Week in Review

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Week in Review

07/06/2024

For the week 7/1-7/5

[Posted 4:30 PM ET, Friday]

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Edition 1,316

Game, Set, Match...Donald Trump and the Republican Party Will Roll in November....unless the Democrats make a big move, soon....

The Supreme Court, in a highly anticipated and critical decision, ruled on Monday that former President Donald Trump is entitled to some level of immunity from prosecution, a decision that in all likelihood delays the trial of the case against him on charges of plotting to subvert the 2020 election. The vote was 6 to 3, divided along party lines.

Trump has contended that he was entitled to absolute immunity from the charges, relying on a prior Supreme Court precedent that recognized such immunity in civil cases for actions taken by presidents within the “outer perimeter” of their official responsibilities.  Lower courts rejected Trump’s claim, but the Supreme Court’s ruling may delay the case enough so that Trump can make it go away should he win in November.

The justices said Trump is immune from prosecution for official acts taken during his presidency but that there was a crucial distinction between official and private conduct. The case goes back to the lower court, which has to decide which actions Trump took were in an official or private capacity.

The majority found the immunity they recognized extends to the “outer perimeter” of a president’s official responsibilities, setting what appears to be a high bar for determining what conduct could potentially be prosecuted.

“In dividing official from unofficial conduct, courts may not inquire into the president’s motives,” Chief Justice John Roberts wrote.  “Nor may courts deem an action unofficial merely because it allegedly violates a generally applicable law.”

“We conclude that under our constitutional structure of separated powers, the nature of presidential power requires that a former president have some immunity from criminal prosecution for official acts during his tenure in office,” Justice Roberts wrote. “At least with respect to the president’s exercise of his core constitutional powers, this immunity must be absolute.”

“The President enjoys no immunity for his unofficial acts, and not everything the President does is official.  The President is not above the law,” Roberts also wrote.

The opinion found Trump is “absolutely immune” from prosecution for alleged conduct involving discussions with the Justice Department.

Trump is also “at least presumptively immune” from allegations that he tried to pressure Vice President Mike Pence to reject certification of the vote, Roberts wrote.

The majority did reject Trump’s arguments that the indictment should be dismissed, and that impeachment is a necessary step in the enforcement of the law.

Justice Sonya Sotomayor, writing for the two other liberal justices, said in a strongly worded dissent that the court’s ruling “makes a mockery of the principle, foundational to our Constitution and system of Government, that no man is above the law.”

“With fear for our democracy, I dissent,” Sotomayor wrote.

“When he uses his official powers in any way, under the majority’s reasoning, he now will be insulated from criminal prosecution.  Orders the Navy’s Seal Team 6 to assassinate a political rival?  Immune.  Organizes a military coup to hold onto power? Immune.  Takes a bribe in exchange for a pardon? Immune.  Immune, immune, immune,” Sotomayor wrote.

“Let the President violate the law, let him exploit the trappings of his office for personal gain, let him use his power for evil ends. Because if he knew that he may one day face liability for breaking the law, he might not be as bold and fearless as we would like him to be. That is the majority’s message today,” Sotomayor also wrote.  “Even if these nightmare scenarios never play out, and I pray they never do, the damage has been done.  The relationship between the President and the people he serves has shifted irrevocably.  In every use of official power, the President is now a king above the law.”

Trump faces three charges of conspiracy and one count of obstructing an official proceeding, all related to his efforts to overturn the 2020 result.  It was back last August that special counsel Jack Smith, in one of two federal criminal cases against him, the other the government documents case related to the FBI raid on Mar-a-Lago, leveled the conspiracy charges.

The trial judge, Tanya Chutkan of the Federal District Court in Washington, denied Mr. Trump’s immunity request in December. “Whatever immunities a sitting president may enjoy, the United States has only one chief executive at a time, and that position does not confer a lifelong ‘get-out-of-jail-free’ pass,” she wrote.

A three-judge panel of the U.S. Court of Appeals for the District of Columbia Circuit agreed in February, saying that “any executive immunity that may have protected him while he served as president no longer protects him against this prosecution.”

Trump posted on social media shortly after the decision was released: “BIG WIN FOR OUR CONSTITUTION AND DEMOCRACY.  PROUD TO BE AN AMERICAN!”

President Biden, in a brief televised address at the White House on Monday night, said the Supreme Court decision on immunity meant “there are virtually no limits” on a president’s actions. “This is a fundamentally new principle.  And it’s a dangerous precedent.”

He said the public had a “right to know” Trump’s role in the Jan. 6, 2021, insurrection, though a trial probably will not take place before the November election.

“I know I will respect the limits of presidential power as I have for 3 ½ years, but any president, including Donald Trump, will now be free to ignore the law,” he said.

Two opinions....

Editorial / Washington Post

“ ‘The Court gives former President Trump all the immunity he asked for and more,’ Justice Sonia Sotomayor declared in her dissent... The decision virtually guarantees that special counsel Jack Smith’s Jan. 6 case against the former president won’t move to trial before the election.  Yet the implications are much bigger than Mr. Trump.  More important – and more alarming – are the potential long-term consequences that could well persist after Mr. Trump is gone.

“All six of the court’s conservatives ruled on Monday that the president is entitled to absolute immunity for official acts involving his core responsibilities – pardons, say, or recognizing foreign nations or removing appointed officers.  Moreover, he’s entitled to what’s known as presumptive immunity for official acts that aren’t related to those core responsibilities.  This presumption can be overcome only if a prosecutor can show that holding him accountable won’t intrude on the executive branch’s ability to function – as Chief Justice John G. Roberts Jr. put it, writing for the court, that it wouldn’t prevent the president from taking the ‘bold and unhesitating action’ essential to his job.  Liability isn’t spared for unofficial, or private, conduct.  But that’s not terribly comforting. While the commander in chief embezzling money or even falsifying business records to cover up an affair is unseemly, these are hardly threats to democracy....

“Was Richard M. Nixon right, then, when he said, ‘When the president does it, that means it’s not illegal?’  Well, not quite.  Grave warnings aside, the sky has not yet fallen, even if a sizable chunk of it might be missing.  Ex-presidents can still conceivably be punished for those official acts that don’t relate to a president’s core responsibilities – if prosecutors can convincingly argue that punishment wouldn’t hinder a vigorous executive branch.  Those who commit misdeeds on the president’s behalf – Seal Team 6, in that one hypothetical – could be criminally liable for their actions.  Courts could also continue to order the executive branch to halt improper activity, as they do regularly, regardless of whether the president is locked up after leaving office for the misconduct.

“So it is up to the courts, including the highest in the land, to ensure the nightmare scenarios the critics have dreamed up do not manifest. The trouble is this week’s opinion invites presidents to push the boundaries.”

Editorial / Wall Street Journal

“Partisans on the left and right are reacting to Monday’s Supreme Court decision on presidential immunity based on how it affects the fate of Donald Trump.  That’s a blinkered view that ignores the long-run implications for the American republic.  The 6-3 Court majority focuses on the institution of the Presidency, and the ability of all Presidents – not merely the last one – to act in the national interest free from prosecution for official acts.

“The opinion by Chief Justice John Roberts in Trump v. U.S. is a landmark on executive power. It was also predictable based on the Court’s 1982 opinion in Nixon v. Fitzgerald, which said a President has absolute immunity from civil suits for acts within the ‘outer perimeter’ of his duties.  The Court ruled on Monday that the threat of criminal prosecution for official acts would be even more debilitating to executive power.

“ ‘A President inclined to take one course of action based on the public interest may instead opt for another, apprehensive that criminal penalties may befall him upon his departure from office,’ writes the Chief for the six conservative Justices.  ‘And if a former President’s official acts are routinely subjected to scrutiny in criminal prosecutions, ‘the independence of the Executive Branch’ may be significantly undermined.’....

“The Court properly reads the Constitution to offer absolute immunity for actions within the core plenary powers of the executive.  This means that a President can’t be prosecuted for actions related to national security, intelligence, or foreign policy.

“He can’t be prosecuted, for example, for deaths that occur from ordering a drone strike.  And he can’t be prosecuted for his communications with the Attorney General on his investigative decisions.  This disqualifies part of special counsel Jack Smith’s narrative against Mr. Trump in the Jan. 6 indictment.

“But the Court rejected Mr. Trump’s claim that all presidential acts have absolute immunity. The Chief writes that a President has only ‘presumptive immunity’ from prosecution for official acts outside of his core constitutional powers, and that unofficial acts have no immunity.  Mr. Trump couldn’t shoot someone on Fifth Avenue, as he once joked, and be immune....

