Week in Review

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Week in Review

10/14/2023

For the week 10/9-10/13

[Posted 5:00 PM ET, Friday]

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Edition 1,278

This is a long column, but an important one. We saw barbarism, terrorism, and pure evil with Hamas’ attack on Israel last Saturday, and the violence is about to get even worse, potentially exponentially so with the imminent invasion by Israel Defense Forces into Gaza, with the express purpose of crushing Hamas.

But this will likely engender a large response from Hezbollah in Lebanon, and as I note below, Iran has also threatened to inject its troops, through Syria.

There are Hezbollah cells as well all over the world, awaiting activation orders…fact.  I wrote of this before 9/11…Hezbollah cells in South America.  And now we have legitimate concerns as to how many crossed our porous southern border with Mexico.

The internal pressure in Israel is compounded by the fact 86% of Israelis blame Prime Minister Benjamin Netanyahu and his government for the catastrophe, according to a Jerusalem Post poll, and for good reason.  Israel dropped the ball.

Lee Sasi, a wonderful 25-year-old who was a survivor of the music festival massacre, one of about 30 in a bomb shelter that Hamas sprayed gunfire and threw grenades into, called this week “Holocaust 2.0.”

One Israeli mother said, “This is a crime against humanity,” but much of the world is saying it’s the reverse, that Israel is the perpetrator, fanned by what’s happening in Gaza.

Israel and the U.S. are now involved on a different front, the propaganda war, as social media is replete with fake news fueled by Russian, Chinese and Iranian disinformation, and with an ignorant world, including many American students on our college campuses, I’m going to continue to do my job, as I have for over 24 years, to get the truth out. 

I know it’s impossible to tell your children to avoid social media, but please try to have a discussion with them on what they are seeing each night.  This is a war that needs to be fought one soul at a time.

The crisis also plays into the hands of Vladimir Putin in a big way, as he sees the potential for aid to Ukraine drying up over time.  [Putin had the gall to caution Israel today against laying siege to Gaza in the same way that Nazi Germany besieged Leningrad…the implied comparison between Israel and Hitler’s Germany having the potential to cause deep offense in Israel.]

Lastly, the House of Representatives is in a total state of chaos, still no one to replace the ousted Kevin McCarthy at speaker, and the legislative process has ground to a halt, aid for Israel and Ukraine stalled, a new government shutdown deadline of Nov. 17 fast approaching.  We truly look like a floundering democracy in the eyes of our allies overseas, and especially with our enemies, the latter just licking their chops, wolves about to pounce.

And so…the story as it unfolded, day by day….

Palestinian Islamist group Hamas launched a shocking, surprise, multi-prong sudden assault  early Saturday, launching more than 2,200 rockets into Israel (3,500 over the course of Saturday), and sending an estimated 1,000 militants across the barrier between Gaza and Israel, including by paraglider and over the sea.

It was a colossal intelligence failure for Israel.  The country has one of the most extensive and sophisticated intelligence networks in the Middle East, both domestic and external.

It has informants embedded inside militant groups not just in the Palestinian territories but in Lebanon, Syria and elsewhere.

It has, in the past, been able to assassinate militant leaders either with precision drone strikes or even booby-trapped mobile phones.

But Saturday, at the end of a Jewish holiday, they were caught asleep at the wheel; though the attack came following months of rising violence in the West Bank.

Hamas was able to plan a carefully coordinated assault on Israel seemingly in total secrecy.  It had to take years to plan the operation.

Vowing “mighty vengeance on this black day,” Israeli Prime Minister Netanyahu launched massive airstrikes on the Gaza Strip.

“This morning Hamas launched a surprise murderous attack against the State of Israel and its citizens,” he said in a video address.  “Hamas wants to murder us all.  This is an enemy that murders mothers and children in their homes, in their beds. An enemy that abducts elderly, children, teenage girls.”

Netanyahu said he had summoned security chiefs and ordered them to “cleanse the towns and villages of the terrorists who infiltrated into them – that’s underway at this time.”  Israel has put in place a “wide call-up” of reserve forces “to fight back,” he said.  Adding, “We are at war and we will win it.”

Saturday’s offensive came exactly 50 years after the start of the Yom Kippur War, when a coalition of Arab states, led by neighbors Egypt and Syria, launched surprise military operations against Israel – on its most holy of holidays – with the aim of retaking Israeli-occupied portions of the Sinai peninsula and Golan Heights.

Hamas leader Ismail Haniyeh said the assault that had begun in Gaza would spread to the West Bank and Jerusalem.

“This was the morning of defeat and humiliation upon our enemy, its soldiers and its settlers,” he said in a speech.  “What happened reveals the greatness of our preparation.  What happened today reveals the weakness of the enemy.”

In a televised speech, Haniyeh addressed the Arab countries that have normalized ties with Israel in recent years.  “We say to all countries, including our Arab brothers, that this entity, which cannot protect itself in the face of resistors, cannot provide you with any protection,” he said.  “All the normalization agreements that you signed with that entity cannot resolve this (Palestinian) conflict.”

In 2020, Israel reached normalization with the United Arab Emirates and Bahrain, and upgraded ties with Morocco and Sudan, despite talks with the Palestinians being frozen for years.

Haniyeh acknowledged in an interview last year that his group received $70 million in military assistance from Iran.  According to a State Department report from 2020, Iran provides about $100 million annually to Palestinian terrorist groups, including Hamas, Palestinian Islamic Jihad, and the Popular Front for the Liberation of Palestine-General Command.

The images that emerged were gruesome, “a sea of bodies” in some streets, as one witness described inside Sderot.

Terrified Israelis were barricaded into safe rooms.  Netanyahu then warned people living in Gaza to leave as he vowed to turn parts of the territory “into ruins.”  Israel launched hundreds of airstrikes.

Hamas deputy chief Saleh al-Arouri told Al Jazeera that the group was holding a large number of Israeli captives, including senior officials.  He said Hamas had enough captives to make Israel free all Palestinians in its jails.

By Monday, Israel said at least 100 Israelis, both citizens and soldiers, had been taken into Gaza.

President Biden pledged “rock-solid and unwavering” support for Israel and warned other countries hostile toward Israel not to take advantage of the moment to attack Israelis.

“This is not a moment for any party hostile to Israel to exploit these attacks to seek advantage.  The world is watching,” he said.

“The United States stands with Israel,” Biden said from the White House, flanked by senior Cabinet members.  “We will always have her back.”

“Israel has the right to defend itself and its people – full stop,” Biden said.

But Biden faced criticism at home from Republicans who pointed to his policies toward Iran and the recent release of $6 billion in frozen funds in exchange for five hostages.  The White House continues to claim “not a single cent from these funds has been spent, and when it is spent, it can only be spent on things like food and medicine,” said a National Security Council spokesman.

“This is so much bigger than anything we’ve seen in the past…an attempt to show that it won’t be just the Palestinians who solely pay the price of the status quo,” said Khaled Elgindy, of the Center for Middle East Policy at the Brookings Institution.

Iran voiced support for Hamas’ actions. An adviser to Iran’s Supreme Leader Ali Khamenei congratulated Palestinian fighters, the semi-official ISNA news site reported.  “We will stand by the Palestinian fighters until the liberation of Palestine and Jerusalem,” it quoted Yahya Rahim Safavi as saying.  Iran’s state television showed parliament members rising from their seats to chant “Death to Israel.”

Supreme Leader Khamenei then posted on X: “Zionist regime will be eradicated at the hands of the Palestinian people and the Resistance forces throughout the region.”

A senior Hamas official said the group planned the attack all by itself.  “This is a Palestinian and Hamas decision,” he said.

Israeli Defense Minister Yoav Gallant ordered a “complete siege” of Gaza and said authorities will cut electricity and block the entry of food and fuel to 2.3 million people.  The United Nations said more than 123,000 people have fled their homes in Gaza.

Monday, Israel said it had mobilized an unprecedented 300,000 reservists.  The death toll was reported at 700 killed in Israel and rising. Over 500 were killed in Gaza.  Hamas, and the smaller Islamic Jihad group claimed to have taken captive more than 130 people from inside Israel.

Among the Israeli dead were 260 attendees at an outdoor music festival. 

The Israeli death toll then rose to at least 900 by Monday evening, including 73 soldiers, with more than 2,000 wounded. The toll in Gaza was 687 dead, with 3,726 wounded, according to Gaza health officials.

Prime Minister Netanyahu said Israel was now engaged in a “long and difficult war” and vowed to destroy “the military and governing capabilities” of Hamas.

One immediate casualty of the unprecedented attack will be U.S.-backed efforts to open relations between Israel and Saudi Arabia, a highly prized, historic move that was gaining momentum in recent weeks.

To seal the deal, Saudi Arabia has been demanding a number of concessions from the U.S. and from Israel, including steps that would move the Palestinians closer to establishing an independent state.  That concession has been steadfastly resisted by Netanyahu and his ultraconservative government.

“Any leverage the Biden administration had” to exact concessions from Netanyahu for improving conditions for the Palestinians “has completely disappeared,” said Aaron David Miller, a veteran former Middle East envoy now at the Carnegie Endowment for International Peace.

“We don’t know where all of this is going, but bloodiness will be going up on all sides,” Miller said.

Given the level of carnage, it will be impossible for any Israeli prime minister to make concessions to the Palestinians, most analysts say.  And Palestinian deaths among civilians complicates any overtures the Saudis might have been willing to make toward Israel.

Among world leaders reacting Saturday, Palestinian President Mahmoud Abbas said: The Palestinian people have the right to defend themselves against the “terror of settlers and occupation troops.”

Ukrainian President Volodymyr Zelensky condemned what he called a “terror attack” on Israel and said Israel’s right to defend itself “cannot be doubted.”

Czech President Petr Pavel: “The attack conducted from the Gaza Strip is a deplorable act of terrorism against the State of Israel and the civilian population,” Pavel said in a statement.  “The rocket attacks and the infiltration of Hamas commandos into Israel will block any efforts for a peaceful solution to the Palestinian-Israeli conflict for a long time.”

China, which has increasingly sought to assert itself as a global peacemaker, issued an initial statement Sunday that avoided naming an aggressor and failed to offer any specific offer of immediate assistance.  It later said that it was a “friend to both” sides and that it was “saddened” by the casualties.  [As in, what a weak statement, but showing Beijing’s true colors, yet again.]

Monday, the Kremlin condemned violence against both Jews and Palestinians, but criticized the United States for what it said was its destructive approach which had ignored the need for an independent Palestinian state.

Foreign Minister Sergei Lavrov said the West was shortsighted if it believed it could simply condemn attacks against Israel and then hope for an Israeli victory without solving the cause of instability – the Palestinian problem itself.

“I cannot but fail to mention the destructive policy of the United States, which thwarts collective efforts within the framework of the Quartet of international mediators,” Lavor told reporters after talks in Moscow with Arab League chief Ahmed Abou Gheit.  The Quartet, set up in 2002, consists of the United Nations, the European Union, the United States and Russia.  Its mandate was to help mediate peace and support Palestinians in preparation for eventual statehood.

Kremlin spokesman Dmitry Peskov said: “This situation is potentially fraught with the danger of spillover, and therefore, of course, it is a subject of our special concern these days.”

