Week in Review

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Week in Review

02/08/2025

For the week 2/3-2/7

[Posted 4:30 PM ET, Friday]

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Special thanks to Dan C. for his ongoing support.

Edition 1,346

Is America really safer today than it was three weeks ago? When you attempt to gut the FBI and our intelligence agencies at a time when the threat level has never been higher?  Our enemies are gloating.

And is it helpful to have the world’s richest man, Elon Musk, who is also the “King of Disinformation,” on the controls, while his young boys club, many just 19-25 years of age with ZERO life experience, run amok inside key government agencies and departments?  I mean these kids know nothing about the real world, having no doubt spent their entire lives playing video games and in chat rooms.

Look....who doesn’t want to ferret out waste, fraud and abuse in our government.  Every single administration in my lifetime has talked of this.  We just don’t expect the kids now running the show abusing our own rights and delving into our personal information.  I saw one of the new cabinet members today tell CNBC that there was “nothing to worry about” when the reporter asked the gentleman just who these young whippersnappers really were.  I beg to differ.

Sure, reduce the size of government.  Except for defense and maybe one or two other key areas, just institute an across the board hiring freeze for two years and you’d reduce the government by 10-12% through attrition.  Kind of simple to me.

And the gutting of U.S. foreign aid, particularly the examples of our nation’s historically important ‘soft power,’ is flat-out ignorant.  But, again, it just shows an amazing, and dangerous, lack of knowledge about the history of the world around us.

But speaking of Musk’s Boys Club, the Wall Street Journal reported on Thursday that a staffer working for Elon “whose access to U.S. Treasury payment systems was approved by a federal judge on Thursday has links to a deleted social-media account that advocated for racism and eugenics.

“The 25-year-old employee, Marko Elez, resigned Thursday after The Wall Street Journal asked the White House about his connection to the account.

“The deleted profile associated with Elez...advocated repealing the Civil Rights Act and backed a ‘eugenic immigration policy” in the weeks before President Trump was inaugurated.

“ ‘You could not pay me to marry outside of my ethnicity,’ the account wrote on X in September, according to a Journal review of archived posts.  ‘Normalize Indian hate,’ the account wrote the same month, in reference to a post noting the prevalence of people from India in Silicon Valley....

“In recent days, Elez had emerged at the center of a legal battle over access to sensitive taxpayer information and systems the Treasury Department uses to process trillions of dollars in payments annually.”

Musk is insisting Elez be brought back.  This is not going to end well for our nation.

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Trump, Week Three....as it went down....

Over the weekend it was all about President Trump imposing tariffs of 25% on Mexico, 25% on Canada and 10% on China, according to the White House, Trump signing an order to that effect on Saturday.  Trump then said that Canadian oil would be hit with lower tariffs of 10%, which could take effect later, on February 18.

[The United States might be the largest oil producer in the world, but roughly 40 percent of the crude oil it refines comes from other countries, according to the American Fuel & Petrochemical Manufacturers, an industry trade association.  Canada is the top source of imported oil by far, followed by Mexico.]

The president also said he planned to impose tariffs on the European Union in the future, saying the bloc had not treated the U.S. well.

The White House said the duties on Canada and Mexico were in response to “the illegal fentanyl that they have sourced and allowed to distribute into our country, which has killed tens of millions of Americans.”

China, Canada and Mexico are the top U.S. trading partners, accounting for 40% of the goods imported into the U.S. last year.  

Canadian Prime Minister Justin Trudeau said on Friday: “It’s not what we want, but if he moves forward, we will also act.”

Chrystia Freeland, Canada’s former finance minister, wrote in a social media post on Friday that Canada should target Tesla, since it is owned by Elon Musk.

President Trump admitted that tariff costs are sometimes passed along to consumers and that his plans may cause disruption in the short-term.

Mark Carney, the former head of Canada’s and England’s central banks, told the BBC that the tariffs will hit economic growth and drive up inflation.

“They’re going to damage the U.S.’s reputation around the world,” said Carney, who is in the running to replace Prime Minister Trudeau as leader of Canada’s Liberal Party.

Later Friday evening, the Wall Street Journal opined on its editorial page....

“President Trump will fire his first tariff salvo on Saturday against those notorious American adversaries...Mexico and Canada.... This reminds us of the old Bernard Lewis joke that it’s risky to be America’s enemy but it can be fatal to be its friend.

“Leaving China aside, Mr. Trump’s justification for this economic assault on the neighbors makes no sense. White House press secretary Karoline Leavitt says they’ve ‘enabled illegal drugs to pour into America.’  But drugs have flowed into the U.S. for decades and will continue to do so as long as Americans keep using them.  Neither country can stop it.

“Drugs may be an excuse since Mr. Trump has made clear he likes tariffs for their own sake.  ‘We don’t need the products that they have,’ Mr. Trump said on Thursday.  ‘We have all the trees you need, meaning the lumber.’

“Mr. Trump sometimes sounds as if the U.S. shouldn’t import anything at all, that America can be a perfectly closed economy making everything at home. This is called autarky, and it isn’t the world we live in, or one that we should want to live in, as Mr. Trump may soon find out.

“Take the U.S. auto industry, which is really a North American industry because supply chains in the three countries are highly integrated.  In 2024 Canada supplied almost 13% of U.S. imports of auto parts and Mexico nearly 42%.  Industry experts say a vehicle made on the continent goes back and forth across borders a half dozen times or more, as companies source components and add value in the most cost-effective ways.

“And everyone benefits.  The office of the U.S. Trade Representative says that in 2023 the industry added more than $809 billion to the U.S. economy, or about 11.2% of total U.S. manufacturing output, supporting ‘9.7 million direct and indirect U.S. jobs.’  In 2022 the U.S. exported $75.4 billion in vehicles and parts to Canada and Mexico.  That number jumped 14% in 2023 to $86.2 billion, according to the American Automotive Policy Council....

“As the Cato Institute’s Scott Lincicome puts it, the data show that ‘as imports go up, U.S. production goes up.’  Thousands of good-paying auto jobs in Texas, Ohio, Illinois and Michigan owe their competitiveness to this ecosystem, relying heavily on suppliers in Mexico and Canada.

“Tariffs will also cause mayhem in the cross-border trade in farm goods.  In fiscal 2024, Mexican food exports made up about 23% of total U.S. agricultural imports while Canada supplied some 20%.  Many top U.S. growers have moved to Mexico because limits on legal immigration have made it hard to find workers in the U.S.  Mexico now supplies 90% of avocados sold in the U.S.  Is Mr. Trump now an avocado nationalist?

“Then there’s the prospect of retaliation, which Canada and Mexico have shown they know how to do for maximum political impact....

“None of this is supposed to happen under the U.S.-Mexico-Canada trade agreement that Mr. Trump negotiated and signed in his first term.  The U.S. willingness to ignore its treaty obligations, even with friends, won’t make other countries eager to do deals. Maybe Mr. Trump will claim victory and pull back if he wins some token concessions.  But if a North American trade wars persists, it will qualify as one of the dumbest in history.”

Trump responded on Truth Social:

“The ‘Tariff Lobby,’ headed by the Globalist, and always wrong, Wall Street Journal, is working hard to justify Countries like Canada, Mexico, China, and too many others to name, continue the decades long RIPOFF OF AMERICA, both with regard to TRADE, CRIME, AND POISONOUS DRUGS that are allowed to so freely flow into AMERICA.  THOSE DAYS ARE OVER! The USA has major deficits with Canada, Mexico, and China (and almost all countries!), owes 36 Trillion Dollars, and we’re not going to be the ‘Stupid Country’ any longer.  MAKE YOUR PRODUCT IN THE USA, AND THERE ARE NO TARIFFS!  Why should the United States lose TRILLIONS OF DOLLARS IN SUBSIDIZING OTHER COUNTRIES, and why should these other countries pay a small fraction of the cost of what USA citizens pay for Drugs and Pharmaceuticals, as an example?  THIS WILL BE THE GOLDEN AGE OF AMERICA!  WILL THERE BE SOME PAIN? YES, MAYBE (AND MAYBE NOT!).  BUT WE WILL MAKE AMERICA GREAT AGAIN, AND IT WILL ALL BE WORTH THE PRICE THAT MUST BE PAID.  WE ARE A COUNTRY THAT IS NOW BEING RUN WITH COMMON SENSE – AND THE RESULTS WILL BE SPECTACULAR!!!”

Saturday on X, Mexican President Claudia Sheinbaum said she had instructed her economy secretary to implement a response that includes retaliatory tariffs and other measures in defense of Mexico’s interests.

“We categorically reject the White House’s slander that the Mexican government has alliances with criminal organizations, as well as any intention of meddling in our territory,” Sheinbaum wrote.

“If the United States government and its agencies wanted to address the serious fentanyl consumption in their country, they could fight the sales of drugs on the streets of their major cities, which they don’t do and the laundering of money that this illegal activity generates that has done so much harm to its population.”

Mexico is the No. 1 trade partner of the U.S. and sends 80% of its exports north.  The top exporter is General Motors.

Mexico is the top source of cars, computers, televisions and refrigerators sold in the U.S.  Mexico also supplies around half of America’s imported fruit and two-thirds of imported vegetables, in dollar terms. And it’s the largest source of imported beer.  Mexico is also the No. 1 provider of medical devices to American hospitals and doctor’s offices, from surgical gloves to scalpels.

Canadian Prime Minister Trudeau on Saturday said that Canada is ready to address the tariffs.  Writing on X, the prime minister said: “We did not want this, but Canada is prepared.” 

“From the beaches of Normandy to the mountains of the Korean peninsula, from the fields of Flanders to the streets of Kandahar, we have fought and died alongside you during your darkest hours,” Trudeau said, speaking in another instance from Parliament Hill in Ottawa.

“Yes, we’ve had our differences in the past, but we’ve always found a way to get past them. As I’ve said before, if President Trump wants to usher in a new golden age for the United States, the better path is to partner with Canada, not to punish us.”

At a news conference late on Saturday, Trudeau set out “far-reaching” tariffs of 25%, affecting over $100 billion of American goods ranging from beer and wine to household appliances and sporting goods.

There were calls across Canada to stop buying liquor from U.S. “red” states and remove American alcohol brands from government store shelves as a response.

Only 1.5 percent of migrants apprehended by U.S. Customs and Border Protection in the 2024 fiscal year and 0.2 percent of fentanyl seized at U.S. borders came from Canada.

