Week in Review

---

Week in Review

10/12/2024

For the week 10/7-10/11

[Posted 4:30 PM ET, Friday]

Note: StocksandNews has significant ongoing costs, and your support is greatly appreciated.  Please click on the gofundme link or send a check to PO Box 990, New Providence, NJ 07974.

Every little bit helps, sports fans.

Edition 1,329

Hurricane Milton will be remembered for a long while in the state of Florida, especially as many of the areas hit were still in the early recovery phase from Hurricane Helene two weeks earlier.  Sixteen deaths have been recorded as I go to post, mostly away from the Gulf Coast as the result of a record tornado outbreak. Three million+ were without power in the immediate aftermath, and millions are still without today.

But as Florida Gov. Ron DeSantis said, it could have been even worse, especially as it looked 24 hours prior to landfall.  Floridians caught a break in that increasing wind shear caused Milton’s winds to weaken on approach and the feared 10-15 feet of storm surge in the Sarasota-Tampa area largely didn’t materialize.

But tell that to those impacted, including those who lost loved ones.

Damage estimates are already in the area of $50 billion in insured losses.  Hurricane Ian in 2022 resulted in losses of $60 billion.

Florida already has an insurance crisis, and Milton and Helene only make it worse.

Milton was the third hurricane to make landfall in Florida this season, tying a record.  Let’s hope there isn’t another.  Recovery is going to take months, and many people have lost everything.

It’s sickening...and so sad.

A new estimate from analytics company CoreLogic pegs Helene’s damage at between $30.5 billion and $47.5 billion.  CoreLogic said its updated estimate, released Monday, includes wind losses as well as insured and uninsured storm surge and inland flood loss for residential and commercial properties across 16 states.

Unlike wind damage, flood damage is typically not covered by standard homeowners’ insurance.

“When intense storm surge and flooding events, like Hurricane Helene, reach regions that are infrequently affected by natural hazards, we can expect to see damage to homes without flood insurance coverage,” Jon Schneyer, director of Catastrophic Response at CoreLogic, said.

Schneyer added that because Helene caused tremendous flooding damage outside of specially designated flood areas, it is “challenging to realize the full extent of impact to uninsured homeowners.”

Meanwhile, Georgia and North Carolina are must-win states for Donald Trump, polls showing a dead heat, and Trump has claimed that Americans were losing on emergency relief money because it had been spent on migrants. 

“There’s nobody that’s handled a hurricane or storm worse than what they’re doing right now,” Trump said at a rally.  “Kamala has spent all her FEMA money, billions of dollars, on housing for illegal migrants.”

But they are two distinct programs with separate budgets, the Biden administration accusing Republicans of spreading “bold-faced lies” about funding for the disaster response.  That said, FEMA’s current account is low, and Congress needs to approve more funding for it (and the Small Business Administration).

When disasters strike, though, government is in a lose-lose situation, and any voter dissatisfaction with recovery efforts will likely redound to Trump’s favor.  By the week’s end, however, his trail of lies was despicable.

Georgia Republican Congressman Marjorie Taylor Greene is among those using the climate emergency to double down on weather conspiracies.  While she stopped short of blaming Jews for the hurricanes, a la her 2018 remarks on “Jewish Space Lasers” being responsible for wildfires, she wrote on X on October 3 about the hurricanes, “Yes they can control the weather,” without specifying who “they” are. “It’s ridiculous for anyone to lie and say it can’t be done.”  [WIRED magazine]

---

Israel-Hezbollah-Iran...as the world waits for Israel’s response to Iran’s recent attack....

--Last weekend, Israel’s military (IDF) said it reopened an offensive in northern Gaza to combat militants it said were attempting to regroup, issuing sweeping evacuation orders for an estimated 300,000 residents that are still living in northern Gaza to move to an expanded humanitarian zone in the south of the Gaza Stirp, which is only exacerbating an already dire situation.

--Israel has also been targeting Lebanon’s border crossing with Syria because Hezbollah was using it to bring in weapons, the IDF adding that its jets had also struck a smuggling tunnel.  Most of Hezbollah’s weaponry comes from Iran through Syria.

Tens of thousands of people fleeing the war in Lebanon have crossed into Syria over the past few weeks.

--Israeli Prime Minister Benjamin Netanyahu, in a video statement addressing the one-year anniversary of the Oct. 7 attack, vowed that Israel would keep fighting and argued that today’s battles would ensure the security of the state for future generations.

The statement came after Israel said it was conducting “extensive” strikes on Hezbollah targets in southern Lebanon and the Dahiya, the densely packed cluster of neighborhoods adjoining Beirut.  On Monday night, the Israeli military continued to order residents in the Dahiya to evacuate.

--The widening war has the Israeli military fighting on multiple fronts.  Israel expanded its campaign against Hezbollah last month with a wave of bombardments and assassinations and started a ground invasion last week targeting Hezbollah positions in southern Lebanon.  Over 2,000 people have been killed and nearly 10,000 wounded since the war began last October, according to Lebanon’s ministry of health (over 1,400 of the deaths in the last three weeks).

--Hezbollah fired rockets at Haifa and Tiberias in Israel, damaging buildings and wounding ten.

--As of Wednesday, Israel has refused to divulge to the Biden administration details of its plans to retaliate against Tehran, U.S. officials say, even as the White House is urging its closest Middle East ally not to hit Iran’s oil facilities or nuclear sites amid fears of a widening regional war.

The White House is frustrated that they have been repeatedly caught off guard by Israel’s military actions in Gaza and Lebanon and are seeking to head off further escalation.  Some had hoped the U.S. would learn more about what Israel was contemplating during a planned visit Wednesday between Israeli Defense Minister Gallant and Defense Secretary Austin at the Pentagon, but Gallant postponed his trip, the Pentagon said.

Prime Minister Netanyahu blocked Gallant from departing to the U.S. on Tuesday night as Israel continued planning its Iran operation, an Israeli official said. 

Israel carried out a strike against Hezbollah leader Hassan Nasrallah without informing the U.S. ahead of time.

But the Biden administration dropped its support for an immediate cease-fire in Lebanon and is openly supporting Israel’s ground offensive, a State Department spokesman said Tuesday, calling the Israeli actions “incursions to degrade Hezbollah’s infrastructure.”

Biden and Netanyahu then finally talked on the phone Wednesday, as the administration still pressed for a measured response against Iran’s ballistic missile barrage.

It was the first call in 49 days between the two leaders amid reports of their strained relationship featured in Bob Woodward’s upcoming book, more below on that.

Netanyahu’s office denied the allegations that the prime minister sabotaged Gallant’s trip to the U.S., claiming the trip was never approved.

Gallant then said Wednesday that the IDF’s counter-strike on Iran will put the original attack to shame.

He said, “The Iranian attack was aggressive but inaccurate.  In contrast, our attack will be deadly, pinpoint accurate, and most importantly, surprising – they will now know what happened or how it happened. They will just see the results.”

Speaking to IDF Intelligence Unit 9900, the defense minister said that much of Israel’s air supremacy in the Middle East is due to their intelligence collection work.

The Jerusalem Post reported that Israel is not expected to attack Iran’s nuclear program but rather to focus on various kinds of military bases and intelligence sites.

--Israel sent a fourth combat division into southern Lebanon, providing thousands more troops for the ground invasion.  Its air strikes have continued to hit Beirut.

Israel said it had begun a “limited, localized, targeted” ground operation in southwest Lebanon and that it had “eliminated” Suhail Hussein Husseini, the commander of Hezbollah’s headquarters, in an overnight air strike on Beirut, Monday.

Hezbollah said it foiled two Israeli attempts to breach its border defenses. Late Monday, the militant group fired 190 rockets towards Haifa, in northern Israel, and a military intelligence base on the outskirts of Tel Aviv.

Wednesday, Hezbollah fought ground battles with Israeli forces in southern Lebanon and lobbed more rockets, an estimated 150, at northern Israeli towns.  Two civilians were killed by shrapnel in the border town of Kiryat Shmona.  Most residents have evacuated the town after a year of cross-border fighting.

Israel said it launched new strikes on southern Lebanon and Syria overnight, targeting Hezbollah’s weapons storage facilities.