“The Chief offers guidance to lower courts and Congress that will shield most official presidential acts.  One principle is that a prosecutor and Congress cannot investigate a President’s motive in making a decision. This makes sense because such an investigation would be an enormous and disruptive intrusion into presidential decision-making....

“The main dissent, by Justice Sonia Sotomayor for the three liberals...offers a parade of potential horribles that Presidents might commit in the future....

“ ‘In every use of official power, the President is now a king above the law.’

“But is he really?  Congress and the judiciary still exist as checks, as the Supreme Court has shown this term on numerous occasions.  The impeachment power exists, and elections are the ultimate check on abusive Presidents....

“Democrats on Monday denounced the Court for favoring Mr. Trump and complicating Mr. Smith’s prosecution.  But the Court is doing its job of protecting the constitutional order.  If they’d take a breath, Democrats would notice that the Justices made it more difficult for Mr. Trump to prosecute Mr. Biden.  The immunity ruling underscores the mistake Democrats have made in using lawfare to disqualify a presidential candidate.  They should have put more trust in the voters.”

For now, while the Supreme Court’s decision about executive immunity makes it all but certain that former President Trump will not stand trial on charges of seeking to overturn the last election before voters decide whether to send him back to the White House in the next one, the ruling did open the door for prosecutors to detail much of their evidence against Trump in front of a federal judge – and the public – at an expansive fact-finding hearing, perhaps before Election Day.

It remains unclear when the hearing, which was ordered as part of the court’s decision, might take place or how long it would last.

But it would address the big question that the justices kicked down to the trial court, which is how much of Trump’s indictment can survive the ruling that former presidents enjoy immunity for official actions they take in office.  Any hearing would be held in Judge Chutkan’s district court.

Biden-Trump Debate, Part II

Further fallout....

After I posted Friday afternoon, more commentary rolled in from some influential voices.  A CBS/YouGov poll released Sunday showed a growing share of voters – 72% - say Biden does not have the cognitive ability to serve as president, compared with 49% who say that about Trump.

Particularly alarming for the Biden campaign, 45% of registered Democrats who responded to the poll believe the president should step aside for another candidate.

A new CNN poll conducted by SSRS, released Tuesday, has three-quarters of U.S. voters saying the Democratic Party would have a better shot at holding the presidency in 2024 with someone other than President Biden at the top of the ticket.

A Wall Street Journal post-debate poll had 76% of Democrats saying Biden is too old to run this year.  About two-thirds would replace Biden on the ballot with another Democrat.

[As Democratic strategist James Carville said this week, “The country is clamoring for change...let’s give it to them!”]

The New York Times reported “President Biden appeared confused or listless in the weeks and months before his devastating debate performance last week, according to many who encountered him.

“People who spent time with him – including current and former White House aides, political advisers, foreign diplomats and financial donors – said that the lapses seemed to be growing more frequent, more pronounced and more worrisome.”

Yes, the president has his good moments, but “Biden is not the same today as he was even when he took office three and a half years ago,” as we all can clearly see.

Biden then pathetically blamed his debate performance on a cold and jet lag after two overseas trips in June, even though there was a 12-day gap between his last return to the States and the debate (10 days in the Eastern time zone).  Gee, Mr. President, glad Russia didn’t threaten the Baltics in like Day 5 of your return...by this logic.

Tuesday, Democratic Rep. Lloyd Doggett of Texas became the first in the party to publicly call for President Biden to step down as the party’s nominee, citing Biden’s debate performance for failing to “effectively defend his many accomplishments.”

Rep. Doggett said that Biden should “make the painful and difficult decision to withdraw.”

“My decision to make these strong reservations public is not done lightly nor does it in any way diminish my respect for all that President Biden has achieved,” Doggett said.  “Recognizing that, unlike Trump, President Biden’s first commitment has always been to our country, not himself, I am hopeful that he will make the painful and difficult decision to withdraw. I respectfully call on him to do so.”

Other House Democrats began to follow Doggett’s lead.  Rep. Seth Moulton from Massachusetts pointed to Biden’s age as a liability.

“The unfortunate reality is that the status quo will likely deliver us President Trump,” Moulton said in a statement. “President Biden is not going to get younger.”

An advisor to LinkedIn co-founder and Democratic megadonor Reid Hoffman told Reuters his team would “enthusiastically support a ticket led by our tough and savvy vice president if Biden were to step aside for any reason.”

President Biden, in a call with campaign staff on Wednesday, sought to project confidence.

“No one’s pushing me out,” he said on the call.  “I’m not leaving.”

Vice President Kamala Harris was also on the line.

“We will not back down. We will follow our president’s lead,” she said.  “We will fight, and we will win.”

Biden then told a group of Democratic governors at the White House (and virtually) he was staying in the race, as the group peppered him with questions about the path forward.  After the meeting, three of the governors went out to the White House driveway to tell reporters Biden still had their support.  But absent were four who could be contenders if the president drops out...Gavin Newsom (CA), Gretchen Whitmer (MI), Josh Shapiro (PA) and Andy Beshear (KY), who all later tweeted or posted their support.

According to the New York Times, Biden told the governors he needs to get more sleep and work fewer hours – and even avoid events held after 8 p.m. – despite indications he can only handle the rigors of the job between 10 a.m. and 4 p.m.

Biden then scheduled a taped interview, today, with ABC’s George Stephanopoulos that will be airing throughout the weekend on various ABC programming, including apparently an airing of the full interview later tonight, Friday.

I have two doctrines, dogmas, at StocksandNews... ‘wait 24 hours’ and ‘I don’t suffer fools gladly’.

Regarding the latter, some of the stuff I heard from defenders of Biden this week was amazingly stupid.  Just one example.  Former California Senator Barbara Boxer suddenly is grabbing any mic she can find and keeps saying, “Give this man (Biden) time to make his comeback.”

That’s the freakin’ point.  He will not get the time...we’re talking Father Time won’t give it to him.  What world do you live in, Senator!  

“We’ve gotta stay by our man,” is the mantra.  Why?  You want to lose the Presidency, Senate and House?!

Yup, this country is loaded with the ignorant, and that is always dangerous.

I’m anxious to see the president at his NATO Summit press conference this week that the White House has been touting.  They say it will be more than the standard two questions from selected media for Biden, and two from the visiting world leader’s handpicked journalists. I have my doubts. 

Editorial / New York Times

“President Biden has repeatedly and rightfully described the stakes in this November’s presidential election as nothing less than the future of American democracy.

“Donald Trump has proved himself to be a significant jeopardy to that democracy – an erratic and self-interested figure unworthy of the public trust. He systematically attempted to undermine the integrity of elections. His supporters have described, publicly, a 2025 agenda that would give him the power to carry out the most extreme of his promises and threats. If he is returned to office, he has vowed to be a different kind of president, unrestrained by the checks on power built into the American political system.

“Mr. Biden has said that he is the candidate with the best chance of taking on this threat of tyranny and defeating it. His argument rests largely on the fact that he beat Mr. Trump in 2020.  That is no longer a sufficient rationale for why Mr. Biden should be the Democratic nominee this year.

“At Thursday’s debate, the president needed to convince the American public that he was equal to the formidable demands of the office he is seeking to hold for another term.  Voters, however, cannot be expected to ignore what was instead plain to see: Mr. Biden is not the man he was four years ago.

“The president appeared on Thursday night as the shadow of a great public servant.  He struggled to explain what he would accomplish in a second term. He struggled to respond to Mr. Trump’s provocations. He struggled to hold Mr. Trump accountable for his lies, his failures and his chilling plans. More than once, he struggled to make it to the end of a sentence....

“(The) greatest public service Mr. Biden can now perform is to announce that he will not continue to run for re-election.

“As it stands, the president is engaged in a reckless gamble.  There are Democratic leaders better equipped to present clear, compelling and energetic alternatives to a second Trump presidency.  There is no reason for the party to risk the stability and security of the country by forcing voters to choose between Mr. Trump’s deficiencies and those of Mr. Biden.  It’s too big a bet to simply hope Americans will overlook or discount Mr. Biden’s age and infirmity that they see with their own eyes....

“The clearest path for Democrats to defeat a candidate defined by his lies is to deal truthfully with the American public: acknowledge that Mr. Biden can’t continue his race and create a process to select someone more capable to stand in his place to defeat Mr. Trump in November.

“It is the best chance to protect the soul of the nation – the cause that drew Mr. Biden to run for the presidency in 2019 – from the malign warping of Mr. Trump. And it is the best service that Mr. Biden can provide to a country that he has nobly served for so long.”

