Week in Review

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Week in Review

12/14/2024

For the week 12/9-12/13

[Posted 4:30 PM ET, Friday]

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Edition 1,338

Last week I opened with some of the following:

“It’s stunning that within a few days, the Bashar Assad regime is in danger of falling. It certainly is threatened.”

Thirty-six hours later, it fell, and Assad was on his way to Moscow.

Turkey is a big winner.  Iran, Hezbollah and Russia are big losers.  The mullahs in Tehran, already in fragile shape, could rush to build the bomb, seeing that as their only real deterrent. 

But the rapid fall of Assad, and the aftermath, is yet another example of my adage ‘wait 24 hours.’

We also had the arrest of the alleged killer of UnitedHealthcare CEO Brian Thompson, and the sickening response on social media, which now wants to award Luigi Mangione with cult status.

The plastering of ‘Wanted’ posters showing the faces of some leading CEOs in Corporate America on New York City streets, the likes of the leaders of Goldman Sachs and JPMorgan Chase, is more than a bit chilling.  And it’s disturbing that so many fools in America harbor such views.

So, in light of this, I can’t help but open with some excerpts from the final message of NBC 4 New York’s longtime anchor Chuck Scarborough.  I remember his first broadcast on NBC, my channel of choice for local and national news, and it’s startling that he was on the air on this station for over 50 years, until his last broadcast Thursday.

“Four months after I arrived in 1974, President Nixon, who won a landslide election just two years earlier, resigned....

“In 1975, New York City plunged into effective bankruptcy and the Vietnam war came to a chaotic end.

“The pace of breaking news has been relentless ever since.  We’ve been through blackouts together, riots, crime waves, hurricanes, blizzards, economic crises, corruption (public and private), 9/11, wars and a pandemic.

“But just as important were the stories of human achievement in the arts and sciences, of forgiveness, kindness, recovery, and resilience.

“If there is one overarching lesson I’ve learned, it is that we are more resilient than we realize – individually and as a city and nation.  We get knocked down, and we come back stronger.

“I will be eternally grateful for the privilege of working with so many dedicated, brilliant and talented broadcast journalists on both sides of the camera, some risking their lives in dangerous place to bring you the news.

“In this age of algorithms and cable channels herding the citizenry into like-minded silos of A.I., and social media fictions suffocating truth, it has never been more important to do what they do so well: hue to the basic principles of accuracy, objectivity and fairness.”

Amen, Chuck. 

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Syria....

It was stunning.  After 13 years of civil war, Syria’s dictatorship suddenly collapsed.  The rebels’ advance out of Idlib, and through Aleppo, Hama, Homs and then Damascus took less than two weeks, more like ten days.  Bashar al-Assad, dictator for 24 years, was forced to flee to Moscow, where President Putin said he and his family would be granted asylum for “humanitarian reasons.”

At least in these first days, Hayat Tahrir al-Sham (HTS), the Islamist group spearheading the offensive, with other rebel groups, avoided sectarian triumphalism and promised to protect minorities, including women.  It asked civilian authorities to remain in post.

As the Washington Post’s David Ignatius reported:

“The chaos in Damascus on Sunday was eased by HTS’s decision to allow the current Syrian prime minister to operate an interim government, with HTS protection... The group has said it intends to maintain current government administrative institutions, including the army. That would certainly ease the transition.

“Qatar, which has long been a covert backer of HTS, appeared to be leading the Arab effort to create a transitional government under United Nations sponsorship. A Qatari statement Sunday underscored ‘the necessity of preserving national institutions and the unity of the state to prevent it from descending into chaos.’”

But as well as fighting the regime, HTS now has to deal with other rebel factions that will want a hand in governing the country.  At the same time, armed groups with competing interests are still fighting for territory and power elsewhere. In northern Syria, fierce fighting took place Tuesday between rebels supported by Turkey and Kurdish forces backed by the U.S.

The West still sees HTS as a terrorist group.  It is going to be exceedingly difficult to form a true power-sharing agreement in such a divided country. 

A key Syrian rebel leader then said he is taking charge as interim prime minister until at least March 1 and it wasn’t HTS leader Abu Mohammed al-Jawlani.  Rather it is a man named Mohammed al-Bashir, who had previously been Jawlani’s chief in charge of the Idlib region, operating under the so-called Syrian Salvation Government, since last January, which HTS has controlled since 2017.

Again, wait 24 hours.  We’ll see...fingers crossed.

--Israeli Defense Minister Israel Katz ordered scores of strikes on Syria, aiming to destroy strategic weapons, including missiles and air defense systems to keep the advanced weaponry out of the hands of the rebels.  Over the weekend, Israeli air strikes targeted suspected chemical weapons sites*.  And they staged attacks against Syria’s navy in the port city of Latakia, Defense Minister Katz said, describing the operation as a “great success.”

The IDF also crossed into Syrian territory in the Golan Heights to prevent the rebels from settling near the border.  Heretofore, there had been about a 2 km buffer zone between Israel and Syrian forces that was part of a 1974 agreement. With the fall of the Assad regime, that agreement was considered null and void by the Netanyahu government.

Tuesday, Israel struck hundreds of targets and sent troops deeper into the country, and said it had “successfully destroyed the Syrian fleet” and hit “most of the strategic weapon’s stockpiles” in the country, including a possible chemical weapons facility.

The IDF said that as of Tuesday, it had carried out 480 strikes on Syria in 48 hours.

Israeli Prime Minister Benjamin Netanyahu said he had authorized the Israeli air force to “strike strategic military assets left by the Syrian army to prevent them from falling into the hands of jihadists.”

Defense Minister Katz said Israel is “absolutely determined to do whatever is necessary to protect ourselves,” but did not cite any specific threat to justify the large-scale attack.  “It’s necessary to make sure whoever is going to be the next ruler is not going to have state-of-the-art weaponry,” said Yossi Kuperwasser, a former Israeli government and military official.  “And it’s a window of opportunity.”

*The Organization for the Prohibition of Chemical Weapons on Monday told Syria that it is under obligations to comply with rules to safeguard and destroy dangerous substances, such as chlorine gas.  The last time the OPCW called an extraordinary meeting was in 2018, in response to the chemical attack on Douma, a town close to Damascus, when some 40 people were killed by poison gas.

Earlier this year, the organization found the Islamic State had used mustard gas against the town of Marea.

--As for the Russian naval base at Tartus, which granted Russia access to the Mediterranean, it is up to Syria’s new rulers whether or not to strike a deal with Russia to allow it to stay.  But if they eventually evict it, that would make it harder for Russian warships to patrol the Mediterranean and Red Sea and for Moscow to support its mercenaries in North Africa.

Russia is also going to have to evacuate its aircraft at the nearby Khmeimim air base, from which it spent a decade pulverizing the very people who have now taken over, such as in cities like Aleppo.

President-elect Donald Trump declared “THIS IS NOT OUR FIGHT,” writing Saturday on social media.

President Biden’s administration told reporters in a call Sunday afternoon: “We will be supporting Syria’s neighbors – Jordan, Lebanon, Iraq, Israel – from any threats from Syria during this important period of transition.  We will be maintaining the mission against ISIS, helping ensure stability in east Syria; protecting our personnel from any threats; but most importantly, engaging with all Syrian groups to establish, and help wherever we can, a transition away from the Assad regime towards an independent, sovereign Syria that can serve the interests of all Syrians under the rule of law, protecting a rich diversity and tapestry of Syrian society – all the ethnicities, religions, minority groups.”  And at least in the short term, U.S.-backed humanitarian relief work will continue.

The next leaders of Syria “will need economic lifelines to rehabilitate and rebuild a country that has endured multiple cruelties since the start of the 2011 war,” Burcu Ozcelik, senior research fellow for Middle East security at the London-based Royal United Services Institute said Sunday, adding: “This is now a radically transformed Syria, and Russia has no good options.”

For the U.S., its SDF [Kurdish Syrian Democratic Forces] now face “the very real prospect of losing U.S. support as Trump has made no secret of his desire to withdraw the 900 or so American troops stationed in the north [Ed. more like the east],” Ozcelik writes. “This will isolate the SDF in Syria and throw into question what role it will have in the new post-war Syria.”

And the Iran question: “Syria was the conduit for Iran’s systematic support for Hezbollah in Lebanon,” Ozcelik noted. “This supply chain has now been cut off,” he said – though some lawless regions will still exist where transport options could be feasible.  But Lebanon’s Bekaa Valley will no longer be a transit point, Israel making sure of that.  [Defense One]

There are so many issues, befitting the nature of Syria, such as the fate of Iran-backed Shi’a proxies as many of the advancing rebels are predominantly Sunni Muslims.  And you have Turkey’s Kurd-focused, counterterrorism operations in northern Syria.