So, as we rolled into Monday morning, the U.S. stock market took a header on fears of a trade war.

Global strategist Ian Bremmer of the Eurasia Group on X:

“I’ve never seen Canadians – politically left, right and center – so angry with the United States as right now.

“Many Americans don’t care or know why it matters.  But long term the United States benefits greatly from deep and trusted international relationships, and none have been closer (and closely integrated) than U.S.-Canada.”

You are seeing that anger in Canadians booing the U.S. national anthem at sporting events between U.S. and Canadian teams, in Canada, in the NBA and NHL.

Sen. Susan Collins (R-Maine) on X:

“The Maine economy is integrated with Canada, our most important trading partner. Certain tariffs will impose a significant burden on many families, manufacturers, the forest products industry, small businesses, lobstermen, and agricultural producers.

“For example, 95 percent of the heating oil used by most Mainers to heat their homes comes from refineries in Canada. The Air National Guard Base in Bangor depends completely on jet fuel and diesel from Canada.  From fisheries to potato farmers to paper mills, these tariffs will have a significant impact on Maine’s economy and risk increasing costs for our residents.”

And then Monday, President Sheinbaum struck a deal with the Trump administration to delay the tariffs for a month as the two countries reached a series of agreements on border security.  Sheinbaum agreed to deploy 10,000 additional troops, who President Trump said would be designated to stop the flow of migrants and illegal drugs across the U.S.-Mexico border.

Later Monday afternoon, Trump and Prime Minister Trudeau cut a deal with similar border promises from Canada, such as posting nearly 10,000 personnel at the border to stop the flow of fentanyl. 

But the tariffs did go through on China at midnight, Monday.

China’s customs and tariff regulator announced 15% tariffs on coal and LNG, as well as 10% levies on crude oil, agricultural machinery and some vehicles.  Its Commerce Ministry announced export restrictions on materials such as tungsten, which is used in high-tech products, and sanctions on two U.S. companies.

China also said it will investigate Google for alleged antitrust violations, although Alphabet Inc.’s search services have been unavailable in the country since 2010, so whatever.

Editorial / Wall Street Journal...Monday evening....

“President Trump never admits a mistake, but he often changes his mind. That’s the best way to read his decision Monday to pause his 25% tariffs against Mexico and Canada after minor concessions from each country.

“Mr. Trump claimed victory, as he always does.  He pointed to Mexican President Claudia Sheinbaum’s decision to deploy 10,000 National Guard troops to the U.S. border to fight drug trafficking, especially in fentanyl....

“Equity markets responded with relief, recovering from steep opening losses and declines in Asia and Europe, though the Nasdaq still fell 1.2% on the day.  We’re glad to see the two sides step back from an immediate and mutually harmful trade war.

“But there’s much less to this tariff truce than meets the eye.  Mr. Trump won an announcement of help at the border, though what the Mexican troops will actually do to fight the cartels trafficking drugs isn’t clear. Drug enforcement is a hardy perennial in U.S.-Mexican relations, and Mexico has promised help before, notably during the presidencies of Felipe Calderon and Enrique Pena Nieto.

“As for immigration, Ms. Sheinbaum has already essentially agreed to cooperate on restoring the Remain in Mexico policy for migrants who reach the Mexico-U.S. border. Illegal border crossings have also been falling fast as Mr. Trump has sent a signal that illegal migrants won’t be allowed to stay in the U.S.

“Later Monday, Mr. Trump paused his tariffs against Canada as well after a phone call with Prime Minister Justin Trudeau. Canada is also deploying more law enforcement to the U.S. border and will appoint a ‘Fentanyl Czar,’ among other enforcement promises.

“If the North American leaders need to cheer about a minor deal so they all claim victory, that’s better for everyone. The need is especially important for Mr. Trump given how much he has boasted that his tariffs are a fool-proof diplomatic weapon against a friend or foe.  Mr. Trump can’t afford to look like the guy who lost. Ms. Sheinbaum in particular seems to recognize this, and so far she’s playing her Trump cards with skill.

“None of this means the tariffs are some genius power play, as the Trump media chorus is boasting. The 25% border tax could return in a month if Mr. Trump is in the wrong mood, or if he doesn’t like something the foreign leaders have said or done. It also isn’t clear what Mr. Trump really wants his tariffs to achieve.  Are they about reducing the flow of fentanyl, or is his real goal to rewrite the North American trade deal he signed in his first term? If it’s the latter, there’s more political volatility ahead.

“Mr. Trump’s weekend tariff broadside against a pair of neighbors has opened a new era of economic policy uncertainty that won’t calm down until the President does.  As we warned many times before Election Day, this is the biggest economic risk of Donald Trump’s second term.”

--Meanwhile, the Trump administration placed two top security chiefs at the U.S. Agency for International Development (USAID) on leave after they refused to turn over classified material in restricted areas to Elon Musk’s government-inspection teams.

Members of Musk’s Department of Government Efficiency, known as DOGE, then gained access Saturday to the aid agency’s classified information, which includes intelligence reports, a former USAID official told the Associated Press on Sunday.

Musk’s DOGE crew lacked high-enough security clearance to access that information, so the two USAID security officials – John Vorhees and deputy Brian McGill – were legally obligated to deny access.

The move comes a day after DOGE carried out a similar operation at the Treasury Department, gaining access to sensitive information including the Social Security and Medicare customer payment systems, salaries for federal personnel, payments to government contractors and grant recipients, and tax refunds, among tens of thousands of other functions. 

Musk had formed DOGE in cooperation with the incoming administration with the stated goal of finding ways to fire federal workers, cut programs and slash federal regulations.

So then Musk said his “DOGE team” of ‘government efficiency enforcers’ is shutting down some payments to federal contractors.

“The corruption and waste is being rooted out in real-time,” Musk posted on X, saying officials reporting to DOGE are “rapidly shutting down” payments to a Lutheran charity.

Musk had taken the president’s mandate to modernize federal information technology and instead began controlling financial flows in other parts of the federal government, like USAID, which Musk on Sunday called “a criminal organization” that should “die.”

Musk was targeting systems that process tens of billions of dollars a day in payments for U.S. government agencies and the officials that oversee them.

Trump gave Musk’s efforts his seal of approval Sunday night.  “Elon’s doing a good job,” Trump said to reporters.

“He’s a big cost cutter,” Trump said. “Sometimes we won’t agree with it and we’ll not go where he wants to go, but I think he’s doing a great job.  He’s a smart guy, very smart, and he’s very much into cutting the budget of our federal government.”

Treasury officials have long maintained that its role is to serve as the nation’s checkbook – and that the decision about whether to approve or deny payment belongs to individual agencies based on funds appropriated by Congress.

So what does USAID actually do?

USAID provides humanitarian and development assistance to other countries, primarily by dishing out funds to nongovernmental organizations (NGOs), foreign governments and international organizations, or other U.S. agencies.

In fiscal year 2023, USAID managed over $40 billion of appropriations – less than 1 percent of the federal budget, according to federal records – provided to about 130 countries. The top recipients of USAID funding currently include Ukraine, Ethiopia, Jordan, the Democratic Republic of Congo and Somalia.

USAID’s projects included providing assistance to famine-stricken regions in Sudan, providing textbooks for displaced schoolchildren in Ukraine and training health workers in Rwanda, according to the website, before it was shut down.

USAID was created by President John F. Kennedy in 1961.

Last week, the White House Office of Management and Budget ordered a freeze on all federal grant spending, an order it rescinded two days later amid an intense political backlash and lawsuits over the consequences of that decision.

So then Musk’s team locked career civil servants out of computer systems that contain the personal data of millions of federal employees.

And staffers at the USAID were instructed to stay out of the agency’s Washington headquarters on Monday, after Elon Musk announced Donald Trump had agreed with him to shut the agency.

Secretary of State Marco Rubio then notified lawmakers Monday that he intends to work with Congress to reorganize USAID, stepping back from the closure of the agency Musk envisioned.

“The Department of State and other pertinent entities will be consulting with Congress and the appropriate committees to reorganize and absorb certain bureaus, offices, and missions of USAID,” Rubio wrote to senior Republican and Democratic lawmakers.

But it was unclear how Rubio’s promise to work with lawmakers to overhaul USAID would be reconciled with Musk’s stated determination to close the agency.

Asked in the Oval Office on Monday about Musk’s action, President Trump said Elon “has access only to letting people go that he thinks are no good, if we agree with him, and it’s only if we agree with him.”

The president added: “Elon can’t do and won’t do anything without our approval. We’ll give him the approval where appropriate; where not appropriate, we won’t.  But he reports in and it’s something that he feels very strongly about.”

Tuesday, employees with USAID began receiving notice that they were being placed on “excused absence” immediately and indefinitely.  The memo was sent out from the email account of one of Elon Musk’s young boys, but ostensibly authored by USAID Acting Deputy Administrator for Policy and Planning Pete Marocco.

Current and former government officials told Defense One’s Patrick Tucker that closing USAID will help China and Russia and hurt countries friendly to the United States.  Ukrainian military leaders in Washington said USAID funding would undermine their efforts to fend off Russia’s invasion and would lead to the unnecessary deaths of troops and civilians.  “We should understand that it’s not only about some small projects in some NGOs. It’s about people’s lives,” one Ukrainian commander said Monday.

Wednesday, Secretary Rubio said the Trump administration was reaching out to USAID missions overseas to identify and designate programs that will be exempted from the sweeping stop-work orders.

The Trump administration then said Thursday that the number of workers at USAID would be reduced from more than 10,000 (6,000 of whom are overseas) to about 290 positions.  The small group of remaining staff includes employees who specialize in health and humanitarian assistance, according to reports.

USAID officials were also told Thursday that about 800 awards and contracts administered through the agency were being canceled.  Foreign service officers were given 30 days to return to the United States, totally upending lives...like finding a place to live in the U.S., finding new day care, placing their kids in school...a real mess.

“You find yourself in a foreign country, in all likelihood a place you moved to despite the terrorism or security risks, and you’re being treated as if you’re somehow an enemy of the state,” one USAID official told the Washington Post. “That’s not even the worst of it.  You know that your career matters far less than the lives of those you were trying to help, and....a lot of them are going to die without American aid.”

--The White House designated Elon Musk a “special government employee,” which means he is subject to conflict of interest rules, but those are largely enforced by White House officials.