Rather rich, I think you would agree, ditto Lavrov’s comments.

For his part, Aboul Gheit said: “We completely reject violence, but on both sides. The Palestinian problem cannot be postponed any longer, and the UN decisions must be implemented.”

The Wall Street Journal reported Sunday night that “Iranian security officials helped plan Hamas’ surprise attack on Israel and gave the green light for the assault at a meeting in Beirut last Monday, according to senior members of Hamas and Hezbollah, another Iranian-backed militant group.

“Officers of Iran’s Islamic Revolutionary Guard Corps had worked with Hamas since August to devise the air, land and sea incursions – the most significant breach of Israel’s borders since the 1973 Yom Kippur War – those people said.

“Details of the operation were refined during several meetings in Beirut attended by IRGC officers and representatives of four Iran-backed militant groups, including Hamas and Hezbollah.”

Reportedly, Iranian Foreign Minister Hossein Amir-Abdollahian attended at least two of the meetings, the officials from Hamas and Hezbollah said.  The Iranian officials said that if Iran were attacked, it would respond with missile strikes on Israel from Lebanon, Yemen and Iran, and send Iranian fighters into Israel from Syria to attack cities in the north and east of Israel.

In making the rounds of the Sunday talk shows, Secretary of State Antony Blinken said the U.S. had not seen evidence of Tehran’s involvement.

The Washington Post reported Monday: “The Palestinian militants behind the surprise weekend attack on Israel began planning the assault at least a year ago, with key support from Iranian allies who provided military training and logistical help as well as tens of millions of dollars for weapons, current and former Western and middle Eastern intelligence officials said Monday.

“While Iran’s precise role in Saturday’s violence remained unclear, the officials said, the assault reflected Tehran’s years-long ambition to surround Israel with legions of paramilitary fighters armed with increasingly sophisticated weapons systems capable of striking deep inside the Jewish state.”

Separately, the Associated Press reported: “An Egyptian intelligence officer said Egypt, which often serves as a mediator between Israel and Hamas, had spoken repeatedly with the Israelis about ‘something big,’ without elaborating.

“He said Israeli officials were focused on the West Bank and played down the threat from Gaza.  Netanyahu’s government is made up of supporters of Jewish West Bank settlers who have demanded a security crackdown in the face of a rising tide of violence there over the last 18 months.

“ ‘We have warned them  an explosion of the situation is coming, and very soon, and it would be big. But they underestimated such warnings,’ said the official, who spoke on condition of anonymity because he wasn’t authorized to discuss the content of sensitive intelligence discussions with the media.

“Israel has also been preoccupied and torn apart by Netanyahu’s judicial overhaul plan.  Netanyahu had received repeated warnings by his defense chiefs, as well as several former leaders of the country’s intelligence agencies, that the divisive plan was chipping away at the cohesion of the country’s security services.”

Writing on social media Monday, Prime Minister Netanyahu said: “Hamas will understand that by attacking us, they have made a mistake of historic proportions.  The savage attacks that Hamas perpetrated against innocent Israelis are mindboggling,” he said; and those attacks included “slaughtering families in their homes, massacring hundreds of young people at an outdoor festival, kidnapping scores of women, children and elderly, even Holocaust survivors.”

“We will exact a price that will be remembered by them and Israel’s other enemies for decades to come,” Netanyahu vowed.

-Israel said it had regained control over its border towns, Monday, as it continued to hammer Gaza.

President Biden, in a televised address from the White House, Tuesday, pledged military assistance to Israel, including rockets to replenish its Iron Dome interceptor system.  He said that 14 U.S. citizens had been killed and called Hamas’ actions “pure unadulterated evil” and an “act of sheer evil” that “brings to mind the worst rampages of ISIS.”

“Like every nation in the world, Israel has the right to respond – indeed has a duty to respond – to these vicious attacks,” Biden said.

Biden said he told Israeli Prime Minister Benjamin Netanyahu in a phone call earlier Tuesday that “our response would be swift, decisive and overwhelming” if similar attacks occurred in the U.S., while adhering to the rule of law.

“We stand ready to move in additional assets as needed,” Biden said.  “Let me say again, to any country, any organization, anyone thinking of taking advantage of this situation, I have one word: don’t.”

“This is terrorism. But sadly for the Jewish people, it’s not new.  This attack has brought to the surface painful memories of the scars left by a millennia of antisemitism and genocide,” the president said.

Biden added that the U.S. would help providence intelligence to save Hamas-captured hostages, who include an unknown number of American citizens, but did not suggest that U.S. troops would assist directly.

[Hamas, as of Tuesday, was believed to have taken around 150 Israeli hostages since Saturday, threatening to kill a captive each time Israel struck Gaza without warning.  Hamas confirmed that at least two of its senior officials had been killed by strikes.]

“We’re going to makes sure that Israel does not run out of these critical assets to defend its cities and its citizens,” Biden said.  “In this moment, we must be crystal clear: we stand with Israel.”

Biden grew emotional, in talking about the atrocities committed by Hamas, denouncing the violence as “abhorrent.”

Israel approved the call-up of an additional 60,000 reservists, raising the total number mobilized so far to 360,000, the most in such a short period since the country’s founding.

The Israeli military said Tuesday it had recovered the bodies of around 1,500 Palestinian assailants since Saturday morning, offering one of the first clear indications of the size of the assault.

The death toll for Israelis, soldiers and civilians, hit 1,000.  Health officials in Gaza said that 900 Palestinians have been killed, and 4,500 others have been wounded.

Tuesday, Iranian Supreme Leader Khamenei said Tehran was not involved in Hamas’ attack, but hailed what he called Israel’s “irreparable” military and intelligence defeat.  “We kiss the hands of those who planned the attack on the Zionist regime,” said Khamenei, who was wearing a Palestinian scarf, in his first televised speech since the attack.  “This destructive earthquake (Hamas’ attack) has destroyed some critical structures (in Israel) which will not be repaired easily… The Zionist regime’s own actions are to blame for this disaster,” said Khamenei.

Khamenei said an attack on Gaza would “unleash a much heavier torrent of anger.  The occupying regime seeks to portray itself as a victim to escalate its crimes further…this is a misguided calculation… It will result in even greater disaster,” Satan said.

Russian President Putin on Tuesday gave his first public comments on the conflict.

“I think that many people will agree with me that this is a vivid example of the failure of United States’ policy in the Middle East,” Putin told Iraqi Prime Minister Mohammed Shia’ Al-Sudani on Tuesday, according to the Moscow Times.

The U.S. “tried to monopolize regulating [the conflict], but was unfortunately unconcerned with finding compromises acceptable for both sides,” Putin added.

The problem with U.S. policy is not “taking the core interests of the Palestinian people into account” and working to create an independent Palestinian state, Putin added.

Wednesday, Hezbollah was clearly on a war footing, deploying special forces and priming its rockets in preparation for the possibility of war. Three Hezbollah fighters have been killed, according to reports.

While Hezbollah is not ruling out war, according to Reuters’ sources, speaking on condition of anonymity, Hezbollah was mounting strikes here and there and responding to Israeli fire into Lebanon.

A major war between Israel and Hezbollah, battled hardened by wars across the region, including Syria, would leave the Israeli army fighting on two fronts.

Mohanad Hage Ali of the Carnegie Middle East Center said Hezbollah’s next steps would be sharped by Israel’s plans for a Gaza ground incursion.  The prospect of Hamas being dealt a killer blow would “propel Hezbollah to intervene, along with Palestinian factions (in Lebanon), and increase the possibility of things getting out of hand,” he said.

Israel is forming an emergency government and war management cabinet, Netanyahu and National Unity Party leader Benny Gantz jointly announced Wednesday.

Gantz, a former defense minister, will join Netanyahu and current defense minister Yoav Gallant in a “war management cabinet,” the joint statement said.

The government will not pass any laws or make any decisions that do not concern the conduct of the war, the announcement said.

That implies that the controversial judicial overhaul will not move forward while the emergency government is in place.

It’s not clear whether opposition leader Yair Lapid and his Yesh Atid party are going to join the government.

Some 250,000 people have fled their homes in Gaza – more than a tenth of the population – most crowding into UN schools.  Others crowded into a shrinking number of safe neighborhoods in the strip of land only 25 miles long, wedged among Israel, Egypt and the Mediterranean Sea.

Israel halted the entry of food, water, fuel and medicine into the territory.  The sole remaining access from Egypt was shut down Tuesday after airstrikes hit near the border crossing.

Gaza’s only power plant shut down Wednesday afternoon after running out of fuel, the Energy Ministry said.  That leaves only private generators to power homes, hospitals and other facilities.  With no fuel able to enter, those were on a ticking clock until individual stocks of diesel run out.

Israel vowed there would be no break to its siege of the Gaza Strip until all its hostages were freed, after the Red Cross pleaded for fuel to be allowed in to prevent overwhelmed hospitals from “turning into morgues.”

The death toll in Gaza hit 1,100+ on Wednesday, according to the Palestinian health ministry.

At least 150 hostages were taken into Gaza.

Israel was warned by Egypt of potential violence three days before Hamas’ deadly cross-border raid, a U.S. congressional panel chairman has said.

House of Representatives Foreign Affairs Committee head Michael McCaul told reporters of the alleged warning. 

Prime Minister Netanyahu described the reports as “absolutely false.”

“We know that Egypt has warned the Israelis three days prior that an event like this could happen,” McCaul told reporters following a closed-door intelligence briefing on Wednesday for lawmakers.

“I don’t want to get too much into classified, but a warning was given,” McCaul added.  “I think the question was at what level.”

The number of Israeli soldiers killed so far in the fighting rose to 222 on Wednesday, per the IDF, which added 97 Israelis were being held hostage, leaving the nationality of the other 50 or so undetermined.

On Wednesday, President Biden warned Iran to “be careful.”  Speaking to a group of Jewish community leaders, Biden for the first time connected the deployment of a carrier fleet near to Israel to concerns Iran might seek to become involved, as Israel reels form the attack by Hamas.

“We moved the U.S. carrier fleet to the eastern Mediterranean and we are sending more fighter jets to that region, and made it clear to the Iranians: Be careful,” he said.

In a televised address Wednesday night, Prime Minister Netanyahu detailed atrocities that took place during the attack, including boys and girls bound and shot in the head, people burned alive, women raped and soldiers who were beheaded.  “Every Hamas member is a dead man,” he said. “We will crush and destroy it.”

The number of American dead climbed to 27, with 14 now unaccounted for.

Late Thursday, Israel told the UN that some 1.1 million Palestinians in Gaza should move to the enclave’s south within the next 24 hours.

“The United Nations considers it impossible for such a movement to take place without devastating humanitarian consequences,” UN spokesman Stephane Dujarric said in a statement.

“The United Nations strongly appeals for any such order, if confirmed, to be rescinded avoiding what could transform what is already a tragedy into a calamitous situation,” he said.

Later, the Israeli Defense Forces said they “will operate significantly in Gaza City in the coming days” and that Gazans “will only be able to return to Gaza City when another announcement permitting.”

It also warned Gazans “not to approach the areas of fence with Israel.”

Hamas dismissed the warning and called on people to stay in their homes, which of course they would say because they want to use the people as human shields and for propaganda purposes.

