratings downgraded the U.S. government’s long-term foreign-currency default ratings to AA+ from AAA.

The ratings agency said the downgrade on the U.S. primary rating reflects “the expected fiscal deterioration over the next three years, a high and growing general government debt burden, and the erosion of governance relative to ‘AA’ and ‘AAA’ rated peers over the last two decades.” 

Fitch also cited repeated debt limit standoffs and last-minutes resolutions.

The move received harsh criticism from all corners, from the Biden administration to Wall Street economists, but good for Fitch!

It’s the truth.  It is outrageous we have a $trillion+ budget deficit in an economy that is growing, and long after the pandemic and emergency spending, and it’s outrageous that our interest expense on the debt is going through the roof with a more normal rate environment, and it’s outrageous there is zero political will on both sides of the aisle to even enact minor tweaks to Social Security and Medicare.

We are headed down a cliff, climate change making it even riskier because it increases the risk of landslides!  [Sorry, I was just reading about the bodies being uncovered by melting glaciers on the Matterhorn and the risks for hikers there today.]

Fitch issued a warning shot and the market finally responded, a little, on Wednesday, plus stocks were heavily overvalued to begin with.

Moody’s Investors Service has the U.S. at AAA and stable.  Standard & Poor’s downgraded the U.S. rating to AA+ after a 2011 fight over the debt ceiling and has yet to readjust it.

For now, the decline in the average has virtually zero impact, even for funds with provisions regarding average ratings (AA+ is still well into investment grade), and the stock and bond markets didn’t react severely like in 2011, which was a short-lived decline.

But there is nothing good to say about our fiscal path and the eventual day of reckoning.  The path we are on is simply unsustainable.

Editorial / Wall Street Journal

“Democrats are attacking Fitch, and Treasury Secretary Janet Yellen criticized the decision as ‘arbitrary and based on outdated data.’ Outdated? Her own department on Monday increased the government’s expected borrowing from July to September to $1 trillion from $733 billion.  That’s for three months.

“She also claims that ‘governance’ has improved under President Biden, citing the infrastructure bill and ‘other investments in America’s competitiveness.’ She must be joking. Since when is blowout spending a credit recommendation?

“Ms. Yellen and Democrats spent months trying to scare markets about even modest future spending reduction.  Congress’ budget process is broken and its tax and spending estimates are often wildly wrong.

“The EV subsidies in the hilariously named Inflation Reduction Act were scored at a cost of $14 billion, but Goldman Sachs estimates they will cost $393 billion because the subsidies are open-ended.  Goldman estimates the climate spending will total $1.2 trillion – three times more than CBO’s estimate.

“Neither Mr. Biden nor Donald Trump shows the remotest interest in reforming entitlements, which will explode as the baby boomers retire.  Mr. Biden and his progressive allies want to create new entitlements that would cost trillions of dollars, while Mr. Trump attacks any Republican who even mentions reform.

“As Piper Sandler’s Andy Laperriere notes, the Trump GOP is moving away from its traditional pro-growth, free-market beliefs to favor protectionism and anti-business policies.  As a result, the U.S. may be settling into a slow growth trajectory as Europe has.  Without faster growth or policy reform, the U.S. fiscal outlook will worsen.

“The reason U.S. debt hasn’t been downgraded earlier and more often is because the dollar remains the world’s reserve currency.  But that ‘exorbitant privilege,’ as the French like to call it, is not a birthright. It can vanish in a flash if markets perceive a broader American decline in governance or its ability to meet its financial obligations.

“This is where political leadership matters, and where it has failed.  The White House criticized Fitch’s decision, but there’s a reason the downgrade happened on Mr. Biden’s watch. It’s a no-confidence vote on U.S. political leaders, and that starts at the top.”

Europe and Asia

Lots of important data for the euro area this week.

A flash report on inflation for July came in at 5.3% for the EA20, down from 5.5% in June and 7.0% in April, but ex-food and energy the rate is still 6.6%, down from 6.8%, and 7.5% in March, as in core inflation is sticky.

Headline flash inflation rates:

Germany 6.5%, France 5.0%, Italy 6.4%, Spain 2.1%, Netherlands 5.3%, Ireland 4.6%.

The European Central Bank seems to want to pause after raising interest rates a ninth consecutive time last week, ECB President Christine Lagarde saying as much, inflation indeed coming down, but 6.6% is hardly the 2% target, so we’ll see.

Prices for services actually accelerated to 5.6% from 5.4% in June.

The final PMIs for July in the eurozone were reported by S&P Global.  Eurozone manufacturing came in at 42.7, a 38-month low, services 50.9, a 6-month low.

Germany 38.8 mfg. (38-mo. low), 52.3 services
France 45.1 mfg. (38-mo. low), 47.1 services
Italy 44.5 mfg., 51.5 services
Spain 47.8 mfg., 52.8 services
Ireland 47.0 mfg. (38-mo. low), 56.7 services
Netherlands 45.3 mfg.
Greece 53.5 mfg. (14-mo. high)

UK 45.3 mfg. (38-mo. low), 51.5 services

Dr. Cyrus de la Rubia, Chief Economist at Hamburg Commercial Bank:

“The Eurozone is off to a bad start in the second half of the year.  According to the PMI, economic output fell in July after stagnating the month before and showing generally solid growth during the first five months of the year.  The slump in activity is driven by manufacturing, but services activity growth has cooled off too, scaling back the support to the economy as a whole.

“It does not require crystal ball powers to see employment growth coming to a halt over the next few months given dimmer prospects for the economy.  However, at least for now companies are still rather reluctant to trim down the staff in the services sector.  Rather, they decide to hire fewer people.

“In the services sector, a weak phase is heralded by the fall of the incoming new business index into contractionary territory.  Amid this development it may be worrisome for the European Central Bank that inflation decreased only slightly in comparison to the month before, according to the PMI survey.”

I’d add rising borrowing costs and stagnating Chinese demand for European goods could also help make for another miserable economic winter in the eurozone.

We had a flash reading on GDP for the second quarter, up 0.3% in the eurozone over the first quarter, and up 0.6% compared with the same quarter of the previous year.