Editorial / The Economist

“Mr. Biden’s chances of winning in November have taken a savage knock. His team sought to debate Mr. Trump because their man was trailing.  Our forecast model has consistently given him a chance of victory of roughly one in three – worrying, but not hopeless.  His staff had been limiting his exposure to interviews, even as they insisted that in private he remains sharp, vigorous and in total control.

“To the shame of the White House and congressional Democrats, that assertion has now been exposed as a falsehood.  The Republicans have long said that Mr. Biden’s powers are fading. The debate was his great chance to prove them wrong.  Alas, in front of many millions of people, he did not just fail to rebut his opponents, he presented irrefutable evidence to back them up.”

Maureen Dowd / New York Times

“He’s being selfish. He’s putting himself ahead of the country.  He’s surrounded by opportunistic enablers.  He has created a reality distortion field where we’re told not to believe what we’ve plainly seen.  His hubris is infuriating.  He says he’s doing this for us, but he’s really doing it for himself.

“I’m not talking about Donald Trump.  I’m talking about the other president.

“In Washington, people often become what they start out scorning. This has happened to Joe Biden.  In his misguided quest for a second term that would end when he’s 86, he has succumbed to behavior redolent of Trump. And he is jeopardizing the democracy he says he wants to save....

“Jill Biden, lacking the detachment of a Melania and enjoying the role of first lady more, has been pushing – and shielding – her husband, beyond a reasonable point.  After Thursday’s embarrassing debate performance, she exhorted the crowd and played teacher to a prized student: ‘You did a great job!  You answered every question!  You knew all the facts!’ This, to the guy who controls the nuclear codes....

“(Joe Biden) didn’t just have an off night, like Obama had when he acted huffy in his first debate with Mitt Romney.  Biden looked ghostly, with that trepidatious gait; he couldn’t remember his rehearsed lines or numbers. He has age-related issues, and those go in only one direction.  It was heart-wrenching to watch the president’s childhood stammer return.

“His wife and staff will build their protective wall ever higher and shoo away reporters, pressing on the age spiral, ever more vigorously.  But Biden, Jill and Democratic leaders have to face the fact that this is an extraordinarily risky bet, with – as they drum into us – democracy on the line.”

David Ignatius / Washington Post

“It was obvious nearly a year ago that President Biden shouldn’t run for a second term. In an August poll by the Associated Press, 77 percent of the public and 69 percent of Democrats said he was too old to be effective for four more years.

“Yet Biden and his inner circle persisted, driving on toward Thursday’s disastrous televised debate, which vividly portrayed Biden, despite the risks, toward his decision to seek another term?

“I have an unusual window on Biden’s march toward the precipice. In September, I wrote a column headlined ‘President Biden should not run again in 2024.’  It shouldn’t have gotten as much attention as it did, because it said no more than what many Democrats were mulling through last summer.  But perhaps because I have been a strong supporter of most of Biden’s foreign and domestic policies, this call for him to step aside created a stir.”

Based on Ignatius’ conversations with people close to Biden since that column, among Ignatius’ conclusions:

“Biden might have considered withdrawing if Vice President Harris was more popular than he was – running 10 points ahead of him in polls, say. But Harris hasn’t gained traction as vice president, and Biden knows it. Some say Biden deliberately sidelined Harris; I think her shortcomings reflect her own political weakness.  But the fact is that Biden had no obvious heir....

“Biden’s family has played a central role, especially his wife, Jill.  When my column appeared last September, I was told by people who know the Bidens well that the president was angry but that the first lady was irate. She’s his protector and advocate – always.  His children, Hunter and Ashley, would probably have been comfortable with him stepping aside. But even after Thursday night’s performance, you could see Jill Biden onstage at a ‘victory’ party clapping and leading a chant, ‘Four more years!’

“Loyalty is admirable, except when it disservices people we love.  President Lyndon B. Johnson’s wife, Lady Bird, knew the strains he was suffering in office and his fragile health. She talked with him about not seeking another term as he was being inaugurated in 1965, and he confided to her in 1967 that he had decided against running the next year, though he kept waffling until his announcement in March 1968.

“Biden’s inner circle of aides has also been protective – to a fault.  Biden is a stubborn and sometimes-irascible man. He has maintained a remarkably disciplined White House, with few leaks and minimal backbiting. But loyalty and discipline can come at a cost. In the days after my column argued that he should step away, I heard rumblings of agreement among insiders, but they were quickly squelched. Discipline prevailed....

“Biden’s closest counselors – political adviser Mike Donilon, former chief of staff Ron Klain, the first lady – have an obligation to be honest with him now. If he has the strength and wisdom to step aside, the Democrats will have two months to choose another candidate.  It will be a wide-open and noisy race, but that will be invigorating for the country. It’s never too late to do the right thing.

“Thursday night had the sense of an ending. There was something Shakespearean about the gaunt, haunted face of Biden on stage squinting as if to see in a dwindling light, struggling for words even as the nobility of his purpose remained. I was reminded of a passage in ‘King Lear,’ when Edgar advises his struggling father, the Duke of Gloucester, ‘Men must endure their going hence, even as their coming hither; Ripeness is all.’

“But an ending is also a new beginning. That’s what Biden, with the wisdom of his age, can give to the country.”

David Remnick / The New Yorker

“There is an immense bounty of bunk about the wisdom of age available to all of us who require it from time to time, but, as the pitiless Mark Twain put it in his autobiography, ‘It is sad to go to pieces like this, but we all have to do it.’

“On Thursday night, it was Joe Biden’s turn.  But, unlike the rest of us, he went to pieces on CNN, in front of tens of millions of his compatriots....

“(Watching) Thursday’s debate, observing Biden wander into senselessness onstage, was an agonizing experience, and it is bound to obliterate forever all those vague and qualified descriptions from White House insiders about good days and bad days.  You watched it, and, on the most basic human level, you could only feel pity for the man and, more, fear for the country....

“(The) tide is roaring at Biden’s feet.  He is increasingly unsteady. It is not just the political class or the commentariat who were unnerved by the debate.  Most people with eyes to see were unnerved. At this point, for the Bidens to insist on defying biology, to think that a decent performance at one rally or speech can offset the indelible images of Thursday night, is folly....

“All of us are like him in at least one way.  It is sad to go to pieces like this, but we all have to do it. There is no shame in growing old. There is honor in recognizing the hard demands of the moment.”

Peggy Noonan / Wall Street Journal

“To me it feels like August 1974. The president’s position isn’t going to get better, it is going to get worse. The longer he waits to step aside the crueler his departure will be.

“The post-debate polls show he is losing support both overall and in the battlegrounds.  A cratering like that doesn’t happen because you had a bad night, or a cold, or were tired. It happens when an event starkly and unavoidably shows people what they already suspected. It happens when the event gives them proof....

“There’s no repairing this. His staff can’t spin or muscle their way out. He is neurologically compromised, we can all see it, it isn’t his fault.  You have no governance in how you age and at what speed, or what illnesses or conditions arise....

“A big part of the president’s personal mythos, and it is shared by all of Biden-world, is that the guy’s a survivor, he always pulls through, you knock him down, he gets back up. An inner belief like that can get you far and gird you.  But it can also harden into mere conceit and unrealism, and blind you to the real facts of current circumstances....

“The elected officeholders of the Democratic Party should take responsibility and press the president to leave. You can’t scream, ‘Democracy is on the line,’ and put up a neurologically compromised candidate to fight for it....

“What a tragedy this is. A president cratering his historical reputation, his wife and family ruining any affection history would have had for them when Donald Trump wins. They have no idea how they’re going to look.”

---

The Week in Ukraine....

--Sunday, President Volodymyr Zelensky said Russia had dropped more than 800 glide bombs in Ukraine in the last week alone.

“Ukraine needs the necessary means to destroy the carriers of these bombs, including Russian combat aircraft, wherever they are.  This step is essential,” he wrote in an online post.

As I’ve written many times in the past, glide bombs are crude Soviet-era heavy bombs retrofitted with precision guidance systems and launched from aircraft flying out of range of air defenses. The bombs weigh more than a ton and blast targets to pieces, leaving a huge crater.  As President Zelensky has been saying all year, since glide bombs became a big factor in Russia’s conduct of the war, you have to be able to go after the aircraft and their airstrips, and for that you need permission from the U.S. and its allies to fire longer range missiles and F-16s to engage the Russians in the air as well.  Ukraine also obviously needs more air defenses.

Saturday, Russian forces fired missiles at the town of Vilniansk, outside the southeastern city of Zaporizhzhia, killing seven people, including two children, and injuring 18 others.  Just another pure terrorist act in the middle of the day on a group of people trying to relax outside on a weekend.