“The president was already asked to answer this question this week,” said White House Press Secretary Karoline Leavitt at a briefing Wednesday.  “And he said, if Elon Musk comes across a conflict of interest with the contracts and the funding that DOGE is overseeing, that Elon will excuse himself from those contracts, and he has again abided by all applicable laws.”

Musk, as CEO of SpaceX, has significant government contracts with NASA and the U.S. military.  The company’s rocket launches are regulated by the Federal Aviation Administration.  And as CEO of Tesla, he has been the subject of probes by several federal agencies ranging from the National Transportation Safety Board to the Securities and Exchange Commission.

--Secretary Rubio on Sunday warned Panama’s President Jose Raul Mulino that Washington will “take measures necessary” if Panama does not immediately take steps to end what President Trump sees as China’s influence and control over the Panama Canal.

Mulino, after talks with Rubio in Panama City, signaled he would review agreements involving China and Chinese businesses, and announced further cooperation with the U.S. on migration, but reiterated that his country’s sovereignty over the world’s second busiest waterway is not up for discussion.

He then did say Panama would not renew its participation in China’s Belt and Road Initiative, making Panama the first Latin American country to do so.  He added that his government will evaluate whether to pull out before its current agreement ends in 2026.

Mulino also assured Secretary Rubio that U.S. Navy vessels would enjoy free passage through the canal.

A State Department spokesman said, “Secretary Rubio made clear that (the) status quo is unacceptable and that absent changes, it would require the United States to take measures necessary to protect its rights under the Treaty.”

But then Thursday Panama rejected the State Department’s claim that U.S. ships can transit the Panama Canal without paying.  And President Mulino accused the Trump administration of lying about the deal.  Secretary Rubio conceded that Panama had a legal process to work through.  Trump and Mulino were expected to talk Friday.

--Interim U.S. Attorney Ed Martin dismissed roughly 30 federal prosecutors who worked on Capitol riot cases in the Washington, D.C., office over the past four years, according to the Washington Post.

The employees were hired to permanent career positions after serving under special or short-term status as the office surged to manage nearly 1,600 prosecutions after the Jan. 6, 2021, attack on the Capitol.  The prosecutors remained under probationary status, which allows the firings without recourse under Justice Department policy, according to people familiar with the matter.

The dismissals came after acting attorney general James R. McHenry III had earlier fired members of special counsel Jack Smith’s team that prosecuted Trump.

Martin, appointed by President Trump about two weeks ago, was a “Stop the Steal” organizer involved in the planning and financing of Trump’s Jan. 6, 2021, rally at the White House Ellipse.

Then you had the issue with the FBI, with ABC News’ Pierre Thomas reporting “The Trump administration believes FBI leadership was complicit and participated in politically motivated investigations targeting President Trump....

“At least eight senior FBI officials who were a part of former FBI Director Chris Wray’s brain trust have been told to retire, resign, or be fired in the very near future. And we’re also learning that some of the top agents who run FBI field offices across the country may soon be forced out as well.

“And more sweeping changes within the FBI could be coming.  (Last) Friday, FBI staff were told that any personnel who were involved in the January 6th investigations and another lesser-known case out of New York are going to have their status reviewed by the Justice Department, which asked the FBI for a list of names.

“This potentially involved thousands of FBI agents and other personnel.  It certainly has sent shockwaves throughout the bureau.”

Mr. Thomas filed his report on ABC’s “This Week” last Sunday and then George Stephanopoulos interviewed former New Jersey governor, and prosecutor, Chris Christie for his opinion on the chaos at the bureau.

CHRISTIE: You know, George, I wouldn’t use a word like panic when it relates to the men and women of the FBI because they work under really stressful situations, but I will tell you that they are stunned by what’s happening.  When you talk about the list that they were asked for – let’s remember something.  None of these agents who worked on the January 6th cases volunteered.  That’s not the way it works.

In fact, at the FBI, they do the opposite. They don’t want you volunteering and self-selecting for an investigation because that may mean you bring some bias to it.  You go and you select these people.  So they were instructed by their bosses to work on the January 6th cases, and what happened as a result of that?  Hundreds of convictions in front of juries, in front of judges that were appointed by both Republican and Democratic administrations.

So they’re saying to themselves, what exactly was informed about the investigations and about their work?  Their work resulted in convictions that were brought by juries or guilty pleas, and that were accepted by Republican and Democratic judges, and so if the president wants to pardon these people, that’s his right to do, but it’s not then his right to fire these folks.

And let me tell you, they’re all civil service protected.  None of them are political appointees.  So what’s going to happen for these folks who don’t go voluntarily is they’re going to file grievances and lawsuits and they’re ultimately going to win them.  And the last piece I would say is this.  Understand how long it takes to get a new FBI agent on board. If you fire hundreds, if not thousands, and it would be thousands on this list of FBI agents, it takes 12 to 18 months to get them on board.

By the time you go through the interviewing process, the vetting process, then they go to Quantico for their training, and then come on board as a brand new FBI agent.  In the threat assessment we have right now across the world, to lose that many agents and then take a year to year and a half to try to replace them is incredibly dangerous for our national security, and for what?  Because they did their jobs. [Emphasis mine.]

RAHM EMANUEL, former U.S. ambassador to Japan: You have the FBI agents who are confronting China, North Korea, Russia, our enemies, Iran, who are cyberattacking the United States constantly, lawyers who are also just as recently prosecuting a case against a Treasury official handing over secrets to the Chinese on economic data.  You can either be focused on internal vengeance and the campaign that we’re doing or external vigilance.

Our guard is down.  We know how this movie ends, Emanuel citing the instance of Benjamin Netanyahu doing the same thing, attacking Israel’s Justice Department.  “The defense forces warned him [Ed. I wrote of this in this space at the time], your deterrence is going to be degraded and you had October 7th, the worst killing of Jews since the Holocaust.”

Tuesday, FBI officials complied with demands to provide the Justice Department with a list of thousands of employees who worked on investigations related to Jan. 6.

More than 5,000 names were submitted.  There are more than 13,000 agents and 38,000 total FBI employees.

Two anonymous sets of FBI agents and employees then filed lawsuits on Tuesday seeking to prevent the Trump administration from releasing the identities of agents and staff members who participated in the investigations.

The lawsuits said that the agents believed the administration intended to reveal their identities, exposing the agents and their families to profound danger.

The administration has not said it intends to release the identities of the agents, but its demand for the names has stoked the belief that it may move to fire them en masse.

--The CIA has sent the Trump administration’s “deferred resignation” offer to its employees, the first intelligence agency to do so.  An aide to CIA Director John Ratcliffe told the Wall Street Journal that the move is intended to help focus the agency on drug cartels, China, and even friendly Western Hemisphere countries.  ‘For example, the CIA will use espionage to give [President] Trump extra leverage in his trade negotiations, potentially spying on Mexico’s government amid the ongoing trade spat, the aide said.”

The deal purports to enable federal employees who agree to resign to stop working but receive their full pay until Sept. 30. But the fine print “made it clear that employees could be required to work until their official resignation date. This means that federal employees could be agreeing to resign in exchange for nothing,” wrote independent journalist Judd Legum. [Defense One]

No recourse if Trump reneges: Signing the deal also signs away the right to take action if the U.S. government does not hold up its end, according to a memo released on Monday by the White House’s Office of Personnel Management.

The same ‘offer’ was then extended to the National Intelligence Agency and a range of similar workforces.

Separately, the CIA sent the White House an unclassified email listing all employees hired by the spy agency over the last two years to comply with Elon Musk’s effort to drastically shrink the federal work force.  The list included many operatives, including those hired to focus on China, whose identities are usually closely guarded.  One former official called the disclosure a ‘counterintelligence disaster.”

--Makena Kelly, Zoe Schiffer / WIRED

“Elon Musk’s minions – from trusted sidekicks to random college students and former Musk company interns – have taken over the General Services Administration, a critical government agency that manages federal offices and technology. Already, the team is attempting to use White House security credentials to gain unusual access to GSA tech, deploying a suite of new AI software, and recreating the office in X’s image, according to leaked documents obtained by WIRED....

“The team appears to be carrying out Musk’s agenda: slashing the federal government as quickly as possible. They’re currently targeting a 50 percent reduction in spending for every office managed by the GSA, according to documents obtained by WIRED.

“There also appears to be an effort to use IT credentials from the Executive Office of the President to access GSA laptops and internal GSA infrastructure. Typically, access to agency systems requires workers to be employed at such agencies, sources say.  While Musk’s team could be trying to obtain better laptops and equipment from GSA, sources fear that the mandate laid out in the DOGE executive order would grant the body broad access to GSA systems and data.  That includes sensitive procurement data, data internal to all the systems and services GSA offers, and internal monitoring software to surveil GSA employees as part of normal auditing and security processes.

“The access could give Musk’s proxies the ability to remote into laptops, listen in on meetings, read emails, among many other things, a former Biden official told WIRED (last) Friday.”

In other words, DOGE will be able to actively surveil government employees.

--About 60,000 federal workers have accepted the offer to resign so far, a White House official told reporters on Wednesday – about 3% of the federal workforce. “In a typical year, about 6% of the federal workforce turns over, so most of those accepting the deal may have been planning to quit or retire anyway. The administration was hoping to convince 5-10% of federal employees to resign,” according to Judd Legum.

Sen. Tim Kaine (D-Va.) told the Wall Street Journal that the deal might be illegal: “There’s no statutory authority that I can see for the president making this offer...The administration immediately knows, you don’t want to work for me. They’ll find some other way to get rid of you.  You should not raise your hand.”

A federal judge on Thursday then paused the deadline for federal employees to decide whether to accept an offer from the Trump administration to resign their jobs voluntarily.

U.S. District Judge George O’Toole in Massachusetts scheduled a hearing for Monday on whether to grant a temporary restraining order that would block the program while the litigation challenging the offer proceeds.

Employees had previously been told they had until the end of the day on Thursday to decide whether to accept the offer.

The American Federation of Government Employees and other unions sued to block the buyout offer, which said employees would be paid for eight months if they left willingly. The unions said agencies couldn’t promise the salaries and benefits beyond what Congress has already authorized, which only extends through March.  They also warned employees that they might not get paid if they resign, and those who refused faced losing their jobs.