But the key nation, Germany, was unchanged in Q2 over Q1, after negative quarters in 2022Q4 and 2023Q1.

2023Q2 vs. 2022Q2

Germany -0.1%, France 0.9%, Italy 0.6%, Spain 1.8%, Ireland 2.8%.  [Eurostat]

The euro area’s unemployment rate was 6.4% in June, stable compared with May, and down from 6.7%.

Germany 3.0%, France 7.1%, Italy 7.4%, Spain 11.7%, Netherlands 3.5%, Ireland 3.8%.  [Eurostat]

June industrial producer prices were down 0.4% in June over May for the EA20, and down 3.4% year-over-year. [Eurostat]

June retail sales fell 0.3% in the euro area over May, and were down 1.4% vs. a year ago.  [Eurostat]

Britain: The Bank of England raised its key interest rate by a quarter of a point to a 15-year peak of 5.25% on Thursday, the 14th hike, and gave a new warning that borrowing costs were likely to stay high for some time.  The BoE’s Monetary Policy Committee gave little suggestion that rate hikes were about to end as it battles high inflation.

“The MPC will ensure that Bank Rate is sufficiently restrictive for sufficiently long to return inflation to the 2% target,” the BoE said in new guidance about the outlook for rates.

“Some of the risks of more persistent inflationary pressures may have begun to crystallize,” it added.

British inflation hit a 41-year high of 11.1% last year and has fallen more slowly than elsewhere, dropping to 7.9% in June, the highest of any major economy.

The current consensus is that the BoE would hike another 50 basis points to 5.75% later this year.

“Inflation hits the least well-off hardest and we need to make absolutely sure that it falls all the way back to the 2% target,” Governor Andrew Bailey said.

Turning to Asia…China’s National Bureau of Statistics released the PMIs for July, with manufacturing down a fourth straight month, 49.3 vs. 49.0 in June.  The service sector reading was 51.5 vs. 53.2 prior.  For good reason China’s Politburo – the top decision-making body of the ruling Communist Party – called the economic recovery “tortuous.”

Caixin’s private sector PMI readings for the month were 49.2 for manufacturing, and 54.1 for the service sector.

Japan’s July manufacturing PMI was 49.6 vs. 49.8 in June, with services at 53.8.

Separately, June industrial production fell 0.4% year-over-year, while retail sales rose 5.9% Y/Y.

South Korea’s July manufacturing PMI was 49.4, up from 47.8 in June, but exports fell more than expected in July and at the steepest pace in more than three years, trade data showed on Tuesday, raising concerns that the downturn may drag on longer than expected amid persistently weak demand from China.

Overseas sales by Asia’s fourth-largest economy fell 16.5% year-on-year, compared with a 6.0% decline in June, the biggest fall since May 2020 and the 10th consecutive month exports fell in annual terms.

Taiwan’s July manufacturing PMI was 44.1 vs. 44.4 prior.

Street Bytes

--Stocks fell after a strong 3-week run, despite economic data that is conducive to a soft landing.  Call it a breather, stocks overvalued anyway in my estimation and summer trading light as always.  Plus Wednesday was ugly after the Fitch downgrade.

The Dow Jones lost 1.1% to 35065, the S&P 500 fell 2.3% and Nasdaq 2.9%.

The S&P was up 3.1% in July, its fifth consecutive month in positive territory.

Next week we have a key reading on consumer prices, which the Fed will espy closely.

--U.S. Treasury Yields

6-mo. 5.45%  2-yr. 4.76%  10-yr. 4.04%  30-yr. 4.20%

Crazy week in the bond pits, as the yield on the 10-year went from last Friday’s close of 3.96% to 4.20% this morning, only to fall back to 4.04%.  The jobs report supplied the Fed with ammunition to pause in September, but initially when it came out, for a brief moment, traders focused on the higher than expected average hourly wages component.  The surge in yield to 4.20% was also aided by the Treasury Department’s announcement of some rather large auctions coming up, as expected, but the demand isn’t going to meet supply, at least that was my read.

--British oil giant BP saw its second-quarter profit drop almost 70% from its year-ago bonanza, as lower commodity prices and weak refining margins hit results.

The oil major’s profit missed market expectations and fell more sharply compared with roughly 50% declines recorded by bigger rivals Exxon Mobil, Shell and Chevron. 

BP said maintenance activity at production sites and weak oil-trading results in the three months ending June 30 were partially offset by what it called exceptional natural-gas trading returns.

BP’s second-quarter net income fell to $1.8 billion from $9.3 billion in the same period last year.  Net debt at the end of Q2 was $23.7 billion, up from $22.8 billion a year ago.

BP flip-flopped on earlier green-energy pledges, saying in February it would increase spending on oil-and-gas production.

--Speaking of crude, Russian Deputy Prime Minister Alexander Novak, Putin’s top oil guy, said global demand is set to grow 2.4 million barrels per day this year, and strong demand makes the market balanced, Novak said today, following a meeting of OPEC+, which is keeping production at existing levels.

Oil, as measured by WTI, closed the week at $82.61, the sixth straight week of rising prices.

--Apple on Thursday forecast that a sales slump would continue into the current quarter, sending shares down 4% despite beating Wall Street sales and profit targets in the fiscal third quarter.

The company predicted the current quarter would be the fourth in a row of declining sales.

For the just-ended period, strength in services drove the profit beat, but weaker than expected sales of Apple’s most famous device, the iPhone, underwhelmed investors.  Executives said iPhone sales would improve in the fourth quarter, but did not say how much.

Apple is in a delicate position, with its entrenched iPhone battling for share against Android rivals in a mature market, while its next big product – the Vision Pro mixed-reality headset announced in June – is not yet in the hands of consumers, plus it costs a zillion dollars.

Apple said sales for the fiscal third quarter ended July 1 fell 1.4% to $81.8 billion and earnings per share rose 5% to $1.26.  That topped expectations of $81.69 billion and $1.19 per share, according to Refinitiv.  Weaker iPhone sales were balanced by strong sales in the services segment that contains Apple TV+ and by sales in China that grew 8% year-over-year. 