It needs to be noted that Egypt won’t let Gaza’s residents into its country from the Rafah border crossing.  Egypt recently received more than 100,000 refugees from Sudan’s civil war and with its economy in terrible shape, it does not want to offer itself as a haven anymore than it already has.

Also Friday, Iranian Foreign Minister Hossein Amir-Abdollahian told reporters in Beirut that Hezbollah could open a new front in Israel’s war against Hamas if the blockade of Gaza and attacks on civilians there continue.

“Of course in the case of the continuation of war crimes and the humanitarian blockade of Gaza and Palestine every possibility and decision by the other currents of the resistance is possible,” the foreign minister said when asked about the possibility of a second front.

He cited the killing of civilians and cutting off electricity in Gaza as examples of alleged war crimes.

Hezbollah leader Hassan Nasrallah later met with Amir-Abdollahian.  The two discussed “everyone’s responsibilities and the positions that need to be taken with regards to these historical events and developments,” according to a Hezbollah statement.

Late today, the Gaza Health Ministry said roughly 1,800 people have been killed in the territory – more than half of them under the age of 18, or women.  Hamas’ assault killed more than 1,300, most of whom were civilians, and roughly 1,500 Hamas militants, the Israeli government said.

Opinion / Analysis….

Daniel Pipes / Wall Street Journal

“The surprise attack on Israel by Hamas, the Islamist organization ruling Gaza, is a humanitarian horror.  It is also a strategic opportunity for Israel, the U.S. and democracies everywhere.

“Hamas is an offshoot of the Muslim Brotherhood, which author Cynthia Farahat describes as ‘the world’s incubator of modern Islamic terrorism.’  From Hamas’ origins in 1987, it has engaged in violence against Israelis, Palestinians and whoever else might cross its path.  A sequence of Israeli missteps led in 2007 to its taking power in the Gaza Strip, an area the size of Omaha, Neb., with a population of two million.  It imposed a totalitarian rule on Gaza similar to that of the mullahs in Iran, attempting to implement medieval strictures, oppressing its own population, and threatening to destroy Israel.

“There are many indications that Gazans hate Hamas. ‘There is boiling anger in the streets against the Hamas movement,’ Tholfekar Swairjo, a Gazan political analyst, told NPR in 2022.  ‘They are blamed for the very low quality of life in Gaza.’….

“Polling finds overwhelming support among Palestinians, especially in Gaza, for the statement that ‘Palestinians should push harder to replace their own political leaders with more effective and less corrupt ones.’  Gazans also reject Hamas by emigrating in droves.  An estimated 250,000 to 350,000 young adults have left the strip since Hamas took over in 2007.

“In short, most Gazans loathe Hamas, but they dare not rise up against their power-hungry oppressors, who enjoy support from Iran.  What about Israel?  It has the motive and the means to end Hamas rule, but its security establishment has preferred that Hamas, for all its horrors and threats, stay in power rather than have the Israel Defense Forces move back into Gaza (from which they withdrew in 2005) and run the territory again.  For one sign of Israel’s acquiescence to Hamas rule, note that it permits and even encourages the government of Qatar to send Hamas $30 million a month.

“As a result nothing changes….

“The next step is to urge Israel to remove Hamas.  Perhaps this, along with the size and barbarism of the latest assault, will change the Israeli security establishment’s reluctant acceptance of Hamas and persuade it to rid the world of this scourge.

“Once Gaza has been secured, Israel would find a great number of its inhabitants ready to start over and build productive lives rather than focus endlessly and hopelessly on the destruction of Israel. Gaza could aspire to become the ‘Singapore of the Middle East’ of which optimists dreamed decades ago.  None of this can happen as long as Iran’s medieval-minded agents run the enclave.

“The Hamas charter of 1988 calls for Islam to ‘obliterate’ Israel. After Saturday’s vicious assault, the time has come for Israel to obliterate Hamas.”

Editorial / Wall Street Journal

“The scenes of Israeli civilians gunned down in the streets, children and grandmothers taken hostage, and Palestinians cheering it all are awful to behold. But behold the world must because Saturday’s assault from Gaza shows the reality of the global disorder that is expanding by the month.  Israel is on the front lines, but all of the democratic world is a target.

“The scale and initial success of the attack puncture many illusions.  One is that Israel is secure in its rough neighborhood.  The Jewish state may have technological superiority, but it is still threatened by implacable enemies north, south and east.

“The surprise assault was clearly in the planning for months and seems timed for the 50th anniversary of the Yom Kippur War in 1973.  That it took Israeli troops hours to reach some of the towns overrun by armed Palestinian militants suggests that even Israelis underestimated the threat.  There will be a reckoning about the intelligence failure once the crisis is past.

“Another myth busted is that Palestinians will live in peace with Israel if they get a state of their own.  Not as long as Hamas and Islamic Jihad can terrorize and dominate Palestinians.  Israel ceded Gaza to the Palestinians in 2005, but Hamas took over in 2007 and assassinates anyone in the territory who challenges its goal of expelling the Jews from all of Israel.

“And please no more condemnation of Israel’s ‘blockade’ or ‘occupation.’  Israel has been allowing 17,000 Gazans to work in Israel each day and would like to allow more. Western critics of Israel don’t live in range of Hamas or Hezbollah rockets supplied by Iran.  They don’t have to fear that their grandparents may be dragged from their homes and imprisoned in a Hamas basement to be traded if they aren’t murdered.  No Israeli government can afford to give up control of more territory that could become a launching point for Hamas attacks.

“Israel faces more difficult choices in the days ahead.  A return to the status quo before Saturday’s assault would seem to be intolerable.  Hamas could be able to rearm, rebuild its tunnels, and wait to attack again.

“But an Israeli invasion of Gaza and reinstatement of Israeli control would be costly in lives and risk that Hezbollah would open a second front in Lebanon.  Iran-backed Hezbollah has stockpiled tens of thousands of missiles. A new buffer zone of several miles between Gaza and Israel is another mooted option.

“The response is Israel’s to make, and it deserves the West’s support.  ‘My administration’s support for Israel’s security is rock solid and unwavering,’ President Biden said on Saturday, and we’re glad to hear it.

“But the temptation at the White House will be to give Israel a week or so to respond with a free hand, and then lean on the Netanyahu government to stand down.  That is always the U.S. pattern, but it shouldn’t be this time.  And if a wider war breaks out, the U.S. will have to provide Israel with the arms and diplomatic support necessary to destroy Hamas and the military capacity of Hezbollah.

“The assault also underscores the continuing malevolence of Iran. The government in Tehran cheered on the attacks, and it has provided the rockets and weapons for Hamas.  It may have encouraged the timing as well, hoping the war will block any near-term chance of a rapprochement between Israel and Saudi Arabia. The Biden Administration’s failure to enforce oil sanctions against Iran, as well as its payment of $6 billion for U.S. hostages, looks even more misguided after this bloody weekend.

“The attacks on Israel, horrible as they are, at least provide some moral clarity about the stakes in the Middle East.  One side seeks the destruction of Israel and the Jews.  The other arms itself to protect its citizens and state from that destruction.  The internal Israeli debates over its Supreme Court look trivial next to the threat to Israel’s existence.

“The assault on America’s closest Middle East ally is also a warning about how dangerous the world is becoming.  As U.S. power and will recede, bad actors feel empowered to fill the vacuum.  American isolationists on the right and left may wish to look away, but the U.S. can’t dodge the consequences.

“Refugees from socialist failure in the Americas are flooding over the U.S. border, and sooner or later the U.S. will become a military target.  The consequences of post-Cold War complacency are coming fast and furious.”

Max Boot / Washington Post

“Israel has gotten accustomed to the threat posed by Hamas rockets – and there was indeed a large-scale rocket attack from the Gaza Strip on Saturday.  But there is no precedent for the massive ground assault that Hamas also mounted.  Hamas’ fighters managed to penetrate Israeli border posts and the border fence enclosing Gaza, rampaging through surrounding Israeli communities, massacring innocent civilians and seizing hostages.  They even managed to penetrate Israeli military bases and seize Israeli tanks and other armored vehicles.  Hamas fighters are committing war crimes while carrying out a daring terrorist operation that has shaken Israel’s sense of security….

“While Israel could never make peace with Hamas, a movement dedicated to the destruction of the Jewish state, it had learned to live with a terrorist organization in control of the Gaza Strip as a lesser evil – compared with a renewed Israeli occupation, an even more extremist group such as al-Qaeda in charge, or Libya-style chaos.  Israel had mounted numerous military operations against Hamas since its takeover in 2007, two years after Israel pulled out of Gaza.  But these were mostly from the air.  And even when Israeli troops were deployed, they never stayed for long.

“As a 2017 Rand Corp. study noted: ‘Israel’s grand strategy became ‘mowing the grass’ – accepting its inability to permanently solve the problem and instead repeatedly targeting leadership of Palestinian militant organizations to keep violence manageable.  Dealing with Hamas in Gaza puts Israel in a strategic quandary: It needs to exert enough force to deter Hamas from attacking but not so much that it topples the regime.  As one Israeli defense analyst put it, ‘We want to break their bones without putting them in the hospital.’….

“The Israel Defense Forces remain the strongest military force in the Middle East, and it will ultimately prevail.  But even a tactical victory would leave Israel facing the question ‘Now what?’  Most Israelis have no desire for a long-term occupation of the Gaza Strip, one that will inevitably lead to further Israeli casualties and accusations that their troops are committing war crimes.  But they are running out of alternatives.”

Thomas L. Friedman / New York Times

“Why did Hamas launch this war now, without any immediate provocation? One has to wonder if it was not on behalf of the Palestinian people but rather at the behest of Iran, an important supplier of money and arms to Hamas, to help prevent the budding normalization of relations with Saudi Arabia, Iran’s rival, and Israel.  Such a deal, as it was being drawn up, would also benefit the more moderate West Bank Palestinian Authority – by delivering it a huge infusion of cash from Saudi Arabia, as well as curbs on Israeli settlements in the West Bank and other advances to preserve a two-state solution.  As a result, West Bank leaders might have earned a desperately needed boost of legitimacy from the Palestinian masses, threatening the legitimacy of Hamas.

“That U.S.-Saudi-Israel deal also would have been a diplomatic earthquake that would have most likely required Netanyahu to jettison the most extreme members of his cabinet in return for forging an alliance between the Jewish state and the Sunni-led states of the Persian Gulf against Iran. Altogether, it would have been one of the biggest shifts in the tectonic plates of the region in 75 years.  In the wake of this Hamas attack, that deal is now in the deep freeze, as the Saudis have had to link themselves more closely than ever with Palestinian interests, not just their own….

“I am watching how the Hamas-Israeli earthquake will shake up another earthquake.

“Ukraine was already dealing with the temblors in the U.S. government.  The toppling of the speaker of the House, combined with an increasingly vocal minority of Republican lawmakers – shockingly to me – coming out against any more economic and military aid to Ukraine has created a political mess that has resulted, for now, in no more U.S. aid for Ukraine being approved. If Israel is about to invade Gaza and embark on a long war, Ukraine will have to worry about competition from Tel Aviv for Patriot missiles as well as 155-millimeter artillery shells and other basic armaments that Ukraine desperately needs more of and Israel surely will, too.