--And then in a news conference Tuesday with Israeli Prime Minister Benjamin Netanyahu at the White House, Trump dropped a bombshell.  He offered for the U.S. to take control of Gaza, which could commit the U.S. to “exactly the kind of foreign entanglement he told voters he would avoid,” according to the Wall Street Journal.  The Associated Press described the plan as a “stunning proposal to forcibly transfer hundreds of thousands of Palestinians out of the Gaza Strip and develop it as a tourist destination.”

Trump, standing next to Netanyahu, said:

“The U.S. will take over the Gaza Strip and we will do a job with it too,” the president declared. “We’ll own it and be responsible for dismantling all of the dangerous unexploded bombs and other weapons on the site, level the site and get rid of the destroyed buildings, level it out, create an economic development that will supply unlimited numbers of jobs and housing for the people of the area.  It’s going to end up the same way it has for 100 years.”

A reporter requested clarification, asking Trump, “You are talking tonight about the United States taking over a sovereign territory. What authority would allow you to do that?  Are you talking about a permanent occupation there, redevelopment?”

Trump replied, “I do see a long-term ownership position and I see it bringing great stability to the part of the Middle East and maybe the entire Middle East.

“Everybody I’ve spoken to loves the idea of the United States owning that piece of land, developing and creating thousands of jobs is something that will be magnificent in a really magnificent area that nobody would know.”

Officials from Saudi Arabia and Turkey were quick to outright reject the plan.  And leaders from Egypt, Jordan, UAE, Qatar and Palestine were already on record opposing such relocation proposals.  The Saudis also emphasized in their statement that they won’t normalize relations with Israel – a key goal of the Trump administration – without the establishment of a Palestinian state including Gaza.

The plan was developed by Trump’s son-in-law Jared Kushner.

Asked about the possibility of sending U.S. troops to Gaza, Trump said the U.S. will “do what is necessary” as he laid out plans for the U.S. to take the area over in “a long-term ownership position,” and he suggested he would visit the territory.

Gaza is not a sovereign land and is considered under international law to be occupied territory.

“A U.S. invasion of Gaza would lead to the slaughter of thousands of U.S. troops and decades of war in the Middle East,” Sen. Chris Murphy (D-Conn.) wrote on X.  “It’s like a bad, sick joke.”

Hamas has ruled in Gaza for most of the past two decades and has begun re-establishing control there since a cease-fire took effect last month.  The group immediately rejected the idea of a mass relocation of the territory’s population.

Experts say Trump’s proposal would be a severe violation of international law. Forced deportation or transfer of a civilian population is defined as a violation of international humanitarian law, a war crime and a crime against humanity.

Far-right politicians in Israel, however, welcomed Trump’s plan as unraveling decades of unwelcome orthodoxy on the Israeli-Palestinian conflict, as well as raising the possibility of negating the militant threat in Gaza without creating a Palestinian state.

Wednesday, top Trump administration officials on Wednesday walked back elements of President Trump’s proposal, insisting that he had not committed to using U.S. troops to clear the territory and that any relocation of Palestinians would be temporary.

Speaking to reporters in Guatemala, Secretary of State Rubio twice suggested that Trump was only proposing to clear out and rebuild Gaza, not claim indefinite possession of the territory.  Steve Witkoff, the special envoy to the Middle East, told Republican senators at a closed-door luncheon that Trump “doesn’t want to put any U.S. troops on the ground, and he doesn’t want to spend any U.S. dollars at all” on Gaza, according to Sen. Josh Hawley of Missouri.

Thursday, in an early morning Truth Social post, Trump laid out how his proposed takeover of the Gaza Strip would unfold.

“The Gaza Strip would be turned over to the United States by Israel at the conclusion of fighting.  The Palestinians, people like Chuck Schumer, would have already been resettled in far safer and more beautiful communities, with new and modern homes, in the region.  They would actually have a chance to be happy, safe, and free.  The U.S., working with great development teams from all over the World, would slowly and carefully begin the construction of what would become one of the greatest and most spectacular developments of its kind on Earth.  No soldiers by the U.S. would be needed! Stability for the region would reign!!!”

This makes zero sense. 

[More on Israel and Gaza below.]

--Peggy Noonan / Wall Street Journal

“I would like to point out a simple fact.  A major and unnoticed part of Donald Trump’s power is that 100% of Americans know who ‘the president’ is, including children above 5 and nonnative speakers.  I base this on personal interactions with strangers of all sorts....

“No modern president has achieved this level of complete cultural saturation.  It gives him power in this ill-educated, broken-up, low-attention-span country.  You remember ‘Jaywalking,’ Jay Leno’s comedy bit in which he’d ask people on the street, ‘Who was Abe Lincoln?’ (‘A singer?’)  When was the American Revolution? ‘Um, 1970?’  We haven’t become more historically literate.

“You have to keep this in mind to understand the moment we’re in.  Mr. Trump has pierced American consciousness in this way. He has broken through as an instantly recognizable, memeable, cartoonable figure – the hair, the red tie, the mouth – but he also provides, deliberately and not, iconic moments that connect to other iconic moments. The tech barons arrayed behind him as he was sworn in, and the White House meeting hours later in which the president promoted artificial intelligence. As I watched them at the inauguration I abstracted. It was like Elon is passing the solid gold phone to Mark Zuckerberg, who nods and passes it to Jeff Bezos, who passes it to Sam Altman, who marvels at its weight and shine.

“That of course is taken from the scene in ‘The Godfather Part II’ in which the American business behemoths sit at a conference table in the palace of Cuban President Fulgencio Batista, as he communicates they’re safe with him because he loves business.  Almost every American adult has seen a ‘Godfather’ movie.  I believe that as they watch the second Trump administration they occasionally connect it to themes of that great drama...he’s settling all family business.  His second term can be understood as an attempt to change his image from Sonny to Michael....

“In 2017, a lot of people who watch closely and think deeply, thought: We’re having an odd moment, but we’ll snap back into place.  Now they are thinking something new has begun.  American politics was a broad avenue with opposing lanes for a very long time, at least a century, and now we have turned and are on a different avenue, on a different slope, with different shadows.

“There’s a sense we’re living through times we’ll understand only in retrospect.  But the collapse of the old international order and the break in America’s old domestic order are shaping this young century.

“So far Mr. Trump is governing by executive order.  This contributes to the uneasiness... The heavy use of executive orders makes all politics personal, having to do with the man who orders and signs with a flourish.  Making it personal distorts our understanding of what a leader can and should do.  Executive orders ignore the branch of government called Congress and work against its authority, its role in the republican drama.  They give the impression we are a government of one branch.  Doing all this habituates the public to the idea of authoritarianism, of rule by the strongman.  We will pick a new caudillo and he will save us with his pen!  When you do away with branches and balances you cause trouble.

“Has it hurt his popularity? No. People back boldness when they think a lot has gone wrong and needs righting. They’d expect a certain amount of mayhem. And with Mr. Trump, chaos is baked in.”

---

Wall Street and the Economy

We had a key January jobs report today, Friday, with the nonfarm payroll figure 143,000 vs. consensus of 168,000 (I use Econoday projections), but December was revised up to 307,000 from 256,000. So nothing concerning, yields on the 2- and 10-year Treasury rising a bit after a rather quizzical rally earlier in the week.

The unemployment rate ticked down to 4.0%, while average hourly earnings increased 0.5%, the highest pace since March 2022, and 4.1% year-over-year, both of these wage numbers higher than forecast.

In other economic news, we had the January ISM figures for manufacturing, a better than expected 50.9, with the service sector reading 52.8 (50 the dividing line between growth and contraction).

December construction spending rose 0.5%, factory orders fell 0.9%.

Separately, in an interview with Fox Business Wednesday, Treasury Secretary Scott Bessent said the administration’s focus with regard to bringing down borrowing costs is 10-year Treasury yields, rather than the Federal Reserve’s benchmark short-term interest rate. 

Bessent repeated his view that expanding energy supply will help lower inflation.  For working-class Americans, “the energy component for them is one of the surest indicators for long-term inflation expectations,” he said.

“So if we can get gasoline back down, heating oil back down, then those consumers not only will be saving money, but their optimism for the future will” help them rebuild from the recent years of high inflation, Bessent said.

Next week we have key inflation data on consumer and producer prices.

The Atlanta Fed’s GDPNow barometer for first-quarter growth is 2.9% (but this is obviously a very early forecast).

Freddie Mac’s 30-year fixed-rate mortgage is 6.89%.

Lastly, in a confusing moment during President Trump’s press conference with visiting Japanese Prime Minister Shigeru Ishiba, Trump suggested that Nippon Steel would no longer buy U.S. Steel as planned, and previously rejected by both Trump and former President Biden, but instead would invest in the company.

Trump kept mistakenly referring to Nippon as “Nissan,” the automaker.

Nippon Steel “is going to be doing something very exciting about U.S. Steel. They’ll be looking at an investment rather than a purchase.”

But the details remain unclear.  Trump said he would meet with the head of Nippon Steel next week “to mediate and arbitrate.”

Europe and Asia

We had PMI readings in the eurozone for January (courtesy of S&P Global and Hamburg Commercial Bank), with the manufacturing figure 46.6, better than December’s 45.1, an 8-month high, but still at a contraction level.  The service sector figure was 51.3, with a composite of 50.2, a 5-mo. high.

Germany: mfg. 45.0; 52.5 services
France: mfg. 45.0; 48.2 services
Italy: mfg. 46.3; 50.4 services
Spain: mfg. 50.9; 54.9 services

Ireland: mfg. 51.3; 53.4 services
Netherlands: mfg. 48.4
Greece: mfg. 52.8

UK: mfg. 48.3; 50.8 services

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

“The slow pace of growth in the services sector, which was evident almost all of last year, continued at the start of 2025.  Putting it more positively, growth at service companies played a crucial role in keeping the eurozone economy in expansion over the past year. Sluggish, but slightly accelerating growth in new orders and employment gives hope that this sector will gain a bit more momentum in the first quarter of this year.

“Costs in the services sector rose at a faster rate in January....

“The services outlook is modest... Given the many political uncertainties, particularly the new elections in Germany and the fragile government in France, this isn’t surprising. No major growth leaps are expected in this sector for now.”

Earlier, Dr. de la Rubia said of manufacturing in the EA20:

“It’s definitely too early to talk about green shoots in the manufacturing sector....

“At least the manufacturing recession has slowed somewhat (in Germany and France)... Despite all of Trump’s tariff threats, we must remember that for most countries in the eurozone, 90% or more of exports go to countries other than the U.S.”