Apple CFO Luca Maestri said the company expects a Y/Y revenue performance in the company’s fiscal fourth quarter ending in September similar to the drop the company reported on Thursday, which is a sales forecast below current consensus of about $90.2 billion.

While Apple expects growth in its service segment, iPad and Mac sales will fall by “double digits,” Maestri said on an analyst call.

The last quarter, Mac and iPad sales were $6.84 billion and $5.79 billion, respectively.

Apple’s research and development spending also hit $22.61 billion for the fiscal year so far, about $3.12 billion higher than at this point in the previous year.

Apple CEO Tim Cook said the increased R&D spending was in part driven by work on generative artificial intelligence research.

Apple’s iPhone sales in its greater China region hit $15.76 billion, up from $14.60 billion in last year’s same quarter.  Overall iPhone sales were $39.67 billion, below expectations.  Cook said the installed base of iPhones hit a new high but gave no numbers.

You can see how critical China remains for Apple.  If I were an investor I’d be nervous, but then I’ve been saying that about Apple and China for like the past decade.

So for good reason, Apple increasingly focuses on services, with Apple TV+ announcing a deal to carry Major League Soccer.  Revenue for the segment was $21.21 billion, above consensus of $20.76 billion.  Cook said Apple now has 1 billion subscribers on the platform, up from 975 million a quarter ago.

--Amazon.com on Thursday reported sales growth and profit ahead of Wall Street’s expectations, as the company delivered goods faster and more cheaply to shoppers and as recent cloud-computing headwinds began to subside.  Amazon’s shares surged over 9% in response.

Facing an array of challenges, Amazon has aimed to keep its mantle as the world’s biggest cloud provider and online retailer.  The company recently answered AI front-runners Google and Microsoft with rival services of its own, drawing thousands of customers and touting the breadth of technology it has on offer, similar to what’s powering the human-like chatbot ChatGPT.

In retail Amazon has reorganized its delivery network and opened warehouses for same-day shopping closer to big metro areas, saving time and costs on delivery.  Brian Olsavsky, Amazon’s CFO, said on a call with reporters that faster speeds have meant Prime loyalty customers are “shopping more often.”

For the second quarter, Amazon’s revenue grew 11% to $134.4 billion, handily beating estimates of $131.5 billion.  Amazon’s cloud-computing division has been key to the company. In recent months, Amazon Web Services (AWS) saw its sales growth slow as economy-wary businesses scrutinized their cloud bills.  Olsavsky said such “cost optimization” continued, but big companies were embracing the cloud anew, a lift to the division this spring and summer.  CEO Andy Jassy said in a statement, “Our AWS growth stabilized.”  The unit beat estimates of around $21.7 billion in second-quarter cloud sales, increasing them 12% to $22.1 billion.  Its rivals posted bigger jumps off smaller bases: 28% growth in Alphabets’ June-quarter cloud revenue and a 26% quarterly increase for Microsoft’s Azure.

The company forecast current-quarter net sales in the range of $138 billion and $143 billion, with analysts expecting $138.25bn.

Amazon has aimed to cut costs all the while, with 27,000 people affected by layoffs or what had been 9% of its roughly 300,000-person staff.

Quarterly profit came in at $6.7 billion, nearly double expectations.

--General Motors said on Thursday that it expects to offer union workers higher wages but granting the United Auto Workers’ ambitious contract demands would hurt its ability to make sound business decisions.

The largest U.S. automaker said the proposals “would threaten our ability to do what’s right for the long-term benefit of the team.”  The UAW presented its economic demands to Chrysler-parent Stellantis on Tuesday, GM on Wednesday and Ford on Thursday ahead of the Sept. 14 expiration of the current four-year contracts.

The union is seeking significant hikes in wages, defined-benefit pensions for all workers and shorter work weeks.  It wants to make all temporary workers at U.S. automakers permanent, increase paid time off and restore retiree health care benefits and cost of living adjustments.

UAW President Shawn Fain on Tuesday said the union demands were its “most audacious and ambitious” proposals in decades.  Fain cited CEO pay at the Detroit Three, with GM CEO Mary Barra receiving $29 million in 2022.  He said an entry level worker at a GM joint venture battery plant would have to work 16 years to earn as much as she made in a week.

Well, you can see where this is headed.  A strike(s) seems inevitable.  Fain, as I noted a while back, had already warned his workers a strike would probably be necessary.

--Caterpillar Inc. warned of a fall in third-quarter sales and margins on Tuesday as dealer inventories rose again, stoking worries that demand for its heavy machinery used in everything from construction to mining may have peaked. 

The company, seen as a proxy for global economic activity, said on Tuesday it was expecting third-quarter sales and operating profit margin to be higher than in the previous year, but lower compared to the second quarter.  CAT reported a $600 million increase in dealer inventory in the second quarter from a year earlier, primarily in its energy and transportation business, as drilling at North American rigs shows signs of weakening.

But the company’s ramp-up in production is being driven by its strategy to make up for lost sales due to a constrained supply chain, analysts said.  CEO Jim Umpleby said when asked about the outlook for next year, “we’re closely monitoring economic conditions, but we do feel good about the business.  But as I’m sure you know, we’re not going to make a ’24 prediction at this point.”

Umpleby added: “We feel good about the quality of the backlog.”

CAT reported an adjusted profit of $5.55 per share in the second quarter, beating expectations of $4.58.  Sales rose 21.6% to $17.32 billion, also well above forecasts of $16.49bn.  And so the shares, despite the issues, rose 8%.

--Shipping group A.P. Moller-Maersk warned on Friday of a steeper decline in global demand for shipping containers by sea this year, prompted by muted economic growth and customers reducing inventories.

The company, one of the world’s biggest container shippers with a market share of around 17%, said it expects container volumes to fall by as much as 4%.  It had previously forecast a decline of no more than 2.5%.

Maersk transports goods for retailers and consumer companies such as Walmart, Nike and Unilever, and is seen as a barometer for global economic and corporate health.