“Our cities and communities suffer daily from such Russian strikes.  But there are ways to overcome this,” Zelensky wrote on Telegram.  “Destroying terrorists where they are.  Destroying Russian missile launchers, striking with real long-range capability and increasing the number of modern air defense systems in Ukraine” were ways to defend the country from such attacks, Zelensky said.

Four other civilians were killed in attacks across eastern Ukraine over the weekend.

--Ukraine’s security service said on Monday that it had foiled yet another Russian plot to stir public unrest and then use the ensuing turmoil to topple the government, outlining a familiar tactic that Kyiv claims has been employed in a string of coup attempts in recent years.

The Ukrainian domestic intelligence agency, the S.B.U., said it had discovered a “group” of conspirators it accused of planning to spark a riot, seize the Parliament building and replace the nation’s military and civilian leadership. Four people have been arrested and charged, according to the authorities.

Few details on how such a plan could have succeeded were given.

On the battlefield, Russia continues to send tens of thousands of new soldiers to the front to replace those killed in the hopes of exhausting Ukraine’s military and Kyiv’s Western backers.  The non-stop bombardment of Ukraine’s infrastructure is designed not just to throttle the economy but to undermine the state’s ability to function.

--Monday was Russia’s deadline for Ukrainian citizens in occupied territories to have obtained a Russian passport. The order requires swearing an oath of loyalty and is supposedly voluntary, unlike Russia’s earlier “passportization” drives that automatically granted citizenship to large numbers of Ukrainians in seized areas.  But penalties for non-compliance are stiff.  Ukrainians without a Russian passport can be deported or detained.

Refuseniks face additional problems. In areas held by Russia, Ukrainians without a Russian passport report losing access to insurance, pensions, schooling and medical care.  Russian authorities are seizing properties owned by Ukrainian citizens.  Parents have even been told they need a Russian passport to keep their children, including newborns. Yet despite the coercion, some Ukrainians may continue to ignore Russia’s citizenship offer for one good reason.  Popping up on the authorities’ radar as wanting to become a Russian could increase one’s chances of being sent to the front to fight Ukraine!

--The U.S. will soon send Ukraine another $2.3 billion in military aid, the Pentagon said Tuesday, including “urgently needed air defense interceptors...as well as artillery and anti-tank weapons to support Ukraine’s needs on the front lines,” Pentagon Press Secretary Air Force Maj. Gen. Peter Ryder said.

Defense Secretary Lloyd Austin and his Ukrainian counterpart Rustem Umerov met Tuesday at the Pentagon.

--Russian casualties since Moscow launched its latest offensive two months ago are around 1,200 killed or wounded every day in May and June, the highest rate since the beginning of the war, according to Western officials.

But the endless waves of Russians that are a part of their tactics, “meat assaults,” as Ukrainian soldiers call them, are having a big impact on the undermanned Ukrainians.

Thursday, Ukraine’s military announced its troops had pulled back from parts of strategic Chasiv Yar in the eastern Donetsk region, a day after Russia said its forces had taken control of a district in the town.

Chasiv Yar stands on high ground. If Russia establishes full control over the town, Russian forces could potentially use it as a staging post to advance westwards towards the Ukrainian cities of Kramatorsk and Sloviansk.

--Russian attacks Friday in Ukraine’s eastern frontline Donetsk region killed three people and injured at least 20, the regional governor said.

In an attack on the village of Komar, Russia troops dropped three guided bombs, killing a 32-year-old woman, injuring scores.  Thirteen private houses, four shops, and two residential buildings were damaged.

--Russian forces have captured an intact guidance system from a long-range U.S.-made ATACMS missile and are studying the technology, Russia’s’ RIA state news agency said on Monday.  Video footage released by RIA showed an unidentified weapons expert, with his face concealed by a balaclava, examining what he said was a guidance system from an Army Tactical Missile System weapon guidance system from an ATACMS apparently shot down by Russian forces.  The expert is seen showing labels on the back of the missile’s GPS guidance system, which indicate it originated in Alabama.

Needless to say, this would only improve Russia’s ability to shoot them down, which Russia has done with other U.S. and Western systems supplied to Ukraine.

--Ukraine’s border guards dismissed claims from Belarus that it was reinforcing troops on their mutual border, describing the reports as an information operation from Minsk with Moscow’s support. 

Belarus said last week the Kyiv was bolstering its forces along the frontier. The Kremlin on Monday said the report was cause for concern.  “It is not the first time Belarus offers information about Ukraine presenting a threat and strengthening itself,” a border guard spokesman told Ukrainian TV.  He said the border remained a concern and Ukraine was strengthening it with engineering while maintaining the necessary number of troops to prevent any provocations.  He also said Belarus had been conducting military exercises since June 21, and that blaming Ukraine for friction at the border could be aligned with those drills.

--Hungary took over the six-month rotating presidency of the Council of the European Union on Monday, giving Viktor Orban a platform to spread his “national conservative” credo in Brussels.  Orban has an axe to grind with Brussels.  His disregard for the rule of law has resulted in Hungary being denied part of its share in EU funds in recent years.  He thinks a more assertive alliance of conservative parties could keep the bloc’s leaders in their place.  He is also Vladimir Putin’s closest ally among EU leaders and has frequently opposed EU initiatives to support Ukraine.

Orban then arrived in Kyiv on Tuesday morning for talks with President Zelensky.

“The most important topic of the talks is the chance to create peace,” Orban’s press chief said.

Orban pushed Zelensky to reach a ceasefire with the invading Russians, he told reporters Monday in Kyiv. “A ceasefire connected to a deadline would give a chance to speed up peace talks,” Orban said.  Zelensky did not respond to those comments.

Orban then, disturbingly, traveled to Moscow on Friday, where he discussed the war with Putin.  The EU was ticked off.  European Council President Charles Michel said Orban had “no mandate to engage with Russia on behalf of the EU.”

Orban is calling it his “peace mission.”  It’s all designed to ensure Vlad the Impaler gets permanent control of the four eastern provinces in any ‘negotiations,’ and to keep European military aid out of the hands of Ukraine.

Putin said today he reiterated his belief that Russia’s proposals should be the key to resolving the conflict, but that Kyiv was not willing to stop the conflict.

*And this really disturbing piece crossed the wires less than an hour before I posted.

“Hungary has cancelled a meeting for Monday in Budapest with Germany’s foreign minister and her Hungarian counterpart, a German foreign ministry official said on Friday.  The Germany ministry said it was ‘astonished’ and that a ‘serious and honest’ discussion was needed after Hungarian Prime Minister Viktor Orban met Russian President Vladimir Putin on Friday.” [Reuters]

--Russia’s reliance on China has gotten to the point where Beijing could end the war in Ukraine if it chose to, Finnish President Alexander Stubb said this week. His comments reflect the increasing frustration among Ukraine’s allies over what they say is China’s increasingly visible support for Russia’s war effort.  They accuse Beijing of providing the Kremlin with technologies and parts for weapons and helping Moscow get around international trade restrictions.  “Russia is so dependent on China right now,” Stubb said in an interview in Helsinki Tuesday. “One phone call from President Xi Jinping would solve this crisis.”

Thursday, at a security summit in Kazakhstan, President Xi upheld China’s ties with Russia and reaffirmed Beijing’s position on Ukraine despite the growing frustration in the West.

Xi and Vladimir Putin said relations between their two countries are “at their best in history” as they met for the second time in less than two months.  Both vowed to jointly safeguard “regional tranquility and stability.”

On Ukraine, Xi repeated his country has “always stood on the right side of history,” according to a readout from the Foreign Ministry, signaling Beijing’s continued support of Moscow.  Putin said Russia opposes external forces interfering in the South China Sea.

“My dear friend, I am very happy at our new meeting,” Xi told Putin.

Sickening.

--The Moscow Times reported today that jailed Kremlin critic Vladimir Kara-Murza has been transferred to a prison hospital in Omsk, where his lawyers have been unable to access him.  Fears for Kara-Murza’s health are especially grave as he is reportedly still suffering from the effects of two attempted poisonings.

---

Israel-Hamas....

--Sunday, Israeli forces advanced further into northern Gaza and also pushed deeper into western and central Rafah in the south.  Speaking at a weekly cabinet meeting, Prime Minister Benjamin Netanyahu repeated his stance that there is no substitute for victory in the war against Hamas.

“We are committed to fighting until we achieve all of our objectives: Eliminating Hamas, returning all of our hostages, ensuring that Gaza never again constitutes a threat to Israel and returning our residents securely to their homes in the south and the north,” he said.

On Saturday, the military (IDF) announced the death of two Israeli soldiers in northern Gaza.  Hamas and allied Islamic Jihad reported heavy fighting in Rafah.