--Pentagon chief Lloyd Austin called his Turkish counterpart Yasar Guler on Sunday.  According to Austin’s team, both men agreeing “to prevent further escalation of an already volatile situation, as well as to avoid any risk to U.S. forces and partners.”  They also reportedly shared an urgency to “protect civilians, including ethnic and religious minorities, and abide by international humanitarian norms” via the proxy forces both nations support inside Syria.  And the two “discussed the risks posed by ISIS and other malign actors in the region,” the Defense Department said in a statement.

President Biden called Assad’s downfall a “fundamental act of justice” but also a “moment of risk and uncertainty” for the region – especially since ISIS is still active inside Syria.

Speaking of ISIS, the U.S. military unleashed “dozens of precision airstrikes targeting known ISIS camps and operatives in central Syria” on Sunday, striking “over 75 targets using multiple U.S. Air Force assets, including B-52s, F-15s, and A-10s,” Central Command officials said in a statement.

“Make no mistake, some of the rebel groups that took down Assad have their own grim record of terrorism and human rights abuses,” said Biden. “But as they take on greater responsibility, we will assess not just their words, but their actions.”

--Rescue workers from the White Helmets say they have ended their search operation for possible detainees in secret cells or basements at Syria’s notorious Saydnaya military prison without finding anyone.

Specialized teams assisted by K9 dog units and individuals familiar with the layout combed the prison and its grounds on Monday, as crowds gathered in the hope of finding their missing relatives.

“The search did not uncover any unopened or hidden areas within the facility,” a White Helmets statement said.

The news came as rebel fighters said they had found almost 40 bodies showing signs of torture in the mortuary of a hospital in Damascus.

The Syrian Observatory for Human Rights, the UK-based monitoring group, says almost 60,000 people were tortured and killed in the Assad government’s prisons.

Human rights groups say more than 100,000 people have disappeared since Assad ordered a brutal crackdown on pro-democracy protests in 2011 that triggered the civil war.

Opinion....

Sune Engel Rasmussen / Wall Street Journal

“Iran spent decades and billions of dollars building a network of militias and governments that allowed it to exercise political and military influence across the Middle East, and deter foreign attacks on its soil.

“In a matter of weeks, the pillars of that alliance came crashing down.

“The departure of Syria’s Bashar al-Assad is the latest strategic catastrophe that will force Iran to rethink decades-old security policies, just as it is also confronting the election of President-elect Donald Trump and his promises of new pressure on Tehran.

“Assad’s removal is also the climax so far in a cascade of events catalyzed by the Hamas attack on Israel on Oct. 7 last year, which resulted in the most fundamental change in Iran’s security landscape since the American invasion of Iraq in 2003.  But, while the toppling of Saddam Hussein ultimately provided Iran with opportunity, this time Tehran is at a disadvantage.

“In more than a year of attacks, Israel has devastated Hamas, Iran’s main Palestinian ally.  Since September, Israel has killed most of the leadership of Hezbollah, the Lebanese militia that is Iran’s most powerful ally, and sent its surviving top commanders into hiding.  Assad’s toppling destroys the remaining front line of Iran’s so-called ‘forward defense,’ said Ali Vaez, director of the International Crisis Group’s Iran Project.

“ ‘The Islamic Republic thought that Hamas’ Oct. 7 attack was a turning point in history. That’s true, but in the entirely opposite direction to what it hoped for,’ he said.  ‘The dominoes for its western front have fallen one after the other.’”

David E. Sanger / New York Times

“Now, with Mr. al-Assad’s ouster, two urgent and related questions are circulating through Washington, just six weeks before the inauguration of President-elect Donald J. Trump for his second term – one in which the world looks dramatically different than when he left office just shy of four years ago.

“First, will the rebels evict the Iranians and the Russians from Syrian territory, as some of their leaders have threatened?  Or, out of pragmatism, will they seek some kind of accommodation with the two powers that helped kill them in a long civil war?

“And will the Iranians – weakened by the loss of Hamas and Hezbollah, and now Mr. al-Assad – conclude that their best path is to open a new negotiation with Mr. Trump, only months after sending hit men to kill him?  Or, alternatively, will they race for a nuclear bomb, the weapon some Iranians view as their last line of defense in a new era of vulnerability?

“It may be months before the answers to either of these questions becomes clear. But where things go next may well determine whether Sunday represented a day of liberation and the start of a rebuilding – or the prelude to more military action.”

Editorial / Wall Street Journal

“The elder Assad [Hafez al-Assad] took power in a coup in 1970 and ran the country like a mafia regime.  Bashar’s older brother was supposed to succeed his father but died in a car accident.  The younger son, trained as an ophthalmologist, became the unlikely heir and the Baathist regime’s bloodiest leader in putting down the various opposition groups that sprung up with the Arab Spring in 2011.

“It’s worth recalling Barack Obama’s role in keeping Mr. Assad in power. Mr. Obama declined to support the opposition in any important way and then refused to enforce his ‘red line’ against Mr. Assad’s use of sarin and chlorine gas to kill his own people.

“Incredibly, Mr. Obama invited Russia to help end the civil war. Vladimir Putin obliged by joining with Iran to prop up Mr. Assad, elbowing the U.S. out, and establishing an air base and a long-desired naval base on the Mediterranean.  This misjudgment helped Iran expand its Axis of Resistance from Tehran to Beirut. It also reversed the strategic triumph achieved by Richard Nixon and Henry Kissinger in the 1970s in minimizing the Soviet Union’s influence in the Middle East....

“Mr. Biden is now barely a caretaker President, but Mr. Assad’s fall creates new openings for the Trump Administration.  Donald Trump said on Truth Social before Damascus fell that the U.S. should stay out of the conflict, but with Mr. Assad gone the U.S. still has interests to protect in Syria.

“One interest is to block the rise of a jihadist state or enclave in Syria.  The U.S. has a small military base in Syria with a mission of protecting against the revival of Islamic State.  Thousands of ISIS fighters and families are detained by Kurdish forces in Syria.

“The rebel charge into Damascus was led by (HTS), which the U.S. has designated a terrorist organization.  But its leader, Abu Mohmmed al-Jawlani, broke with ISIS in 2012 and al Qaeda in 2016 and has been saying he wants a diverse government that tolerates minorities.  The U.S. can engage with Mr. Jawlani and test his sincerity.  A stable Syria that wants to rebuild rather than export revolution would be a welcome development.

“Another U.S. interest is defending allies.  Jordan could become a renewed target for jihadist revolt. Israel will also be wary of radical intentions and on the weekend bombed a chemical plant used for weapons in Syria lest it fall into the hands of the next regime.  The Kurds, who control parts of northern Syria, are friendly to U.S. interests and are a target for Turkey’s Islamist leader, Recep Tayyip Erdogan.

“Then there is Iran, which may respond to its new weakness by accelerating its nuclear program....

“Mr. Trump will face an early decision on whether to destroy this capacity before Iran gets a nuclear weapon.

“Optimism is rarely warranted in the Middle East, but realism and strength can increase deterrence.  The Oct. 7 Hamas massacre is turning out to be a miscalculation for the ages, leading to defeats for the forces of Mideast mayhem. Mr. Trump can exploit the opportunities.”

Hal Brands / Bloomberg, Johns Hopkins University’s School of Advanced International Studies

“The collapse of Assad’s regime could cause a revival of the Islamic State, the emergence of a jihadist regime in Damascus, or a descent into chaos that affects the entire region.

“The fate of Assad’s remaining chemical weapons is uncertain, which is why the Israeli air foce is hunting them right now.  U.S.-Turkey relations could get very tense, if the Turks seize the opportunity to attack Syrian Kurdish groups loosely allied to Washington. And although Iran is in parlous position, it still has cards to play.

“The Houthis could intensify their assault on freedom of the seas if they get anti-ship cruise missiles from Moscow.  Iran could tighten its grip on Iraq through the Shiite militias that give it sway there.  Or perhaps an Iran that feels cornered will make a dash for nuclear weapons, confronting the new American administration with a choice between acquiescing and starting the big Middle Eastern war Trump has pledged to avoid.

“But for now, the regional balance of forces is more favorable to the U.S., Israel and their allies than at any time in a generation. [Former Hamas leader Yahya] Sinwar is likely to be remembered as the author of a murderous surprise attack that soon boomeranged in epically counterproductive ways. That’s not the legacy Sinwar sought on Oct. 7, 2023. But it’s one he richly deserves.”

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Russia-Ukraine....

--President-elect Trump held a hastily arranged meeting last Saturday with Ukrainian President Volodymyr Zelensky and France’s Emmanuel Macron while in Paris for the reopening of Notre Dame Cathedral.  Macron and other European leaders are trying to persuade Trump to maintain support for Ukraine.