Thursday, at least 22 people were killed and 117 wounded in Israeli airstrikes that hit two different areas in central Beirut, not the Hezbollah stronghold of Dahiya in Beirut’s southern suburbs.

Earlier Thursday, an Israeli strike on a school sheltering displaced people in the Gaza Strip killed at least 27, Palestinian medical officials said. The Israeli military said it targeted militants, but people sheltering there said the strike hit a meeting of aid workers.

--Over 900,000 people have been displaced in Lebanon, the UN said.  Israeli evacuation orders now cover a quarter of Lebanon’s land.

Friday, the UN says two of its peacekeepers were injured “after two explosions occurred close to an observation tower” in southern Lebanon, where Israeli forces are trying to force residents to flee while they hunt for suspected Hezbollah militants.

A UN spokesman told the BBC: “It looks more of a deliberate attack against our troops, who have been trying in the south to bring back stability at the moment, and it’s very, very challenging,” Andrea Tenenti said.  “How can this be a mistake from an army that is pretty well prepared, and they know what they’re doing?” he asked.

The international community condemned the Israeli action.

--Tehran told Gulf Arab states it would be “unacceptable” if they allowed use of their airspace or military bases against Iran and warned that any such move would draw a response, a senior Iranian official said, as reported by Reuters.

Iran’s foreign minister, Abbas Araghchi, warned Israel that any attack on its infrastructure would be avenged.

Separately, Brig. Gen. Esmail Qaani, the head of Iran’s elite Quds Force, is said to be under guard, according to some Arab news outlets – as the Islamic Revolutionary Guards Corps investigates security breaches into how Israel was able to bring down Hezbollah’s most senior leadership and identify where and when Hassan Nasrallah could be found.

Sky News Arabic reported Qaani is being probed over alleged ties to Israel.  The outlet also reported the general had a heart attack while he was being questioned.

--Israel launched airstrikes on a residential building in the Syrian capital, Damascus, according to Israeli officials.  The attack, which landed near the Iranian Embassy, was an attempt by the Israeli military to assassinate a ranking Hezbollah official involved in weapons smuggling, they said.

Syria’s state news agency said that the rockets had killed seven civilians, including women and children, citing a military source. It was not clear if the targeted official was among the dead.

--The U.S. military struck more than a dozen Houthi targets in Yemen last Friday, going after weapons systems, bases and other equipment belonging to the Iranian-backed rebels, U.S. officials confirmed

Houthi media said seven strikes hit the airport in Hodeida, a major port city, and the Katheib area, which has a Houthi-controlled military base.  Four more strikes hit the Seiyana area in Sanaa, the capital.

The strikes came days after the Houthis threatened “escalating military operations” targeting Israel after they apparently shot down a U.S. military drone flying over Yemen.  Last week, the group claimed responsibility for an attack targeting American warships, all the missiles and drones intercepted by the Navy destroyers, according to several U.S. officials.

--Editorial / Wall Street Journal

“Hamas’s massacre last Oct. 7 was a catastrophe for Israelis, but a year later it has also taught the West forgotten lessons about deterrence, political will, and the illusions of a liberal, peaceful world.

“The Oct. 7 attack took Israel by surprise, and the Jewish state has recognized its mistake of underestimating its enemies. Its response since is an unanswerable argument for the necessity of military readiness, and not only for Israel.

“The world should never forget the videos of Hamas’ atrocities.  The terrorists livestreamed as they slaughtered the defenseless. They killed some 1,200 people and took 251 hostages, 101 of whom remain in captivity, assuming they are still alive.

“Hamas is proud of this handiwork and would repeat it if it could.  As Hamas politburo member Ghazi Hamad put it on Lebanese TV, the terror group would like to repeat Oct. 7 ‘again and again.’  Since Palestinians are victims of Israel, he says, ‘Nobody should blame us for the things we do.  On Oct. 7, on Oct. 10, on Oct. one-millionth, everything we do is justified.’

“Another ugly surprise has been the support for Hamas’ argument in the West, especially on elite college campuses. The intellectual case for murderous terror made by Frantz Fanon and taught without cavil for two generations has poisoned the young against their own civilization.  Students for Justice in Palestine called Oct. 7 ‘a historic win for Palestinian resistance,’ and antisemitism was tolerated by university presidents as free speech.

“This has been a shocking revelation, especially since this view has become a major influence in the Democratic Party.  President Biden and Vice President Kamala Harris have felt obliged to chastise Israel for its response to the massacre as much as they do Hamas for hiding behind innocent children.

“Israel has fought on despite its international critics, who have underestimated Israeli public support for a powerful military response.  Israel has shown more political resolve and military strength than its enemies anticipated.

“The reply of respectable liberalism has been to urge de-escalation, cease-fires and a two-state solution, and to blame Israeli Prime Minister Benjamin Netanyahu when they don’t materialize. It’s as if Hamas, Hezbollah and their patron in Iran don’t exist.  Hamas has refused to engage with mediators for weeks, and a Palestinian state at peace with Israel has never been its objective or Iran’s.  They want Israel destroyed and the Jews expelled or murdered.

“As long as Iran pursues war, Israel must defend itself aggressively to survive.  Mr. Biden has supported Israel, but he has also tried to cut short its defense....

“French President Emmanuel Macron now calls for an arms embargo on Israel.  Charles de Gaulle cut off Israel three days before the 1967 war with the Arabs.  It is an old delusion that disarming Israel will buy peace from the fanatics who attack it.

“As long as the West handcuffs Israel but refuses to deter Iran, the flames will spread across the Middle East.  Israel’s best option is to degrade the Iranian axis’ capabilities and deny it safe havens.  Israel will have a better chance at a durable cease-fire when its enemies know they will suffer more than Israel does when they attack....

“As for the U.S., Oct. 7 is a reminder that Americans can’t withdraw from the Middle East and assume we can avoid its menace. Iran is bent on America’s destruction as much as it is on Israel’s. The Jewish state is the frontline of the West, and we can’t let it lose.”

Brett Stephens / New York Times

“The American people had better hope Israel wins.

“Since it came to power in 1979, Iran’s Islamist regime has declared itself at war with two Satans: the little one, Israel; the big one, us.  This has meant suffering for thousands of Americans: the hostages at the U.S. embassy in Tehran; the diplomats and Marines in Beirut; the troops around Baghdad and Basra, killed by munitions built in Iran and supplied to proxies in Iraq; the American citizens routinely taken as prisoners in Iran; the Navy SEALs who perished in January trying to stop Iran from supplying Houthis with weapons used against commercial shipping.

“The war Israelis are fighting now – the one the news media often mislabels the ‘Gaza war’ but is really between Israel and Iran – is fundamentally America’s war, too: a war against a shared enemy; an enemy that has been attacking us for 45 years.  Americans should consider ourselves fortunate that Israel is bearing the brunt of the fighting; the least we can do is root for it.

“Those who care about the future of freedom had better hope Israel wins.

“We are living in a world that increasingly resembles the 1930s, when cunning and aggressive dictatorships united against debilitated, inward-looking, risk-averse democracies.  Today’s dictatorships also know how to smell weakness. We would all be safer if, in the Middle East, they finally learned the taste of defeat.”

---

Russia-Ukraine

--Russian forces attacked Ukraine overnight Saturday with 87 Shahed drones and four different types of missiles, officials said Sunday.  Ukraine’s air force said in a statement that air defenses had destroyed 56* of the 87 drones and two missiles over 14 Ukrainian regions, including the capital, Kyiv.  A man was killed in his car in Kharkiv.

*25 others “disappeared” from the radar and the air force assumes they were shot down.

--A Russian missile attack struck near a major Ukrainian military airfield on Monday morning, officials from Ukraine said, part of a broad campaign of assaults by Moscow aimed at degrading Ukraine’s military infrastructure and wearing down its air defense.

In a rare acknowledgement that a military base had been hit, the Ukrainian Air Force reported that a Kinzhal hypersonic missile, which can travel several times the speed of sound, hit near the Starokostiantyniv air base in western Ukraine.

--In September, Russia launched drone and missile attacks on Ukrainian cities and towns every day according to the country’s military, a pattern of attacks that has continued into October.