The company said the number of containers it loaded onto ships between April and June fell by 6% from a year earlier, while average freight rates halved.

--TSA checkpoint numbers vs. 2019

8/3…98 percent of 2019 levels
8/2…99
8/1…99
7/31…102
7/30…104
7/29…104
7/28…102
7/27…99

--Chip giant Intel is increasing its business ties in China with a new innovation hub in Shenzhen meant to help domestic start-ups, even as Washington puts increasing pressure on semiconductor firms to reduce trade with the country.

The center will focus on artificial intelligence, chip applications and edge computing, among other technologies, a statement from Intel and the Nanshan district government in Shenzhen said.

Intel CEO Patrick Gelsinger concluded a low-key trip to China earlier this month, his second to the country in three months.

--Intel rival Advanced Micro Devices on Tuesday forecast a strong fourth quarter and expects to have artificial-intelligence hardware that can challenge Nvidia chips by then.

AMD CEO Lisa Su said the company is set to ramp production of its MI300 AI chips in Q4, describing customer as “very high” and that AMD expanded its work with “top-tier cloud providers, large enterprises and numerous leading AI companies” during the third quarter.

But AMD has not given a detailed full-year forecast, though it said it expects sales in its data center business that will contain MI300 sales to be higher in 2023 than 2022’s $6.04 billion total.

That said, for the second quarter, revenue at AMD’s data center business fell 11% to $1.32 billion, while revenue at its client business fell 54% to $998 million from $2.2 billion a year ago.  As in why such rosy forecasts when business has been down?

Well, AMD finance chief Jean Hu said: “Looking to the third quarter, we expect our Data Center and Client segment revenues to each grow by a double-digit percentage sequentially driven by increasing demand for our processors, partially offset by Gaming and Embedded segment declines.”  The company forecast current-quarter revenue of about $5.7 billion, plus or minus $300 million, which was sort of in line with existing forecasts.

It's just that AMD shares had already soared gobs this year (82%) so the shares fell 7% on Wednesday.

--One of Ireland’s biggest employers, Accenture, is axing 890 jobs, on top of 400 it shed over recent months on the Emerald Isle.  The Irish-headquartered multinational ranks as one of the country’s biggest private sector employers and with 6,500 workers based there, this represents 20 percent of its Irish workforce.

Just showing what happens worldwide, as the tech sector cuts back, post-pandemic.

--Michael R. Bloomberg / Washington Post

“Anyone who has set foot in Washington recently knows that the city remains a shadow of its former self, as too many federal employees continue working from home. At some agencies, employee absences have negatively affected customer service. This has gone on too long. The pandemic is over.  Excuses for allowing offices to sit empty should end, too.

“In his State of the Union address in March 2022, President Biden promised that ‘the vast majority of federal workers will once again work in person.’ Ten months later, when most workers still weren’t back in offices, D.C. Mayor Muriel E. Bowser (D) urged ‘decisive action by the White House.’  Instead, this past April, the White House came up with new guidance that once more encouraged federal workers to return to the office – and once more set no firm targets or timelines.  Unsurprisingly, little has changed.

A recent survey by the Government Accountability Office shows just how bad the situation remains.  The GAO measured 24 federal agencies’ use of their headquarters during one week in each of January, February and March.  Six of these agencies – the Agriculture Department, the General Services Administration, the Department of Housing and Urban Department, the Office of Personnel Management, the Small Business Administration and the Social Security Administration – recorded an average occupancy rate of less than 10 percent.  Seventeen of them averaged 25 percent or less.  Across all 24 agencies, the average was only a little more than 20 percent. In other words: Federal office are mostly empty….

“At Blomberg, for more than a year, we have been asking employees to work in our offices at least three days a week.  There will always be a need for exceptions, of course, but more than 80 percent of our people have been meeting the standard.  In the fall, much of the company will move to four days a week, as some of our employees are already doing.

“Our managers have seen the benefits of returning to in-person work, and we have heard about those benefits from their teams, too, especially from young people just starting their careers. When senior managers are not present to mentor and nurture junior staff members, it hurts their professional development and prospects for career growth – and the future of the organization, too….

“Employee union leaders are resisting return-to-office efforts, of course, but the case for remote work looks increasingly weak. Though some early research found that remote employees were more productive than those in the office, newer studies are finding the opposite. Remote work’s organizational benefits, if any, are likely to fade with time because the first months of working from home can draw on established relationships and office-based patterns of collaboration. With time and as workers change jobs, these understandings break down.  In jobs where productivity is hard to measure, face-to-face supervision and mentoring are especially important….

“The federal government should lead by example, and the president should keep his promise. Taxpayers deserve immediate action and hard deadlines – and the better service and stronger capital city that will result.”

God, I wish he was president.

--CVS Health topped second-quarter expectations, but the health care giant’s profit sank as pricing pressure hurt its drugstore business and rising medical costs hit the health insurance side.

The drugstore chain, pharmacy benefit manager and insurer said Wednesday that it posted adjusted earnings of $2.21 per share in the quarter ending June 30, with total revenue up 10% to $88.92 billion, though net income plunged 37% to $1.9 billion, both earnings and revenue beating the Street.

CVS Health operates one of the nation’s largest drugstore chains with nearly 10,000 retail locations.  It runs prescription drug plans for big clients like insurers and employers through a large pharmacy benefit management business.

It also provides health insurance for more than 25 million people through its Aetna arm. 

It kept guidance for the full year at between $8.50 and $8.70 per share.  Shares rose 2% in a down market Wednesday.

But CVS also said it was shedding about 5,000 jobs to help reduce costs, primarily corporate positions. CVS said it doesn’t expect customer-oriented roles in stores, pharmacies and clinics will be affected in the layoff plan.

Personally, I appreciate that CVS called me and said, “Come in and get your shingles shot!”  Actually, they didn’t scream at me, but I would have deserved it, putting this off for too long.

--Yellow, one of the oldest and biggest U.S. trucking businesses, shut down on Sunday, wrecked by a string of mergers that left it saddled with debt and stalled by a standoff with the Teamsters union.