Ceasefire efforts had stalled, Hamas maintaining any deal must end the war and bring a full Israeli withdrawal from Gaza, which is a non-starter for Israel, which has said it will only accept temporary pauses in the fighting until Hamas is eradicated.

--Thousands of ultra-Orthodox men clashed with Israeli police in central Jerusalem on Sunday during a protest against a supreme court order for them to begin enlisting for military service.

The landmark decision last week ordering the government to begin conscripting ultra-Orthodox men could lead to the collapse of Netanyahu’s governing coalition.  The protesters later turned violent, police said, throwing rocks.

--The Israeli army ordered residents of several towns and villages in eastern Khan Younis to evacuate their homes, prior to tanks re-entering the area the military had left several weeks ago.

--Israeli forces bombarded several areas of southern Gaza on Tuesday and thousands of Palestinians fled their homes in what could be part of a final push of Israel’s intensive military operations in nine months of war.  A number of Palestinians were killed, according to health officials, while Israel’s military said that two soldiers had been killed in a battle a day earlier, bringing the toll to at least 320 in Gaza, while the IDF said at least one third of the reported 38,000 Palestinians that have been killed are fighters (Israel disputing the 38,000-figure released by Palestinian health officials who are controlled by Hamas).

Israel has been winding down the phase of intense fighting against Hamas and had said it would shift to more targeted operations.

Later Tuesday, 17 Palestinians were killed in Israeli tank shelling of a street in the densely populated Zeitoun neighborhood of Gaza City in the north of the Strip, medics said.

--Israel, facing growing international pressure to relieve the humanitarian crisis in Gaza, said Tuesday it connected a power line to a desalination plant in the enclave to provide additional water output, which will not only provide drinking water but improve sanitation issues.

--Wednesday, Israel said it was studying Hamas’ response to a proposal that would include a hostage release deal and ceasefire in Gaza, according to a statement from Israel’s Mossad spy agency.  No details were given.

--Israel approved the largest seizure of land in the occupied West Bank in over three decades, a move that is likely to worsen already soaring tensions linked to the war.

Authorities recently approved the appropriation of 12.7 square kilometers (nearly 5 square miles) of land in the Jordan Valley that connects Israeli settlements along a key corridor bordering Jordan, further undermining the prospect of a contiguous Palestinian state.

--But the week was ending with major concerns on the Israeli-Lebanese border as Israeli forces killed a senior Hezbollah commander in a drone strike in southern Lebanon on Wednesday, prompting the Lebanese militia to retaliate with a heavy rocket barrage across the border, Thursday, as diplomats scrambled to prevent an all-out war.

More than 200 rockets and a swarm of drones targeted 10 Israeli military sites, Hezbollah said, but Israel reported no casualties.  Israel then struck some Hezbollah military structures in two southern Lebanon villages. It also has been flying its fighter jets over parts of Lebanon, including Beirut, with the Jets breaking the sound barrier, the sonic booms intended to rattle nerves.

The commander, Mohammad Naameh Nasser, also known as Abu Naameh, was among the highest-ranking Hezbollah fighters to have been killed since Hezbollah began firing on northern Israel in solidarity with Hamas. He led one of the main fighting forces along the border.

More than 150,000 people have already been displaced on both sides of the border.  A full-scale war would be catastrophic, leaving large swaths of Lebanon in ruins, causing Hezbollah to unleash its arsenal of precision-guided missiles on cities across Israel, overwhelming Iron Dome and other Israeli defenses, and possibly setting off an even wider regional war.

Israeli Defense Minister Yoav Gallant said on Wednesday Israeli forces were prepared to take any action necessary against Hezbollah but that they preferred a diplomatic settlement.

--Prime Minister Netanyahu and President Biden talked on Thursday about the ceasefire talks, Israel sending a delegation to attempt to jumpstart negotiations on a hostage release deal with Hamas.  But Netanyahu reiterated Isarel would only end its war in Gaza when all of its objectives had been achieved, a statement from his office said.

For its part, on Friday, Hamas said it rejected any statements and positions that support plans for foreign forces to enter the Gaza Strip under any name or justification.  The group said the administration of the Gaza Strip is a purely Palestinian matter.  The Popular Resistance Committee, a group allied with Hamas, said it considered any attempt to deploy international or other forces in Gaza as “an aggression” and will deal with it as occupying forces.

---

Wall Street and the Economy

Tuesday, Federal Reserve Chair Jerome Powell was at a European Central Bank forum in Sintra, Portugal, where he said inflation in the United States is slowing again after higher readings earlier this year, while adding that more such evidence would be needed before the Fed would cut interest rates.

After some persistently high inflation reports at the start of 2024, Powell said the data for April and May “do suggest that we are getting back on a disinflationary path.”  He added Fed officials still want to see annual price growth slow further toward their 2% target before they would feel confident of having fully defeated high inflation.

“We just want to understand that the levels that we’re seeing are a true reading of underlying inflation,” he added.

If the Fed cuts rates too soon, Powell cautioned, inflation could re-accelerate, forcing policymakers to reverse course and impose punishing rate hikes.  But if the Fed waits too long to reduce borrowing costs, it risks weakening the economy so much as to potentially cause a recession.

“Getting the balance on monetary policy right during this critical period, that’s really what I think about in the wee hours,” Powell said in response to a question about his top worries.

Powell noted the U.S. economy and job market remain fundamentally healthy, which means the Fed can take its time in deciding when rate cuts are appropriate. He noted the job market is “cooling off appropriately,” which likely means that it won’t heighten inflationary pressures through rapid wage gains.

The Chair declined to signal any time frame for a rate cut.  Investors are betting that there is nearly a 70% chance for a reduction at the Fed’s meeting in September.

On the economic data front, we had the June ISM readings, with manufacturing at a less-than-expected 48.5 (50 the diving line between growth and contraction).  The services figure was also disappointing, a big miss at 48.8 when 53.0 was forecast.

May construction spending fell 0.1%, and factory orders in the month were down 0.5% when a gain was expected.

All leading up to the June employment report today...nonfarm payrolls increasing by 206,000, a little better than consensus of 190,000, but April was revised down from 165,000 to 108,000, while May was reduced from 272,000 to 218,000.  The unemployment rate ticked up to 4.1%, highest since Nov. 2021, ditto U6, the underemployment rate, 7.4%, highest since the same date.

A key for the Fed, average hourly earnings, rose 0.3%, 3.9% year-over-year, which was good news, the smallest gain in wages since June 2021, following a 4.1% rise in May.

The Atlanta Fed’s GDPNow barometer for second-quarter growth is down to just 1.5%.

Freddie Mac’s 30-year fixed-rate mortgage is up to 6.95% from last week’s 6.86%.

Next week the last CPI/PPI data before the Fed’s July 30-31 confab.  If it doesn’t contain a surprise or two to the upside, the Fed could telegraph a September rate cut at the end of the month.  I’m in the September camp.

Europe and Asia

--We had a slew of important data for the eurozone, including June PMIs, courtesy of S&P Global and Hamburg Commercial Bank.  The euro area manufacturing reading was 45.8, down from May’s 47.3.  The service sector came in at 52.8.  The composite was 50.9 vs. 52.2 in May.

Germany: 43.5 mfg., 53.1 services
France: 45.4 mfg., 49.6 services
Italy: 45.7 mfg., 53.7 services
Spain: 52.3 mfg., 56.8 services
Ireland: 47.4 mfg., 54.2 services
Netherlands: 50.7 mfg.

UK: 50.9 mfg., 52.1 services

Dr. Cyrus de la Rubia, Chief Economist HCB

“Growth in the Eurozone can be attributed fully to the service sector. While the manufacturing sector weakened considerably in June, activity growth in the services sector continued to be nearly as robust as the month before. Considering the upward revision versus the preliminary flash PMI figures, the chances are good that service providers will remain the decisive force keeping overall economic growth in positive territory over the rest of the year....

“The service sector, in our opinion, is supported by the high number of tourists. The New Export Index, which includes tourism, has been on an almost continuous upward trend for six months and is now nearly two points above the long-term average... In Germany, tourism is getting an additional boost from the European Football Championship. For the next few months, tourism is likely to remain an important growth factor for the Eurozone.”

And of course you have the Olympics.

--A flash estimate of euro area inflation for June, courtesy of Eurostat, showed it at 2.5%, down from May’s 2.6%, which was up from April’s 2.4%, with the core rate, ex-food and energy, at 2.8%, down from 2.9% prior and unchanged from April.

At the Sintra, Portugal forum, European Central Bank President Christine Lagarde reiterated that the ECB is not on any “predetermined path” and that its recent rate cut “would be followed by further review of data.” 