Ukraine did not disclose the extent of the damage caused by the missile hit near the base, which has been regularly attacked since Russia’s full-scale invasion began in early 2022.

Attacking daily with waves of drones has two main benefits for Russia. First, it compels Ukraine to use up some of its stocks of missiles to intercept the drones. Second, it exposes the location of Ukrainian air defenses by forcing Kyiv’s troops to fire their weapons to shoot down the drones, facilitating Moscow’s planning for future attacks.

--Russian forces have entered the outskirts of the eastern Ukraine frontline city of Toretsk, Ukraine’s military said late on Monday, less than a week after the fall of the bastion town of Vuhledar.

“The situation is unstable, fighting is taking place literally at every entrance (to the city),” a spokesperson of the Operational Tactical Group “Luhansk” told Ukraine’s national broadcaster.  “The Russians have entered the eastern outskirts of the city.”

Earlier in the day, Russia’s defense ministry said its forces inflicted damage to manpower and equipment near several settlements in the area, including near Toretsk.

Russian military bloggers, including military analysts, said Russian troops continue to advance towards the center of the town.

The advance of Moscow’s forces – as in the capture of Vuhledar – underscores Russia’s vast superiority in men and materiel as Ukraine pleads for more weapons from the Western allies that have been supporting it.

Russia, which controls just under a fifth of Ukrainian territory, has been advancing towards Toretsk since August, with its infantry aided by the increased use of the highly destructive guided (glide) bombs.

President Zelensky ordered his top brass do “everything that can be done” to minimize Moscow’s advance along the frontline.

For Ukraine, Toretsk has been a frontline city for 10 years now, as it is close to Ukraine’s territories seized by Russian-backed separatists in 2014.  It has since become an anchor of Kyiv’s fortifications.

Toretsk sits on a hilltop that would let Moscow obstruct key logistical routes connecting the operational rear of Kyiv forces in the area with the combat zone.

--President Zelensky said on Tuesday that Ukraine needed to secure and deploy advanced missiles and to achieve faster results with them on the battlefield.

Speaking in his nightly video address, Zelensky said a meeting with top commanders had been devoted to the development of domestic weapons supplies in the more than 2 ½-year war.

This, he said, involved drones, electronic warfare and, above all, deploying missiles that would reap rapid benefits in battlefield confrontations with Russian forces.

“Results are needed faster.  And all relevant tasks are now being carried out.”

--Russia launched two Iskander-M ballistic missiles and 19 drones in an overnight attack Tuesday, but the air force shot down 18 drones, and the last returned to Russian territory.  The attack was on the Odesa region,

A Russian missile hit a Palau-flagged vessel in Odesa port on Monday, killing a Ukrainian national and injuring five crew members in the second such attack in as many days, officials said.

Then on Thursday, Russian missiles hit a civilian container ship at a port in the Odesa region, killing eight people, according to local officials.

“This is the third attack on a civilian vessel in the past four days,” said the region’s head, Oleh Kiper, who described it as “yet another crime” by an “insidious enemy.”  Kiper said all the victims were Ukrainian.

The wave of strikes on Ukraine’s Black Sea ports coincided with a European tour by President Zelensky, who is visiting leaders in London, Paris, Rome and Berlin.

Zelensky was to meet President Biden along with other Western allies in Berlin on Saturday, but Biden cancelled his trip because of Hurricane Milton.

--Many in Ukraine expect Russia to launch (further) large-scale missile attacks on the country’s energy infrastructure ahead of winter, seeking to plunge Ukrainians into cold and darkness as subzero temperatures set in.

--Ukraine is keeping up its campaign of attacking Russia’s oil infrastructure, including an early morning strike Monday at a large terminal in occupied Crimea.

--Ukraine said it blew up another Russian weapons depot, this time with North Korean weapons destroyed as well, the General Staff announced on Facebook. 

The target was in the Bryansk region, Ukrainian officials said. The strike occurred late Tuesday and featured troops with Ukraine’s drone forces.

Russian authorities declared a “state of emergency” in the region following the strike.  The General Staff said, “The arsenal stored ammunition for missile and artillery systems, including those delivered from North Korea, as well as glide bombs.  Much of the ammunition was stored in the open.”

--A senior U.S. defense official said Wednesday that more than 600,000 Russian soldiers have been killed or wounded since Putin launched his full-scale invasion in Feb. 2022.

“Russian forces sustained their highest month-on-month losses of the war in September,” the official said, citing a Russian push toward Pokrovsk as a leading factor there, Defense One reported.

According to polling from the Lavada Center in September in Russia, there has been a rise in those who are willing to say they believe war in Ukraine is bad for Russia – 47% compared to 41% in May.

And those who feel “war is good” for Russia has dropped to 28% compared to 38% four months prior.

---

Wall Street and the Economy

Wall Street veteran Ed Yardeni (Yardeni Research Inc.), said the Fed’s easing campaign for 2024 may already be over after the strong labor report last Friday, which underscores the stubborn resilience of the world’s largest economy.

Yardeni said further policy easing would risk sparking inflation just as oil prices rebound and China seeks to jump start its economy.

Yardeni said in an interview with Bloomberg last Friday evening, “They don’t need to do more. I assume several Fed officials regret doing so much.”

Well, the Fed’s Open Market Committee minutes from the Sept. 17-18 meeting were released Wednesday, and, indeed, officials were divided over how much to reduce interest rates, with a substantial majority favoring the larger half-percentage-point reduction that was ultimately approved, but others favoring a smaller quarter-point cut.

The decision to lower the benchmark funds rate to a range between 4.75% and 5% was supported by 11 of 12 members of the rate-setting committee, with only Fed Governor Michelle Bowman dissenting, but the minutes suggested her reservations may have been shared by other policymakers.

The above was prior to Thursday’s consumer price report for September, which came in a tick hotter than forecast, both on headline and core.

The CPI rose 02.%, and 2.4% from a year ago, while ex-food and energy, the figures were 0.3% and 3.3%...the 2.4% and 3.3% higher than the forecasted 2.3% and 3.2%, though the 2.4% on headline was a tick lower than the prior reading of 2.5%, so the Fed can hang its hat somewhat on that number as showing continued improvement, though on core, 3.3% was higher than the prior 3.2%.

The Fed had said in September it had projected two more quarter-point rate cuts this year.

“I want to maintain the strength that we see in the economy and in the labor market,” John Williams, president of the Federal Reserve Bank of New York, said in an interview this week with the Financial Times.

In terms of the numbers behind the headline figures, food prices rose 0.4% in September* after rising 0.1% in August.  Shelter continued to moderate, up 0.2%, but motor vehicle insurance rose 1.2%, or 16.3% year-over-year.

*The Food and Agriculture Organization of the United Nations said in a report that global food prices for a basket of staple foods rose 3.0% in September from August and 2.1% higher year-on-year. 

Following the CPI release, John Williams said during an event at Binghamton University, “Month to month, there’s wiggles and bumps in the data, but we’ve seen this pretty steady process of inflation moving” downward.  “I expect that will continue.”

Williams said he thought it would be appropriate to “continue the process of moving the stance of monetary policy to a more neutral setting over time.” Williams is a permanent voting member on the FOMC.

Richmond Fed President Thomas Barkin, also a voting member this year, said inflation was “definitely headed in the right direction.”

But Atlanta Fed President Raphael Bostic, a 2024 voting member, told the Wall Street Journal Thursday that in his projections released in September, he had called for one additional quarter-point cut this year, not two.

“I am totally comfortable with skipping a meeting if the data suggests that’s appropriate,” he said.

Friday’s producer price data for September won’t change the debate any, with the PPI unchanged for the month, and up 1.8% from a year ago, while ex-food and energy, we were up 0.2%, and 2.8% year-over-year, a little hotter than forecast.

The Atlanta Fed’s GDPNow barometer for third-quarter growth is at 3.2%.

Freddie Mac’s 30-year fixed-rate mortgage rose to 6.32% from 6.12% a week ago, largely tied to the spike in the 10-year Treasury.

Meanwhile, the Congressional Budget Office warned in a Tuesday report that the federal budget deficit swelled to $1.8 trillion in the fiscal year that ended in September, while the CBO said interest payments on the debt reached $950 billion, larger than the Pentagon budget.