The 99-year-old company is known for its cut-rate prices and has more than 12,000 trucks moving freight across the country for Walmart, Home Depot and many other smaller businesses.  What Yellow couldn’t deliver – despite swallowing rivals, getting union concessions and securing a government bailout – was consistent service for customers or profits for investors.

A failure imperils nearly 30,000 jobs, including around 22,000 Teamsters members.  Hundreds of its nonunion employees were laid off Friday after the company stopped taking in new shipments from customers.

Disruptions were expected to be limited, as many customers shifted their cargoes to rivals in recent weeks, hastening Yellow’s demise.

A shutdown brings new scrutiny to the Trump administration’s decision to give the company a $700 million Covid rescue loan in 2020.  The U.S. Treasury now holds about 30% of Yellow’s shares, which have plunged and ended last Friday at 71 cents apiece.  [The shares then stupidly soared to above $3 this week, as a bankruptcy filing loomed.]

--Yum Brands topped market estimates for quarterly sales on Wednesday, as cheaper meals and promotional offers at its KFC restaurants boosted demand and overshadowed lackluster traffic at Taco Bell and Pizza Hut.

The company has attracted more lower-income consumers who have been most hit by inflation through aggressive promotions and value meal deals, while an array of new menu item launches across its brands have helped boost traffic.

Yum is also benefiting from cooling costs of key commodities such as chicken, cheese and pork.

Quarterly comp sales at KFC rose 13%, beating estimates of 8.3% and logging the best same-store sales growth in at least seven quarters.  Meanwhile, Taco Bell’s second-quarter same store sales grew 4%, slightly below expectations.  Operating margin at KFC rose to 47.7% in the quarter from 43.2% a year earlier, while at Taco Bell, it improved slightly to 36.8%.

I remain very upset that I don’t have either a Taco Bell or KFC within 15 minutes of me and it has impacted my life deeply.

--Starbucks reported record revenue in its fiscal third quarter as its China business roared back to life.  Same-store sales jumped 46% in China, reversing last year’s declines due to Covid infections.

The coffee giant said its revenues rose 12% to $9.2 billion in the 13 weeks ending July 2.  But that fell short of the Street’s forecasts of $9.3 billion.

Starbucks’ global same-store sales increased 10%, also lower than consensus of 11%.

North American same-store sales rose 7%, largely due to higher prices and customers ordering more items per visit.  Customer traffic was up just 1%.

Starbucks said its net income rose 25% to $1.1 billion, or 99 cents per share, higher than the 95 cents forecast.

The shares were largely unchanged Wednesday (earnings released after the close Tuesday), which was OK, given the down market.

--Marriott International Inc. raised its full-year profit forecast on Tuesday, as the U.S. hotel operator bets on higher room rates and resilient travel demand to boost its earnings.  Hotel operators have begun to reap benefits from a strong rebound in international travel as the easing of pandemic-related restrictions and a strong U.S. dollar have emboldened consumers to travel overseas.

“While conditions could change rapidly, booking trends remain solid.  We are raising our full-year rooms growth and earnings guidance,” said CEO Anthony Capuano.

The company sees full-year adjusted profit of $8.36 to $8.65 per share, up from the prior forecast of between $7.97 and $8.42 per share.  Marriott’s revenue per available room, or RevPAR, rose about 13.5% in the quarter from a year earlier.

Second-quarter revenue of $6.08 billion beat analysts’ average estimate of $5.99 billion. Earnings of $2.38 beat consensus of $2.18.  Second-quarter net income rose 7% to $726 million, beating estimates of $654.6 million.

Marriott’s results follow Hilton’s upbeat earnings last week, underscoring the strength in consumer spending on travel.

--Anheuser-Busch InBev saw U.S. sales and profits plunge in the second quarter as drinkers abandoned Bud Light over the Dylan Mulvaney controversy.

On Thursday, AB InBev said its second-quarter revenue in the U.S. – its largest market – dropped 10.5%, while earnings fell 28.2%.  The company attributed the big profit drop to losing market share as well as spending more on marketing and support for distributors who have been battered by the slump in Bud Light.

The results cover the three months to June 30, with the boycott of Bud Light beginning in April.

AB InBev said that while the company’s market share of the U.S. beer industry had declined over the quarter, it had been stable since the last week of April through the end of June.

Since the boycott, Anheuser-Busch has stepped up production of new Bud Light ads, emphasizing football and country music.  The brewer has also told its distributors that it would buy back unsold cases of beer that have gone past their expiration date.

AB InBev fared better outside the U.S.  Volumes in the Asia Pacific region grew 9.5%.  Volumes were flat in Europe, the Middle East and Africa, while in South America they declined 1.9%.

Overall, the company reported a 7.2% rise in second-quarter revenue on an organic basis – which strips out the impact of currency and mergers and acquisitions.

Molson Coors earlier this week said it had recorded the best quarter for sales since 2005 after gaining share in the U.S.   In the second quarter, Coors Light and Miller Lite combined were 50% bigger than Bud Light by value, it said – a big reversal in fortunes from one year ago, when Bud Light was larger than both those brands combined.

--Norwegian Cruise Line on Tuesday forecast downbeat third-quarter profit after a strong second quarter, as elevated costs offset gains from robust demand and higher ticket prices, sending the company’s shares tumbling more than 13%.  While higher costs have been a nagging pain for most cruise operators, they have also benefited from pent-up demand for leisure travel, with many picking cruises that offer a range of fun activities under one-roof over more expensive land-based vacations.

Royal Caribbean last week forecast an upbeat third-quarter profit and also lifted its annual profit expectations.

Despite undertaking price hikes on its itineraries, Norwegian Cruise has been bogged down by higher borrowing costs, inflation, a stronger U.S. dollar, spiraling marketing expenses and higher labor costs.

Rival Carnival has also forecast third-quarter profit below estimates, signaling that rising marketing and labor costs were eating into its gains from higher ticket prices and steady demand.

Norwegian’s revenue in Q2 rose 85.8% to $2.21 billion, and an adjusted profit of 30 cents per share, both the top and bottom line beating expectations, but it was all about Q3.