Trump said on Truth Social after: “Zelensky and Ukraine would like to make a deal and stop the madness.  There should be an immediate ceasefire and negotiations should begin.  Too many lives are being so needlessly wasted, too many families destroyed, and if it keeps going, it can turn into something much bigger and far worse... I know Vladimir [Putin] well.  This is his time to act. China can help. The World is waiting!”

“Likewise, Zelensky and Ukraine would like to make a deal and stop the madness.  They have ridiculously lost 400,000 soldiers, and many more civilians,” Trump added.

Following his meeting with Trump, Zelensky underscored his desire for “a just and enduring peace” and blasted Putin for being “addicted to war.”

--In a post on social media, President Zelensky said some 43,000 Ukrainian soldiers have been killed since Russia’s full-scale invasion began, a rare admission of the extent of the nation’s casualties.  He added there had been 370,000 injuries, though this figure included soldiers who had been hurt more than once and some of the injuries were said to be minor.

He also claimed that 198,000 Russian soldiers had been killed and a further 550,000 wounded.  The figures could not be independently verified.

While Kyiv and Moscow have regularly published estimates of the other side’s losses, they have been reluctant to detail their own.  The new figure is a significant bump up from the last time Zelensky gave an update in February, when he put deaths at 31,000.

It seems he was compelled to write something after Donald Trump wrote on social media that Ukraine had “ridiculously lost” 400,000 soldiers, while close to 600,000 Russians had been killed or wounded, Trump of course not stating where the heck these figures came from.

But Zelensky’s estimates of Russia losses are similar to those provided by senior Western officials, who put them at 800,000, both killed and injured.

The UK’s defense ministry says Russia suffered 45,680 casualties in November alone – more than during any month since its full-scale invasion began in February 2022.

According to the latest UK Defense Intelligence estimates, an average of 1,523 Russian soldiers are being killed and wounded every day.

On November 28, it says Russia lost more than 2,000 men in a single day, the first time this has happened.  Moscow disputes the figures.  The Kremlin claims Ukrainian losses were “many times higher” than Russian ones, including Ukrainian losses in Kursk alone of 38,000.

But the consensus, outside Russia, is that Russian casualty figures are much higher than Ukraine’s due to their “meat grinder” tactics.  [BBC]

At the same time, however, Russia continues to make incremental gains on the eastern front, taking about 900 square miles in eastern Ukraine and in Russia’s western Kursk region since the start of the year.

[To try to visualize 900 square miles, consider that New York City and the five boroughs comprise about 300...so a decent amount of territory, but Ukraine’s total territory is 233,000 square miles, of which Russia controls about 20 percent currently.]

Russian forces are worrisomely approaching within roughly six kilometers of Pokrovsk, which the New York Times describes as “a key rail and road hub for Ukraine’s army.”

In line with the above, Russian troops are allegedly attacking Ukrainian positions “up to 30 times per day and have an advantage in artillery fires – suggesting that Russian forces are currently relying on a superior number of personnel and artillery ammunition to secure tactical gains in the Pokrovsk direction,” analysts at the Institute for the Study of War wrote Wednesday, citing a Ukrainian commander in the area.

“Another Ukrainian brigade officer reported that Russian forces lost nearly 3,000 personnel in the Pokrovsk direction in two weeks,” which ISW said suggests “Russian forces may well continue making gains towards Pokrovsk, but the losses they are taking to do so will temper their ability to translate these gains into more far-reaching offensive operations.”

--According to a Wall Street Journal analysis of daily data from the Ukrainian Air Force Command, Russia fired more than 6,000 explosive drones and missiles against Ukraine over September, October and November. That was over three times the number it fired over the previous three months, and more than four times the number fired during the same fall months in 2023.

--A Russian missile attack Tuesday on the southern city of Zaporizhzhia killed at least eight people and injured another 22, local officials said. Others were trapped under the rubble after the strike on a private clinic and residential buildings in the city center, police say.

President Zelensky reiterated his plea for more air defense systems.

“We don’t have enough systems to protect our country from Russian missiles.  But our partners have these systems.  Again and again, we repeat that air defense systems should save lives, not gather dust in warehouses,” he said.

Russia on Friday then launched a massive aerial attack involving dozens of cruise missiles and drones, the latest such strike aimed at further crippling the country’s electricity system.

Energy Minister Herman Halushchenko wrote on Facebook, “The enemy continues its terror.”

Russia fired hypersonic and highly precise Kinzhal, or dagger, missiles against targets mostly in the western regions, according to Ukraine’s air force.  Neighboring Poland scrambled fighter jets in response.

The attack took place a day after President-elect Trump said in an interview for TIME that he opposes Ukraine’s use of western-made long-range weapons to strike deep inside Russian territory.

As details came in, the attack involved nearly 200 drones, as well as scores of missiles,  President Zelensky said, in what Moscow described as a direct response to Ukraine’s recent use of American missiles against targets inside Russia.

The attack was “one of the largest strikes targeting our energy infrastructure,” to date, Zelensky said.

Russia launched at least 93 missiles, he said, including at least one North Korean weapon.  Ukraine was able to down 81 of them, 11 of which were intercepted with F-16 jets, he added.  But some struck targets, expanding the already widespread power blackouts caused by prior Russian strikes.

Russia’s Defense Ministry posted on Telegram that the attack was a direct response to a Dec. 11 Ukrainian attack on a Russian airfield near the southwestern city of Taganrog, when it said six U.S.-made ATACMS were used.

--The U.S. announced last weekend it will provide nearly $1 billion more in longer-term weapons support to Ukraine, as the Biden administration rushes to spend all the congressionally approved money it has left to bolster Kyiv before Donald Trump takes office in January.

The latest package will include more drones and munitions for the HIMARS’.

But the weapons systems purchased under contract are for the future, not ‘today,’ as Ukraine needs it.

--The former head of a notorious prison in Russian-occupied Ukraine has reportedly been killed in a car blast in Donetsk, in what is being seen as the latest in a series of attacks on pro-Kremlin figures in occupied land.

Ukrainian media said that Sergei Yevsyukov, 49, was killed in a blast from an explosive device planted under his car.

Yevsyukov was chief of the Olenivka Prison where dozens of Ukrainian prisoners of war died in a missile strike in July 2022.

Russia blamed Ukraine for the attack but Ukraine said Russia had targeted the prison to destroy evidence of torture and other war crimes committed there.

Ukrainian bloggers reported Yevsyukov’s wife had been injured in the attack, losing a leg, and was in crucial condition.

--NATO Secretary General Mark Rutte warned on Thursday that Vladimir Putin wants to “wipe Ukraine off the map” and could come after other parts of Europe next, as he urged Europeans to press their governments to ramp up defense spending.  This was part of Rutte’s inaugural speech, just over two months after he took office as NATO’s top civilian official.

“It is time to shift to a wartime mindset,” Rutte told security experts and analysts at the Carnegie Europe think-tank in Brussels.

There are real concerns Donald Trump will force an unfavorable truce on Ukraine.  Asked by the Associated Press how damaging a quick and shoddy peace agreement might be, Rutte said that “a bad deal means Putin coming out on top, and that will have worldwide ramifications.”

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Wall Street and the Economy

As the members of the Federal Reserve’s Open Market Committee went quiet before next week’s gathering, we had key inflation data this week and the consumer price index for November was exactly as expected, 0.3%, 2.7% year-over-year, while ex-food and energy, the figures were 0.3% and 3.3% Y/Y.

But the 2.7% was a tick up from October’s 2.6%, and its further proof inflation is sticky, and getting down to the Fed’s 2% target won’t be easy, let alone the 3.3% core figure.

Nonetheless, virtually everyone expects the Fed to cut rates again next Wednesday, but then most believe the Fed will pause come January and March.  Certainly, I would expect Chair Jerome Powell in his post-meeting press conference to target a pause, saying something like, “it’s appropriate to now take a pause and gather a lot more data before the March meeting, and we will have had a good look at the incoming administration’s policy initiatives by then and any impact they might have on the inflation numbers.”

The producer price index for November was not as expected, up 0.4%, 3.0% vs. a year ago, and ex-food and energy, up 0.2% and 3.4%, all but one number above consensus.

Next week, aside from the Fed, we have a key reading, post-FOMC, for PCE (personal consumption expenditures index), as well as data on retail sales.

The Atlanta Fed’s GDPNow barometer for fourth-quarter growth is 3.3%.

Freddie Mac’s 30-year fixed-rate mortgage fell to 6.60%, down 9 basis points on the week, but is headed back up after the rally in the 10-year Treasury stalled on the inflation news, and yields rose.