“Vladimir Putni has noticed. Last Thursday in the Black Sea resort of Sochi, he said that Ukraine was being propped up ‘thanks to multibillion donations that come each month.’  He added, ‘Just imagine the aid stops tomorrow.’  Ukraine ‘will live for only a week when they run out of ammo.’”

Yonah Jeremy Bob / Jerusalem Post

“How did Israel fall so far to such an inferior enemy?

“How could this happen?

“First, obviously, imagination and the conceit that being superior militarily generally can always prevent an inferior adversary from victory anywhere.

“There are many examples in war, going back to the battle of Thermopylae around 2500 years ago when a small group of Greeks held off a massive army of Persians for an extraordinary amount of time when an inferior group make issues for a superior overconfident, or complacent group.

“Then there was a lack of understanding: IDF intelligence has many debates about many security issues, but every official who briefed the Jerusalem Post made it clear that Hamas was broadly deterred from a big conflict with Israel.

“And the data seemed to support this.  In numerous recent conflicts with Gaza, Hamas did not even take part. They seemed too afraid to join the fray with Islamic Jihad. They seemed to have learned the lesson of the 2014 and 2021 Gaza wars that if they jumped into the ring with Israel, they would always come out much worse.

“The thinking was far too black and white as the fact is that Hamas did go to war with Israel in 2014 and 2021 despite many earlier experiences in which the IDF slammed it to the ground.

“The lesson should have been that sometimes Hamas is deterred, but if it hits a low point where it feels it is getting nowhere and has nothing to lose, it is willing to fight a losing battle just to get back into the conversation.

“Then there is Hamas’ tactical genius in the operation.

“Part of why the IDF was not ready for many of its tactics was because Hamas had not revealed them, or certainly not in huge volumes and with the complex synchronized orchestration that it pulled off.

“The IDG was used to rocket fire without border riots or border riots without rocket fire.

“It was used for one small group of sea commandos trying to invade Zikim beach or one or two drones or other flying contraptions being sent over the border which could be easily isolated and handled.

“Instead, Hamas launched 2,000 rockets as a cover.

“At the same time that it launched rockets diverting IDF attention, it also launched an entire fleet of motorized hang-gliders (something which has barely ever been discussed by the IDF) which manually dropped bombs on Israeli lookout positions.  These motorized hang gliders were a brilliant tactical use of homemade retro technology with a tiny ‘footprint’ (in terms of being able to detect them in advance) customized to pinpoint holes in the IDF’s highly advanced technological apparatus.

“With the lookout positions taken out, immediately after Hamas sent its forces into different crossing locations.

“As the IDF started to notice that its crossing locations were under attack along with the rocket fire, its attention was diverted from the 20 or so entry points, which already lacked lookout positions, where Hamas was ready with additional large volumes of soldiers.

“At the same time, Hamas did not come into Israel on land with dozens, but with hundreds of soldiers, a volume the IDF never expected.

“Also, at the same time, Hamas did not penetrate Israel by sea with one group of Hamas naval commandos, but with many groups, something the navy was not ready for.

“Let’s also not forget that despite Israel declaring complete victory over all Hamas attack tunnels, it turns out that the terror group figured out a way to dig around a dozen new attack tunnels which the IDF’s fancy billion-dollar technologies failed to detect.

“All of this happened simultaneously, but in a specific order to allow each next step to move forward smoothly and further confuse and overwhelm Israeli decision-makers about where and what was going on….

“The system was simply overloaded.”

Editorial / New York Post…on President Biden’s failure to mention Iran in his address to the people on Tuesday.

“Do Biden and his minions just lack the courage to face the truth here?

“Yes, it means admitting the idiocy of Team Biden’s pathetic efforts to revive the disastrous 2015 nuclear deal with Iran, plying Tehran with conciliatory gestures.

“That includes tens of billions in sanctions relief (and sanctions non-enforcement), even before last month’s $6 billion ransom payment for five hostages.

“All those funds made it easier for Tehran to fund Hamas, and the worst massacre of Jewish civilians since the Holocaust.

“These events should have ended the Bidenites’ delusions about Iran, yet the prez won’t even whisper ‘Iran.’

“This is the Biden way: Half-measures that do nothing to help us command international respect.  Pull out of Afghanistan but fail to do any planning to secure the government, or even our own people.  Back Ukraine against Russia but slow-walk the weapons it sorely needs.

“Cowardice won’t cut it.  Tell the truth about what’s going on, Mr. President, and be willing to reject the coddling of Iran you inherited from President Barack Obama and realize the reality.  It’s Israel’s enemy.  And ours.”

---

This Week in Ukraine….

--A Russian attack on the southern Ukrainian region on Sunday wounded scores.  Over 24 hours, Russian forces carried out 59 attacks on Kherson, the region’s administration said on Telegram, including 19 instances of shelling Kherson city.

Saturday, an official from Vladimir Putin’s United Russia Party was killed in a car-bombing in the Kherson region.

Russia carried out a missile strike on Ukraine’s southern Odesa region.

--Saturday night in a note, the Washington-based Institute for the Study of War said Russia “is already and will likely continue to exploit the Hamas attacks in Israel to advance several information operations intended to reduce U.S. and Western support and attention to Ukraine.”

“The Kremlin amplified several information operations following (the attacks), primarily blaming the West for neglecting conflicts in the Middle East in favor of supporting Ukraine,” ISW said.

Ukraine’s armed forces reported separately that about 580 Russian troops had been killed during fighting over the last day.  Posting its latest summary of casualties, Ukraine’s military claims Russia has suffered 282,280 losses since the start of the war.  The figures have not been independently verified.

--Ukrainian forces are making some headway in both the eastern and southern theaters of their four-month-old counteroffensive, military officials said on Monday.

Russian accounts of the fighting said Moscow’s forces had repelled Ukrainian attacks near the devastated eastern city of Bakhmut and inflicted heavy casualties in strikes on Ukrainian positions outside the city.

Ukraine aims to secure control of areas around Bakhmut in order to recapture the town.  In the south, Kyiv wants to advance to the Sea of Azov to sever the Russian land bridge linking areas it occupies in the south and east.

As in I was writing the same thing last month, and basically the month before.  It’s clear not that much progress has been made.

And now the rainy season has begun in Ukraine, though conditions vary across the front lines, according to the Institute for the Study of War.  The deteriorating weather, though, makes drone operations more challenging.

--President Zelensky hailed ties with Romania as a “factor of stability for Europe and beyond” on Tuesday as he visited the NATO member state for the first time since Russia’s invasion last year. The Romanian port of Constanta has become Ukraine’s main export route for grain via Ukrainian ports on the Danube River since Russia quit the grain deal in mid-July that had guaranteed safe shipments via three Ukrainian Black Sea ports.

Zelensky wrote on X: “Romania is a friend who came to our help on our darkest day and whose support gets stronger with time.”

The country, which shares a 650-km (400 mile) border with Ukraine, is host to a U.S. ballistic missile defense system and, as of last year, has a permanent alliance battlegroup stationed on its territory.

--Wednesday, a Russian missile strike struck a school in the town of Nikopol in the central Ukrainian region of Dnipropetrovsk, killing at least three people, Ukrainian officials said.

--Ukraine’s security service identified two brothers as suspected informants who helped Russia carry out a missile strike that killed more than 50 people at a funeral in Hroza last week.

The strike was one of Russia’s deadliest in the war and highlights the threat posed by spies and informants who, according to the security agency, the SBU, perform tasks from scouting targets for missile attacks to passing on information about the location of Ukrainian military forces.

The SBU says it has uncovered more than 2,000 people who have committed treason since the war began, including a former army-base worker tracking President Zelensky’s planned movements, a trained sniper with a weapons cache under his daughter’s bed and an insurance executive researching energy infrastructure in Kyiv.

--The Pentagon announced a new $200 million weapons package for Ukraine on Wednesday, as the Defense Department encouraged Congress “to meet its commitment to the people of Ukraine by passing additional funding to ensure Ukraine continues to have what it needs to defend itself against Russia’s brutal war of choice.”

The announcement pushes total U.S. military aid to nearly $44 billion since the war began in Feb. 2022.  And the U.S. isn’t alone.  “The three biggest European donors to Ukraine, Germany, the United Kingdom and Poland, have all committed more than the United States as a percentage of GDP, and so have many other European countries, including Croatia, Denmark, Finland, Sweden, and all three of the Baltic states,” Defense Secretary Lloyd Austin told a meeting of NATO defense chiefs in Brussels.  Excluding U.S. aid to Kyiv, those other Ukraine allies have combined to pledge more than $33 billion in arms to date, said Austin.

--Russian troops are advancing in southeastern Ukraine’s Donetsk region, southwest of Avdiivka near Sieverne and northwest of Avdiivka near Stepove and Krasnohorivka, according to the Ukrainian military.  In an apparent change of tactics, the Russians are allegedly relying more directly on armored vehicles followed by columns of infantry, according to the Institute for the Study of War, writing Wednesday evening.  But Russia is also losing armored vehicles to the fight near Avdiivka as well.

“These tactical-level adaptations and successes, however, are unlikely to translate into wider operational and strategic gains for Russian forces,” ISW predicted.

--Friday, at least two people were killed and 15 wounded in Russian air strikes in southern and eastern Ukraine, Ukrainian officials said.

---

--Russia accused the United States on Tuesday of carrying out preparatory work at a nuclear testing site in Nevada but said that Moscow would not restart its own nuclear testing program unless Washington did.

Deputy Foreign Minister Sergei Ryabkov made the comments as Russia’s lower house of parliament urgently studies how to revoke Moscow’s ratification of the landmark treaty banning nuclear tests and as tensions between Moscow and Washington are at their highest level since the 1962 Cuban missile crisis.

Ryabkov claimed: “The indications are that there is or was, at least until recently, (preparatory) work underway at the Nevada Testing Site.”

The United States last tested in 1992 and the Soviet Union in 1990.

“If they go down this (testing) path, then the position that was stated by the president of the Russian Federation will be triggered – that we will be forced to mirror this as well.  This is when a completely different situation arises, but the responsibility for whether it will or won’t arise lies with Washington.”

Ryabkov’s comments came days after Vladimir Putin held out the possibility of resuming nuclear testing.

--In a most worrisome development, Russian investigators on Friday detained three lawyers who have worked for Alexei Navalny, allies of the jailed opposition leader said, in what is clearly a move to deepen his isolation and deprive him of legal support.  The lawyers are accused of belonging to an “extremist group.”

Despite his imprisonment, Navalny has been able through his lawyers to post on social media and file frequent lawsuits over his treatment in prison.  After Navalny’s expected transfer to a new penal colony, “his lawyers will not be able to visit him there or even to find out his whereabouts if they’re locked up themselves,” said Navalny aide Leonid Volkov on X.  Volkov said the lawyers faced up to six years in prison if found guilty.

This is beyond sick.  Stalin 2.0…that’s what Vlad the Impaler has become.

--Wall Street Journal reporter Evan Gershkovich lost his appeal against his arrest Tuesday, meaning he will stay in jail until at least the end of November.

It was the second time in less than a month that the journalist had appeared before a judge after the Moscow court declined to hear his appeal in September owing to unspecified procedural violations.

The journalist was detained in March while on a reporting trip to the city of Yekaterinburg, about 1,200 miles east of Moscow, and a judge ruled in August that he must stay in jail until the end of November.