We also had a flash estimate of euro area inflation for January, 2.5%, up from 2.4% in December.  Ex-food and energy, 2.7%, unchanged. [Eurostat]

Headline inflation:

Germany 2.8%, France 1.8%, Italy 1.7%, Spain 2.9%, Ireland 1.5%, Netherlands 2.9%.

As ECB President Christine Lagarde has warned, caution needs to be the watchword for any future ECB action on interest rates as the headline figure is up from 1.7% in September.  But at the same time, the eurozone economy remains very weak.

Thursday, the Bank of England lowered interest rates by a quarter point, judging a sharp upward revision to its inflation forecasts for this year will prove temporary, while two officials called for a bigger rate cut against a backdrop of weaker growth.

The cut to 4.5% was in line with economists’ expectations.

Bank of England Governor Andrew Bailey said the BoE would be “monitoring the UK economy and global developments very closely and taking a gradual and careful approach to reducing rates further” – a shift from December’s language where he spoke only of a “gradual” approach.

Industrial producer prices in the euro area rose 0.4% in December compared with November. For all of 2024, prices decreased 4.2% over 2023. [Eurostat]

December retail sales in the eurozone fell 0.2% over November, but were up 1.9% year over year.

Turning to Asia...China was still celebrating its Lunar New Year.  But we did have the private Caixin PMI readings for January.  Manufacturing 50.1 vs. 50.5 prior; services 51.0 vs. 52.2.

Japan’s manufacturing PMI for January was 48.7 vs. 49.6 prior; 53.0 vs. 50.9 for the service sector, the latter encouraging.

December household spending rose 2.3% from November, up 2.7% year over year.

South Korea’s January manufacturing PMI was 50.3; Taiwan’s 51.1.

Street Bytes

--Stocks would have finished higher on the week except late this afternoon, President Trump talked of a round of reciprocal tariffs he would initiate next week.  So in the end, the Dow Jones fell 0.5% to 44303, the S&P lost 0.2% and Nasdaq 0.5%.

--U.S. Treasury Yields

6-mo. 4.32%  2-yr. 4.28%  10-yr. 4.49%  30-yr. 4.70%

Yields on the short end of the curve rose this week, and fell on the long end.

After Friday’s jobs report, traders are betting on the Fed cutting rates in June (with meetings in March and May in between), with another cut end of the year.

--Oil prices gyrated wildly within a band of about $71 to $74 on West Texas Intermediate this week, as the market was buffeted by President Trump’s pronouncement is was set to restore “maximum pressure” on Iran, only to back off some on the rhetoric, the U.S.-China trade tensions and fears of weaker global demand, a larger-than-expected rise in U.S. crude inventories, and OPEC+ confirming plans to gradually increase oil output from April.

--Alphabet earnings beat Wall Street expectations, but revenue missed the mark.  The Google parent reported fourth-quarter earnings of $2.15 a share ($26.6 billion in net income) on revenue of $96.47 billion, with analysts at $2.13 and $96.68bn.  In the same period a year ago, Alphabet reported EPS of $1.64 on revenue of $86.3 billion.

Cloud revenue in the quarter of $12 billion – a 30% increase from last year – just missed analyst estimates of $12.2 billion.  The 30% is also vs. a 35% increase in the September quarter.  This comes after Microsoft said on Jan. 29 that revenue in the second quarter from Azure and other cloud services increased by 31%, compared with 33% one quarter earlier.

YouTube offered a bright spot for Alphabet, with its advertising revenue of $10.47 billion beating consensus of $10.23 billion.

The company reported capital expenditures in the quarter of $14.28 billion, above the Street’s estimate of $13.26 billion and an increase from the $11 billion last year.

On the company’s conference call, CFO Anat Ashkenazi said that most of the investments were towards technical infrastructure, with the largest component being investments in servers and data centers.

“We are confident about the opportunities ahead, and to accelerate our progress, we expect to invest approximately $75 billion in capital expenditures in 2025,” CEO Sundar Pichai said in an earnings release.

Wal Street had been expecting 2025 cap-ex of about $58 billion, so this was a negative surprise and, coupled with the slowing growth in the cloud business, the shares fell about 7%.

Google has remained the king of search for years, but generative AI-powered chatbots have put its market share at risk.  On top of ChatGPT and Meta AI, DeepSeek’s chat model directly competes with Google’s Gemini.

Looking ahead, investors are awaiting updates on the Department of Justice’s antitrust case.  The DOJ has suggested a breakup of the company as a potential remedy.

--Amazon posted fourth-quarter results on Thursday afternoon presented a mixed picture of the business.

Earnings per share were up 86% to $1.86, compared to Wall Street’s consensus estimate of $1.49. Revenue for the quarter was $187.8 billion, against expectations of $187.3 billion, and up 10% on the year.

Amazon’s cloud unit, AWS, saw growth of 19% to $28.8 billion, versus expectations of $28.9 billion.  AWS is closely watched because it’s a profit machine for Amazon.  In the latest quarter, AWS had a 36.9% of operating profit margin, versus 6.6% for the rest of Amazon.  Though AWS represented only 15% of Amazon revenue, it accounted for over half the operating profit.

AMZN’s revenue outlook for the first quarter fell well short of expectations at $153.3 billion at the midpoint, up 7% from 2024, vs. consensus of $158.6 billion, a potential big miss.  The operating profit outlook of $16.0bn is well below current estimates of $18.3 billion.

Amazon also provided guidance for 2025 capital expenditures at around $105 billion, driven by its AI data center buildout. That figure would be a 27% increase from 2024, which was 57% higher than the previous year.

When asked on the earnings call if DeepSeek R1 and the lower AI cost structure would lead to lower revenue for AI cloud services, CEO Andy Jassy said: “We have never seen that to be the case. What happens is companies will spend a lot less per unit of infrastructure, and that is very, very useful for their businesses.  But then they get excited about what else they cold build that they always though was cost prohibitive before, an they usually end up spending a lot more in total on technology once you make the per unit cost less.”

The increased spending and tepid guidance led to the shares falling 4% on Friday.

--Disney reported first quarter earnings on Wednesday that beat expectations as the media and entertainment giant reported a profit in its streaming segment while its parks business faced setbacks in the midst of two back-to-back hurricanes and greater cruise ship investments.

Disney+ subscribers also fell by 700,000 in the quarter as a result of expected user churn amid recent price increases. The company hiked the price of its various subscription plans in mid-October. 

Analysts expected subscribers to decline by 1.41 million.  The company had reported a loss of 600,000 Disney+ subscribers in the year-ago period.  For the current quarter, the company said it expects another “modest decline” in Disney+ subscribers compared to Q1.

Revenue of $24.7 billion beat expectations of $24.57 billion in the quarter and represented a 5% increase from the prior-year period.

Adjusted earnings of $1.76 came in ahead of the $1.42 analysts’ forecast. 

For full-year 2025, Disney reaffirmed guidance of high-single digit EPS growth compared to fiscal 2024.

Across its various segments, the company saw mixed results, highlighted by a 5% decline in operating income for the company’s domestic parks and experiences segment.  This reflected a “9 percentage-point adverse impact to year-over-year growth due to the hurricanes and cruise pre-opening expenses,” the company said in a release.

Disney estimated in November that Hurricanes Helene and Milton would register a hit of about $139 million in the quarter.

The company maintained its prior guidance that operating income at the parks will improve beyond the first quarter, estimating growth between 6% and 8% for full-year 2025.

Operating income at Disney entertainment increased 95% year over year as the company enjoyed a string of theatrical hits at the box office, including “Mufasa” and “Moana 2.”

And on the streaming front, its direct-to-consumer streaming business – which includes Disney+, Hulu, and ESPN+ swung to a profit of $293 million from a loss of $138 million one year ago, ahead of analyst expectations.

--TSA checkpoint numbers vs. 2024

2/6...130 percent of 2024 levels
2/5...84
2/4...72
2/3...120
2/2...106
2/1...81
1/31...125
1/30...137

--Palantir Technologies posted a big beat with its fourth-quarter results on Monday and the shares soared.  Earnings per share were up by 75% to 14 cents, compared with the Street’s consensus of 11 cents, with revenue reaching $828 million, above expectations of $776 million and up 36% on the year.

Commercial revenue grew by 31% to $372 million from 2023, and government revenue grew by 40% to $455 million.

While Palantir is known primarily as a contractor to defense and intelligence agencies, its U.S. commercial business is pushing growth higher. Revenue was up 64% on the year for this end market and the backlog almost doubled.

U.S. government revenue grew by 45% from 2023.

Palantir’s revenue outlook for the first quarter came in well above expectations at $858 million to $862 million, up 36% from 2024, with the Street at $799 million.

A tailwind for Palantir is one that may accrue to many business software companies. “I think one of the obvious lessons of DeepSeek R1 is something that we’ve been saying for the last two years, which is that the models are commoditizing,” CEO Alex Karp said on the earnings call.  “They’re getting better across both closed and open, but they’re also getting more similar, and the price of inference is dropping like a rock.”

Palantir began as a government contractor to help agencies make sense of a flood of data, but it now has a healthy commercial business, making up 46% of companywide revenue in the last 12 months.

Companies, especially large ones, produce a ton of data, and have to make sense of it to understand their businesses better and improve productivity.

--U.S. technology firms have been racing to adopt the latest AI reasoning model from Chinese start-up DeepSeek despite increasing global scrutiny of the Hangzhou-based company, which claims it can develop industry-leading models at a fraction of the usual cost.

Chip designer Nvidia made DeepSeek’s R1 model available to users of its NIM microservice since Thursday, saying the model provides “state-of-the-art reasoning capabilities,” “high inference efficiency,” as well as “leading accuracy” for tasks requiring logical inference, reasoning, mathematics, coding and language understanding.

--Staying on the DeepSeek topic, from Matt Burgess and Lily Hay Newman / WIRED:

“Ever since OpenAI released ChatGPT at the end of 2022, hackers and security researchers have tried to find holes in large language models (LLMs) to get around their guardrails and trick them into spewing out hate speech, bomb-making instructions, propaganda, and other harmful content.  In response, OpenAI and other generative AI developers have refined their system defenses to make it more difficult to carry out these attacks.  But as the Chinese AI platform DeepSeek rockets to prominence with its new, cheaper R1 reasoning model, its safety protections appear to be far behind those of its established competitors.