The next president, and Congress, face key decisions about whether and how to tackle the debt and skyrocketing interest costs, but as outlined further below, former President Trump and Vice President Harris haven’t made deficit reduction a key plank of their campaigns.

As of last Friday, the U.S. had accumulated a public debt of $35.7 trillion.  The CBO projected in June that the debt would exceed $50 trillion by the end of this decade.  The nation’s debt compared with the size of the overall economy, a key metric of fiscal stability, is projected to exceed its all-time high of 106 percent by 2027.

“A [nearly] $2 trillion deficit is bad news during a recession and war, but completely unprecedented during peace and prosperity,” said Brian Riedl, a senior fellow at the conservative-leaning Manhattan Institute.  “The danger is the deficit will only get bigger over the next decade due to retiring baby boomers and interest on the debt.”

Social Security and Medicare, spending on which rose 8% and 9%, respectively, are currently projected to run out of money in 2035 and 2036, forcing sharp reductions in benefits without action from lawmakers.  And as I’ve literally noted for decades on this issue, interest on the debt risks crowding out spending on other vital needs.

The government collected $4.92 trillion in revenue and spent $6.75 trillion in the past fiscal year, according to the CBO. 

Revenue was up 11% for the year, but spending also rose 11%.

The deficit in F2023 was officially $1.7 trillion, but it was actually larger than that, because the government recorded more than $300 billion in spending for student-debt cancellation in 2022 and recorded a similar-size spending cut in 2023 when the Supreme Court blocked President Biden’s program.

Speaking of Social Security, the cost-of-living increase for those receiving benefits will be 2.5% next year, not exactly what the ‘real’ inflation rate is for average Americans, but as Tony Soprano would have said, ‘whaddya gonna do...’

[The average monthly benefit for retired workers is set to increase by $49 to $1,976 starting in January, up from the current average of $1,927.]

Europe and Asia

A light week on the data front for the eurozone, with August retail trade up 0.2% compared with July, up 0.8% year-over-year.

Turning to Asia...no major economic news in China this week.  But officials in the National Development and Reform Commission, the country’s economic planning agency, said Tuesday they would speed up spending while largely reiterating plans to boost investment and increase direct support for low-income groups and new graduates.  They added that China would continue to issue ultra-long sovereign bonds next year to support major projects and bring forward a 100-billion-yuan ($14 billion) investment in key strategic areas originally budgeted for 2025 to this year.

But a rally in the Chinese stock market faded after investors returned from a week-long holiday as traders questioned Beijing’s resolve to add more stimulus, and the plan failed to be more specific on the details.

The World Bank forecast that China’s economy would grow at 4.8% this year, shy of the country’s own forecast of “around 5%.”

We have a slew of data on the economy over the coming week, including on GDP.

Japan reported on household spending in August, down 1.9% year-over-year, while the September producer price index rose 2.8% vs. a year ago.

Street Bytes

--Ho hum...stocks rose a fifth consecutive week, the Dow Jones and S&P 500 closing at record highs again, with investors confident earnings will continue to be strong, ditto the economy, no recession on the horizon, and the Fed in an accommodative mode...for now.

The Dow finished the week up 1.2% to 42863, the S&P 1.1% and Nasdaq 1.1%.

Next week, earnings season really kicks into gear with more reports from the big banks, the airlines, Netflix and more. 

--U.S. Treasury Yields

6-mo. 4.44%  2-yr. 3.94%  10-yr. 4.08%  30-yr. 4.39%

The yield on the 10-year Treasury crossed back over 4.00% for the first time since August, with concerns over the Fed’s next move(s) and the still solid economy. You see the impact that is having on mortgage rates, for one.

--JPMorgan Chase and Wells Fargo were the first two big banks to report for their third quarters and the market liked what they saw, and heard, with the shares in both rallying 4-5 percent.

JPMorgan reported its net income fell 2% in Q3 as the bank had to set aside more money to cover bad loans.

Net income fell to $12.9 billion from $13.2 billion in the year ago quarter.  However, earnings per share rose to $4.37 from $4.33, beating analysts’ forecasts, which called for a profit of $3.99.

JPM set aside $3.1 billion to cover credit losses, up from $1.4 billion in the same period a year ago.

Total revenues rose to $43.3 billion from $40.7 billion a year ago.  Investment banking operations performed better than expected, as that revenue grew 29% from a year ago to $2.4 billion.

CEO Jamie Dimon said the bank continues to monitor geopolitical tensions that he called “treacherous and getting worse.”

“There is significant human suffering, and the outcome of these situations could have far-reaching effects on both short-term economic outcomes and more importantly on the course of history,” Dimon said in a statement.

Dimon often weighs in on global and economic issues that go beyond the scope of banking.  But he’s seen as the banker that Washington and global leaders can turn to for advice, and his comments often reverberate through Washington and Corporate America.

Regarding the U.S. economy, it remains strong for both consumers and big companies, according to JPM.  The biggest bank in the country continued to earn more than expected on lending in the quarter and raised forecasts of what it will earn this year, even after the Fed recently cut interest rates for the first time in four years.

Executives said consumers continue to spend and big businesses are confident.

“These results are consistent with a soft landing,” CFO Jeremy Barnum said on the earnings call.  “That’s pretty consistent with this kind of Goldilocks economic situation.”

As for Wells Fargo, its profit fell in the third quarter as the bank’s interest income was squeezed by subdued loan demand and higher payments to depositors.

The fourth-largest lender reported net income of $5.11 billion for Q3, compared with $5.78 billion a year earlier.

Net interest income – or the difference between what it earns on loans and pays out for deposits – dropped 11% to $11.69 billion in the third quarter.  On a per share basis, quarterly profit was $1.42 vs. $1.48 a year ago, but ahead of consensus.

Revenue fell 2% to $20.37 billion.

Wells is also reportedly doubling down on efforts to lift a $1.95 trillion asset cap imposed by the Federal Reserve that prevents the bank from growing until regulators deem it has fixed problems dating back to the 2016 fake accounts scandal.

The asset cap curtails Wells Fargo’s ability to take in more deposits and expand its trading business.

--BlackRock pulled in $160 billion of client cash to its long-term investment funds last quarter, pushing the world’s largest money manager to a record $11.5 trillion of assets as it seeks to become a one-stop shop for stocks, bonds and, increasingly, private assets.

Investors added $97 billion to exchange-traded funds and $63 billion to fixed-income overall in the third quarter, a total that topped the $100 billion average estimate of analysts.  BlackRock has pulled in $360 billion of total net inflows so far this year, surpassing the full-year net flows of 2022 and 2023.

“We are effectively leveraging our technology, scale, and global footprint to deliver profitable growth,” CEO Larry Fink said in a statement.

BLK’s adjusted net income rose 5% from a year ago to $11.46 per share.  Revenue rose 15% to $5.2 billion from a year ago.

--The Wall Street Journal reported Tuesday night that the Justice Department submitted a filing that presented a federal court with a range of potential options involving a breakup of Google – from conduct restrictions to a breakup – aimed at ending what a judge said was Google’s unlawful monopoly in search.

The filing said the government is considering a “full range of tools” to restore competition, including “structural” changes to Google’s business that would prevent it from using products such as its Chrome browser or Android operating system to advantage Google’s search engine.

Google responded in a blog post that the Justice Department’s initial proposal for reforming the search engine market is “radical and sweeping” and could have “negative unintended consequences for American innovation and America’s consumers.”

U.S. District Judge Amit Mehta in August found that Google ingrained its monopoly by paying billions of dollars to operators of web browsers and phone manufacturers to be their default search engine.  Mehta will now spend the better part of a year deciding what to do about it.

--The crisis engulfing Boeing took a dramatic turn, as negotiations to end an almost monthlong strike collapsed and S&P Global Ratings warned it may cut the planemaker’s credit grade to junk as the work stoppage shows no sign of ending and Boeing hemorrhages cash.

Both the company and the International Association of Machinists and Aerospace Workers blamed each other for the impasse.  Boeing said the union made “non-negotiable demands,” while the IAM said the company was “hell-bent on standing on the non-negotiated offer.”