The ECB cut its key policy rate at its last meeting, but the numbers, as noted above, still show the ECB has a ways to go to get to their 2% target.

Headline inflation:

Germany 2.5%, France 2.5%, Italy 0.9%, Spain 3.5%, Netherlands 3.4%, Ireland 1.5%.

May producer prices (PPI) in the eurozone fell 0.2% over April and -4.2% year-over-year. [Eurostat]

Eurozone unemployment rates for May (Eurostat):

EA20 6.4%, unchanged from April and down from 6.5% in May 2023.

Germany 3.3%, France 7.4%, Italy 6.8%, Spain 11.7%, Netherlands 3.6%, Ireland 4.0%.

Retail sales for May in the euro area rose 0.1% over April, 0.3% year-over-year. [Eurostat]

---

France: With record turnout last Sunday in the first round of a parliamentary election, Marine Le Pen’s National Rally (RN) won 33% of the vote* (per the Interior Ministry’s official results), followed by a newly created left-wing bloc (New Popular Front) with 28% and well ahead of President Emmanual Macron’s broad alliance of centrists, who scored just 21% (20.8%).

*RN won 18.7% of the first-round vote in 2022’s national elections.

Financial markets rallied a bit, about one percent for the CAC 40 (France’s S&P 500), because RN didn’t tally higher as feared.

But it’s all about this Sunday’s second round of voting, with RN needing at least 289 seats in parliament for a majority (577 seats total).  There are all kinds of prognostications out there, showing RN with between 250 and 300, but it is impossible to know. Leaders of both the left-wing New Popular Front and Macron’s centrist alliance indicated that they would withdraw their own candidates in districts where another candidate was better placed to beat the RN in the run-off.  But there are divisions within the left wing that complicate matters, such as the far-left France Unbowed party of Jean-Luc Melenchon, a bombastic figure with radical tax-and-spend proposals and class war rhetoric.

[As of Tuesday, near the deadline, more than 200 candidates confirmed they would not stand in the second round.] 

In constituencies with no outright winner*, the top two candidates, plus any candidate with more than 12.5% of registered voters in that constituency, had until Tuesday evening to confirm whether they will go into the second round.

*Seventy-six seats were won outright.  Pollsters projected that National Rally, and its allies, made it into at least 390 run-offs, the New Popular Front at least 370, and Macron’s centrist coalition at least 290. 

In the event of a new majority of lawmakers opposed to Macron, he would be forced to appoint a political adversary as prime minister, in the case of RN, 28-year-old Jordan Bardella.

If no clear majority emerges, the country could be headed for months of political deadlock or turmoil.  Macron, whose term doesn’t end until 2027, has ruled out resigning.  He cannot call new legislative elections for another year.

But after all the candidates for the run-off were declared and after politicians across party lines formed an anti-RN front, a Harris Interactive poll showed RN would fall far short of the 289 seats needed for a majority, and in fact RN and its allies would get just 190 to 220 seats, while the center-right Republicans (LR) would win 30 to 50 seats. This could rule out the possibility of a far-right minority government supported by part of the LR parliamentary group.

The Harris poll showed that the leftist New Popular Front alliance would win 159 to 183 seats, while Emmanual Macron’s Together alliance would win just 110 to 135 seats.

So, we’ll see how it all plays out Sunday.

---

UK: Heading into Thursday’s election, the 20-point lead of the Labour Party over the Conservatives was holding up...ending 14 years of Conservative rule.

Many voters blame the Conservatives for a long list of problems facing Britain, from the cost-of-living crisis, to long waiting lines for health care, Brexit and its accompanying dislocations, and a series of scandals, such as during Boris Johnson’s reign and his handling of Covid.  [We’ll party here at Downing Street, but you little people can’t!]

Nigel Farage’s support for his Reform UK party had been falling after he said the West had provoked Vladimir Putin’s invasion of Ukraine.

But what will the new Prime Minister Keir Starmer do?  He’s a centrist and many see his approach as unambitious.

Well, the results came in and it was an historic election.

Labour...412 seats... +211 over 2019
Conservative...121... -250
Liberal Democrat...71... +63 ...relatively new centrist party on the rise...
Scottish National Party...9... -38

[Source: BBC...others have slightly different results, re: change over 2019]

Labour actually won just 33.7% of the vote to the Conservatives’ 23.7%, but thanks to the quirk of Britain’s first-past-the-post system and a low turnout (worst since 2001), Labour’s triumph was achieved with fewer votes than it secured in 2017 and 2019 – the latter its worst result for 84 years.

So, it’s not like there is a lot of enthusiasm for Prime Minister Starmer, who in his first remarks at 10 Downing Street, said Britain needed to rediscover its identity and undergo a wider reset, promising to fight to restore trust in politics and serve all voters.

“It is surely clear to everyone that our country needs a bigger reset, a rediscovery of who we are, because no matter how fierce the storms of history, one of the greatest strengths of this nation has always been our ability to navigate a way to calmer waters.”

Rishi Sunak said he would stand down as party leader.

“To the country I would like to say first and foremost I am sorry,” he said in his final speech outside Downing Street. “I have given this job my all, but you have sent a clear signal that the government of the United Kingdom must change, and yours is the only judgment that matters.  I have heard your anger, your disappointment and I take responsibility for this loss.”

Former Prime Minister Liz Truss was among the many conservative leaders, including a number of senior ministers (among them defense minister Grant Shapps), who lost their seats.

Nigel Farage’s Reform UK party won more than four million votes, and while it secured only five seats, Farage won his race and is in parliament for the first time (after seven failed attempts), where he will carry a big megaphone in the conservative/right-wing movement.  [Reform UK polled at 14.3%.]

The Scottish National Party imploded, ending its own decade of dominance in Scotland and leaving its dream of independence for Scotland in tatters.

Sinn Fein became the largest party in Northern Ireland for the first time.

---

Turning to Asia...China’s official government manufacturing PMI for June was 49.5, unchanged, with non-manufacturing at 50.5. The private Caixin manufacturing reading was 51.8, with services at 51.2, down from 54.0 in May.

Japan’s June manufacturing PMI was 50.0, services at 49.4, down from 53.8 prior.

May household spending fell 1.8% year-over-year, much worse than forecast.

South Korea’s manufacturing PMI for June was a solid 52.0. Taiwan’s was 53.2.

Street Bytes

--The S&P 500 and Nasdaq hit more record highs, including today, ahead of earnings season (some major banks leading things off next Friday).  Of course, we’re overvalued but remember 1995-99.  These rallies can last a long time, though this one already has.

For the week the Dow Jones gained 0.7% to 39375, while the S&P added 2.0% and Nasdaq 3.5%.

--U.S. Treasury Yields

6-mo. 5.29%  2-yr. 4.60%  10-yr. 4.27%  30-yr. 4.47%

After spiking on fears a Trump presidency could lead to a further expansion of the deficit, and increased Treasury supply, yields fell on the 2- and 10-year as softening economic data led to renewed hopes of a September rate cut.

--I didn’t have time to note an important Supreme Court ruling from last Friday that could significantly limit the power of federal agencies, imperiling an array of regulations. 

In a 6-3 vote, divided along ideological lines, the Court reduced the power of executive agencies by sweeping aside a longstanding legal precedent, endangering countless regulations and transferring power from the executive branch to Congress and the courts.

The precedent, set in 1984, Chevron v. Natural Resources Defense Council, one of the most cited in American law, requires courts to deter to agencies’ reasonable interpretations of ambiguous statutes.  There have been 70 Supreme Court decisions relying on Chevron.

Now you will see challenges to the actions of an array of federal agencies, including those regulating the environment, health care, the financial industry and consumer safety.

“Chevron is overruled,” Chief Justice John Roberts wrote for the majority.  “Courts must exercise their independent judgment in deciding whether an agency has acted within its statutory authority.”

In dissent, Justice Elena Kagan said the ruling amounted to a judicial power grab: “Agencies report to a President, who in turn answers to the public for his policy calls; courts have no such accountability and no proper basis for making policy.”

“A rule of judicial humility,” she wrote, “gives way to a rule of judicial hubris.”

The decision was the latest in a sustained series of legal attacks on what its critics call the administrative state.

The chief justice wrote that the retroactive impact of Friday’s decision will be limited, saying that regulations upheld by courts under Chevron were not subject to immediate challenges for that reason alone.

Justice Kagan, quoting an earlier opinion, disagreed: “The majority’s decision today will cause a massive shock to the legal system, ‘casting doubt on many settled constructions’ of statutes and threatening the interests of many parties who have relied on them for years.”