--SeaWorld Entertainment warned that attendance fell in the second quarter, as the scorching summer heat kept some visitors away from the company’s theme parks during a crucial period.

Orlando-based SeaWorld runs three of its namesake parks in the U.S. as well as others under the Busch Gardens banner and other brands.

For the three months through June 30, SeaWorld estimates that it drew 6.1 million visitors, down from 6.3 million a year ago.  The company said the decline was driven by “adverse weather across a number of the company’s markets, including during peak visitation periods.”

Final results will be released Aug. 8, but the company estimates that quarterly sales will be $494 million to $497 million, lower than the $504.8 million that the company recorded in the same period last year and below the $518.3 million that Wall Street analysts expected.  Visitors who did show up, spent more on average than they did last year.

The warning from SeaWorld comes after the Wall Street Journal reported that traffic to Walt Disney’s theme parks slowed this year, and CEO Robert Iger confirmed last month that a scorching July 4 weekend in Orlando weighed on attendance.

--Bed Bath & Beyond is no longer.  At least as you and I knew it.  The final stores closed last weekend.  I went into my local/flagship store a few times during the liquidation sale and ended up buying one pillow for 60% off.  But the last time I was there was about 7 days before the end and it was sad.  Literally, 95% of the shelves were empty, two employees left.

It used to be my favorite store to just browse through, but then management made the fatal mistake of going basically all house-brand.  Gone were the days where I could find New York Mets and Jets bottle openers.

Alas, the name now survives as Overstock swapped its name for BBBY.

“We thought we had a good operating model but a bad name; we thought Bed Bath & Beyond had a great name but a bad operating model,” said Overstock CEO Jonathan Johnson.  Overstock, unlike BBBY, doesn’t own its inventory.  Rather, third-party suppliers ship the items directly to customers.

So go ahead, punch up Overstock.com and you’ll see BBBY.  Sign up for the coupons…though it’s only 15%, not 20%.

--Warner Bros.’ “Barbie” and Universal Pictures’ “Oppenheimer” continued to dominate the domestic box office last weekend as Disney’s “Haunted Mansion” crept into third place, according to estimates from ComScore.

“Barbie” was No. 1 again, adding $93 million in its second frame for a North American cumulative of $351.4 million.  “Oppenheimer” stayed in second place, grossing $46.2 million for a North American total of $174.1 million.

“Barbie” has collected more than $750 million worldwide, while “Oppenheimer” is at $400 million in global ticket sales.

“Haunted Mansion” took in a disappointing $24.2 million domestically, especially considering it cost at least $200 million to produce and market.

Foreign Affairs

China: Two active-duty U.S. Navy sailors were arrested on charges of handing over sensitive national security material to China, U.S. officials said Thursday.  Assistant Attorney General Matt Olsen told reporters in San Diego that because of their actions, “sensitive military info ended up in the hands of the People’s Republic of China,” Olsen said.

The U.S. has accused China of espionage and cyberattacks, a charge that Beijing has rejected.  China has also declared that it is under threat from spies.

But look at China’s weaponry (very similar to ours), due to the stealing of intellectual property, and then reverse engineering.  And look at the massive spying taking place on U.S. military bases by China.

The two, if found guilty, of course should be executed.

Along these lines, the New York Times published a story last weekend by David E. Sanger and Julian E. Barnes that read in part:

“The Biden administration is hunting for malicious computer code it believes China has hidden deep inside the networks controlling power grids, communications systems and water supplies that feed military bases in the United States and around the world, according to American military, intelligence and national security officials.

“The discovery of the malware has raised fears that Chinese hackers, probably working for the People’s Liberation Army, have inserted code designed to disrupt U.S. military operations in the event of a conflict, including if Beijing moves against Taiwan in coming years.

“The malware, one congressional official said, was essentially ‘a ticking time bomb’ that could give China the power to interrupt or slow American military deployments or resupply operations by cutting off power, water and communications to U.S. military bases.  But its impact could be far broader, because that same infrastructure often supplies the houses and businesses of ordinary Americans, according to U.S. officials….

“(U.S. officials) say the Chinese effort appears more widespread – in the United States and at American facilities abroad – than they had initially realized.  But officials acknowledge that they do not know the full extent of the code’s presence in networks around the world….

“The first hints of the new campaign by Chinna came in May, when experts at Microsoft released some details of the malware found in Guam* – home to major U.S. Air Force and Marine bases – and elsewhere in the United States.”

*Guam, two months after a typhoon walloped it, is still recovering with the U.S. Air Force continuing to clean up facilities around the island, including more than 175 tons of debris, as well as picking up pieces of destroyed shelters for two of the U.S. military’s Terminal High Altitude Area [missile] Defense systems that have been posted in Guam for nearly a decade.

Regarding Taiwan, China accused the United States this week of turning Taiwan into an “ammunition depot” after the White House announced a $345 million military aid package for Taipei.

But while Taiwan has purchased $19 billion worth of weaponry, overall, much of it has yet to be delivered.

On Sunday, Taiwan’s Ministry of National Defense said it was tracking six Chinese navy ships near the island.

Meanwhile, China replaced two leaders of an elite unit managing its nuclear arsenal, triggering speculation of a purge.

General Li Yuchao who headed the People’s Liberation Army’s Rocket Force unit and his deputy had “disappeared” for months.

This is the biggest unplanned shake-up in Beijing’s miliary leadership in almost a decade.

Separately, Japan released its annual defense white paper last weekend, calling China the “greatest strategic challenge,” while labeling North Korea an “imminent threat.”  Japan needs to “fundamentally” strengthen its military and “work more closely with countries like South Korea to preserve regional stability,” the white paper said.

The document is a reaffirmation of Tokyo’s commitment to playing a more active role in East Asian security.

Taiwan is of course a serious concern for Japan, for one because it is a crucial source of semiconductors for Japanese industry.  And with North Korea’s stepped up missile launches, there are rising fears of a strike, whether accidental or intentional.

North Korea: The White House is increasingly concerned North Korea will send munitions to Russia, as Russia seeks to increase military cooperation with Pyongyang, witness the appearance of Russia’s defense minister there last week.