“(Security researchers) from Cisco and the University of Pennsylvania (recently published) findings showing that, when tested with 50 malicious prompts designed to elicit toxic content, DeepSeek’s model did not detect or block a single one.  In other words, the researchers say they were shocked to achieve a “100 percent attack success rate.”

“The findings are part of a growing body of evidence that DeepSeek’s safety and security measures may not match those of other tech companies developing LLMs.  DeepSeek’s censorship of subjects deemed sensitive by China’s government has also been easily bypassed.”

--Well, staying on topic, DeepSeek is raising national security and data privacy concerns for the U.S., not unlike those that spurred a ban on TikTok last month.

The concern revolves around the ability of the Chinese government to access and manipulate the platform’s data.

“The privacy policy explicitly says that it collects information and secures it on servers in China.  Any data that you’re putting into DeepSeek, that is through the app or through a DeepSeek model available on the internet, that is collected goes to China,” said Oliver Roberts, co-head of the AI Practice Group at law firm Holtzman Vogel.

Australia has banned DeepSeek from being installed on government phones, ditto Taiwan and Italy and some U.S. agencies, with further congressional action expected in Washington in the coming weeks.

--Tesla saw sales of China-made electric vehicles fall 11.5% in January from a year earlier to 63,238 units, according to data from the China Passenger Car Association on Friday.

Deliveries of China-made Model 3 and Model Y vehicles were down 32.6% from December.

Chinese rival BYD, with its series of EVs and plug-in hybrids, sold 296,446 passenger vehicles last month, a 47.5% increase on the year, but a 41.8% decline from the prior month.

--Advanced Micro Devices forecast first-quarter revenue above Street estimates on Tuesday, betting on strong demand for its AI chips as tech heavyweights build infrastructure to dominate the emerging technology. 

The company expects revenue of about $7.1 billion, plus or minus $300 million in the first quarter, with consensus at $7bn.  For the fourth quarter revenue was $7.66 billion, compared with expectations of $7.53 billion.  Adjusted EPS of $1.09 beat consensus of $1.08.

But AMD shares fell a whopping 10% on soft datacenter revenue of $3.86bn, which was below the $4.14bn estimate.

The deceleration in AMD’s artificial intelligence business took the shine off share gains in the market for personal computing.

On a conference call with analysts and investors, CEO Lisa Sue said AI models such as DeepSeek and AI infrastructure buildout announcements like Stargate are highlights showing the “rapid pace of AI innovation across every layer of the stack, from silicon to algorithms.” All these developments will drive more AI compute demand, providing AMD with growth opportunities, she said.

--Nissan Motor Co. is pulling out of its deal with Honda Motor Co. to combine both brands and regain global competitiveness, the Nikkei newspaper reported Wednesday.

The Japanese carmakers had been negotiating the terms of a tie-up under which Honda would offer Nissan a lifeline by absorbing its struggling rival and bring the two brands under a single holding company in 2026.

Honda and Nissan are still discussing various options, including the possibility of withdrawing from the deal, both companies said in separate statements filed with the Tokyo Stock Exchange.

--Ford Motor delivered a solid fourth quarter, but the outlook for 2025 was a big disappointment and the shares fell.

For Q4, Ford reported an operating profit of $2.1 billion from sales of $48.2 billion, beating the Street on both.  For the full year, Ford generated about $185 billion in sales, selling 4.4 million vehicles. Revenue rose 5% year over year, vehicle sales rose about 1%.

But for 2025, Ford expects operating profit to land between $7 billion and $8.5 billion. That isn’t enough.  Wall Street currently projects about $9.3 billion.  Ford earned $10.2 billion in 2024.

Ford’s guidance doesn’t include anything for changing policies, such as tariffs, which could significantly raise costs for consumers and auto companies.

Ford’s electric vehicle business continues to struggle, losing $1.4 billion in the fourth quarter and $5.1 billion for the full year.

CEO Jim Farley then said on the earnings call: “There’s no question that tariffs at (the) 25% level from Canada, Mexico, if they’re protracted, would have a huge impact on our industry, with billions of dollars of industry profits wiped out and adverse effect on U.S. jobs as well as the entire value system in our industry.  Tariffs would also mean higher prices for customers.”

--Share of chipmaker Qualcomm fell 4% on the heels of a weak outlook for its patent licensing business that outweighed strong expectations for quarterly sales and profit.

The company said its licensing business, which accounted for 15% of its revenue in the reported quarter, would see no sales growth this year following the expiration of its agreement with Huawei Technologies.  But Qualcomm has secured license agreements with two other Chinese smartphone firms.

The company, one of the biggest makers of processors that power smartphones – beat fiscal first-quarter results on strong demand for AI features in mobile devices.

The company’s performance is often viewed as an indicator of overall end-market demand in the smartphone industry.

The midpoint of the second-quarter sales forecast of $10.75 billion and an adjusted profit of $2.80 per share, came in ahead of expectations, but it’s the uncertainty over the smartphone industry overall that caused anxiety among investors.

--Dow Jones member Merck topped Wall Street’s fourth-quarter expectations Tuesday, but lighter-than-expected 2025 sales guidance pressured the shares, which fell heavily.

Merck expects $64.1 billion to $65.6 billion in sales this year, with the top side of the outlook missing forecasts for $67.1 billion.  Similarly, the pharmaceutical company projects $8.88 to $9.03 per share in adjusted earnings, below the Street’s call for $9.16.

Sales climbed 7% to $15.62 billion, topping consensus, and adjusted EPS of $1.72 per share beat projections by 11 cents.

Revenue from Merck’s bread-and-butter cancer drug, Keytruda, grew 19% to $7.84 billion, but sales of Gardasil, a human papillomavirus vaccine, generated $1.55 billion, down 17%.

For 2024, Keytruda represented $29.5 billion of $64 billion in sales, or 45%.  It faces patent expiration in 2028.

--Eli Lilly shares rose Thursday after the drugmaker posted quarterly earnings that beat Wall Street expectations, and the company issued upbeat 2025 guidance.

Fourth-quarter adjusted earnings came in at $5.32 a share, above estimates of $5.01.  The drugmaker said it sees 2025 adjusted EPS in the range of $22.50 to $24, with current consensus at about $22.75.

Lilly also confirmed quarterly sales for its widely popular diabetes and weight-loss drugs: Mounjaro sales were $3.5 billion in the quarter and Zepbound sales came in at $1.9 billion.

--The drugmaker across the street from moi here in Summit, NJ, Bristol Myers Squibb, reported fourth-quarter results that soundly beat the Street, but management’s guidance for the full 2025 fiscal year was short of expectations, sending the shares down some, though the stock has performed well the past six months.

“It’s really a tale of two trends,” Bristol CEO Chris Boerner told Barron’s, explaining the 2025 outlook.  “Our guidance reflects the near-term impact of generics across multiple products, but at the same time we’ve got good momentum in the growth portfolio.”

Fourth-quarter revenue was $12.3 billion, better than the $11.6bn analysts expected, with adjusted earnings of $1.67 per share, beating consensus for $1.46.

But Bristol said it expects revenue of around $45.5 billion in 2025, below current estimates, with earnings between $6.44 and $6.85 per share, while the Street is at $6.91.

Multiple-myeloma treatment Revlimid, which has had some generic competitors in the U.S. since 2022, could see sales fall to between $2 billion and $2.5 billion in 2025 from $5.8 billion in 2024, the company said.

In a press release, Bristol said that it expects revenue from its older drugs to fall by approximately 18% to 20% in 2025 due to the impact of generics.

But investor enthusiasm in recent months has focused on Cobenfy, a schizophrenia treatment the FDA approved in late September.  Sales were $10 million in the fourth quarter, far exceeding expectations, and the Street sees revenue from the drug hitting $2.5 billion in 2029.  Employees walking across the street to the Dunkin’ Donuts in my building don’t seem as jittery these days.

--State Farm on Monday asked California for permission to hike insurance rates by an average of 22%.

In the wake of the Los Angeles-area wildfires, the insurer said, it has already paid out more than $1 billion to customers, after receiving more than 8,700 claims.  And because insurance premiums have been kept artificially low for many years, it was unable to collect the premium dollars it needed.

“Insurance will cost more for customers in California going forward because the risk is greater in California,” the company said in a press release.  “Higher risks should pay more for insurance than lower risk.  Over the last 9 years, the lack of alignment between price and risk means that for every $1.00 collected in premium, State Farm General has spent $1.26, resulting in over $5 billion in cumulative underwriting losses.”

--Uber Technologies reported weaker-than-expected fourth-quarter earnings and operating income, overshadowing steady bookings growth.   Shares declined in response.

Adjusted earning were $1.84 billion, just shy of the Street’s forecast, while income from operations for the quarter was $770 million, well below the average estimate of $1.2 billion.

Gross bookings, which includes ride hails, delivery orders and driver and merchant earnings but not tips, grew 18% to $44.2 billion in the last three months of 2024.  For the current quarter, it forecast bookings of $42 billion to $43.5 billion.

Uber’s U.S. flagship rideshare business, which accounts for more than half of its profitability, has lately been weighed down by rising insurance prices. Executives have blamed these expenses for slowing ride demand, saying it’s had to pass higher costs on to consumers in certain markets such as New Jersey, Southern California and parts of Florida.

The company has gone on the offensive in New York, filing a racketeering lawsuit against a group of law firms, doctors and clinics it claims staged fake car accidents to take advantage of insurance policies.

--PepsiCo shares fell after the company forecast annual profit below expectations and missed quarterly revenue estimates on Tuesday, as the Quaker Foods maker faces weakening demand for its sodas and snacks such as Lay’s in the U.S., its largest market.

Americans are still paring back spending on soft drinks and salty treats to save their dollars for essential purchases, forcing PepsiCo to tap promotions for volume growth after several quarters of slowdown wrought by price hikes.

The target is to bring back consumers leading towards smaller pack sizes of picking up cheaper alternatives from retail aisles following a post-pandemic increase in prices of PepsiCo’s products.

“We expect our North America performance to gradually improve as the year progresses, and our commercial activities take hold,” executives said in the company’s prepared remarks.

PepsiCo’s largest unit, North American beverages, reported a 1% increase in organic revenue in the fourth quarter, compared with a 7% rise a year ago.  Frito-Lay North America, its second-largest unit, posted a 0.5% fall, compared with 9% growth last year.

Quarterly net revenue fell 0.2% to $27.78 billion, missing estimates, though adjusted EPS of $1.96 per share were above expectations.