“The impact will be enormous,” said Jennifer Jones, director of the Center for Science and Democracy at the Union of Concerned Scientists. “By paralyzing federal agencies and inviting lawsuits against the rules these agencies implement, this decision will profoundly undermine bedrock laws like the Clean Air Act that are meant to protect public health.”

Senate Leader Mitch McConnell (R-Ky.) said in a statement: “After 40 years of Chevron deference, the Supreme Court made it clear today that our system of government leaves no room for an unelected bureaucracy to co-opt this authority for itself.”

The case centered on a federal requirement that some herring boats host government-approved observers aboard their vessels and cover an estimated $710 daily cost. Two groups of fishing companies sued, saying Congress didn’t authorize the National Marine Fisheries Service to require them to pay for the observers.

Heck, I’ll be an observer for $710 a day.  Can I bring my own beer?

Anyway, yes, this was a far-reaching decision...across multiple industries. Many local disputes will now arise, for instance, on the environmental front.

In the days prior to the Chevron ruling, the Court had also said Congress went too far in authorizing the Securities and Exchange Commission to enforce securities fraud through in-house hearings and blocked Environmental Protection Agency rules intended to reduce cross-state air pollution.

--The Supreme Court on Monday, aside from potentially handing Donald Trump the election, also avoided a definitive resolution of challenges to laws in Florida and Texas that curb the power of social media companies to moderate content, leaving in limbo an effort by Republicans who have promoted such legislation to remedy what they say is a bias against conservatives.

Instead, the justices unanimously agreed to return the cases to lower courts for analysis.  In the majority opinion, Justice Elena Kagan wrote that neither lower appeals court had properly analyzed the First Amendment challenges to the Florida and Texas laws.

Supporters of the laws said they were an attempt to combat what they called Silicon Valley censorship. The laws, they added, fostered free speech, giving the public access to all points of view.

Opponents said the laws trampled on the platforms’ own First Amendment rights and would turn them into cesspools of filth, hate and lies.

Various trade associations challenging the laws said that social media companies were entitled to the same constitutional protections enjoyed by newspapers, which are generally free to publish without government interference.

--Boeing and aerostructure manufacturer Spirit Aerosystems announced a definitive merger agreement, with Boeing acquiring Spirit for $37.25 per share in Boeing common stock, this deal having been in the works since late February. Certain Spirit assets would be sold to Airbus.  The deal requires regulatory approvals and Spirit shareholder approval.

--Severe turbulence on an Air Europa flight to Uruguay from Spain on Monday injured at least 40 passengers, leaving several with neck and skull fractures, in at least the second case of severe injuries from turbulence worldwide in less than a month. One man was stuck in the overhead bins before fellow passengers got him down.  Imagine the force that propelled him upward.  [Obviously, he wasn’t wearing his seat belt.]

Flight UX045 made an emergency landing early Monday in the seaside city of Natal, Brazil, after experiencing turbulence more than four hours into the flight from Madrid, according to flight data.

Later Monday, four passengers were still in intensive care.

-- “Spoiled food” sickened passengers on a Delta Air Lines Flight and forced an emergency landing in New York City early Wednesday, with at least 24 becoming ill after eating the mold-laden food aboard Amsterdam-bound Flight 136, originating in Detroit, which touched down at JFK Airport.  No one was hospitalized, but the situation was clearly severe enough for the flight, over Newfoundland at the time, to divert.

All 277 of the flight’s passengers were given hotel accommodation for the night and put on a new flight Wednesday evening. What a disaster for so many of the passengers, including some onboard for a Taylor Swift concert in Amsterdam!

--Aer Lingus’ 8-hour strike by its pilots last Saturday affected 17,000 of the airline’s passengers. There is optimism future work stoppages can be avoided as negotiations now proceed.

--TSA checkpoint numbers vs. 2023

7/4...87 percent of 2023 levels...anomaly...2,221,572
7/3...112...2,786,125
7/2...126...anomaly...2,537,968
7/1...120...anomaly...2,754,205
6/30...112...2,834,751
6/29...102...2,639,429
6/28...102...2,935,065
6/27...106...2,921,490

6/23...2,996,193 still the high.

--Top U.S. automakers posted slower sales growth for the second quarter as a cyberattack at software systems provider CDK hit operations at several dealerships during the crucial selling period of late June.

General Motors reported a 0.6% rise in new-vehicle sales, compared with a jump of 19% last year, and said some sales would shift to the current quarter due to the hack, GM delivering 696,086 vehicles in the quarter, up from 691,978 a year earlier.  EV sales increased 40% to 21,930.

Ford Motor said Q2 vehicle sales were up 1% year-over-year.  The company sold 536,050 vehicles total during the quarter, up from 531,662 a year ago.  Truck sales were up 4.5% Y/Y to 308,920 units while SUV sales declined 5.3% to 213,393.

Electric vehicle sales rose 61.4% to 23,957 units while hybrid vehicle sales jumped 55.6% from a year earlier to 53,822.

To point out the obvious, GM and Ford EV sales are still a very small percentage of their total sales, despite spending $billions on the efforts.

Toyota Motor North America’s sales rose roughly 9%, much lower than last year’s jump of about 20%.  Market research firm Cox Automotive estimates overall U.S. new-vehicle sales volume in the second quarter likely grew 1% to nearly 4.2 million units.  That compares with a year-on-year surge of about 16% in 2023. CDK said on Thursday that substantially all dealer connections were live again on the dealer management system.

Hyundai posted a nearly 2% rise in second-quarter U.S. sales, compared with a 14% jump last year.  Honda also reported a 2% gain in sales.

Electric-vehicle leader Tesla reported a smaller-than-expected 5% drop in deliveries in the second quarter, after price cuts and incentives helped stimulate demand (and piss off existing owners, who saw the value of their current vehicle decline further, should they need to sell it).

Shares rallied 10%, hitting the highest level in over five months.  The EV maker handed over 443,956 vehicles in the three months to June 30, 4.8% lower than a year earlier and up 14.8% from the preceding quarter. The share price rallied because Wall Street expected 438,000 vehicles.

Tesla delivered 422,405 Model 3 and Model Y, and 21,551 units of other models, which include the Model S sedan, Cybertruck and Model X premium SUV.

Tesla’s better-than-expected news led to a 6.5% rise in the stock, Wednesday, to $248, on top of Tuesday’s 10% jump, wiping out 2024’s losses, an amazing comeback for a stock that was below $140 a share on April 22.

The move added about $30 billion to Elon Musk’s wealth, propelling him into the lead spot among the world’s richest people, surpassing Jeff Bezos.

Kind of ironic given deliveries declined.

China’s BYD sold 426,039 EVs in the April-June quarter, around 18,000 vehicles fewer than Tesla’s vehicle deliveries in the quarter.  Tesla’s China sales, which includes domestic sales and exports to Europe and other areas, fell 17% in the second quarter from a year earlier. But Tesla did not give a breakdown on its actual domestic sales in China.

--Deere said Tuesday it is laying off about 590 factory employees in Illinois and Iowa, effective Aug. 30, due to reduced demand for the product manufactured at these facilities.

Deere said in a statement.  “To better position Deere to meet future demand, we continue to take proactive steps to reduce production and inventory.”

--According to a report in Asia Financial, about 80 percent of the AI chips Huawei produces are defective as the firm tries to expand its footprint in the industry.  The challenges come after several months of production and as U.S. sanctions prevent the company from accessing key microelectronics technologies.

Huawei’s AI chip – the Ascend 910B – has been touted as China’s answer to top chipmaker Nvidia and recent U.S. chip export bans.

The chips are manufactured by China’s biggest foundry, Semiconductor Manufacturing International Corporation (SMIC), and according to market research firm TrendForce, the chip’s “yield rate” remains a lowly 20%, meaning out of every five Ascend 910B chips that SMIC makes, four are defective.  TrendForce said the chip’s production was further slowed by frequent equipment failures; Huawei and SMIC being forced to use older stockpiles of chipmaking equipment.

--Moderna Inc. secured nearly $200 million from the U.S. government to speed development of an mRNA vaccine for pandemic influenza as a dangerous strain of bird flu sweeps through the nation’s dairy farms, fueling concern about a budding health crisis.

The Department of Health and Human Services awarded Moderna $176 million to help pay for late-stage clinical trials that will start in 2025. The vaccine will be tailored so it can target several influenza strains with pandemic potential, including the family of bird flu viruses currently in circulation.

So then Wednesday, public health officials in Colorado announced an adult man had tested positive for avian flu after reporting mild symptoms, including conjunctivitis, or pink eye, which have been the symptoms for some other human cases.  All four in the U.S. thus far were dairy farm workers, with one of the four reporting mild respiratory symptoms.