Separately, North Korea confirmed custody of Travis King in its first response to requests for information on the U.S. soldier’s whereabouts, the UN Command has said.

The UN gave no further information, as it “did not want to interfere with the efforts to bring him home.”

But Pyongyang’s reply could indicate the North is ready to start negotiating.

The UN Command polices the Demilitarized Zone, thus their critical involvement.

Niger: Hundreds of supporters of Niger’s military junta marched in the capital Niamey on Thursday to protest against West African sanctions, as the region’s defense chiefs were due to wind up talks on a possible intervention to restore democracy.

General Tiani, the former head of Niger’s presidential guard (and a man who trained in the U.S., like many of Africa’s coup leaders, incidentally), confined President Mohamed Bazoum to his residence last Wednesday and declared himself head of state in the seventh coup in West and Central Africa since 2020.

The main regional bloc, the Economic Community of West African States (ECOWAS) has imposed sanctions and said it could authorize the use of force if soldiers did not restore Bazoum to power by Sunday.  It has taken its hardest line yet with Niger, saying it had to show that it “cannot only bark but can bite.”

One of the demonstrators in Niamey held a placard that said: “Long live Niger, Russia, Mali and Burkina. Down with France, ECOWAS, EU.”

Like the recent coups in neighboring Burkina Faso and Mali, Niger’s military takeover has come amid a growing wave of anti-French sentiment, with locals saying they want the former colonial ruler to stop interfering in their affairs.

Mali and Burkina Faso – also ruled by military juntas – said they would come to Niger’s defense and that any outside intervention to restore the ousted government would be seen as a declaration of war.

France has up to 1,500 troops in Niger, helping to fight an Islamist insurgency that has spread across the region.  The U.S. has 1,000 in the country for the same purpose.  What happens to these troops is one of the big questions.

Western countries are concerned that Niger will turn towards Russia as an ally.  Yevgeny Prigozhin said last week he welcomed the coup and said his forces were available to restore order.

In a televised address on Wednesday night, Tiani vowed not to bow to international pressure to step down and called the sanctions “inhumane.”  He said he rejected any foreign interference but was open to dialogue within the country.

There are signs that regional sanctions are starting to have an impact: Nigeria cut power supplies to Niger, while Nigerian truckers were stranded in limbo by border closures. 

Niger has been an important Western ally in a fight against groups linked to al Qaeda and Islamic State, and the coup has been condemned by foreign powers who fear it could allow the militants to gain ground.

Niger is also the world’s seventh-biggest producer of uranium.

Amid the chaos in Niamey, the likes of France, other European states and the U.S. seek to complete evacuations of hundreds of their citizens.

Friday, ECOWAS said it had a plan for potential military intervention to reverse the coup, including how and when to deploy forces.  ECOWAS will not divulge to the coup plotters when and where it will strike.

Pakistan: At least 54 people were killed in the country’s northwest over the weekend in an apparent suicide bombing, probably orchestrated by an Islamic State affiliate that is active near the border with Afghanistan.  The group has previously targeted members of Jamiat Ulema-e-Islam-Fazi, the Islamist political party that organized the rally.

Bottom line, the security situation in Pakistan continues to deteriorate and this is a country with nukes, the security of which has always been called into question.

Another general election is slated for the fall, and such attacks dissuade voters from going to the polls.

Random Musings

--Presidential approval ratings….

Gallup: New numbers…40% approve of President Biden’s job performance, 55% disapprove; 38% of independents approve (July 3-27). The previous split was 43-54, 41 Ind.

Rasmussen: 46% approve, 53% disapprove (Aug. 4).

A New York Times/Siena College poll gave President Biden a 39% approval rating, 54% disapproval.

In a hypothetical matchup with Donald Trump, the two were tied at 43% apiece among registered voters.

Among Democrats who planned to participate in their party’s primary, Biden had the backing of 64%, while Robert F. Kennedy Jr. polled 13% and Marianne Williamson 10%.

--A different New York Times/Siena College national poll released Monday showed Trump leading the field with a whopping 54 percent of likely Republican voters, to Ron DeSantis’ 17 percent.  No other candidate topped 3 percent!

Republicans who described themselves as “very conservative” favored Trump by a 65-15 margin.

In a hypothetical one-on-one race between Trump and DeSantis, Trump wins 62 percent to 31 percent.

A New York Times/Siena poll of Iowa Republicans had a tighter race there, with Trump receiving 44%, DeSantis 20%, and Tim Scott 9%.

--A separate report Monday showed that Trump’s joint fundraising committee raised $53.9 million during the first half of this year for his presidential campaign, but it spent more than $52 million in the same period, including $40 million in legal fees.

--Some comments from Republican presidential contenders regarding the Jan. 6 indictments.

Mike Pence took a strong stance, accusing his former boss of making “knowingly false” claims of voter fraud in a desperate bid to stay in power.

“Today’s indictment serves as an important reminder: anyone who puts himself over the Constitution should never be President of the United States,” Pence tweeted.

“Our country is more important than one man.  Our Constitution is more important than any one man’s career,” he added in another post.

“On January 6th, Former President Trump demanded that I choose between him and the Constitution.  I chose the Constitution and I always will.”

Chris Christie called the latest charges “a stain on our country’s history.”

“The events around the White House from election night forward are a stain on our country’s history & a disgrace to the people who participated,” Christie tweeted.

“This disgrace falls the most on Donald Trump. He swore an oath to the Constitution, violated his oath & brought shame to the presidency.”

Former Arkansas Gov. Asa Hutchinson: “I have always said that Donald Trump is morally responsible for the attack on our democracy,” he tweeted.  “Now, with today’s indictment, our system of Justice will determine whether he is criminally responsible.”

But Florida Gov. Ron DeSantis vowed in a tweet to “end the weaponization of government, replace the FBI Director, and ensure a single standard of justice for all Americans.”

South Carolina Sen. Tim Scott expressed his concern about Biden’s Justice Department and “its immense power used against political opponents.”