Boeing’s now-withdrawn proposal, made two weeks ago in a direct approach to workers, offered to hike wages 30% and boost retirement benefits.  The first major strike in 16 years is costing Boeing $100 million a day in lost revenue, according to analysts.

--Delta earned $971 million, down from $1.31 billion a year earlier, with adjusted earnings for the September quarter coming in at $1.50 a share, down 26% from a year ago. Revenue rose slightly to $14.6 billion, but spending on labor, airport landing fees and its Delta Connection regional affiliate grew much faster, the Atlanta airline said Thursday.

Delta said that it will return to year-over-year earnings growth in the current quarter.  The airline figures to benefit from a pullback in flying by lower-cost competitors, and it is seeking compensation for the July outage that cost it $500 million.

But the midpoint of Delta’s forecast of earnings between $1.60 and $1.85 a share for Q4, falls below the existing consensus of $1.76.

CEO Ed Bastian said bookings for Thanksgiving and Christmas are strong, but he expects a brief drop in travel spending before the holidays while Americans fret about the outcome of the November elections.

July’s global technology outage occurred after CrowdStrike, a cybersecurity firm that provides software to scores of companies worldwide, deployed a faulty update to computers running Microsoft Windows.

The outage disrupted operations at thousands of businesses, including airlines, but Delta was hit particularly hard, forcing it to ground 7,000 flights over a five-day period, and prompting a Department of Transportation investigation into the reasons that it failed to recover as quickly as other airlines.

--TSA checkpoint numbers vs. 2023

10/10...92 percent of 2023 levels
10/9...89
10/8...91
10/7...99
10/6...105
10/5...94
10/4...97
10/3...98

I’ve said this is a terrific economic indicator, but this week’s numbers were no doubt impacted by Hurricane Milton.  If they remain largely under 100 percent next week, that will say something, at least to moi. 

--Sales of Tesla’s China-made electric vehicles rose 19.2% in September from a year earlier (up 1.9% month-over-month), data from the China Passenger Car Association showed on Wednesday.  Tesla had already announced quarterly global deliveries but had not detailed sales in China.

Tesla saw 12% growth in China-made EV sales in the July-September period, its first quarterly rise this year.

Chinese rival BYD, with its lineup of EVs and plug-in hybrids, recorded its best month with a 45.56% year-on-year increase in passenger vehicle sales to 417,603 units in September.

Thursday, Elon Musk unveiled prototypes of a long-awaited robotaxi called Cybercab, saying production may start in 2026 and that the vehicle could cost less than $30,000.

The start date was disappointing, seeing as Musk never hits his proposed deadlines, and there were few details, so the Street took the shares down today over 8%.  [Which aided Uber, whose shares soared 10%!  The robotaxi is no immediate threat to Uber’s business.]

The event didn’t address how Tesla will make the leap from selling advanced driver-assistance features to fully autonomous vehicles.    Musk’s presentation glossed over topics including regulation or whether the company will own and operate its own fleet of Cybercabs.

Tesla has had a particularly difficult time following through on Musk’s self-driving predictions.  The CEO told investors in 2019 that Tesla would have more than 1 million robotaxis on the road by the following year.  The company hasn’t deployed a single autonomous vehicle in the years since.

--Taiwan Semiconductor Manufacturing Co. (TSMC) posted a better-than-expected 36.5% rise in quarterly revenue (39.6% in September alone), assuaging concerns that AI hardware spending is beginning to taper off.

The main chipmaker to Nvidia Corp. and Apple Inc. reported September-quarter sales of $23.6 billion, compared with consensus at $23.3 billion.

Some caution that the likes of Meta Platforms Inc. and Alphabet’s Google can’t sustain their current pace of infrastructure spending without a compelling and monetizable AI use case.

Separately, TSMC uses a staggering 9% of Taiwan’s electricity.  Taiwan’s more than 23 million people consume nearly as much energy per capita as U.S. consumers, but the lion’s share of that consumption – 56% – goes to Taiwan’s industrial sector for companies like TSMC, according to a paper put out by Yale Environment 360.  One estimate by Greenpeace has suggested that by 2030 Taiwan’s semiconductor manufacturing industry will consume twice as much electricity as did the whole of New Zealand in 2021.  And that the bulk of that will come from TSMC.

This is a problem, as Taiwan is heavily dependent on fossil fuels, and while it has ambitious clean energy targets, it’s not close to meeting them.

--PepsiCo on Tuesday revised its 2024 sales outlook after its North America and international sales lagged Wall Street’s expectations in the third quarter.

The snack and beverage giant told investors on Tuesday that it now expects to end the year with a low-single-digit increase in organic revenue growth, below the previously expected 4% growth.

The company posted adjusted third quarter earnings of $2.31 a share, slightly above the $2.30 consensus.  But revenue in the quarter trailed Wall Street’s estimates, coming in at $23.3 billion, versus the $23.8bn analysts expected.

Chairman and CEO Ramon Laguarta said in an earnings release that fiscal third quarter performance was impacted by “subdued category performance trends in North America,” the impact of recalls at Quaker Foods North America and business disruptions from “rising geopolitical tensions in certain international markets.”

Laguarta, in a call with analysts, said consumers are “very challenged” and they are making a “lot of trad-offs” when it comes to food.  Its snack business, Frito-Lay, saw volume decline 1.5%.

--Regarding the labor agreement that ended the three-day port strike on the East Coast, Barron’s Evie Liu had some statistics.

“At the Port of New York and New Jersey, the busiest on the East Coast, annual earnings for longshore workers in 2020 ranged from less than $25,000 to above $450,000, according to a report from the Waterfront Commission, a regulator for New York Harbor that was dissolved in 2023.  More than half of the workers made between $100,000 and $250,000, the report said.

“The midpoint of that range, at $175,000, is in line with the annual mean pay of lawyers and managers in finance, according to 2023 data from the Bureau of Labor Statistics.  A 62% raise from that level would bring pay to about $284,000 in six years, compared with the $264,000 in mean pay physicians received in 2023, according to the BLS.”

And then there is the issue of automation.  ‘We will have no automation,’ say the longshoremen. I saw the other day that in a World Bank global ranking of container ports by “efficiency,” of 405 ranked, the highest ranked U.S. port was Charleston at No. 53.  That’s pathetic.

I just have to add that I saw the Singapore port firsthand in a visit years ago and wondered where it ranked, and its No. 17.

--New Jersey-based TD Bank agreed to a $3 billion fine after pleading guilty in a “staggering” money laundering scheme that funneled hundreds of thousands of dollars to drug cartels, the Department of Justice said Thursday.

The DOJ said that for more than a decade, TD Bank failed to meet its responsibilities under the federal Bank Secrecy Act, which requires financial institutions to report suspicious activity that may be linked to money launder.

The deficiencies in TD Bank’s anti-money laundering compliance program “allowed criminal proceeds to flow” through the bank to cartels in Colombia, Sellinger said.

This is shocking...some bank tellers accepted gift cards as bribes in exchange for filing false or misleading reports on certain transactions, according to Deputy Secretary of the Treasury Wally Adeyemo.

“The bank enabled drug trafficking,” Adeyemo said.

In one case, he said, TD Bank “facilitated over $400 million in transactions to launder money on behalf of criminals that were selling fentanyl and other deadly drugs that are poisoning our neighborhoods.”

The bank also “failed to detect the suspicious activities of one of its own employees who was accepting bribes in exchange for opening accounts in the name of shell companies,” Adeyemo said on Thursday.

The bank agreed to a four-year monitor to oversee “extensive remedial measures,” according to federal officials.

--Domino’s Pizza posted mixed third-quarter results and reiterated its commitment to value deals.  The shares were largely unchanged.

The company reported revenue of $1.08 billion, less than the $1.1bn expected by the Street. 

Adjusted earnings per share of $4.19 for the quarter beat consensus of $3.65.

CEO Russell Weiner said the results demonstrate that its strategy is working “despite a pressured global marketplace.”

He added that Domino’s value pillar of its strategy will be the “primary focus” in the near term as the company believes its value proposition provides a “competitive advantage” that can help grow its market share.

In a call with investors, Weiner said it’s all about getting value right.  “We need to make sure that our promotional prices are consistent and they don’t go above the CPI in the market,” he said.