Finally, once again Congress is facing another deadline to keep the government operating, Dec. 20, or punting and extending the deadline further – to March.

Meanwhile, House and Senate Republicans are at odds over how to sequence President-elect Trump’s legislative priorities next year to try to pocket speedy success on issues such as tax reform (cuts) and immigration/border changes.  Honeymoons don’t last that long, and Trump comes in as a lame-duck president from day one.

At least the must-pass National Defense Authorization Act is working its way through Congress, a $883.7 billion bill that includes widely supported provisions, such as strengthening the U.S. presence in the Indo-Pacific region, and a 19.5 percent pay raise for junior-enlisted troops.  It also includes amendments that Democrats oppose, including specific restrictions on transgender health care for children of service members.

But the gross $dollar figure is not enough to meet the needs of today’s military given the threat matrix.

Europe and Asia

The European Central Bank lowered interest rates for a third consecutive meeting, signaling more reductions next year as inflation nears 2% and the economy struggles.

The deposit rate was cut by a quarter-point to 3% - as predicted, bringing total easing since June to 100 basis points.

The ECB’s statement dropped wording saying policy will remain “sufficiently restrictive” for as long as necessary.

“The Governing Council is determined to ensure that inflation stabilizes sustainably at its 2% medium-term target,” the ECB said Thursday. “It will follow a data-dependent and meeting-by-meeting approach to determine the appropriate monetary-policy stance.”

Traders are betting on about 125 basis points more of easing next year.

Dangers to growth remain tilted to the downside, according to President Christine Lagarde, who pointed to waning momentum in the 20-nation eurozone.

“The economy should strengthen over time, although more slowly than previously expected,” she told a press conference in Frankfurt.  “The risk of greater friction in global trade could weigh on euro-area growth by dampening exports and weakening the global economy.”

Lagarde said that while the ECB’s decision was unanimous, some officials did broach a bigger move.

One data item for the eurozone, industrial production in October rose 0.3% over September, down 1.2% from a year ago

Lastly, births in the EU fell 5.5% in 2023, the largest such decline on record.

France: President Emmanual Macron on Friday named centrist ally Francois Bayrou as prime minster, after a historic parliamentary vote ousted the previous government last week.

Bayrou, 73, a crucial partner in Macron’s centrist alliance, has been a well-known figure in French politics for decades.  His political experience is seen as key in efforts to restore stability as no single party holds a majority at the National Assembly.

But now he has to urgently form a cabinet and get an emergency budget passed next week to avoid a shutdown of essential services.

Macron has vowed to remain in office until his term ends in 2027.

Turning to Asia...China’s National Bureau of Statistics reported that November inflation rose 0.2% year-over-year vs. 0.3% prior, while producer prices fell 2.5% vs. -2.9%.

November exports grew by 6.7% Y/Y, missing market forecasts of 8.5% and sharply deteriorating from a more than two-year high of 12.7% in the previous month, reflecting ongoing trade tensions with the West. Still, it marked the eighth consecutive month of expansion in outbound shipments.

Exports to the U.S. rose 8.0% and the EU 7.2%. For the first eleven months of the year, overall sales expanded by 5.4%, driven by plastic products, textiles, aluminum and mechanical and electrical products. [General Administration of Customs]

Meanwhile, a major decision-making body of the Communist Party, the Politburo, said China will adopt a “more active” set of polices to expand domestic demand in 2025.

The integrated development of technology and industry will be supported and the property and stock markets will be stabilized, according to the official Xinhua News Agency.

“The main goals for economic and social development throughout the year will be successfully completed,” read the meeting’s summary statement, with a growth target for GDP set at around 5 percent – the same benchmark as this year, though this isn’t usually formally announced until March.

And going back to the above inflation number, 0.2%, that is far short of the goal of 3%.  While low inflation seems like a blessing, it reflects inadequate spending.

Per the statement, China will implement a “moderately loose” monetary policy – a shift in rhetoric from “prudent” in a prior outlook.

With the clock ticking down on China’s 2021-25 five-year plan, many infrastructure targets remain unmet, setting the stage for a potential acceleration in construction that could spur a rise in investment next year; think railways to nuclear power, which are lagging behind the plan’s goals.

But the stock market in China was unimpressed with the statements and continued lack of real specifics.

Japan’s Cabinet Office reported the economy grew at a 1.2% annualized pace in Q3 2024, compared to a preliminary estimate of 0.9%, and vs. 2.2% expansion in Q2, despite marking the second consecutive quarter of yearly expansion.  Capital spending moderated in the face of rising interest rates while government spending eased sharply.

The November producer price index rose 3.7% year-over-year vs. 3.6% prior, while October industrial production rose 1.4% Y/Y.

Street Bytes

--Stocks ended the week mixed, the Dow Jones falling 1.8% to 43828, the S&P 500 losing 0.6%, but Nasdaq finishing up 0.3%, including a new record high on Wednesday of 20034.

--U.S. Treasury Yields

6-mo. 4.32%  2-yr. 4.24%  10-yr. 4.40%  30-yr. 4.61%

Yields surged as it began to sink in that the Fed could be on hold after Wednesday’s cut in the funds rate for a good while, certainly at least through the March meeting.  The yield on the 10-year rose a whopping 25 basis points on the week.

--Canada’s central bank lowered its key interest rate by a half point on Wednesday and called President-elect Trump’s threat to impose sweeping new tariffs on Canada “a major source of new uncertainty.”

The Bank of Canada’s decision marked the fifth consecutive reduction since June and brings the central bank’s key rate down to 3.25%.  The big rate cut comes on the heels of a November labor report that showed the unemployment rate rising to 6.8%.

--The International Energy Agency (IEA) on Thursday raised its projection for 2025 oil demand growth, driven by emerging Asia, but noted that overall demand remains soft.

The projections follow moves by OPEC+ members to keep output cuts until the end of March.

The IEA is forecasting the oil glut to widen if OPEC+ unwinds the output cuts.

The IEA now forecasts global demand to grow by 1.1 million barrels per day, up from last month’s forecast of “just shy of” 1 million B/D next year. 

It cut its estimates for this year to 840,000 B/D from around 920,000 B/D previously.

“While the market is closely assessing ongoing geopolitical tensions and evolving OPEC+ supply dynamics, the bigger question for 2025 remains global oil demand,” the IEA said, noting that the “abrupt halt to Chinese oil demand growth this year,” as well as “sharply lower increases” in some emerging nations, “has tilted consensus towards a softer outlook.”

--Luigi Mangione, the alleged killer of UnitedHealthcare CEO Brian Thompson in Manhattan, was arrested on Monday after he was spotted at an Altoona, Pennsylvania, McDonald’s following a days-long manhunt spanning several states.  He was allegedly found with a gun similar to the murder weapons, a silencer and numerous fake IDs, one of which was used by him at the New York youth hostel he stayed at before assassinating Thompson.

Mangione then appeared at an extradition hearing in Pennsylvania on Tuesday, as more details emerged about a potential motive in the killing.  His lawyer, Thomas Dickey, said Mangione would contest being moved to New York to face murder charges.  “I haven’t seen any evidence that he’s the shooter,” Dickey said.

But then evidence emerged Wednesday, New York City police matching Mangione’s fingerprints with those found near the scene of the shooting.  And then they matched shell casings to the gun found Monday.  So it would seem Mr. Dickey will soon have some evidence to deal with, though this doesn’t necessarily pertain to the case in Pennsylvania.

Mangione tried to address reporters as he arrived for his hearing Tuesday, shouting “completely unjust” and “insult to the intelligence of the American people” before he was bundled into court.

Mangione was charged with murder in New York, but extradition could take a while and a trial in New York likely wouldn’t start for a year.

The suspect is from a wealthy family in the Baltimore area, attending a prestigious private high school where he was valedictorian.  Mangione then graduated with multiple degrees from the University of Pennsylvania.

The McDonald’s employee was helped in the identification of Mangione after NYPD released two new images of the suspect over the weekend.

When looking for a motive, police found a 2 ½-page manifesto of sorts, where at one point Mangione writes (seethed) “These parasites had it coming,” the plural use of concern to investigators as to whether there were other intended targets.

As is today’s sick society, tasteless trolls showered praise on the suspect and threatened the McDonald’s worker.

“To the stupid bitch that ratted out my baby Luigi Mangione...you will be dealt with,” wrote one.

Users even rallied to boycott McDonald’s in light of the arrest.

Earlier, UnitedHealth Group posted a condolence note on its Facebook page for Mr. Thompson’s family, and it had to be taken down as 84,000 users reacted with a laughter emoji.