--Russians who leave the country and support Ukraine should be sent to a far eastern region known for its Stalin-era Gulag prison camps if they ever return home, according to the speaker of Russia’s State Duma lower house of parliament.

Vyachelav Volodin, the speaker of the Duma, told lawmakers on Tuesday that those who had left Russia and rejoiced at Ukrainian drone and missile attacks on their country should know that they were no longer welcome in their homeland.

“Those who left the country and committed despicable acts, rejoicing at the shots fired on the territory of the Russian Federation, wishing victory to the bloody Nazi Kyiv regime, should realize that no one is waiting for them here – but if they do come back, then Magadan will be provided for them,” i.e., the term for the Gulag – a series of forced labor camps where Russians were used as slave labor under Stalin.

--Editorial / Wall Street Journal

“Already officials are leaking that the U.S. may struggle to supply both Israel and Ukraine with artillery or other weapons while also deterring China. But America can either meet the moment or regret it later when the world’s rogues attack other allies, or U.S. forces deployed abroad, or even the homeland….

“Mr. Biden could also stop trashing all Republicans as stooges of Donald Trump. The world moment looks increasingly comparable to the 1930s, with gathering threats.  Mr. Biden will need bipartisan help in a crisis. That means working with Sens. Mitch McConnell and Tom Cotton, Reps. Mike Gallagher and Michael McCaul, and other Republicans who are serious about U.S. security.

“As for Republicans in Congress, they will have to get serious about governing and elect a new Speaker with dispatch. They need to isolate the Steve Bannon acolytes who treat shutting down the government for no good reason like a personal power play.  Americans may be among Hamas’ hostages, and the GOP should support Mr. Biden if he sends a military mission to rescue them.  The world needs to see that the U.S. can unite in a common security purpose….

“The growing global disorder is a result in part of American retreat, not least Mr. Biden’s departure from Afghanistan that told the world’s rogues the U.S. was preoccupied with its internal divisions.  But too many Republicans are also falling for the siren song of isolationism and floating a defense cut in the name of fiscal restraint. The Hamas invasion should blow up dreams the U.S. can ‘focus on China’ and write off other parts of the world.

“Donald Trump didn’t rebuild U.S. defenses as much as he claims, and his political competitors should say so. Former Vice President Mike Pence was correct when he said over the weekend that the awful scenes abroad are what happens when political leaders are ‘signaling retreat from America’s role as leader of the free world.’  Nikki Haley sounded similar notes.

“They seem to know what time it is.  The rest of Washington needs an alarm clock.”

Ukraine aid is in serious trouble, and President Zelensky knows this.  Monday, admitting the new war in the Middle East could divert Western support from Ukraine, Zelensky called out “Russian propagandists.”

“Russia is interested in triggering a war in the Middle East, so that a new source of pain and suffering could undermine world unity, increase discord and contradictions, and thus help Russia destroy freedom in Europe,” Zelensky said.

--Vladimir Putin’s foreign intelligence chief said on Wednesday that the issue of support for Ukraine was becoming toxic in the United States and that the divisions would deepen ahead of next year’s presidential election, as stated by Sergei Naryshkin, the director of Russia’s Foreign Intelligence Service (SVR), during a visit to Azerbaijan.

“It is becoming a bone of contention,” Naryshkin said, casting the struggle in Washington as one between those interested in improving the lives of Americans and those who were gripped with a hatred of Russians.

Putin has been betting American resolve over Ukraine will weaken as Washington faces different global crises and it becomes clear just how arduous a task it is to defeat hundreds of thousands of well-dug-in Russian soldiers in Ukraine.

--NATO is investigating damage to a gas pipeline and data cable running between member states Finland and Estonia, and will mount a “determined” response if the cause is proven to be a deliberate attack, NATO Secretary General Jens Stoltenberg said on Wednesday.

The damage on the Balticconnector (sic) pipeline and telecommunications cable was confirmed on Tuesday.

The pipeline, between Inkoo in Finland and Paldiski in Estonia, crosses the Gulf of Finland, part of the Baltic Sea which stretches eastward into Russian waters and ends at the port of St. Petersburg.  The Kremlin described the incident as “disturbing” and said it was awaiting further information.

The latest incident comes about a year after the larger Nord Stream gas pipelines, which cross the Baltic Sea between Russia and Germany, were damaged by explosions that authorities said were caused by sabotage.

---

Wall Street and the Economy

As we approach the next Federal Reserve Open Market Committee meeting on Oct. 31-Nov. 1, the Fed was eyeing key inflation data this week, consumer and producer prices for September.

The PPI came in hotter than expected, 0.5%, and 0.3% ex-food and energy, with the year-over-year figure at 2.2% on headline, 2.7% on core.

And then Thursday, the CPI was a tick hotter than forecast, 0.4%, while on core it was 0.3%.  Year-over-year, 3.7% headline, 4.1% on core, this last key figure as expected and down from the prior month’s 4.3%.

But…still above 4%, let alone the Fed’s target of 2%.

There’s been all kinds of chatter this week from various Fed officials and more often than not, they are clearly in the ‘pause’ camp for November, but most regional bank presidents recognize the potential need for a further hike.

The minutes from the Fed’s Sept. 19-20 policy meeting released Wednesday revealed that Fed officials were split over whether they would need to raise interest rates again this year when they decided last month to hold their benchmark policy rate steady.

In individual comments this week, some of the Fed officials recognized that the run-up in long-term Treasury yields could moot the need to raise rates again this year.

Just a few snapshots: Fed Governor Christopher Waller, a permanent voting member on the FOMC, said that the Fed can “watch and see” how inflation is influenced by recent financial market tightening, some of which is due to the FOMC’s interest-rate increases, before determining if further monetary policy adjustments are needed.

Fed Governor Michelle Bowman (permanent voter) repeated her recent comments that despite some improvement on inflation, the rate remains well above the 2% target and the labor market stayed tight, suggesting further tightening followed by a period of restrictive rates (i.e., ‘higher for longer’) will be needed to bring inflation back to target.

Atlanta Fed President Raphael Bostic (nonvoter) again said that further rate increases may not be necessary unless the improvements seen in inflation reverse.

Fed Vice Chair Philip Jefferson (voter) and Dallas Fed President Lorie Logan (voter) issued dovish remarks on Monday.

The Treasury market was closed Monday for the holiday (stock market was open), so it wasn’t until Tuesday that the bond market was able to react to the cataclysmic developments in the Middle East and the yield on the 10-year Treasury fell from 4.79% to 4.64%, a huge decline.  The 2-year note yield dipped to below 5.00%.

On the earnings front, as third-quarter reports start rolling in, members of the S&P 500 will report earnings per share 1.3% higher than a year earlier, after a second-quarter decline of 2.8%, according to estimates.  And the earnings normally end up being a little better than the final forecast heading into the season.

The Atlanta Fed’s GDPNow barometer for third-quarter growth is at 5.1%.

Freddie Mac’s 30-year fixed-rate mortgage sits at another new high, 7.57%, up five straight weeks.

Lastly, according to the International Monetary Fund, the world economy is losing momentum in the face of higher interest rates, the war in Ukraine and widening geopolitical rifts, including the Middle East, the IMF warned Tuesday.

It now expects global economic growth to slow to 2.9% in 2024 from an expected 3% this year.

“We see a global economy that is limping along,” IMF chief economist Pierre-Olivier Gourinchas told reporters ahead of the IMF and World Bank’s fall meetings in Marrakech, Morocco.

I can’t believe they are holding the meeting there, one month after the deadly earthquake that struck the area and killed nearly 3,000.

The IMF expectation of 3% growth this year is down from 3.5% in 2022 but unchanged from its July projections.

The news isn’t all bad. The world economy has displayed “remarkable resiliency,” Gourinchas said, at a time when the U.S. Federal Reserve and other central banks worldwide have aggressively raised interest rates to combat a resurgence in inflation.

The IMF sees global consumer price inflation dropping from 8.7% in 2022 to 6.9% this year and 5.8% in 2024.

The United States is a standout in the IMF’s latest World Economic Outlook. The IMF upgraded its forecast for U.S. growth this year to 2.1% (matching 2022) and 1.5% in 2024 (up sharply from the 1% it had predicted in July).

But the IMF downgraded eurozone growth to 0.7% this year and 1.2% in 2024.  Germany is seen shrinking 0.5% this year before recovering to 0.9% growth next year (as in putrid).

The Chinese economy is forecast to grow 5% this year and 4.2% in 2024 – both downgrades from what the IMF expected in July.

Europe and Asia

Just one datapoint this week for the eurozone of note, August industrial production was up 0.6% compared with July, and down 5.1% year-over-year.

Turning to Asia…China got back to work after a lengthy Golden Week holiday, and the government reported on consumer prices for September, unchanged from a year ago, 0.0%, while producer prices fell 2.5% Y/Y.

Both September exports and imports fell the same 6.2% year-over-year.  On exports, this was an improvement from the -8.8% pace in August.  Exports to the U.S. were down 9.3% Y/Y.

Meanwhile, the country’s embattled property developers, such as China Evergrande, and Country Garden, continue to miss overseas debt payments, Country Garden basically saying this week it is likely to default on its obligations, with roughly $187 billion in liabilities.  Evergrande is in bankruptcy.

Japan’s producer prices for September rose 2% Y/Y.

Street Bytes

--In the end, stocks finished mixed on the week, the Dow Jones gaining 0.8% to 33670, the S&P 500 up 0.5%, but Nasdaq finished down 0.2%.

Earnings season really begins to ramp up next week, but I imagine the focus will be on Israel, Gaza and others in the region.

--U.S. Treasury Yields

6-mo.  5.55%  2-yr. 5.05%  10-yr. 4.62%  30-yr. 4.76%

At the end of a chaotic week, the yield on the 10-year fell 17 basis points, 20bps on the 30-year.

--The International Energy Agency said in its monthly report that crude oil’s retreat from almost $100 shows that prices climbed enough to start eroding demand.  Still, China will drive consumption to a record, and global inventories will drain sharply this quarter.

“Supply fears gave way to deteriorating macroeconomic indicators and signs of demand destruction in the United States, where gasoline deliveries plunged to two-decade lows,” the IEA said in the report.  “Demand destruction has hit emerging markets even harder, as currency effects and the removal of subsidies have amplified the rise in fuel prices.”

Meanwhile, OPEC on Monday raised its long-term oil demand outlook amid population and economic growth.

Demand for oil is expected to reach 116 million barrels per day by 2045, up from 99.6 million barrels last year, OPEC said in its 2023 World Oil Outlook report.  The estimate is about 6 million barrels a day higher than the group’s forecast in its previous annual report, with the potential to be even higher.  Global energy demand is seen expanding by 23% in the period to 2045.

The oil industry will require total investments of $14 trillion, or about $610 billion on an annual basis, to meet projected demand, according to the group.

--Exxon Mobil said on Wednesday it would buy rival Pioneer Natural Resources in an all-stock deal valued at $59.5 billion that puts it atop the largest U.S. oilfield and secures a decade of low-cost production.  Exxon has offered $253 per share for Pioneer, whose shares closed at $237.41 on Tuesday.