“What we see today are two different tracks of justice.  One for political opponents and another for the son of the current president,” Scott tweeted in reference to Hunter Biden.  “We’re watching Biden’s DOJ continue to hunt Republicans, while protecting Democrats.”

--Donald Trump on Sunday vehemently denied directing a staffer to delete security footage at Mar-a-Lago, as Special Counsel Jack Smith alleged in further charges in the documents case.

“MAR-A-LAGO SECURITY TAPES WERE NOT DELETED.  THEY WERE VOLUNTARILY HANDED OVER TO THE THUGS, HEADED UP BY DERANGED JACK SMITH,” Trump wrote on Truth Social.

“WE DID NOT EVEN GO TO COURT TO STOP THEM FROM GETTING THESE TAPES.  I NEVER TOLD ANYBODY TO DELETE THEM. PROSECUTORIAL FICTION & MISCONDUCT!  ELECTION INTERFERENCE!”

Mar-a-Lago employee Carlos De Oliveira, who allegedly informed the resort’s IT director that “the boss” wanted the server scrubbed, appeared in court Monday and was released on bail (that the judge gave him time to meet).

De Oliveira was hit with a charge for allegedly lying to the FBI about efforts to move boxes alongside Trump aide Walt Nauta, who was previously charged by Smith and pleaded not guilty; the boxes allegedly containing national security documents that Trump illegally took with him when he left the White House, then lied about it to authorities afterward and kept and hid some.

But what I loved was Alina Habba, a Trump lawyer, ‘Hot Alina,’ as some of us observe, who in telling “Fox News Sunday” the tapes were not deleted:

“What was the obstruction of justice?....He turned them over, he cooperated as he always does.  But they would like the American public to believe in these bogus indictments,” Habba said.

“If President Trump didn’t want something turned over, I assure you, that is something that could have been done.  But he never would act like that.  He is the most ethical American I know,” she added.

And there you have it…the most ethical American of all time, as the former president would no doubt say on the campaign trail.  We are so lucky to be living in HIS time.

--The gunman who stormed a synagogue in the heart of Pittsburgh’s Jewish community and killed 11 worshippers was sentenced to death for perpetrating the deadliest antisemitic attack in U.S. history, a jury decided Wednesday, and the judge then agreed to Thursday.

Robert Bowers spewed hatred of Jews and espoused white supremacist beliefs online before methodically planning and carrying out the 2018 massacre at the Tree of Life synagogue, where members of three congregations had gathered for Sabbath worship and study.  Bowers also wounded two worshippers and five responding police officers.

--The weather….

At least 20 were killed, scores missing, in catastrophic flooding in Beijing and neighboring Hebei province as Tropical Storm Doksuri lashed northern China as it was hit by the heaviest rain in at least 140 years.

Beijing recorded 29.3 inches of rain between Saturday and Wednesday morning, the Beijing Meteorological Bureau said Wednesday.

Talk about extremes, Ireland’s weather bureau (Met Eireann) reported the country just experienced its wettest July ever recorded, an average of 7+ inches, and this came after the hottest June on record, breaking an 83-year-old record.

South Korean President Yoon Suk Yeol ordered that air-conditioned buses and water trucks be sent to a global scout event his country is hosting, after hundreds of teenage participants fell ill due to extreme heat.

At least 600 people at the World Scout Jamboree, which kicked off in southwestern Buan on Tuesday, have been treated for heat-related ailments, officials said.

The event coincides with the highest level heat warning by the government in four years, as temps hit 100F this week in some parts of the country.

More than 43,000 are participating in the jamboree, scouts aged between 14 and 18, the first global gathering of scouts since the pandemic.

Lastly, Phoenix’ run of days over 110F air temp ended Monday at 31, when the previous high was 18…But a new streak commenced Wednesday, that is forecast, as of today, to last at least 17 straight over 110.

--Sheila Oliver, New Jersey’s lieutenant governor and the first Black woman to hold statewide elected office in my state, died on Tuesday after being suddenly rushed to the hospital the day before. She was 71.

Our governor, Democrat Phil Murphy, was in Italy with his family at a home the former Wall Streeter owns.  When Oliver was taken to the hospital, Murphy released a statement that in essence understated the obvious seriousness of her condition, and how he wouldn’t rush back.

Then Oliver died.  Murphy had to immediately return.

Tuesday night I was with a politically connected friend of mine who has certain duties in Trenton and he commented that the last time he saw Oliver, a few weeks ago, “she looked like hell.” [No cause of death was released, and my friend told me what he thought the cause was but it’s not appropriate for me to say it without knowing for sure.]

If New Jersey had had a flooding emergency like Vermont had a few weeks ago while Oliver was incapacitated and Murphy was away, there would have been hell to pay for the governor.

--NASA lost control with its Voyager 2 probe billions of miles away from Earth after mistakenly severing contact with it, the space agency revealed.

Last month, the spacecraft – exploring space since 1977 – was sent the wrong command, tilting its antenna to point two degrees away from Earth.

As a result, the probe has stopped receiving commands or sending data.

NASA hopes communication will resume when the probe is due to reset in October.

Voyager is more than 12.3 billion miles from Earth, hurtling through interstellar space – the space between the stars – at an estimated 34,390 mph.

So let’s see…you go to the Indianapolis Motor Speedway for the Indy 500, watch guys go 240 mph down the front straightaway, and you divide that into 34,390 and…good lord, that’s fast!

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

Pray for Ukraine.

God bless America.

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Gold $1977
Oil $82.61…sixth straight up week

Regular Gas: $3.83; Diesel: $4.15 [$4.13 / $5.21 yr. ago]

Returns for the week 7/31-8/4

Dow Jones  -1.1%  [35065]
S&P 500  -2.3%  [4478]
S&P MidCap  -1.3%
Russell 2000  -1.2%
Nasdaq   -2.9%  [13909]

Returns for the period 1/1/23-8/4/23

Dow Jones  +5.8%
S&P 500  +16.6%
S&P MidCap  +10.3%
Russell 2000  +11.1%
Nasdaq  +32.9%

Bulls 57.1
Bears 18.6

Hang in there.

Brian Trumbore

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