As the Washington Post opined:

“Those who excuse or celebrate Mr. Thompson’s killing reveal an ends-justify-the-means sentiment that is flatly inconsistent with stable democracy.  An all-things-are-warranted mindset also animated the mob at the Capitol on Jan. 6, 2021, and campus protesters who have hailed the ‘martyrs’ of Hamas – groups very different in their degrees of moral transgression and practical impact, but similar in their embrace of extreme measures to right perceived wrongs.”

On the security issue now facing Corporate America, the Post adds:

“Of necessity, corporate chieftains are already reacting by fortifying their personal security, in case the shooting inspires copycat violence.  Other insurers are deleting images of their leaders or removing webpages that list their executives. This will make them more insulated from the public and their customers. Just like the Sept. 11, 2001, attacks, when Manhattan was also Ground Zero, it will mean a new normal of a more hardened society: extra barriers, less openness and higher security costs, which will need to be passed along to consumers.

“The foreseeable repercussions mean that this violent attack on one man is really an attack on society itself.  Murder is like that.”

--General Motors said Tuesday it will stop funding and exit robotaxi development at its majority-owned Cruise business, a blow to the automaker that had made the advanced technology unit a top priority.

GM said it would no longer fund work on the robotaxis “given the considerable time and resources that would be needed to scale the business, along with an increasingly competitive robotaxi market."  The automaker has invested more than $10 billion in Cruise.

In 2023, GM CEO Mary Barra said the Cruise business could generate $50 billion in annual revenue by 2030.

“This is the latest in the series of decisions that GM has announced which underscore our focus on having the right technology for the future of our company and the industry and reflects our commitment to execute with speed and efficiency,” she said on Tuesday.

Barra declined to say how many Cruise employees could be moved over to GM, but the company did say it plans to combine the technical teams from Cruise and GM into a single effort to advance autonomous and assisted driving.

GM said it expects the restructuring to reduce spending by more than $1 billion annually after the proposed plan is completed, which is expected in the first half of next year.

In October 2022, Ford Motor shifted spending away from its autonomous driving initiative, Argo AI, though it is still part of Ford’s advanced driver assistance systems.  Others have stopped funding their autonomous driving businesses.

--President Biden is expected to formally block the $14.1 billion sales of U.S. Steel Corp. to Nippon Steel Corp. on national security grounds once the deal is referred back to him later this month, people familiar with the matter said.

The Committee on Foreign Investment in the United States panel, which has been reviewing the proposed takeover for much of this year, must refer its decision to Biden by Dec. 22 or 23, according to multiple news stories.

It’s not exactly clear what the CFIUS review will say. However, any referral to the president suggests at least one member of the panel sees the deal posing a risk.  Nippon and U.S. Steel are poised to pursue litigation over the process if Biden decides to block the merger.

--China has opened an antitrust investigation into American chipmaker Nvidia, the world’s largest provider of processors that power artificial intelligence, according to Chinese state media.

The probe serves as the latest escalation of a growing battle for AI dominance, which both the U.S. and China believe is critical for national security.

China Central Television in a report Monday said the Chinese government believes Nvidia’s purchase of Israeli networking company Mellanox could violate the country’s anti-monopoly laws, though the report did not specify what the merger did to potentially break the law.  China approved the acquisition in 2020.

Yes, this is all part of a tit-for-tat China-U.S. chip war that has entered a new phase this month, after the Biden administration levied another round of restrictions on high tech memory chip sales to China a week earlier.  The memory chips are different from the graphics processors Nvidia makes, but both are crucial for powering AI.

The U.S. fears China can use AI to gain a military advantage, and Commerce Department officials believe the restrictions can slow China’s development of AI chips.

China’s Commerce Ministry blasted the U.S. restrictions, saying they pose “a significant threat” to the stability of global supply chains.  The Chinese government recently banned the sale of essential elements used for manufacturing chips, including germanium and gallium.

Senior U.S. officials have accused China of stealing American-made AI software...and so it goes.

--TSA checkpoint numbers vs. 2023

12/12...103 percent of 2023 levels
12/11...101
12/10...103
12/9...105
12/8...108
12/7...102
12/6...104
12/5...102

Back to normal with the above, after the Thanksgiving comparisons chaos.

--Tesla shares continued their post-election surge, hitting a new all-time high on Wednesday, up 65% since the election.

The latest positive news came Tuesday night when the EV maker said it sold 21,900 vehicles in China in the first week of December, its highest weekly sales in the fourth quarter, according to Tesla China in a rare weekly disclosure.

Tesla logged its best month in the Chinese market this year in November, sales exceeding 73,000.

Tesla’s Model Y has been the best-selling passenger vehicle in China over the past year with 556,000 in sales.

But the company has been ramping up incentives in the China market as it loses ground to BYD.

Tesla’s price-earnings ratio is currently about 125 times estimated 2025 earnings.

--Oracle’s fiscal second-quarter report late Monday showed total cloud service and license revenue coming in at $10.81 billion, up 12% for the quarter ended Nov. 30, which was a bit below the Street’s expectations.  The company also projected total revenue growth of 7%-9% year-over-year for the current quarter, which was below the consensus forecast projecting growth of about 10.4%.

Oracle reported total revenue of $14.06 billion in the quarter, up 9% from a year ago, but below estimates.

Despite seeing healthy growth in its cloud segment, Oracle competes with cloud heavyweights such as Microsoft and Amazon, which have established a large presence in the field.

The stock had surged 36% since the company’s very strong report three months ago – and more than 80% year to date, but the shares fell 7% on Tuesday after the disappointing news.  The shares were trading at more than 28 times forward earnings ahead of the report as well.

Oracle is sticking by its aggressive growth targets it laid out for analysts following its fiscal first-quarter report in September.  But like the other tech giants rushing to build generative artificial intelligence capabilities, Oracle is spending a lot to service the projected growth.  Capital expenditures shot up 72% from the previous quarter to nearly $4 billion, and Oracle said on its call Monday that capex for the fiscal year ending in May is expected to double from the previous year.

CEO Safra Catz said total Oracle cloud revenue should top $25 billion in this fiscal year.

Adjusted earnings of $1.47 were a penny shy of estimates.

--Photoshop maker Adobe saw its shares crater 13% after the company forecast fiscal 2025 revenue below Wall Street estimates on Wednesday, suggesting the company’s investments to weave AI into its software applications were taking longer than expected to bear fruit.

The company forecast annual revenue for 2025 between $23.30 billion and $23.55 billion, compared with estimates of $23.78 billion.

Adobe is making significant investments in AI-driven image and video generation technologies in response to the growing competition from well-capitalized startups such as Stability AI and Midjourney.

While the company projected strong growth for the second half of the year in June, its forecast on Wednesday indicated the company was still struggling to monetize its AI push.

Adobe last year launched Firefly, a family of generative AI models that is integrated into its various applications and products.

It forecast first-quarter revenue between $5.63 billion and $5.68 billion, which fell short of estimates of $5.73bn.

Adobe’s fourth-quarter revenue rose 11% to $5.61 billion from a year ago, beating expectations of $5.54bn.

--Alphabet shares closed at an all-time high on Wednesday, $195, after the Google parent announced its Gemini 2.0 model and some of the projects that will come with it.

Alphabet said that developers will be the first to have access to Gemini 2.0, with general availability in January. Gemini 2.0 is an update to Gemini 1.5, with enhanced performance at similarly fast times.

Alphabet is competing with fellow mega-cap tech companies to push out gen-AI offerings.  But it’s a tough race, with peers like Microsoft and ChatGPT-owner OpenAI also pushing competing products.

And it’s an expensive race. Alphabet reported in October that capital expenditures, which primarily reflect investments in technical infrastructure, were $13.1 billion for the third quarter.

--Shares in Broadcom surged about 20% Friday, its market cap nearing $1 trillion, as the chipmaker touted its “massive” opportunity in the AI market during a quarterly earnings call Thursday evening, after the market close.

Broadcom CEO Hock Tan said the company expects its custom AI chips will generate between $60 billion and $90 billion over the next three years from its three existing hyperscaler customers, whom the company did not name.

Broadcom also confirmed that it has added two more hyperscaler customers who are “in advanced development for their own next-generation AI XPUs,” which could further revenue.  Media reports have speculated that those new customers could be ChatGPT-maker OpenAI and Apple.

Broadcom makes custom chips for data centers, consumer electronics like smartphones and laptops, and electric vehicles.

--A judge blocked the pending $25 billion merger of grocery chains Kroger and Albertsons on Tuesday, siding with the Federal Trade Commission in a win for the Biden administration.

U.S. District Judge Adrienne Nelson’s ruling essentially scuttles the merger, Kroger has said in court documents.