The deal, long rumored, will be Exxon’s biggest since its $81 billion purchase of Mobil Oil in 1998 and the largest acquisition this year.

The deal will leave four of the largest U.S. oil companies in control of much of the Permian Basin shale field and its extensive oilfield infrastructure.  Pioneer is the Permian’s largest operator accounting for 9% of gross production, while Exxon occupies the No. 5 spot at 6%, according to RBC Capital Markets analysts.

Antitrust experts said Exxon and Pioneer stood a good chance of completing their deal, even though they would face heavy scrutiny.  This is because they could argue that together they will account for a small fraction of a vast global market for oil and gas.

--The United Auto Workers union went on strike at a Ford Motor pickup-truck plant in Kentucky Wednesday evening, escalating its nearly four-week labor action by hitting the automaker’s largest factory.

The plant’s 8,700 workers walked off the job at 6:30 p.m., marking the largest strike action taken by the UAW at any of the three Detroit automakers since the union declared a strike against Ford, General Motors and Chrysler-parent Stellantis in mid-September.

The Louisville, Ky., factory makes Super Duty pickup trucks and the Ford Expedition and Lincoln Navigator large SUVs, among the company’s biggest moneymakers.

“It’s time for a fair contract at Ford and the rest of the Big Three,” UAW President Shawn Fain said in a statement.  “If they can’t understand that after four weeks, the 8,700 workers shutting down this extremely profitable plant will help them understand it.”

Ford said in a statement: “The decision by the UAW to call a strike at Ford’s Kentucky Truck Plant is grossly irresponsible but unsurprising given the union leadership’s stated strategy.”

Ford then said its offer of a 23% raise to the UAW is the best that it can do and that going any higher would hurt the company.

“We have been very clear that we are at the limit,” Kumar Gahotra, head of Ford’s internal combustion business, said in a briefing with reporters Thursday.  “We stretched to get to this point. Going further will hurt our ability to invest in the business.”

--We had the first big bank earnings today, and I’m going to be briefer than usual given time constraints, but shares in JPMorgan Chase, Wells Fargo and Citigroup all moved 3% to 4% higher at the opening, before selling off as the market drifted down at day’s end on Middle East fears, all three, however, beating expectations.

JPMorgan Chase beat estimates for third-quarter profit as a tighter monetary policy and the acquisition of failed First Republic Bank drove its interest income to a record high.  The white-knight rescue in May added billions of dollars worth of consumer loans to JPM’s balance sheet, bolstering its net interest income, or the difference between what banks earn on loans and pay out on deposits.

CEO Jamie Dimon said that although U.S. consumers remained healthy, several geopolitical factors including the war in Ukraine and conflict in Israel could keep inflation at elevated levels.

“This may be the most dangerous time the world has seen in decades,” Dimon said, echoing the comments earlier in the week on CNBC of famed trader/investor Paul Tudor Jones (“sociopaths with nukes,” when looking at Russia, China and North Korea, and soon, Iran).

Net interest income rose 30% to $22.9 billion for JPM.  Excluding the impact of First Republic, it still rose 21%.

The provision for credit losses was $1.4 billion, 10% lower than last year.

Lingering economic uncertainty continues to be a drag on dealmaking activity.  Investment banking revenue at JPM fell 6% to $1.6 billion.

The bank has avoided mass layoffs and headcount actually rose 3% to 308,669 at the end of the quarter.  But that could soon change, CFO Jeremy Barnum warned, saying that headcount will be sized as appropriate for the investment bank.

JPM’s profit rose 35% to $13.15 billion, or $4.33 per share, $4.50 adjusted, well above analysts’ average estimate of $3.96.  Revenue was $39,87 billion.

Wells Fargo, the fourth-biggest U.S. bank, beat profit estimates and raised its annual forecast for income from interest payments, as customers paid more to borrow.  The bank now expects 2023 net interest income to climb about 16% from a year earlier, compared with a previous forecast of 14%.  But bank executives are sounding a note of caution in this area.

“While the economy has continued to be resilient, we are seeing the impact of the slowing economy with loan balances declining and charge-offs continuing to deteriorate modestly,” CEO Charlie Scharf said in a statement.

Ex-items, Wells earned $1.39 per share in the third quarter, beating expectations of $1.24.  The bank posted a decline in total deposits to $1.34 trillion from $1.41 trillion a year earlier. As interest rates rose, some customers have moved their cash into money market funds in search of higher yields.

Wells said provision for credit losses in the quarter included a $333 million rise in the allowance for credit losses, primarily for commercial real estate office loans.

“The office portfolio, in particular in the commercial real estate sector, is the place where we’re seeing weakness,” Wells CFO Michael Santomassimo told reporters on an earnings call.  “We do expect to see some losses there over time, but we haven’t seen anything significant yet,” he added.

Wells’ quarterly revenue of $20.86 billion also topped expectations of $20.11bn.

Citigroup beat estimates as it too benefited from rising interest payments.  Net income rose 2% to $3.5 billion from a year ago, while earnings per share remained stable at $1.63, $1.52 adjusted, beating forecasts of $1.21.

Citi’s overall revenue climbed 9% to $20.1 billion.  The third largest U.S. lender set aside more money to cover potential bad loans, even though delinquency levels were still low compared to historical levels.

Deposits at the end of the third quarter came in at $1.3 trillion, down 3% from a year ago.

Citi has been undergoing a sweeping reorganization under CEO Jane Fraser that will give her more control over the company’s businesses. Fraser said there was “no room for bystanders” as the bank embarked on its biggest overhaul in more than two decades.

--Boeing released its September delivery numbers Tuesday and they weren’t good, but investors sloughed it off.

Boeing said it delivered 27 commercial jets last month, including 15 737 MAX jets. Boeing delivered 35 jets in August, including 22 MAX jets, and in July, it delivered 43 jets, including 32 MAX jets.

That brings third-quarter numbers to 105 jets delivered, including 69 MAX aircraft.  Wall Street was looking for 118 and 77.

But Wall Street estimates had been falling over the past few weeks, and Boeing supply chain problems are partly to blame, namely at Spirit AeroSystems, which manufactures the fuselages of the 737.  The issue involves misdrilled fastener holes in a key structural part.

The Street expects 548 deliveries in 2023.  Boeing delivered 371 planes in the first nine months of 2023, leaving a hefty total of 177 for the fourth quarter to hit the target.

But investors see better things down the road for the company, including 707 jet deliveries in 2024.

*Today, however, the shares fell 3% as Boeing and Spirit AeroSystems announced they had expanded the scope of their inspection of improperly drilled holes on the bulkhead of the 737 MAX.

--Delta Air Lines released its third-quarter earnings on Thursday and the carrier said planes packed with summer travelers helped boost profit to $1.11 billion, with Delta expecting revenue to keep rising into the holiday season.

Profit was up 59% from a year earlier, as strong ticket sales, especially for premium seats and international flights helped Delta shrug off higher labor costs.

The Atlanta-based airline predicted ranges for fourth-quarter and full-year profit that mostly exceed the Street’s expectations.

“I think we’re closing the year strong, and the holiday bookings that we see right now are pretty good,” CEO Ed Bastian said in an interview.  “Domestic travel is solid, and international is really strong.”

Travelers flew 64 billion miles on the airline in the quarter, a 17% increase, and they filled 88% of the seats on the average flight, a point higher than last summer.

Delta’s adjusted earnings per share came to $2.03, 8 cents better than forecast, with revenue rising 11% to $15.49 billion, also beating expectations.

For the fourth quarter, Delta sees revenue rising as much as 11% from a year ago, and earnings between $1.05 and $1.30, with current consensus at $1.09.

--TSA checkpoint numbers vs. 2019

10/12…104 percent of 2019 levels
10/11…102
10/10…99
10/9…102
10/8…105
10/7…107
10/6…102
10/5…103

--Kaiser Permanente reached a tentative deal with the unions representing 75,000 employees, following the largest-ever health care strike in U.S. history.

--Tesla’s top-selling electric vehicles now compete directly with gasoline cars on price after the latest round of price reductions.  The lower prices could cost the company $1.2 billion a year, according to Gary Black, managing partner at the Future Fund, and a Bloomberg analysis.

At $38,900, the base Model 3 sedan now cost $8,700 less than the average amount paid for a car or truck in the U.S.  The starting price for a Model Y SUV is $3,700 below the average auto price of roughly $48,000.

--Caroline Ellison, the former CEO of Sam Bankman-Fried’s hedge fund, testified on Tuesday that the former crypto mogul directed her and others to defraud customers of his FTX exchange by taking their money without their knowledge.

Ellison, who said she previously dated Bankman-Fried, depicted her former boss as an ambitious young man who had no qualms about sharing misleading financial information with lenders, grew preoccupied with a rivalry with the Binance crypto exchange, and thought he could one day become U.S. president.

Ellison said the hedge fund, Alameda Research, took about $10 billion in FTX customer funds to repay its debts and make investments.

Prosecutors say Bankman-Fried plundered billions in customer funds to prop up Alameda, buy real estate and donate more than $100 million to U.S. political campaigns before FTX declared bankruptcy in November 2022 following a collapse that shocked financial markets.

On Wednesday, in explosive testimony from Ellison, she said that Bankman-Fried and his associates engaged in international bribery, traded crypto from the accounts of Thai prostitutes and tried to raise funds from Saudi Crown Prince Mohammed bin Salman.

Ellison said FTX attempted to unfreeze billions of dollars’ worth of funds Chinese officials seized on exchanges in that country in early 2021,when FTX was being investigated for money laundering.

Bankman-Fried and Ellison attempted to trade the funds off frozen accounts using Thai prostitutes’ identities, which were provided by another top executive, Ryan Salame, according to Ellison.  When that didn’t work, they sent a $150 million bribe to Chinese government officials in November 2021, which ultimately unfroze the funds, Ellison testified.

--Britain’s competition regulator has cleared Microsoft’s acquisition of Call of Duty maker Activision Blizzard after the restructured deal substantially addressed its earlier concerns.

The $69 billion deal is now official.

--The Screen Actors Guild-American Federation of Television and Radio Artists said Thursday that they are “ready to negotiate” with Hollywood studios after talks between the parties broke down.

The Alliance of Motion Picture and Television Producers said Wednesday that negotiations with the union were “no longer moving us in a productive direction” and that the gap between the two was “too great.”

--PepsiCo on Tuesday raised its annual profit forecast for a third time this year, as the company banks on the multiple price increases it undertook across its major markets and resilient demand for its snacks and beverages.

Shares of the company, which owns brands including Mirinda, and Gatorade, rose about 2% after it beat third-quarter profits estimates.

PepsiCo and rival Coca-Cola have been largely shielded from the effects of price hikes due to their near-domination of the global carbonated drinks market, as well as cost-conscious consumers spending on products categorized as “affordable luxuries.”

PepsiCo’s average prices jumped 11% in the third quarter ended Sept. 9, while organic volume slipped 2.5%. That compared with an average price increase of 16% in the first quarter of 2023.  Net revenue rose nearly 7% to $23.45 billion in the quarter, edging past estimates of $23.39bn.  PepsiCo’s adjusted earnings came in at $2.25 per share, topping forecasts of $2.15.

Revenue at the company’s North America beverage unit, PepsiCo’s largest business, rose 6% in the third quarter, but volumes fell 6%.