--Tyson Foods raised its annual sales forecast on Monday as robust demand for its beef and chicken products helped the meat packer beat estimates for first-quarter results, sending its shares rising.

The company expects fiscal 2025 sales to be flat to up 1%, compared with its prior forecast of flat to down 1%.

Tyson also raised its annual adjusted operating income forecast to between $1.9 billion and $2.3 billion, from the previous range of $1.8bn to $2.2bn, driven by lower animal feed costs and efforts to cut costs and streamline operations.

A gradual recovery in restaurant traffic is helping revive Tyson’s wholesale supply to fast-food and fine-dining chains, while sustained eat-at-home trends have supported demand for its meat products.

Sales in Tyson’s beef segment, its largest, were up 6.2% in the quarter ended Dec. 28, while prices were up 0.6% and volumes rose 5.6%. Chicken volumes rose 1.5%.

The company’s net sales rose 2.3% to $13.62 billion in the fiscal first quarter, with the Street at $13.44 billion.  Adjusted EPS came in at $1.14 per share, vs. consensus of 88 cents.

--Chipotle shares fell a bit as the company had to fight off multiple headwinds to meet expectations for its fourth quarter.

The burrito chain contended with inclement weather and tough comparisons to its second quarter, where its chicken al pastor boosted results.  Same store sales for the fourth quarter and full-year earnings jumped 5.4% and 7.4%, respectively.

New CEO Scott Boatwright, who reported to former CEO Brian Niccol (now at Starbucks) as COO since 2017, called it “another outstanding year” where the company delivered “strong transaction” driven sales-growth each quarter and expanded margins.

For fiscal 2025, the company expects same-store sales to increase in the low to mid-single digit range.  It also plans to open between 315 to 345 locations. The chain has over 3,700 restaurants and aims to reach 7,000 in North America.

Adjusted EPS of $0.25 and revenue of $2.85 billion was in line with consensus, with same-store growth a bit below.

Any tariffs on Mexico could impact the cost of avocados, which make up about 10% of Chipotle’s cost of goods, with some analysts estimating Chipotle imports 85% of its avocados from Mexico.

--Workday is cutting around 1,750 jobs, or 8.5% of its workforce.  CEO Carl Eschenbach said the layoffs were necessary for ongoing growth efforts at the company – including a particular focus on AI investments.

The maker of human resources software also disclosed that it expects to exit certain office space, but didn’t specify a timeline or which locations may be impacted.

--Cosmetics giant Estee Lauder announced it will cut up to 7,000 jobs and warned of a steep sales drop to start the new year.  The stock plunged 15% on Tuesday as a result, with the company warning it expects sales to fall 10% to 12% for the quarter that ends March 31.

--Kohl’s has slashed about 10% of its corporate workforce.  The move comes after the struggling retailer announced it would be closing 27 “underperforming” stores in 15 states by April.  That leaves about 1,120 Kohl’s locations in operation.

Kohl’s said in November that it expects 2024 sales to be down 7% to 8%.  The company reports later this month.

--Ferrari stock zoomed higher after the Italian luxury automaker reported results that topped expectations and guidance that surged past investor expectations.  In addition, the company’s well-heeled clientele likely shields the company from tariff pressures coming from the Trump administration.

Global sales for the fourth quarter rose 14% to $1.8 billion from a year ago, topping estimates, with adjusted earnings at $2.22, also topping the Street.  For 2025, the automaker hiked guidance.

Ferrari earned $115,000 profit per car sold in the quarter.

--Waffle House announced it added a 50-cent surcharge for every egg in a customer’s order, the diner chain saying the fee is temporary and is a response to a “dramatic increase in egg prices” caused by bird flu outbreaks.

“While we hope these price fluctuations will be short-lived, we cannot predict how long this shortage will last,” a statement from the company read.

The price of U.S. wholesale eggs hit an all-time high in December, with the virus wiping out more than 20 million chickens in the U.S. last quarter, according to data from the Department of Agriculture, the highest toll since the beginning of the outbreak in 2022.

Waffle House says its 2,100 locations across the United States serve 272 million eggs every year.

The Department of Agriculture projects that egg prices will rise about 20% this year, while overall food prices are only forecast to rise by 2.2%.

Recent discoveries of bird flu outbreaks include a duck farm in Merced County, California, and a duck farm in Long Island, New York.

[Separately, data from the Department of Agriculture shows 32 new confirmed cases of H5N1 infections among dairy cows in California the past month.]

--Lara Trump, Donald Trump’s daughter-in-law and former co-chair of the Republican Party, will begin hosting a new weekend show on Fox News on Feb. 22.

“My View with Lara Trump,” expected to air on Saturdays at 9 p.m. Eastern, is described by the network as a show focused on “the return of common sense to all corners of American life,” echoing a term, “common sense,” that the Trump administration has frequently deployed.

There is no precedent for the close relative of a sitting president to host a high-profile show on a major television news channel.

Jenna Bush Hager joined NBC’s “Today” in 2009, a few months after her father, George W. Bush, finished his second term.

Fox News recorded its highest-rated January since its founding in 1996.

Foreign Affairs

Russia-Ukraine: We had a series of attacks on Ukraine over the weekend.  At least 18 people were killed following a heavy Russian bombardment using missiles, drones and aerial bombs, Ukrainian authorities said.

The assault followed a series of drone strikes on Russian oil infrastructure claimed by Ukraine earlier this week.  In a statement, Russia’s defense ministry said it targeted gas and energy infrastructure supporting Ukraine’s defense industry.

A Russian ballistic missile strike hit the historic city center of Odesa on Ukraine’s Black Sea coast, damaging the city’s opera and ballet theater and high-end hotel, hardly energy infrastructure.   

And then a Russian missile strike on an apartment block in the city of Poltava killed at least 14 people, including children, Saturday. 

Ukrainian President Volodymyr Zelensky said: “Each such terrorist attack proves that we need more support in defending ourselves against Russian terror.  Every air defense system, every anti-missile weapon, saves lives,” he wrote on Telegram.

The Ukrainian air force said Russia had launched 123 drones and more than 40 missiles, air defense units shooting down 45 of the drones and redirecting 61.  The air force provided no figures on how many missiles were intercepted.

--North Korean ballistic missiles appear to be getting more accurate, Ukrainian officials told Reuters.  Since December, North Korean-made missiles launched by Russian forces against Ukraine have been more accurate than previous salvos, landing within 50 to 100 meters of their targets.  This “suggests North Korea is successfully using the battlefield to test its missile technology, the sources said.”

--President Trump said Monday he wants to strike a deal with Ukraine whereby Kyiv would supply the United States with rare earth minerals in exchange for American aid, offering the clearest sign yet of his transactional approach to supporting the war-torn nation.

“We’re looking to do a deal with Ukraine, where they’re going to secure what we’re giving them with their rare earths and other things,” Trump said from the Oval Office.  “We want a guarantee.”

Ukraine is indeed rich in rare earth minerals such as lithium, uranium and titanium, which are key to manufacturing a broad range of products including electric vehicles and wind turbines, neither of which Trump supports.

But Trump’s proposal came as the government halted foreign development aid worldwide, forcing many humanitarian organizations in Ukraine to suspend operations, while scrambling for alternative financing for critical programs, including support for its battered energy grid and war veterans.

President Zelensky said U.S. military assistance provided by the Biden administration had not been affected by the freeze on foreign aid.  But Trump has balked at sending further weapons and equipment, arguing that it costs the U.S. too much.

--The Kremlin said Wednesday that contacts between the U.S. and Russia had taken place and recently intensified, the first time Moscow has indicated the two countries are discussing a potential plan to end fighting in Ukraine.

“There is indeed contact between certain government agencies and they have intensified recently,” Kremlin spokesman Dmitry Peskov told journalists in response to a question about Ukraine negotiations.

Peskov’s remarks come as both countries signal an increased willingness to talk to the other to halt the conflict.  The Kremlin has repeatedly called Zelensky illegitimate as president, but Peskov said Moscow was ready to talk to him for the sake of negotiations. Zelensky, likewise, said in an interview Tuesday that he was ready to sit down for direct talks with Putin.

Trump has appeared increasingly impatient with Putin, and he and his advisers have been floating plans to force Russia to concessions with heightened sanctions or undermining the price of Russia’s main export, oil.

Russia’s Foreign Ministry then said on Thursday that the United States needed to formulate its policy on ending the conflict and that Moscow would then base its own position on specific U.S. action.

Russia’s RIA state news agency quoted a senior lawmaker as saying that preparations for a meeting between Putin and Trump were at an “advanced stage” however.

Israel-Gaza: Hamas released three more hostages and Israel freed a group of Palestinian prisoners last Saturday as part of an ongoing cease-fire deal, in a quick process that was a stark contrast to a chaotic and drawn-out transfer earlier in the week.  Among those released was Keith Siegel, 65, an American Israeli.

Israel then released about 180 Palestinians from custody.

The exchange was the fourth in a multiphase cease-fire deal that Israel and Hamas agreed to last month.  Under the deal, Hamas pledged to free at least 33 of the 97 remaining hostages over the first six weeks in exchange for more than 1,500 Palestinians jailed by Israel.

Friday, Hamas released the names of three more hostages that are to be released tomorrow.

--The Israeli military blew up buildings in the Jenin refugee camp in the occupied West Bank on Sunday in an operation that the Palestinian state news agency said leveled around 20 buildings.

Palestinian President Mahmoud Abbas in a statement urged the United States to end Israel’s military operation and requested an emergency meeting of the UN Security Council “to stop the ongoing Israeli aggression against the Palestinian people.”

The Israeli military said 23 structures had been “dismantled” in the northern West Bank after explosives laboratories, weapons and observation posts were uncovered.

Syria: Ahmed al-Shara, Syria’s newly appointed interim president, landed in Saudi Arabia this week to forge a partnership with the oil-rich Gulf nation.  He met with the kingdom’s crown prince, Mohammed bin Salman, according to Syrian and Saudi state news media.

The trip reflected Syria’s political shift away from Iran, a key ally of its longtime dictator Bashar al-Assad.  For the Saudis, it’s an opening to reassert influence in both Syria and Lebanon, two countries where the kingdom had once vied for sway and largely lost out to Iran.