The FTC argued at a three-week trial in Portland, Oregon, that the merger would eliminate head-to-head competition between the top two traditional grocery chains, leading to higher prices for shoppers and reduced bargaining leverage for unionized workers

Nelson agreed in the ruling that the merger was likely to remove direct competition between the two grocers, which would make it unlawful.

Kroger fought the FTC claims, saying the deal would bring prices down, particularly at Albertsons stores, where it said prices are 10-12% higher than at Kroger stores.  The merged company would fund price cuts through cost savings it expects from a larger operation, and a larger customer base to drive revenue for Kroger’s data consulting business, Kroger said.

Kroger and Albertsons had tried to convince Nelson that selling 579 of an estimated 5,000 combined stores, particularly in western U.S. states where Kroger and Albertsons are located near each other would preserve competition.

Alas, the deal is kaput and Albertsons said it was terminating its merger agreement and filed a lawsuit saying Kroger failed to exercise its best efforts to win regulatory approval for the $20 billion deal, a day after a federal court blocked it.

Albertsons said it was seeking billions of dollars in damages from Kroger.

Kroger had previously agreed to pay Albertsons a $600 million breakup fee if the deal didn’t come to fruition.

--President-elect Trump selected Andrew Ferguson, a Republican member of the Federal Trade Commission, to serve as the agency’s chair, a politically charged role currently held by Lina Khan.

--Omnicom Group will acquire Interpublic Group in a deal that will create the world’s largest advertising business, the companies confirmed Monday, as first reported by the Wall Street Journal.

A combined entity would have net revenue of more than $20 billion, based on 2023 figures for each company, and include storied ad agencies such as TBWA Worldwide and McCann Worldgroup. Their client rosters include Amazon, AT&T, PepsiCo, Unilever and Volkswagen.

The stock deal values Interpublic at more than $13 billion.

It is intended that the combination will be able to better compete with the likes of Google and Meta Platforms, which have emerged as dominant forces in the advertising business and stand to push even further into Madison Avenue’s territory with the rise of generative AI.  This technology is expected to enable them to handle more of the creative development for brands – a cornerstone of ad agencies.

--Macy’s posted its official third-quarter results Wednesday, after it concluded an internal investigation into an employee hiding up to $151 million of expenses that led to a delay in reporting.

While the third-quarter earnings were broadly in line with preliminary results shared last month, the company lowered its full-year profit guidance as it closes stores in a turnaround push.  It now expects adjusted profit per share of $2.25 to $2.50, versus its prior forecast of $2.34 to $2.69 and the shares fell further.

Net sales declined 2.4% from a year ago.  Same-store sales declined 1.3%, better than the 1.5% forecast.

Regarding the investigation, the employee acted alone, and did not pursue the acts for personal gains. 

--A Nevada commissioner ruled resoundingly against Rupert Murdoch’s attempt to change his family’s trust to consolidate his eldest son Lachlan’s control of his media empire and lock in Fox News’ right-wing editorial slant, according to a sealed court document obtained by the New York Times.

The commissioner concluded that father and son, who is the head of Fox News and News Corp., had acted in “bad faith” in their effort to amend the irrevocable trust, which divides control of the company equally among Murdoch’s four oldest children after his death.

The battle over the trust is not about money, as Rupert was not seeking to diminish any of his children’s financial stakes in the company, but rather about future control of the conservative media empire, that includes Fox News, the Wall Street Journal and New York Post, as well as major outlets in Britain and Australia.

Murdoch, 93, is seeking to ensure the right-wing bent of his empire, but two of the children, James and Elisabeth, are known to hold less-conservative political views than Lachlan, while the fourth, eldest daughter Prudence, has not been that involved in the family business.

If Rupert fails to lock in Lachlan’s leadership of the company, he won’t be able to guarantee that Fox News will remain a right-wing bastion after his death, putting in jeopardy his legacy.

--The U.S. Department of Agriculture will begin testing the nation’s milk supply for the bird flu virus known as H5N1 next week, nearly a year after the virus began circulating through dairy cattle, the department announced last weekend. 

Under the new strategy, officials will test samples of unpasteurized milk from large storage tanks at dairy processing facilities across the country.

Farmers and dairy processors will be required to provide samples of raw milk on request from the government. And farm owners with infected herds will be required to provide details that would help officials identify more cases and contacts.

Many virologists are upset that it has taken this long for the Ag Dept. to act.  The virus does not yet spread easily among people, but every untreated infection is an opportunity for it to gain the ability to do so, experts have said.

Robert F. Kennedy Jr., tabbed by Donald Trump to lead the health department, has been a proponent of raw milk.

While no one has been known to become ill with bird flu from drinking raw milk, farm animals, including cats, are thought to have died after consuming contaminated milk. Pasteurized milk sold to consumers has already been shown to be free of the virus.

--Largely as a result of bird flu, egg prices have seen a 37% year-over-year increase – and a 8.2% jump month over month.  Seasonal price increases during the holidays (Christmas and Easter) also played a role.

--Walt Disney Co.’s animated film “Moana 2” remained at the top of the box office in its second weekend in theaters as it brought in another record haul.

The film added $52 million, bringing its domestic total to $300 million, and its global tally to a staggering $600 million.

“Wicked” added $34.9 million, bringing its domestic total to $320.5 million in three weeks.  Globally, the total is at $455.6 million.  “Gladiator II” followed in third place with $12.5 million.

--Fox News Channel has seen a surge in its share of the primetime cable news audience postelection, while MSNBC’s ratings have collapsed.

Fox News has captured a whopping 73% of all cable news primetime viewers, including 71% in the advertiser-coveted demo ages 25-54, according to Nielsen.

Fox News has averaged 3.2 million total primetime viewers, a 34% increase from before the election of President-elect Trump and 417,000 in the key demo, a hefty 46% increase.

CNN has averaged only 469,000 total primetime viewers, down 35% from its pre-election audience, and just 99,000 in the key demo, a 36% loss.

But MSNBC has suffered a whopping 47% drop to 702,000 total viewers, and only 69,000 in the key demo, a loss of more than 50% versus pre-election.

--Lastly, Taylor Swift’s Eras Tour ended last weekend in Vancouver, Canada.  Across five continents, and 149 shows, roughly 10 million tickets produced revenue that could be around $2 billion.

Music executives say Swift has raised the bar for the concert industry, not just with ticket and merchandising sales, but conceptual ambition, stage production, wardrobe and news-cycle penetration.

Major respect for Ms. Swift.  Awesome.

Foreign Affairs

South Korea: Going back to last Saturday, South Korean lawmakers’ attempt to impeach President Yoon Suk Yeol ended in failure, foiled by his conservative People Power Party.  All but one member of the party walked out of the room before the impeachment motion was put to a vote, making the effort moot. [Only 195 votes were cast, below the threshold of 200 needed for the vote to count.]

Earlier on Saturday, Yoon bowed before the nation and apologized in a brief televised address but resisted calls to resign.  Han Dong-hoon, the chairman of Yoon’s party, has presented himself as the government’s decision maker and has said the president is no longer running the country, even though South Korea’s Constitution doesn’t allow for anyone to replace the president unless he resigns or is impeached.  For obvious reason, the South Korean people are asking, who is really in charge?

The ruling People Power Party said that President Yoon could resign by February, after his short-lived coup attempt.  Yoon is now under investigation for insurrection and has been banned from leaving the country.  He faces a second impeachment vote on Saturday.  The main opposition party did say it would pass the budget that was the source of controversy prompting the coup attempt.

The opposition bloc controls 192 seats in the 300-menber parliament and while the PPP holds 108, it needs eight defections from the PPP to secure the two-thirds majority needed to pass the motion to impeach.

Former defense minister, Kim Yong-hyun, who resigned after the coup attempt and took responsibility for the martial law declaration, tried to take his own life Tuesday while in detention, an official said.  He was arrested on Sunday.

If Yoon stands trial following an investigation for masterminding an insurrection plot by sending troops to the Parliament, and he is convicted, he would face the death penalty or life imprisonment.

Wednesday, police in South Korea raided the presidential office in Seoul, but Yoon’s presidential security service didn’t allow police to search it.

And then Yoon defended his martial law decree as an act of governance and denied rebellion charges, vowing Thursday to “fight to the end” in the face of attempts to impeach him and intensifying investigations into last week’s dramatic move.

Parliament on Thursday passed motions to impeach national police chief Cho Ji Ho and Justice Minister Park Sung Jae, suspending them from official duties, over their enforcement of martial law.

The National Assembly on Thursday passed a bill that could introduce an independent counsel to investigate Yoon on rebellion charges without his approval.  A bill it endorsed earlier this week on appointing an independent counsel requires Yoon’s approval.