--Global personal-computer sales slumped 7.6% in the third quarter from a year ago to 68.2 million units, according to International Data Corp.  But IDC also noted that the quarter marked a second straight quarter of sequential increases, “indicating that the market has moved past the bottom of the trough.”

The third-quarter shipments were up from 61.6 million in the second quarter, and 56.9 million in the first quarter.

Lenovo was the market leader in the quarter, with shipments of 16 million units, off 5% from a year ago.  HP was second at 13.5 million PCs, then Dell at 10.3 million units in the quarter, IDC estimates, and Apple at 7.2 million.

--The Wall Street Journal reported that “Daily market prices to move cargo from Asia to the U.S. and Europe in September were down as much as 90% from early 2022, a bad sign for ship operators since voyages are often unprofitable at current rates.”

“Ship operators are mothballing vessels to keep operating costs down, resulting in a 7% reduction in container capacity in September compared with a year ago, according to Peter Sand, chief analyst at Norway-based Xeneta.”

Retailers such as Amazon.com, Target and Walmart that normally bring in large amounts of cargo in the summer months ahead of the holiday shopping season, have cut back.

--Social Security recipients will get a 3.2% increase in their benefits in 2024, far less than this year’s historic boost and, so the government says, reflecting moderating consumer prices, but we know ‘real’ prices, such as for food (insurance, basically everything), have done nothing but go up.  [See PepsiCo, as an example.] It’s bulls---.

--Luxury sandal maker Birkenstock notched a valuation of $8.32 billion in its market debut on Wednesday, with the initial public offering price at $46.  But the stock began trading at $41 on the NYSE, and closed its first day at $40.20, down nearly 13%.  Then it hit $36 today, Friday.  Not helpful for the overall IPO market.

--Disneyland Resort announced Wednesday that it had increased single-day admission prices on its most popular days by nearly 9%, while parking fees have risen nearly 17% and the cost of using the Anaheim parks’ ride-jumping Genie+ service has gone up 20%.

The lowest-priced ticket for a single-day visit on low-demand days at Disneyland and California Adventure will remain at $104, the same price since 2019.  The daily ticket for days when demand is highest, which was $179, has increased to $194, an 8.4% increase. 

The two-day pass will now cost $310, up from $285, an 8.8% increase.

Preferred parking has increased to $55 a day from $50.  Price for standard parking increased to $35 from $30.

So when your two kids go, “Mommy, Daddy, can we go to Disneyland this weekend?”

Dad: “Sure.  But first you have to come within $20 of the cost of taking you there.”

Little Bobby: “$42.”

Dad: “Try over $800 for starters.  We’ll, err, Mom, will take you to the Taylor Swift movie, Chloe.  Bobby, we’re going to watch the Lakers together right here on television.”

Chloe is happy.  Little Bobby is sulking.  Give him a box of Funny Bones.

Family counseling…another free feature of StocksandNews.

--For the first time in almost two years, rents in New York City actually decreased month over month, according to the latest Douglas Elliman report, a sign that the market may have finally passed its peak even as prices remain much higher than their pre-Covid levels.

In Manhattan, the median September rent fell to $4,350, a slight decline from August’s record high of $4,400, according to the report.

--Following a multiyear audit, the IRS has ordered Microsoft to pay $28.9 billion in additional tax, plus interest and penalties, covering the period from 2004 to 2013.

The company is contesting the finding, and the stock only fell 0.6% in trading late Wednesday. 

Microsoft disclosed the IRS request in a filing with the SEC and in a blog post. The company said resolution is likely to take several years.

--Inbound tourism has recovered to 67 percent of 2019 levels in China, before it sealed its borders, according to the travel sector analytics firm ForwardKeys.

But China’s Ministry of Culture and Tourism data has shown Chinese travel agencies received only 477,800 foreign tourists in the first six months of 2023, only 5.6 percent of the same period from 2019.

The ministry said 31.88 million foreigners came to China for tourism in 2019 and spent $77.1 billion in China.

--Consumers are expected to spend $12.2 billion for Halloween candy, costumes and decorations, according to the National Retail Federation’s annual survey conducted by Prosper Insights & Analytics.

This year’s Halloween spending is expected to surpass pre-pandemic levels.

--Police arrested 12 people suspected of stealing 74 tons of olives in the Spanish province of Seville, mere weeks after 6,000 liters of olive oil was stolen in Malaga. Heatwaves and drought ruined this year’s harvest in Spain, the world’s largest producer.  As a consequence, the price of olive oil at origin has risen 112% since last year.

Foreign Affairs

China: Senate Majority Leader Chuck Schumer led a bipartisan Senate delegation to Beijing this week and said on Tuesday there had been “serious engagement” during a rare meeting between such a delegation and Chinese President Xi Jinping the previous day.  “We need to get results,” Schumer said during a media briefing at the U.S. Ambassador’s residence in Beijing, but acknowledged “there seems to be a difference” between the sides.

The meeting seemed designed to pave the way for President Xi’s visit to San Francisco next month for a one-on-one with President Biden, which scares the hell out of me, given Biden’s feebleness of mind.

Schumer had blasted Beijing’s stance on the Israel-Hamas conflict.

“I urge you and the Chinese people to stand with the Israeli people and condemn the cowardly and vicious attacks upon them,” Schumer told Xi in the meeting. “I say this with respect, but I was disappointed by the foreign minister’s statement showing no sympathy or his support for the Israeli people during these tragedies.”

The American delegation was in China when Hamas launched its attack.

Separately, the number of births in China tumbled 10% last year to hit their lowest level on record – a drop that comes despite a slew of government efforts to support parents and amid increasing alarm that the country become demographically imbalanced.

China had just 9.56 million births in 2022, according to a report published by the National Health Commission.  It was the lowest figure since records began in 1949.

The high costs of childcare and education, growing unemployment and job insecurity as well as gender discrimination have all helped to deter many young couples from having more than one child or even having children at all.

Last year, the country’s population also fell for the first time in six decades, dropping to 1.41 billion people.

That’s caused demographers to lament that China will grow old before it gets rich, slowing the economy as revenues drop and government debt increases due to soaring health and welfare costs.

North Korea: Recent satellite photos show a sharp increase in rail traffic along the North Korea-Russia border, indicating the North is supplying munitions to Russia, according to a U.S. think tank.

“Given that Kim and Putin discussed some military exchanges and cooperation at their recent summit, the dramatic increase in rail traffic likely indicates North Korea’s supply of arms and munitions to Russia,” Beyond Parallel, a website run by the Washington-based Center for Strategic and International Studies think tank, said in a report last weekend.

“However, the extensive use of tarps to cover the shipping crates/containers and equipment makes it impossible to conclusively identify what is seen at the Tumangang Rail Facility” on the border, it said.

Iran: The United States and Qatar have agreed to deny Iran’s access to $6 billion in funds recently transferred to the nation as part of a deal between Washington and Tehran that led to the release of five imprisoned Americans from Iran last month.

But few believe this is a hard and fast denial of access and it is unclear whether the Biden administration intends to cut off the funds permanently or may be taking an interim step as it gathers more information about Iran’s potential ties to Hamas.

Of course we already know Iran’s involvement.

Afghanistan:  So many awful tragedies with natural disasters recently, such as Libya and the flooding that killed at least 11,000.  But that story is already off the map.

And now with everything going on, Afghanistan was hit by a powerful earthquake Saturday that killed at least 2,400, according to last reports.  One of the deadliest earthquakes to hit the country in two decades.

Turkey: The Defense Ministry said on Saturday it had “neutralized” 58 Kurdish militants in northern Syria in overnight targets, after the Kurdistan Workers Party (PKK) militia claimed responsibility for the Oct. 1 bombing in Ankara.

President Erdogan repeated his warning that Turkey “may suddenly come one night,” a term he has often used to target militants in Syria and Iraq.  “We will implement our strategy of ending terror at its root with determination, and hold...”  And here he names some groups and individuals the president holds responsible, one of whom I will attempt to make contact with in a few weeks.   

India: Authorities charged the renowned novelist Arundati Roy over public comments she made 13 years ago about the restive Kashmir region, in the latest step in an intensifying crackdown on free speech by the government of Prime Minister Narendra Modi.  It was not clear why the charge was filed now. A disturbing development.

Random Musings

--Presidential approval ratings….

Gallup: 41% approve of President Biden’s job performance, 58% disapprove; 39% of independents approve (Sept. 1-23).

Rasmussen: 43% approve, 54% disapprove (Oct. 13).

--In a new Fox News survey, President Biden tops former President Trump in a head-to-head, 49% to 48% among registered voters, while Biden lags behind Nikki Haley 49% to 45%.  Biden also trails Ron DeSantis by 49% to 47% in hypothetical head-to-head matchups.

Among GOP voters, Trump still holds a whopping lead at 59%, with DeSantis a distant second with 13%, Haley 10%.  Vivek Ramaswamy stands at 7%, Mike Pence 4%, and Chris Christie 3%.  Tim Scott is just at 1%.

The Fox poll closely mirrors the latest RealClearPolitics aggregate, which has Trump at an average of 57.8% support nationwide, while DeSantis receives an average of 12.8%.

Meanwhile, just 45% of Democratic primary voters back Biden as the party’s 2024 standard-bearer, while 53% want someone else to be the party’s nominee.

In a three-way battle with Robert F. Kennedy Jr., both Biden and Trump each receive 41%, and Kennedy 16%.  This is nuts. 

--Speaking of RFK Jr., as I noted would be the case last week, on Monday, he announced he was going to run for president as an independent.

Four of Kennedy’s siblings – Kerry Kennedy, Rory Kennedy, Joseph P. Kennedy and Kathleen Kennedy Townsend – said they were saddened by the announcement.  “Bobby might share the same name as our father, but he does not share the same values, vision or judgment,” they said in a statement. The family has also called Bobby “dangerous.”

--Peggy Noonan / Wall Street Journal…on the fall of Kevin McCarthy…

“What happened in the House (last) week was irresponsible and destructive, a classless move by classless people for low and shallow reasons.  Finding a new speaker won’t be quick; it will be a painful, destructive winnowing that will make America look worse.

“What GOP members need is what they don’t have. They need a leader who, through the force of his presence and with an awesome competence, can listen to everyone, reach out, heal – and instill sharp stabs of terror in the hearts of his lean and hungry legislators.  He needs to be feared.  They need a ruthless Mama Cat who can pick the kittens up by the scuff of the neck and throw them in the box.  They need Nancy Pelosi.  Who, somebody once said, has a Glock in that Channel bag.

“On Wednesday, feeling bleak, I reckoned that demoralized Republicans had two options. First, they could pick as speaker a nut from the nut caucus that did Mr. McCarthy in, and then wait for it to all blow up. It would within months, because they can’t govern.  They have verve, they raise money, they know how to use social media and tickle the party’s id. But they can’t lead institutions because they don’t respect institutions because they’re not in the least conservative.  They’re a bunch of crazy narcissists, and narcissists can’t create and sustain coalitions because that means other people exist.  But picking one of them and watching him flail might break some of the fever.

“Or the conference could pick someone normal, someone who connects with moderate Republicans and the nuttier quadrants.  The nuts themselves might support someone like that now. They’d think it would show they were always sincere and it was never personal.  They’d follow that vote with a party at which they talk about how the new speaker has better personal relationships than Kevin, and his word is more reliable.  Then, after a few months or a year, they’d try to kill him.