Meanwhile, 15 people, including 14 women, were killed in a car bomb attack on a vehicle transporting agricultural workers in northern Syria.  Another 15 women were wounded in the blast on the outskirts of the city of Manbij, east of Aleppo, according to the Syria Civil Defense (or White Helmets).

There was no immediate claim for responsibility.  It was the second deadly car bomb attack in the area in three days, the earlier incident killing four.

Random Musings

--Presidential approval rating....

Gallup: 47% approve of President Trump’s job performance, while 48% disapprove.  46% of independents approve (Jan. 21-27).

Rasmussen: 51% approve, 45% disapprove (Feb. 7).

--In the first Quinnipiac University national poll of registered voters, conducted Jan. 23-27, 46% approve of President Trump’s job performance, while 43% disapprove and 11% had no opinion.  In a Quinnipiac poll Jan. 26, 2017, 36% approved of the job he was doing, with 44% disapproving.

Separately, a majority of voters (60%) approve of sending U.S. troops to the southern border with Mexico, while 36% disapprove.

On the topic of Elon Musk, voters 53-39 percent disapprove of him playing a prominent role in the Trump administration. [Democrats (90-6) and independents (56-36) disapprove, while Republicans (73-19) approve of Musk’s role.]

Voters’ views of the Democratic and Republican parties set new records since Quinnipiac began asking voters about them in November 2008.

Only 31% of voters have a favorable opinion of the Democratic Party, while 57% have an unfavorable opinion.  This is the highest percentage of voters having an unfavorable opinion of the Democrats since Quinnipiac began asking the question.

As for the Republicans, 43% have a favorable opinion of the party, while 45% have an unfavorable opinion, the highest percentage of voters having a favorable opinion of the GOP in the poll’s history.

Meanwhile, voters by a 57-37 margin disapprove of Trump’s actions when he pardoned or commuted the sentences of more than 1,500 people who were involved in the Jan. 6, 2021, attack on the U.S. Capitol.  [Democrats (96-3) and independents (60-32) disapprove of Trump’s actions, while Republicans (74-19) approve.]

Voters by a 62-31 margin disapprove of former President Biden issuing preemptive pardons for five members of his family who haven’t been charged with any crimes. [Independents disapprove 63-28.]

--The Senate Finance Committee voted along party lines, 14-13, to forward the nomination of Robert F. Kennedy Jr. to the full Senate, setting up a vote on whether RFK, a prominent critic of vaccines, should become the nation’s next health secretary.  Louisiana Sen. Bill Cassidy, a Republican and physician, could have squelched the nomination and had been on the fence, but he cast the deciding vote.

--Pam Bondi was confirmed by the Senate Tuesday to lead the Justice Department.  Bondi’s nomination was approved 54-46, with all but one Democrat – John Fetterman of Pennsylvania – voting against her confirmation.

--The Senate confirmed Chris Wright, a fracking executive, to be President Trump’s energy secretary.  The vote was 59-38, with seven Democrats and one independent, who caucuses with Democrats, crossing the aisle.

At the same time, the U.S. Interior Department under the direction of new Secretary Doug Burgum, unveiled a suite of orders aimed at carrying out Trump’s agenda to maximize domestic energy and minerals production and slash red tape.

--The Senate confirmed Russell Vought as White House budget director Thursday night by a party-line 53-47 margin.

Democrats had warned Vought was Trump’s “most dangerous nominee,” having played an influential role in Trump’s effort to remake the federal government as one of the architects of Project 2025, a conservative blueprint for Trump’s second term.

--The Trump administration, in an unprecedented move, announced late last Friday it would remove four media organizations from their dedicated office spaces in the Pentagon, citing a desire to make room for others.

Being removed are the New York Times, National Public Radio, NBC News and Politico.  In their place will be the New York Post, One America News Network, Breitbart News Network and HuffPost News.

I’m biting my tongue.

--The U.S. Army identified the female soldier in the doomed Black Hawk helicopter which crashed into an American Airlines flight last week at Reagan National.

Capt. Rebecca M. Lobach, of Durham, North Carolina, was assigned to the 12th Aviation Battalion in Fort Belvoir, Virginia, having served since July 2019, the Army said in a statement.

The Army had initially refused to identify Lobach at the request of her family.

The decision to release her name came “at the request of and in coordination with the family,” according to the statement.

“We are devastated by the loss of our beloved Rebecca. She was a bright star in all our lives,” her family said in a statement released by the Army.  “Rebecca was a warrior and would not hesitate to defend her country in battle.”

Following the tragic accident, an innocent female pilot was destroyed on social media, having been falsely identified, and this is what Capt. Lobach’s family was worried about...to have their daughter deceased and the victim of vicious and cruel behavior online.

Army officials have said that Lobach was undergoing an annual proficiency evaluation that required a mission at night.  Before the fatal mission, she had completed 450 flight hours as a Black Hawk pilot, her family said, and received a certification as a pilot-in-command after testing by the most senior pilots in her unit.

In the investigation into the crash, radio transmissions showed that air traffic controllers twice alerted the crew of the helicopter to the presence of an inbound American Airlines jet, with the first warning issued two minutes before the aircraft collided.

The Washington Post reported that while the quality makes it difficult to hear the audio recordings, aviation experts who reviewed the communication said that a member of the Black Hawk crew responded each time by saying that he could see the plane and requested “visual separation,” meaning the helicopter crew would maintain a safe distance.  Each time, the request was approved.

The radio transmissions indicate that the helicopter had more than enough time to take action to avoid the plane, according to three aviation experts.  That the helicopter crew did not suggests that the crew may have seen something else – such as another aircraft in the area – and not the American flight flagged twice by the air traffic controller.

The National Transportation Safety Board then confirmed that the Black Hawk was flying too high when it crashed into the American Airlines jet, 300 feet, when the maximum altitude for helicopters in the area is 200 feet.  [Actually, the air traffic control radar is rounded to the nearest 100 feet, the NTSB said – meaning the helicopter could have been anywhere between 251 feet and 349 feet of elevation.]

We also learned from the NTSB that a key safety system had been turned off on the Black Hawk.

--That was an awful scene Friday night in Philadelphia, as six people on board a medical transport jet, all from Mexico, were killed in a horrific crash in northeast Philly.  Seeing as the Lear jet basically went straight down into a very crowded neighborhood and commercial district shortly after takeoff from Northeast Philadelphia Airport, we all were amazed just one person on the ground also perished, though at least 19 were injured.

--President Trump signed an executive order yesterday banning trans athletes from competing in women’s sports.  Trump said he will push the International Olympic Committee to make a similar rule.  In December, NCAA president Charlie Baker said he believed there are fewer than 10 transgender athletes among the 510,000 competing at member schools.

--California was battered by a series of atmospheric rivers, bringing prolific mountain snows and soaking rains.  Some parts of the Sierra Nevada received over 8 feet of snow.

With the wildfires in the Los Angeles area now fully contained and fire season over, at least for a spell, you know those water releases President Trump has bragged about?

From the Los Angeles Times:

“Federal records show that more than 2 billion gallons were released from the reservoirs over three days. The action occurred after Trump’s visit to fire-devastated Los Angeles, when he pledged to ‘open up the valves’ to bring the region more water – even though reservoirs that supply Southern California’s cities were at record levels (and remain so).”

The three-day water dump “has led to criticism from some residents, water managers and members of Congress, who say the unusual discharge of water seems to have been intended to make a political statement – to demonstrate that Trump has the authority to order federal dams or pumps to send more water flowing as he directs.

An Army Corps of Engineers spokesperson told the Times that water was released “to ensure California has water available to respond to the wildfires.”

State officials and experts say that’s not how it works.

Peter Gleick, a water scientist and senior fellow at the Pacific Institute, said Trump’s actions amounted to wasting billions of gallons of water “for a political photo op and a social media post.”

“(The water will) not be used or usable for firefighting, not be used by farmers since this isn’t the irrigation season, and won’t be saved for the dry season, which is coming,” Gleick told the Times.

And despite Trump’s claims that the “beautiful, clean water” will flow to farmers in desperate need of it, Dan Vink, former general manager of the Lower Tule River Irrigation District, told the Times that the president’s order will mean less water when those fields need it the most.

“This is going to hurt farmers,” Vink said.  “This takes water out of their summer irrigation portfolio.”

--The Greek island of Santorini has experienced “thousands” of earthquakes this week, many in the 4.0 magnitude range, one Thursday 5.2, and more than 11,000 people have evacuated, with experts not knowing when this period of “seismic crisis” on the popular tourist island might end.

Authorities are preparing for a potential larger quake, over 6.0, which could cause landslides on parts of the island.

--The NYPD said shootings in Gotham were down 21% in January to the lowest level in 3 decades.

The drop in shootings was bolstered by a five-day streak with no shooting victims that coincided with a brutal cold snap, officials said.

Which is why you seldom hear of violence up at the North Pole, or Antarctica, for that matter, save for the occasional leopard seal incident.

--Speaking of the cold, on Sunday, Punxsutawney Phil saw his shadow, predicting six more weeks of winter.

But P-Phil, as he’s known in the ‘hood, has a really lousy track record.  In fact, as USA TODAY reports, while Phil has been making forecasts since 1886, according to the National Oceanic and Atmospheric Administration, he only has a 35% overall accuracy rating.

So which groundhog, nationwide, has the most accurate forecasting record? 

Staten Island Chuck (New York) with a sterling 85% record, and the Chuckster emerged from his habitat at the Staten Island Zoo on Sunday and did not see his shadow, predicting an early spring.

Of course it was 11 years ago that then-New York City Mayor Bill de Blasio famously dropped the Staten Island Chuck of that day, and the dude later died of internal injuries.  The mayor should have been deported.

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

God bless America.

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Gold $2885...another all-time high
Oil $71.00

Bitcoin: $95,700 [4:00 PM ET, Friday]

Regular Gas: $3.14; Diesel: $3.66 [$3.14 - $3.94 yr. ago]

Returns for the week 2/3-2/7

Dow Jones  -0.5%  [44303]
S&P 500  -0.2%  [6025]
S&P MidCap  -1.0%
Russell 2000  -0.4%
Nasdaq  -0.5%  [19523]

Returns for the period 1/1/25-2/7/25

Dow Jones  +4.1%
S&P 500  +2.5%
S&P MidCap  +2.7%
Russell 2000  +2.2%
Nasdaq  +1.1%

Bulls 47.5
Bears 29.5...no update this week....

Hang in there.  Enjoy The Game.

Brian Trumbore

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