U.S. same-store sales for the third quarter increased 3%, which was slightly less than the Street’s projection of a 3.5% increase and less than the previous quarter’s 4.8% growth.

International same-store sales growth also came in well below the 2.8% Wall Street projected with a 0.8% increase due to a slowdown in early August.

--Orlando’s theme park operators Walt Disney and Universal Studios shut their attractions ahead of Hurricane Milton but reopened Friday.

Foreign Affairs, Part II

China: Ellen Nakashima / Washington Post: “Chinese hackers have breached at least three major U.S. telecommunications providers in what appears to be an audacious espionage operation likely aimed in part at discovering the Chinese targets of American surveillance, according to U.S. officials.

“The investigation by the FBI, U.S. intelligence agencies and the Department of Homeland Security is in its early stages.  The full scope of the compromises and their impact is not yet known, said the officials, who spoke on the condition of anonymity because of the matter’s sensitivity.”

News of the compromise and potential counterintelligence effort was first reported by the Wall Street Journal, with officials saying the breach compromised the networks of companies including Verizon, AT&T and Lumen, though the list is probably longer, as the hackers have been in the systems for months.

There are indications that China’s foreign spy service, the Ministry of State Security, which has long targeted the U.S. for intelligence, is involved in the breach.

Chinese hackers have also gained access to critical U.S. infrastructure networks, such as water, energy and transportation systems, to lie in wait and launch destructive attacks in a potential U.S.-China conflict.  And, of course, they are spreading propaganda and disinformation to undermine confidence in Western institutions.

Back in 2010, the Washington Post reported that Chinese hackers breached Google and gained access to a sensitive database with years’ worth of information about U.S. surveillance targets. [Think Chinese agents who maintained email accounts through Google’s Gmail service.]

Meanwhile, Taiwanese leader William Lai Ching-te rejected mainland China’s authority to represent the island, using a speech on the annual Double Tenth Day to say the two sides “are not subordinate to each other.”

“The Republic of China [the island’s official title] has already settled down in Taiwan, Quemoy, Matsu and Penghu, and it is not subordinate to the People’s Republic of China,” Lai said on Thursday, marking the 113th anniversary of ROC’s founding.

“On this land, democracy and freedom are growing and thriving.  The People’s Republic of China has no right to represent Taiwan.”

He called for “healthy and orderly dialogue and exchanges between the two sides,” saying he would continue to maintain the cross-strait status quo while upholding his “commitment to resist annexation or encroachment upon our sovereignty.”

North Korea: North Korea’s military said the North would “permanently shut off and block the southern border,” severing road and railway access to South Korea starting Wednesday in a bid to “completely separate” the two countries.

The Korean People’s Army (KPA) described the move as “a self-defensive measure for inhibiting war,” claiming it was in response to war exercises in South Korea and the frequent presence of American nuclear assets in the region.

This marks a further escalation of hostility at a time when tensions between the Koreas are at their highest point in years.

On one hand the move is largely symbolic in that roads and railways leading from North Korea to the South are rarely used, with many dismantled by North Korean authorities over the past year, but this follows a string of inflammatory incidents that have worsened relations, including missile tests and hundreds of trash balloons being sent over North Korea’s southern border.

And in 2023, ruler Kim Jong-un said he was no longer striving towards reunification with the South, raising concerns that war is on the horizon.

One analyst at the Korea Institute for National Unification suggested that Pyongyang could be waiting for the outcome of the U.S. election before making any concrete decisions.

Random Musings

--Presidential approval ratings....

Gallup:  New numbers...45% approve of President Biden’s job performance, 52% disapprove; 43% of independents approve (Sept. 16-28).  This could be significant.  Yes, Biden isn’t running, but it might reflect on Vice President Harris.  The prior split was 39-58, 31.

Rasmussen: 43% approve, 55% disapprove (Oct. 11).

--A new Reuters/Ipsos national poll has Kamala Harris with a 46%-43% advantage over Donald Trump.  A Sept. 20-23 Reuters/Ipsos survey had Trump trailing by six points

Respondents rated the economy as the top issue facing the country, and some 44% said Trump had the better approach on addressing the “cost of living,” compared to 38% who picked Harris.

Trump appeared buoyed by widespread concerns over immigration, currently at its highest level in America over a century. Some 53% of voters in the poll said they agreed with a statement that “immigrants who are in the country illegally are a danger to public safety,” compared to 41% who disagreed.  Back in a May Reuters/Ipsos poll, voters were more closely divided, with 45% agreeing and 46% disagreeing.

A New York Times/Siena College national poll has Harris leading Trump 49%-46%; the first time Harris has led Trump in the Times/Siena poll since July, when President Biden dropped out of the race and Democrats rallied behind Harris.

--A Quinnipiac University poll of three key states had it deadlocked, within the margin of error, just as every other survey is showing it.

Pennsylvania: Harris 49%, Trump 46%, other candidates 2%
Michigan: Trump 50%, Harris 47%, other candidates 2%
Wisconsin: Trump 48%, Harris 46%, other candidates 2%

In Quinnipiac’s September 18 poll, Harris held a lead in Pennsylvania, a slight lead in Michigan, and the race was essentially tied in Wisconsin.

--Democrats hold a 51-seat Senate majority and control of it could hinge on the fate of the most endangered Democratic senator, Jon Tester of Montana, who trails his Republican challenger Tim Sheehy by a 52-44 margin in a new Times/Siena poll.

Democrat Colin Allred only trails Republican incumbent Sen. Ted Cruz by 48-44 in a separate Times/Siena survey.

But Republicans are already set to pick up a seat after the retirement of Senator Joe Manchin, an independent who caucuses with Democrats, so the party cannot afford to lose additional seats.

In the above-noted Quinnipiac University poll, on the Senate side....

Pennsylvania: Incumbent Democratic Sen. Bob Casey leads Republican challenger David McCormick, 51%-43%.

Michigan: The race for the Senate here is now tied, with 48% supporting Democratic Congresswoman Elissa Slotkin and 48% supporting former Republican Congressman Mike Rogers.  Slotkin had a 51-46 lead in September.

Wisconsin: Incumbent Democratic Senator Tammy Baldwin leads Republican challenger Eric Hovde, 50%-46%.

--In a wide-ranging sit-down with “60 Minutes” that aired Monday, Vice President Harris defended her policy reversals on issues such as fracking and criticized former President Trump for backing out of the interview with the program.

Harris said that shifts in her positions on a fracking ban and Medicare for All, both of which she no longer supports, came after hearing from Americans across the country in her travels as vice president.

“What the American people do want is that we have leaders who can build consensus, where we can figure out compromise and understand it’s not a bad thing, as long as you don’t compromise your values, to find common sense solutions,” Harris told correspondent Bill Whitaker.  “And that has been my approach.”

Trump had agreed to do the interview, then changed his mind, his campaign saying CBS would fact-check the interview, CBS correspondent Scott Pelley said in the program’s introduction.

“We fact-check every story,” Pelley stated.

Addressing Trump’s absence, Harris repeated a debate attack line and told viewers to watch his events.

“If he is not gonna give your viewers the ability to have a meaningful, thoughtful conversation, question and answer with you, then watch his rallies,” she said.  “You’re gonna hear conversations that are about himself and all of his personal grievances.”

The economy continues to be the top issue for voters, and Harris said that bringing down high grocery prices would be a priority if she wins the election.

“And I know that, and we need to deal with it, which is why its part of my plan.”

But when Harris was asked about immigration, she maintained it’s a “longstanding problem” while refusing to answer whether officials should’ve cracked down sooner.

Asked why by Bill Whitaker, Harris cited the immigration bill proposed to Congress in early 2021 and slammed Republicans for tanking a recent bipartisan border bill after Trump urged them to reject the measure.

Whitaker asked: “But there was an historic flood of undocumented immigrants coming across the border the first three years of your administration. As a matter of fact, arrivals quadrupled from the last year of President Trump.  Was it a mistake to loosen the immigration policies as much as you did?”

“It’s a longstanding problem.  And solutions are at hand. And from day one, literally, we have been offering solutions,” Harris said.