South Korean law gives a president immunity from prosecution while in office, except for allegations of rebellion or treason.  That means that Yoon can be questioned and detained by investigative agencies over his martial law decree, but many observers doubt that authorities will forcefully detain him because of the potential for clashes with his presidential security service.

So Yoon has done a complete about-face, after apologizing for declaring martial law and saying he wouldn’t avoid responsibility for it.

China: Taiwan says China just deployed more ships near the Taiwan Strait than at any time since 1996.  Some 100 Chinese warships and various coast guard vessels have arrived in an area “stretching from the southern Japanese islands to the South China Sea,” the New York Times reported.  “This is likely the first time such a large-scale maritime operation has involved multiple Chinese theater commands and its coast guard,” the Wall Street Journal noted, citing a Taiwan official.

Chinese ships seem to be building two “walls” in the Pacific, “one at the eastern end of Taiwan’s Air Defense Identification Zone and the other further out in the Pacific,” Reuters reports, citing Taiwanese intelligence official Hsieh Jih-sheng.  “They are sending a very simple message with these two walls: trying to make the Taiwan Strait an internal sea,” he said.

There is speculation that the activity is linked to imminent war games in retaliation for visits made by Lai Ching-te (William Lai), Taiwan’s president, to Hawaii and Guam last week on his way to the Pacific islands, which drew condemnation from Beijing.

Separately, but related, the Stimson Center think tank issued a report Thursday that postulated Chinese missile attacks would likely close the runways at U.S. air bases across the Pacific, should the two countries come to blows.

And as things stand, those runways could remain disabled for the first several weeks of a conflict with China, slowing the arrival of aerial refueling tankers and other aircraft and repair assets.  “American political and military leaders – as well as the American public – should be under no illusions: there will be no refuge or rest from the long reach of Chinese missiles for U.S. air bases in a war,” the authors warn.

Why it matters: “Chinese military planners might calculate that they have a window of over 30 days – when American airpower would be largely sidelined – to accomplish a fait accompli” in Taiwan, the authors write. “If Beijing concludes that it can win a quick and easy military victory, its actions could become very hard to deter.”

“Addressing this threat to U.S. air bases is arguably the most critical and daunting task facing the U.S. Air Force today,” the Stimson Center says. [Defense One]

The aerial refueling tankers are critical because many U.S. aircraft would not be able to travel to Taiwan and the South China Sea and return to existing bases in the region without that capacity.

Iran: As alluded to above, the danger of Iran choosing to build a nuclear weapon is increasing, with a U.S. intelligence report released late last week issuing a warning.

According to the report from the Office of the Director of National Intelligence, Iran now has enough fissile material to make more than a dozen nuclear weapons, but the main question is, how quickly can they weaponize it and fashion it into a warhead.

The DNI report said that since Israel and Iran first exchanged direct military attacks in April, there had been a public debate in Iran about the deterrent value of nuclear weapons.

In a report last Friday to the International Atomic Energy Agency board, the UN body’s chief, Rafael Grossi, said Iran had taken steps to sharply increase its production of 60% uranium, what he called a “dramatic acceleration.”  Grossi said the change could mean Iran is producing around 34 kilograms (about 75 pounds) of the highly enriched uranium a month versus the 4.7 kg a month it was producing recently.

While CIA Director William Burns said in October that he was “reasonably confident” that the U.S. and its allies would catch an Iranian effort to build an atomic bomb “relatively early on,” French and British intel chiefs last week noted Western concerns about the expansion of Iran’s program.

Israel: Prime Minister Netanyahu began giving evidence on Tuesday in a case, in which he faces corruption charges, that has been dubbed Israel’s “trial of the century.”

Police opened investigations against him eight years ago and it is almost five years since he was indicted, making him the first serving prime minister in Israel’s history to go on trial.  He is accused of fraud and breach of trust in three separate cases, including one in which he also faces the more serious charge of bribery.

Netanyahu has been a master of delay, but the moment has arrived.  Judges rejected the argument that regular appearances by Netanyahu at the same venue constituted a security risk, but did consent to move the proceedings from Jerusalem to an underground chamber at the Tel Aviv district court.

Netanyahu then tried to spread out his testimony for as long as possible, requesting two short hearings a week, but the judges also rejected this, ruling that he must appear in three full sessions over consecutive days each week.

A number of ministers have said that in light of developments in Syria, as well as the ceasefire with Hezbollah and the war in Gaza, that Netanyahu’s testimony should be delayed three months, but the judges, clearly having long lost patience with the defense team’s attempts to delay the trial ruled that the public interest demands the proceedings proceed without delay.

Netanyahu said of the charges: “I am shocked by the magnitude of this absurdity.”

Separately, almost 30 mostly Jewish citizens who allegedly spied for Iran in nine covert cells were arrested, causing alarm in the country.   The arrests point to Tehran’s biggest effort in decades to infiltrate its arch foe, Israeli security services said.

Among the unfulfilled goals of the alleged cells was the assassination of an Israeli nuclear scientist and former military officials, while one group gathered information on military bases and air defenses, security service Shin Bet said.  One father/son team was accused of passing on details of Israeli force movements including in the Golan Heights where they lived.

Lastly, the war in Gaza continues, Israeli strikes pounding the Strip overnight Tuesday and into Wednesday, hitting a home where displaced people were sheltering in the isolated north and a refugee camp.  At least 34 were killed, according to Palestinian health officials.  Many of the victims were children.

Thursday, more than 30 were killed and 50 others injured in Nuseirat, a refugee camp in central Gaza, according to local officials, in another Israeli strike.  A post office was hit in which people were sheltering, Reuters reported.  Israel said it was targeting a senior member of Palestinian Islamic Jihad.

The United States, Egypt and Qatar continue to mediate talks between Israel and Hamas, and diplomats, for like the fifteenth time, said those efforts have recently gained momentum.

Hamas has said it will not release the remaining hostages without an end to the war and a full withdrawal of Israeli troop, while Netanyahu has pledged to continue the war until Hamas is destroyed and all the hostages are returned and has said Israel will maintain a lasting military presence in some areas.

That said, Arab mediators at week’s end said Hamas has yielded to two of Israel’s key demands for a deal, raising hopes for an agreement that could release some hostages within days.

The militant group told mediators for the first time that it would agree to a deal that would allow Israeli forces to remain in Gaza temporarily when the fighting stops.  Hamas also handed over a list of hostages, including U.S. citizens, whom it would release under a cease-fire pact, something it hasn’t done since the first truce in the conflict last year.

Romania: Dozens of armed men were arrested on their way to the Romanian capital to take part in protests against the decision to scrap presidential elections because of alleged Russian interference.

The frontrunner in the annulled vote, far right candidate Calin Georgescu, had called on supporters to gather around closed polling stations on Sunday, the day of the now cancelled run-off.

“No one ever can close the door in the face of Romanians, especially not the state institutions,” Mr. Georgescu said. “The state must be open to people, not closed... The institutions [must] let Romanians choose their destiny and not allow others to choose for them.”

The country’s constitutional court last Friday took the unprecedented decision to annul the first round of the vote that took place last month and which was topped by Georgescu, a previously little-known ultranationalist who expressed sympathy for Vladimir Putin and railed against NATO and the EU, vowing to cut off aid to Ukraine.

Romania is thus the first democracy to cancel an election over alleged Russian interference, although similar allegations of Moscow-backed influence campaigns were made in advance of European Parliament elections in June and more recently, in Moldova’s EU referendum and presidential elections.

The 20 men arrested were led by a former Foreign Legion mercenary, and carried guns and machetes in their cars when they were stopped by police.

The country, needless to say, is in a state of flux, with a new presidential poll to be held once a coalition government is formed following parliamentary elections.

Amid demonstrations held by Georgescu and other far right politicians, there were no reports of violence in Bucharest or other cities.

Random Musings

--Presidential approval ratings....

Gallup: 37% approve of President Biden’s job performance, 58% disapprove; 32% of independents approve (Nov. 6-20).

Rasmussen: 46% approve, 52% disapprove (Dec. 13).

--FBI Director Christopher Wray said he is resigning before the end of his 10-year term, after President-elect Trump made it clear he would fire him in favor of a loyalist intent on shaking up the bureau.

Wray told employees Wednesday he would resign before the new administration begins.

“In my view, this is the best way to avoid dragging the Bureau deeper into the fray, while reinforcing the values and principles that are so important to how we do our work,” Wray said during a town hall for the workforce.

Trump chose Wray for the position in 2017, but soured on him and the bureau more broadly after years of federal investigations into his conduct.  Wray, a Republican, tried to keep the spotlight on the FBI’s other work but instead the Bureau became entangled in partisan politics.