“But a few days later I thought there’s hope in this: There are 221 Republicans in the House, and only eight of them voted, with all the Democrats, to remove the speaker. That number was decisive, it carried the day, but it was small.

“The normal Republicans and conservatives who numerically dominate the GOP conference have to assert themselves in a new way. The Gaetz Eight should be shunned and Mr. Gaetz expelled from the conference.  He thinks he’s such a big freelance power, let him be freelance.

“Members who took a constructive part should stand together.  They have to stop seeing themselves as victims of those who make chaos.  They should spy an opening where it exists.  What’s happening in the GOP isn’t a civil war but a split on the Trumpian right.  Mr. Gaetz sent out a fundraising email this week saying Mr. McCarthy was ‘Democrat-owned,’ lies to conservatives and cut deals with Democrats.  Right-wing radio star Mark Levin immediately shot him down on Twitter: ‘But Marxist Democrats unanimously backed you, moron.’  He suggested Mr. Gaetz should vacate his own seat after his ‘shameless serial lies to conservatives.’

“That split is an opening, exploit it. And don’t allow the next speaker to agree that in the future it will only take one vote to vacate the office….

“Something has to come along and break through this stasis.  Something will, but I don’t know what.”

Thursday, Republican Rep. Steve Scalise ended his bid to become House speaker after originally winning a vote in his conference, 113-99, over Rep. Jim Jordan.

Scalise said after he emerged from a closed-door meeting, “I just shared with my colleagues that I’m withdrawing my name as a candidate for speaker-designee.”

Scalise said the Republican majority “still has to come together and is not there.”

He had been working furiously to secure the votes after being nominated by a majority of his colleagues, but it was clear some lawmakers would not budge from their refusal to support him.

“There are still some people that have their own agendas,” Scalise said.  “And I was very clear, we have to have everybody put their agendas on the side and focus on what this country needs.”

Jim Jordan then became the new nominee this afternoon.  No way he can get 217 either.

--George F. Will / Washington Post

“There is national incredulity, exhaustion, embarrassment, disgust and fatalism about the political parties’ inability to generate palatable presidential choices. Tim Scott could alter this with a trifecta of statesmanlike acts; withdrawing from the competition for the Republican presidential nomination, challenging others to do likewise and exhorting them to join him in supporting Nikki Haley.

“This is the South Carolina senator’s choice: He can acknowledge that his energetic campaigning has failed to enkindle sufficient enthusiasm and depart as he campaigned, cheerfully. Or he can try to become someone whom, to his credit, he has no aptitude for being – another peddler of synthetic anger, stoking today’s rage culture.

“Of Scott we may say what Sam Rayburn, Democratic House speaker for 17 years, reportedly said of Dwight D. Eisenhower when in 1948 Democrats contemplated giving Ike their presidential nomination: ‘Good man but wrong business.’  Actually, Ike was, like Scott, a good man and, as Scott someday could be, a fine president. Scott is not, however, the man for this season.

“By catalyzing a coalescence around Haley, Scott could transform the nation’s political mood.  As long as the Republican race pits Donald Trump against a cluster of lagging pursuers, the nominating electorate cannot ponder a binary choice.  When, however, it is Trump against one experienced, polished, steely and unintimidated adversary, voters can internalize this exhilarating reality: There is a choice suitable for a great nation.”

--Donald Trump on Wednesday called Hezbollah “very smart,” and in separate remarks the former president implied Hamas would never have attacked Israel if he was in the White House.

During a rally in West Palm Beach, Flas., Trump blamed Israeli and U.S. government officials for Wednesday’s attack from the Iranian-backed terror group, which came days after Hamas terrorists stormed across the Israeli border, killing over 1,000.

“Two nights ago, I read all of Biden’s security people, can you imagine, national defense people, and they said, ‘Gee, I hope Hezbollah doesn’t attack from the north, because that’s the most vulnerable spot,’” Trump told the crowd. “I said, ‘Wait a minute.’  You know, Hezbollah is very smart.  They’re all very smart.”

Trump then appeared to claim that Israeli defense officials made the same mistake, in his view, prompting the attack.

“They have a national defense minister or somebody saying, ‘I hope Hezbollah doesn’t attack us from the north.’  So the following morning, they attacked,” Trump said.

“They might not have been doing it, but if you listen to this jerk, you would attack from the north, because he said that’s our weak spot,” he went on. “Whoever heard of officials saying on television that they hope the enemy doesn’t attack in a certain area?”

Trump blamed Prime Mininster Netanyahu for not being prepared and went on to suggest that if he was president, the U.S. would have detected and prevented the terrorist attack in Israel.

“And under Trump, they wouldn’t have had to be prepared,” he said.

--The Biden administration has let 99% of migrants who have come over the border since 2021 – over two million people – stay in the country according to a new Congressional report released by House Republicans Monday.

The report found “at least” 2,148,738 illegal aliens had been released into the United States by the Department of Homeland Security from when Joe Biden came into office until March 31, 2023.

Of those, only a small fraction have been properly vetted to test their claims of asylum, the study asserts.

--President Biden was interviewed as part of a probe into his handling of classified documents, after he left the vice-presidency in 2017.

Biden met voluntarily with Special Counsel Robert Hur at the White House over two days, officials said.

Hur was appointed after a separate investigation was launched into secret documents found at Donald Trump’s home.

Biden has not been charged with any crime.

--Some Harvard University students and groups are desperately trying to backtrack on their support of a letter blaming Israel for the mass slaughter of its own people by Hamas – as some business titans seek to blacklist them from future jobs.

More than 30 student groups at Harvard had said they held Israel “entirely responsible” for the attacks carried out by Hamas.

Former Harvard president Larry Summers, who served as Treasury Secretary in the Clinton administration, said he had never been more “disillusioned and alienated” from the university.

“The silence from Harvard’s leadership, so far, coupled with a vocal and widely reported student groups’ statement blaming Israel solely, has allowed Harvard to appear at best neutral towards acts of terror against the Jewish state of Israel,” Summers wrote on X.

“Instead, Harvard is being defined by the morally unconscionable statement apparently coming from two dozen student groups blaming all the violence on Israel.”

Harvard President Claudine Gay said on Tuesday: “Let me also state…that while our students have the right to speak for themselves, no student group, not even 30 student groups, speaks for Harvard University or its leadership.”

A total whiff on the part of Ms. Gay.

--The president of New York University’s student bar association sent an incendiary pro-Hamas message to the school Tuesday – cheering the terror attack on civilians and blaming Israel for the bloodshed.

Ryan Workman also accused the Jewish state of “genocide” in the missive – which caused so much outrage a law firm rescinded a cushy job offer to the student.

Among the things Workman said in his message to the school was: “Israel bears full responsibility for this tremendous loss of life. This regime of state-sanctioned violence created the conditions that made resistance necessary.”

Blowback to the post was swift on campus, encouragingly.  And a few hours after Workman’s message was publicized, the law firm of Winston & Strawn released a statement that said they heard about their “inflammatory comments regarding Hamas’ recent terrorist attack” and “accordingly, the Firm has rescinded the law student’s offer of employment.”

Workman identifies as non-binary. 

I liked what Peggy Noonan said of the students from her perch at the Wall Street Journal:

“I’m not going to dwell on The Squad, or the Ivy League student groups that declared support for Hamas.  Except to say, about the latter, we seem to be raising a generation whose most privileged and educated members appear to be incapable of making moral distinctions. They made me think of the Oxford Union vow, in 1933, not to fight for king and country: High-class dopes always get it wrong.  In Oxford’s defense, when World War II came many of them did their part.  These guys are apparently upset they might not get jobs on Wall Street.  What cold little clowns.”

Ben Sasse, president of the University of Florida and former Republican senator from Nebraska, in an email addressed to “Jewish Gator Alums,” as relayed by the Wall Street Journal:

“In the coming days, it is possible that anti-Israel protests will come to UF’s campus. I have told our policy chief and administration that this university always has two foundational commitments: We will protect our students and we will protect speech.  This is always true: Our Constitution protects the rights of people to make abject idiots of themselves…”

--New Jersey Democratic Senator Robert Menendez was charged last month with taking bribes in exchange for lucrative political favors, but now faces a new accusation, as it was announced Thursday he conspired to act as an agent of Egypt even as he served as the chairman of the Senate Foreign Relations Committee.

Manhattan federal prosecutors filed the fresh charge against Menendez and his wife, as well as a third defendant, accusing them of conspiring to have the senator act as a foreign agent without registering with the Justice Department.

The charge cuts to the heart of Menendez’s Senate oath to “bear true faith and allegiance” to the United States and will intensify pressure on him to resign.

--A new indictment filed Tuesday charged Rep. George Santos with stealing the identities of donors to his campaign and then using their credit cards to ring up tens of thousands of dollars in unauthorized charges.

Prosecutors said some of that stolen money ended up in his own bank account.

The 23-count indictment replaces one filed earlier against the New York Republican charging him with embezzling money from his campaign and lying to Congress about his wealth, among other offenses.

“As alleged, Santos is charged with stealing people’s identities and making charges on his own donors’ credit cards without their authorization, lying to the FEC (Federal Elections Commission) and, by extension, the public about the financial state of his campaign,” US. Attorney Breon Peace said in a statement.

--Lastly, growing up, Jewish friends were very good to me and my family.  I think back to one family, the Tannenbaums, who put us up for weeks in their home while we were transitioning from Plainfield to Summit, N.J., for example, and Sam and Netta in Queens, and others.

To my Jewish friends this week, you are in my thoughts and prayers.

I also can’t help but note the aforementioned Peggy Noonan’s close in her weekly column released today at the Journal.

“There is something Israel has shown to a heroic degree each day since that terrible Saturday morning.

“It has led with its heart.

“On a Zoom call this week a man living with his family in Israel told Americans a story. One of the young women killed at the rave was from Brazil.  Her mother and sister flew in for the funeral.  But someone on WhatsApp sent out word, a fear that no one else would be there to mourn.  So the man’s teenage son jumped in his car and drove, and he had to stop 25 minutes from the site, traffic at a standstill, because…7,000 or 8,000 people showed up, having heard that the family might be alone.  My eyes filled as I heard it, and fill again as I write.

“What a people. Hearts like that can awe and move the minds of the world.”

---

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

Pray for Ukraine…and Israel…and civilians in Gaza who have nothing to do with Hamas.

God bless America.

---

Gold $1941…up nearly $100 on the crisis in the Middle East
Oil $87.68…up nearly $5 on the week

Regular Gas: $3.62; Diesel: $4.48 [$3.91 / $5.18 yr. ago]

Returns for the week 10/9-10/13

Dow Jones  +0.8%  [33670]
S&P 500  +0.5%  [4327]
S&P MidCap  -0.5%
Russell 2000  -1.5%
Nasdaq  -0.2%  [13407]

Returns for the period 1/1/23-10/13/23

Dow Jones  +1.6%
S&P 500  +12.7%
S&P MidCap  +0.5%
Russell 2000  -2.4%
Nasdaq  +28.1%

Bulls 48.6
Bears 22.8

Hang in there.

Brian Trumbore

---