Whitaker pressed her on the record number of crossings and whether more action should’ve been taken sooner, as I have said since the executive order that finally lowered the number of illegal crossings, like realistically, why not two years ago?  Harris still didn’t answer, focusing instead on the move that finally reduced crossings and putting the onus on Congress to act.

It was a totally embarrassing performance by the vice president.  I understand why she said what she said, but it exposed for all to see, the failure, further reinforcing Trump’s leading message.

Trump responded on Truth Social, in part: “The Interview on 60 Minutes with Comrade Kamala Harris is considered by many of those who reviewed it, the WORST Interview they have ever seen.  She literally had no idea what she was talking about, and it was an embarrassment to our Country that a Major Party Candidate would be so completely inept.  In addition, her Incompetence on ‘helping’ people through the devastation of Hurricane Helene is being reviewed as, by far, the Worst in American History, even worse than Katrina – if that is possible!”

Editorial / Wall Street Journal...on Harris’ media blitz this week....

“For Kamala Harris, even friendly interviews are treacherous these days. This week she may have made the biggest mistake of her 81-day campaign in response to similar questions from TV host Stephen Colbert and ‘The View.’  Asked what she would do differently than President Biden, the Vice President said ‘there is not a thing that comes to mind.’

“If Ms. Harris loses, that answer will go far to explaining why. Her mistake isn’t merely that she hasn’t distanced herself enough from Mr. Biden’s unpopular record, though that is a problem.  It’s that she hasn’t shown voters that she is her own woman.  Her campaign of ‘vibes’ and safe appearances suggests she will be, like Mr. Biden has been, a captive of her party and its unpopular policies....

“Without having to compete in a presidential primary, Ms. Harris had a chance to set her own campaign path. Instead she has hugged closely to both the Biden record and her party’s progressive agenda....

“(There’s) not a single issue on which she has stood up to the left of her party....

“The political problem here is as much about character as policy.  Voters want a President who is strong enough to bear the burdens of the job, and that means standing up against powerful interests or countries that want to harm America.  The Vice President has looked more like an empty political vessel who will say or do whatever her advisers tell her to....

“This may explain why the Vice President’s political momentum seems to have stalled....

“Ms. Harris and Democrats are betting that a majority of voters will never vote for Mr. Trump again, and they may be right. But he could win anyway if the remaining undecided voters conclude that Ms. Harris is merely a political cipher whose agenda is whatever Democrats like Chuck Schumer and Elizabeth Warren command.”

--The Wall Street Journal reported Monday that Donald Trump’s fiscal plan – a combination of tax cuts, tariff increases, military expansion and mass deportations – “would widen budget deficits by an estimated $7.5 trillion over the next decade, according to the Committee for a Responsible Federal Budget, a nonpartisan group that favors lower deficits.  Meanwhile, Vice President Harris’ plans – social-policy spending, middle-class tax cuts and tax increases on corporations and high-income households – would increase deficits by $3.5 trillion.”

Of course these are just plans, and not legislation, but “Trump’s deficits could be as low as $1.45 trillion and as high as $15.15 trillion, while Harris’ could be as low as break-even and as high as $8.1 trillion,” according to the analysis.

--House Speaker Mike Johnson (R-La.) had a testy exchange on ABC’s “This Week” Sunday, as host George Stephanopoulos asked Johnson if he could say “unequivocally that Joe Biden won the 2020 election and Trump lost.”

Johnson declined, saying only that “this is the game that is always played by mainstream media with mainstream Republicans.  It’s a gotcha game.”

“So like Vance, you can’t say,” Stephanopoulos replied – referencing the vice presidential debate and Vance avoiding answering whether Biden won the election.

Sunday, Johnson accused Stephanopoulos of trying to get him to “litigate things that happened four years ago when we’re talking about the future.”

“We’re not going to talk about what happened in 2020,” Johnson said. “I’m not going to engage in it.  We’re – we’re not talking about that.”

Stephanopoulos argued, correctly, that Trump “every single day” claims that the “election was rigged, that he won and that Joe Biden lost.”

“I’m just saying if you accept that or not,” Stephanopoulos said.

“I’m not going to play the game,” Johnson said.

--Donald Trump returned to Butler, Pa., last Saturday.

“I return to Butler in the aftermath of tragedy and heartache to deliver a simple message to the people of Pennsylvania and to the people of America,” Trump told the crowd Saturday.  Our movement, he said, is “nearer to victory than ever before.”

Trump invited billionaire Elon Musk to join him on stage, calling him “a truly incredible guy.”

“This is the most important election of our lifetime,” Musk said in his first onstage appearance with Trump in the campaign. “President Trump must win to preserve the Constitution.  He must win to preserve democracy in America.”

A rather rich statement.

But regarding Butler and the ongoing “active threat” U.S. officials have warned of, Iran looking to assassinate Trump and other officials, David Ignatius of the Washington Post writes:

“The danger is real and immediate....

“Trump has a special obligation to protect himself at an explosive time in the Middle East. If something happened, God forbid, in Butler or any other stop on the campaign trail over the next month – and it had any link with the Iranian threat stream – there would be an intense public demand for a decisive response. That’s how wars begin.  Remember the assassination of Austrian Archduke Franz Ferdinand in Sarajevo in June 1914, which began a chain of events that sparked World War I....

“Concerns from Trump about the Iranian threat is accurate – which makes his decision to campaign in difficult to secure settings all the more reckless. Iran released a propaganda video showing a mock drone attack targeting Trump on a golf course.  A computer message flashes on the video: ‘Soleimani’s murderer and the one who gave the order will pay the price.’

“One Iranian plot has already been disrupted.  The Justice Department on Aug. 6 indicted a Pakistani man named Asif Raza Merchant who had visited Iran... The arrest warrant noted that Iran has ‘publicly stated the desire to avenge the death of Qasem Soleimani,’ and cited an unsuccessful plot disclosed a year before to kill a ‘former U.S. national security adviser,’ probably Trump’s one-time aide, John Bolton....

“America is burning red-hot this election season, yet party divisions briefly vanished last week as Congress voted unanimously to beef up protection for the former president.  He, too, must protect himself and the country by working more cooperatively with the Secret Service to avoid another incident that could be catastrophic.

“The Secret Service, for all its past mistakes, is trying to keep the former president safe. But it needs more help from Trump.”

--Citadel CEO mega-billionaire Ken Griffin said on Thursday that he has not supported Donald Trump for president in the upcoming election.

“I have not supported Donald Trump,” the Republican told journalists at an event in New York.  “I’m so torn on this one... I know who I’m going to vote for, but it’s not with a smile on my face.”

--Former President Barack Obama hit the campaign trail Thursday for Kamala Harris, and he tried to rally Black men to vote for her...to rally behind potentially the first woman of color to ascend to the White House but talking about the reluctance of Black men to do so, Harris not doing as well in the polls as Joe Biden did in picking up the Black vote, specifically Black males.

The “women in our lives have been getting our backs this entire time,” Obama said.  “When we get in trouble and the system isn’t working for us, they’re the ones out there marching and protesting. And now, you’re thinking about sitting out or supporting somebody who has a history of denigrating you, because you think that’s a sign of strength, because that’s what being a man is?  Putting women down?  That’s not acceptable.”

--In a new book titled “War” by journalist Bob Woodward, scheduled for release next week, Woodward writes that former President Trump has spoken to Vladimir Putin as many as seven times since Trump left the White House, according to an unidentified aide.

The book also reports that Trump, while still in office early during the Covid-19 pandemic in 2020, secretly sent Putin rare tests for the virus for the Russian’s personal use.  Putin, according to Woodward, urged Trump not to publicly reveal the gesture because it could damage the American president politically.

Trump’s campaign dismissed Woodward’s book by assailing the author with typically personal insults – without addressing any of the specifics reported in it.

But the Kremlin confirmed Trump sent Putin Covid-19 testing devices during the height of the pandemic.

Kremlin spokesman Dmitry Peskov said on Wednesday that the tests had been sent but denied the book’s claim that the two leaders had spoken by phone several times since Trump left office.

--Daniel Henninger / Wall Street Journal:

“At the Trump rally last weekend in Butler, Pa., Elon Musk said, ‘This is the most important election.’ He’s right. But if the stakes are as high as Mr. Musk says, there are two reasons this election seems to have gone flat: Kamala Harris and Donald Trump.