Then in August 2022, the FBI raided Mar-a-Lago in search of classified documents they determined he had to relinquish, and the relationship, what was left of it, was shattered.

“He invaded my home, I’m very unhappy with the things he’s done,” Trump said in his interview on NBC News Sunday.

--Speaking of which, in his first sit-down broadcast network interview since being re-elected, President-elect Trump said that on Day 1 of his new administration he would extend clemency to the hundreds of his backers who stormed the Capitol on Jan. 6, 2021, and try to bar automatic citizenship for children born in the United States to immigrant parents.

Trump told NBC’s Kristen Welker on her “Meet the Press” program that he would fire Christopher Wray, said members of Congress who investigated his role in the Jan. 6 attack should be thrown behind bars.

“For what they did, honestly, they should go to jail,” Trump said, talking about the likes of Liz Cheney.  He said he would not direct his new attorney general or FBI director to pursue the matter but indicated that he expected them to do it on their own. “I think they’ll have to look at that,” he said, “but I’m not going to” order them to.

Trump said he would not appoint a special counsel to investigate President Biden and his family, as he once vowed, and he signaled that he would not seek to fire Jerome Powell, chairman of the Federal Reserve*, or restrict the availability of abortion pills.  And although he vowed to end birthright citizenship, Mr. Trump said he would try to work with Democrats to spare immigrants brought to the country illegally as children, known as Dreamers, from deportation.

“I’m really looking to make our country successful,” Trump said, when asked about investigating Biden and his family.  “I’m not looking to go back into the past. I’m looking to make our country successful.  Retribution will be through success.”

Trump said he did not believe his nominee to replace Christopher Wray at the FBI, Kash Patel, would go after about 60 people Patel said he considered “members of the executive branch deep state” as he put it in a 2023 book.

“No, I don’t think so,” Trump said when asked if Patel would pursue investigations into political adversaries.  But Trump said, “If they were crooked, if they did something wrong, if they have broken the law, probably,” he said. “They went after me.  You know, they went after me, and I did nothing wrong.”

Regarding Trump saying he would try to reverse the constitutional guarantee that anyone born in the United States is a citizen regardless of the status of their parents, most legal scholars have said the president has no power to overturn the right to citizenship guaranteed by the 14th Amendment, which says that “all persons born” in the United States “are citizens of the United States.”

*As for Trump saying he won’t fire Jerome Powell before his term expires in 2026, take that with a grain of salt.  If inflation starts ticking up back to 3% on headline CPI and the Fed stops lowering interest rates, and the stock market finally takes a header, Trump will be furious...and take it out on Powell, irrationally so.

--Senator Joni Ernst, Republican of Iowa, signaled on Monday that she would not oppose Pete Hegseth’s bid for defense secretary, hinting at a turnabout after days of hectoring and threats by President-elect Trump’s hard-right supporters who threatened political retribution if she failed to fall into line.

The onslaught of pressure put Ernst in a bind.  Over two terms in the Senate, she has built a reputation for being a principled leader on matters of sexual assault and the military. As a combat veteran, she also holds strong views on the role of women in the military that clash significantly with those of Hegseth, who has said women should not serve in combat roles, though he is backtracking on that.

--Florida Gov. Ron DeSantis has a big decision to make.  Who to replace Sen. Marco Rubio with after Rubio moves on to the State Department in the new administration.  Lara Trump wants the job, so DeSantis is under extreme pressure.  He is considering several candidates, including Florida Attorney General Ashley Moody.

The person appointed gets to hold the seat until a special election in 2026.

Lara Trump announced last Sunday she was stepping down as co-chair of the Republican National Committee.  President-elect Trump then endorsed KC Crosbie as a co-chair of the RNC, along with Chair Michael Watley.

--Hungarian Prime Minister Viktor Orban met with Donald Trump and Elon Musk Monday at Mar-a-Lago, the third meeting this year between Orban and Trump.  A simple question.  Why?

--Trump chose Kari Lake to lead Voice of America, whose aim is to offer unbiased news to audiences around the world.  This is laughable.

--Trump was thrilled to learn he was named TIME “Person of the Year” Thursday for a second time, the first in 2016.  It capped off a great day for him, as he rang the opening bell on Wall Street, surrounded by family and future cabinet members (assuming they are confirmed).

TIME called Trump’s political comeback “unparalleled in American history.”

--A U.S. bankruptcy judge on Tuesday stopped the parody news site the Onion from buying conspiracy theorist Alex Jones’ Infowars website, ruling that a bankruptcy auction did not result in the best possible bids.

U.S. Bankruptcy Judge Christopher Lopez rejected Jones’ claims that the auction was plagued by “collusion,” at the end of a two-day hearing in Houston.

But he said the court-appointed bankruptcy trustee who ran the auction made “a good faith error” by quickly asking for final offers for Infowars instead of encouraging more back-and-forth bidding between the Onion and a company affiliated with Jones’ supplement-selling businesses, which was the runner-up.

Of course this is all tied to Jones being forced to liquidate his assets to pay over $1.3 billion in legal judgments to the families of 20 students and six staff members who were fatally shot in the 2012 massacre at Sandy Hook Elementary School in Newtown, Connecticut.

--New Jersey has been dealing with a ‘mystery drone’ problem, large drones flying over some strategic sites in the state, and on Wednesday, state officials, including our congressmen, voiced “deep concern” after police video recorded an army of 55 drones coming from our coast.  So obviously you think about what kind of vessel they might be launched from.  One congressman said the drones were coming from an Iranian ship.

But the Department of Defense said Wednesday that it does not believe the UFOs are coming from “a foreign entity or adversary,” deputy Pentagon press secretary Sabrina Singh told reporters.

“There is no Iranian ship off the coast of the United States, and there’s no so-called mothership launching drones towards the United States.”

Well, us New Jerseyans then ask, “If you’re so smart, Ms. Singh, what exactly are they?  What’s their purpose? That’s your job to explain.”

The lack of information we are receiving is pathetic.

--A New York City jury found Daniel Penny not guilty Monday of criminally negligent homicide in the choking death of subway performer Jordan Neely.

The verdict came after jurors said Friday they were deadlocked on a more serious charge of second-degree manslaughter, and the judge accepted the prosecution’s request to dismiss it.

As former federal prosecutor Neama Rahmani told the Washington Post, “As of Friday, at least one juror was willing to hold Penny to account for the higher charge. It is surprising that this juror was then willing to declare him not guilty on a less-serious charge.”

The case sparked discussions on public safety, race relations, and New York’s handling of homelessness and mental health problems.  Penny’s defense centered on the claim that he acted to protect other subway passengers from Neely.  Penny became a conservative symbol for citizen crime-fighting.

--More than 180 people were killed in a massacre over the weekend in one of the poorest neighborhoods of Haiti’s capital, the UN human rights chief said on Monday.  A leading Haitian human rights group described the killings as the personal vendetta of a gang boss who had been told that witchcraft caused his son’s fatal illness.

The slaughter began on Friday in a sprawling slum in Port-au-Prince.  Most of the victims were elderly.

--This year will be the year’s warmest since records began, with extraordinarily high temperatures expected to persist into at least the first few months of 2025, European Union scientists said on Monday.

The data from the EU’s Copernicus Climate Change Service confirmed that from January to November, 2024 was certain to be the hottest year on record, and the first in which average global temperatures exceed 1.5 degrees Celsius (2.7 degree Fahrenheit) above the 1850-1900 pre-industrial period.

The previous hottest year on record was 2023.

“While 2025 might be slightly cooler than 2024, if a La Nina event develops, this does not mean temperatures will be ‘safe’ or ‘normal,’ said Friederike Otto, a senior lecturer at Imperial College London.

“We will still experience high temperatures, resulting in dangerous heatwaves, droughts, wildfires and tropical cyclones.”

--Scientists, in a series of reports, have concluded that Neanderthals interbred with modern humans 47,000 years ago, earlier than once thought, passing down DNA that still exists in many modern-day people, which helps explain the presence of the GEICO caveman.

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

Pray for Ukraine.

God bless America.

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Gold $2666
Oil $71.18

Bitcoin: $101,575

Regular Gas: $3.02; Diesel: $3.50 [$3.12 - $4.07 yr. ago]

Returns for the week 12/9-12/13

Dow Jones  -1.8%  [43828]
S&P 500  -0.6%  [6051]
S&P MidCap  -1.6%
Russell 2000  -2.6%
Nasdaq  +0.3%  [19926]

Returns for the period 1/1/24-12/13/24

Dow Jones  +16.3%
S&P 500  +26.9%
S&P MidCap  +17.8%
Russell 2000  +15.8%
Nasdaq  +32.7%

Bulls 62.3
Bears 16.4

Hang in there.

Brian Trumbore

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