“Kamala Harris is the political equivalent of a fireworks display.  One’s first reaction is: Wow, look at that!  Then in a blink, it’s gone. Ms. Harris always spikes on entry, but never quite delivers.

“Expectations were high when she entered the 2019 Democratic presidential primary debates, but by the fifth debate she was gone.  Andrew Yang lasted longer...

“But where’s the Trump bump?  The past argument that Donald Trump always ‘underpolls’ is not implausible, but it would be surprising if Mr. Trump’s ‘shy voter’ phenomenon was happening simultaneously for the third time in seven separate states.

“A legitimate campaign question: How much Trump can the country take? I’m not talking about the Democratic notion that Mr. Trump is a ‘threat to democracy.’ The more interesting question is whether the infinitely repeated image of the fellow in the white shirt, red tie, dark suit and blond hair simply has reached saturation with the public.

“One might have expected that two shocking assassination attempts would have boosted the former president, but it didn’t happen.  Mr. Trump’s modus operandi, after all these years, is the Trump rally, which has become more an experience than an expression of forward-looking political ideas.

“Mr. Trump remains a charismatic political personality with unlimited confidence in his own appeal.  But as a former TV performer, he should know that even the most popular series and characters eventually become familiar and fade.

“An irony is that the two candidacies have gone flat amid a shaking world. Domestic disasters, such as Hurricane Helene, sometimes turn into challenges for presidential leadership. The disorder in the Middle East and Ukraine should be presidential campaign issues.  Neither really is.

“Serious questions have been raised about the Federal Emergency Management Agency’s response to Hurricane Helene. But with the onset of Hurricane Milton’s path through Florida, the overwhelming scale of the human tragedy isn’t giving the relief debate much political traction....

“(The Vice President’s) ’60 Minutes’ answer on Israel was a trip to the Harris salad bar: ‘...an ongoing pursuit around making clear our principles, which include the need for humanitarian aid, the need for this war to end...’  The world is giving Vice President Harris an opportunity to reveal her commander-in-chief skills, and she isn’t taking it.

“Mr. Trump’s default answer is that none of this happened when he was president, but that doesn’t provide much clarity on his current views.  The candidates’ stand-offishness is sucking the importance out of an issue on voters’ minds.

“If a generalized enthusiasm gap emerges in these final weeks, it will be hard to predict its effect on turnout among key demographic groups – undecided voters, young Democrats, college students or minority voters.  But at the moment, the most exciting thing out there is taking place on baseball and football fields.”

--The exodus continues from New York City Mayor Eric Adams’ administration, the First Deputy Mayor, Sheena Wright, resigning Tuesday.  Wright’s husband, outgoing School Chancellor David Banks, is stepping down, and his brother and close Adams pal, Phil Banks, resigned as deputy mayor on Sunday.

It seems from reports that Gov. Kathy Hochul won’t push Adams out before the Nov. 5 election.

About ten members of the team have resigned or been fired.  As I noted a few weeks ago, it’s more than a bit unsettling given security concerns on all manner of fronts these days.  The mayor is distracted, to say the least.

One of those who resigned Monday, the community affairs liaison, was charged Tuesday with witness tampering and destroying evidence in a federal investigation.

But wait, there’s more!  Gotham’s interim police commissioner, Thomas Donlon, is expected to leave his job soon, less than a month after Mayor Adams handpicked him to replace his scandal-scarred predecessor Edward Caban, according to multiple reports.

--Last weekend, a criminal gang gunned down civilians and torched homes in a small farming town in Haiti, killing at least 70 people including women and babies, the United Nations said.

The attack by the notorious Gran Grif gang on the town of Pont Sonde was one of the worst massacres in recent years in a country shaken by political instability and violence.  Gangs that already control much of the capital of Port-au-Prince have been expanding to rural areas once deemed relatively safe.

Acting Prime Minister Garry Conille said the attack was an act of “unspeakable brutality.”  Alas the beleaguered police force can do little to stem the flow of violence.

In case you wondered why Haitians are desperate to flee to the U.S.

--Pope Francis named 21 new cardinals Sunday, significantly increasing the size of the College of Cardinals and further cementing his mark on the group of prelates who will one day elect his successor.

Among the 21 is 99-year-old Monsignor Angelo Acerbi, who was once held hostage for six weeks in Colombia by leftist guerrillas.  Acerbi is the only of the 21 who is ineligible to vote on a new pope, the age limit being 80.

Usually the college has 120 voting-age cardinals, and as of Sept. 28, there were 122 cardinal-electors; which brings the new infusion to 142.

Among those named were influential heads of several dioceses and archdioceses in South America, as well as those from Asia, and Africa, where the church is growing.

The youngest in the new group is 44-year-old head of the Ukrainian Greek Catholic Church in Melbourne, Australia, Bishop Mykola Bychok, named in a nod to the ongoing war in Ukraine.

Only one is from North America, the archbishop of Toronto, Francis Leo.

The consistory, or ceremony where the new cardinals receive their red hats, is Dec. 8.

Before the latest group, 92 of the cardinals under 80 had been named by Francis.

--From Aaron Gregg and Christian Davenport of the Washington Post:

“Russia’s space agency has identified four cracks and about 50 other ‘areas of concern’ in a Russian section of the International Space Station, leading NASA to classify the problem at the highest level of risk and study how to evacuate its astronauts in the case of an emergency.

“NASA has been so concerned with the cracks that officials have negotiated a deal with their Russian counterparts to seal off the small segment and keep the hatch to it open only during critical operations, the space agency said.  When the hatch is open, NASA astronauts remain on the U.S. side of the space station so that they can be close to their spacecraft in the case of an emergency that would force them to evacuate.”

The cracks have “all been covered with a combination of sealant and patches” by Roscosmos, the Russian space agency, NASA said in a statement.

NASA has determined the station remains safe enough for the 11 people aboard, but the agency decided its astronauts need more options “in the event that a rapid departure from the space station becomes necessary,” as the Post reports.

NASA’s current plans call for the space station to be decommissioned in 2031.  How do the astronauts sleep at night?

--Among the rainfall totals from Hurricane Milton was St. Petersburg’s 18.86 inches, including 5 inches in a one-hour period, a record, while Tampa’s rainfall of 11.43 inches was the second-highest single-day total in its history, as well as a new record for any October, all in the span of about six hours.

Milton at one point had a pressure reading of 897 millibars, the lowest observed in any Atlantic hurricane since Wilma in 2005, and the fifth-lowest pressure on record for any Atlantic hurricane.

--We note the passing of Ethel Kennedy, 96. The widow of Senator Robert F. Kennedy, she was a popular and vital force in the Kennedy political dynasty.

Ethel Kennedy’s passion for politics was so consuming that as the New York Times wrote, she was often said to be “more Kennedy than the Kennedys.”  She campaigned tirelessly for her husband and other Kennedys, much of the time while pregnant.

Her 11th and last child was born after her husband’s assassination in 1968 in Los Angeles.  Her third eldest is Robert F. Kennedy Jr.

Ethel Kennedy never remarried, and her subsequent life was devoted to rearing her children, keeping alive the memory of her husband and working on behalf of the causes he had championed.

Her display of grace and resilience in the face of her husband’s murder recalled the brave face of sister-in-law Jackie, when JFK was assassinated.

RIP.

---

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

Pray for Ukraine. Pray for all those impacted by Hurricanes Helene and Milton.

God bless America.

---

Gold $2674
Oil $75.37

Bitcoin: $63,026 [4:00 PM ET, Friday]

Regular Gas: $3.20; Diesel: $3.61 [$3.66 - $4.49 yr. ago]

Returns for the week 10/7-10/11

Dow Jones  +1.2%  [42863]
S&P 500  +1.1%  [5815]
S&P MidCap  +1.1%
Russell 2000  +1.0%
Nasdaq  +1.1%  [18342]

Returns for the period 1/1/24-10/11/24

Dow Jones  +13.7%
S&P 500  +21.9%
S&P MidCap  +13.4%
Russell 2000  +10.2%
Nasdaq  +22.2%

Bulls 53.2
Bears 22.6

Hang in there.

Brian Trumbore

---