The CDC said the risk to the general public from bird flu remains low. The virus has now infected cows in at least 139 farms in 12 states, according to the Department of Agriculture. But as I’ve noted before, many farms are not reporting the information because they don’t want to be tainted.

--U.S. officials approved another Alzheimer’s drug that can modestly slow the disease, providing a new option for patients in the early stages of the incurable, memory-destroying ailment.

The Food and Drug Administration approved Eli Lilly’s Kisunia on Tuesday for mild or early cases of dementia caused by Alzheimer’s.  It’s only the second drug that’s been convincingly shown to delay cognitive decline in patients, following last year’s approval of a similar drug from Japanese drugmaker Eisai

The delay seen with both drugs amounts to a matter of months – about seven months, in the case of Lilly’s drug. Patients and their families will have to weigh that benefit against the downsides, including potentially dangerous side effects like brain swelling.

--State Farm General is seeking to dramatically increase residential insurance rates for millions of Californians, a move that would deepen the state’s ongoing crisis over housing coverage.

In two fillings with the state’s Department of Insurance the other day signaling financial trouble for the insurance giant, State Farm disclosed it is seeking a 30% rate increase for homeowners, a 36% increase for condo owners and a 52% increase for renters.

Ricardo Lara, California’s insurance commissioner, said in a statement that “State Farm General’s latest rate filings raise serious questions about its financial condition. This has the potential to affect millions of California consumers and the integrity of our residential property insurance market.”

State Farm should lay off Jake, as a first step to reduce costs.

--Walt Disney Co./Pixar’s “Inside Out 2” crossed the $1 billion mark at the worldwide box office in less than three weeks of release, reaching that level in the fastest time of any animated film in history, Disney said on Sunday.

It’s the highest-grossing film of the year and the only one to cross $1 billion. As of last weekend, an estimated $469 million of this was in the U.S. and Canada, according to Comscore, $545.5 million internationally.

Kevin Costner’s “Horizon: An American Sage – Chapter 1,” drew a disappointing $11 million domestically during its opening weekend.

--For the record (details coming out after I posted last week), the first presidential debate hosted by CNN attracted 51.3 million viewers – far fewer than 2020’s first debate, which drew 73.1 million.

The drop wasn’t surprising as the debate occurred far earlier in the calendar than past debates, with many Americans not fully tuned into the presidential contest until the fall.

With CNN providing the feed to other television networks, CNN’s broadcast drew 9.5 million, Fox News 9.3 million and MSNBC 4.1 million. The data does not include online viewing.  CNN, for example, said its own streaming properties peaked at 2.3 million simultaneous live views at 9:47 p.m. Eastern.

Fox’s conservative commentators prior to the debate were bashing moderates Jake Tapper and Dana Bash for being biased against Donald Trump and that he would not get a fair shake. They changed their tune afterwards.

ABC was the most-watched broadcast network with 9.21 million viewers, followed by NBC (5.17 million), and CBS (4.8 million),

Foreign Affairs, Part II

China: Beijing said it seized a Taiwanese boat, which had five crew members on board, for illegally fishing in its territorial waters on Tuesday night.

Taiwan asked China to release the vessel – and the men, two Taiwanese and three Indonesians, who are being held at Weitou, a port in the southeast.

Taiwanese officials confirmed that the boat was seized inside China’s territorial waters, about 2.8 nautical miles off its coast.  It was operating during China’s annual summer-time fishing ban from May to August.

“The fishing vessel violated the fishing moratorium regulations and trawled illegally within the...prohibited area,” a spokesperson of the China Coast Guard, said.  He also accused it of using the wrong fishing gear and “damaging marine fishery resources.”

Chinese authorities have seized and detained 17 Taiwan-registered vessels since 2003 for fishing during the summer-time ban, according to Taipei.

It was for a moment a tense standoff as three Taiwanese coast guard ships were dispatched to rescue the boat. But they did not pursue them because there were four other Chinese coast guard ships approaching and they did not want to escalate tensions.

The two sides used loudspeakers with their demands.  One day things will escalate.

Separately, according to a study from the Center for Strategic and International Studies, a Washington-based think tank, images captured from space show the growth of Cuba’s electronic eavesdropping stations that are believed to be linked to China, including new construction at a previously unreported site about 70 miles from the U.S. naval base at Guantanamo Bay.

Last year the Wall Street Journal first reported that China and Cuba were negotiating closer defense and intelligence ties, including jointly operating eavesdropping stations on the island, according to U.S. officials.

The concern has been China is using Cuba’s geographical proximity to the southeastern U.S. to scoop up sensitive electronic communications from American military bases, space-launch facilities, and military and commercial shipping.

North Korea: Pyongyang launched a short-range ballistic missile and another one, the two going about 70 and 370 miles, according to the South Korean military.  On Sunday, North Korea had reiterated it would have an “overwhelming response” against joint South Korean, U.S. and Japanese military exercises.

Iran: We had a presidential run-off today, July 5th, after neither of the front runners last week secured more than 50% of the vote in the first round of voting, government officials said. Saeed Jalil, a hardline conservative, will face Masoud Pezeshkian, the only reformist candidate who was allowed to stand.

Jalili is a zealous ideologue loyal to Supreme Leader Ayatollah Ali Khamenei who plans to resolve the country’s social, political and economic ills by adhering to the hardline ideals of the 1979 Islamic Revolution, assuming he wins the second round of voting.  Pezeshkian narrowly beat Jalili in the first round, but the other hardline candidates will have their people voting for Jalili, Pezeshkian the only ‘reformer’ in the election.

Jalili, 58, was once Iran’s top nuclear negotiator and was an opponent of Tehran’s 2015 nuclear pact.  He is currently a member of a body that mediates in disputes between parliament and the Guardian Council, a body that screens election candidates for their political and Islamic qualifications.  He is staunchly anti-Western.  He also lost his right leg in the 1980s in fighting during the Iran-Iraq war.

But it’s Khamenei who wields power over the armed forces, has the power to declare war, controls the nuclear program and appoints all senior figures in the government and state media.

Random Musings

--Presidential approval ratings....

Gallup: 38% approve of President Biden’s job performance, 58% disapprove; 33% of independents approve (June 3-23).

Rasmussen: 43% approve, 56% disapprove (July 3).

--The aforementioned new CNN national poll of largely registered voters, conducted June 28-30, has President Biden’s approval rating at a new low of 36%, with 45% now saying they strongly disapprove of his performance, a new high in CNN’s polling.

Among the full U.S. public, Biden’s favorability rating stands at just 34%, with 58% viewing him unfavorably.

In a matchup between Trump and Biden, Trump leads 49% to 43%, identical to the results of CNN’s national poll on the presidential race in April.  But among independents, Trump wins 44-34.

If Kamala Harris replaces Biden, she trails Trump 47-45.

A generic congressional matchup in the poll suggests a near-even contest for the House of Representatives; 47% of registered voters nationwide would choose the Republican candidate in their district, 45% the Democrat.

--A New York Times / Siena College national poll, post-debate, showed Donald Trump’s lead had widened, as concerns President Biden is too old to govern effectively rose to new heights among Democrats and independent voters.

Trump leads Biden 49% to 43% among likely voters (notice, same as the CNN poll), a three-point swing toward the Republican from a week earlier.

Overall, 74% of voters view Biden as too old for the job, up five percentage points since the debate.  Concerns about Biden’s age have spiked eight points among Democrats in the week since the debate, to 59%.  The share of independent voters who said they felt that way rose to 79%, nearly matching the Republican view of the president.

When possible third-party and independent candidates were added, Trump’s lead expanded by two points in the last week, Trump ahead of Biden 42% to 37%, with Robert F. Kenedy Jr. at 8%.

President Biden’s job approval rating was just 34%.

--A new Wall Street Journal national poll of registered voters, post-debate, also had Biden’s approval rating at 34%.

In a two-person matchup, Trump led Biden 48% to 42%, the widest in Journal surveys dating to late 2021 and compared to a 2-point lead in February.

With third-party candidates included, Trump still led Biden by seven points, 40%-33%, with RFK Jr. at 10%, followed by Jill Stein (2%) and Libertarian Chase Oliver (1%).

Amazing uniformity in these surveys.

--Independent presidential candidate Robert F. Kennedy Jr. said on Tuesday he has “so many skeletons in my closet,” when asked about an allegation in a Vanity Fair article that he sexually assaulted a former family babysitter.  Kennedy told a podcast on Tuesday, “I am not a church boy.” “I had a very, very rambunctious youth,” he said. “I said in my announcement speech that I have so many skeletons in my closet that if they could all vote, I could run for king of the world.”

And we are supposed to vote for him why?

--Manhattan prosecutors on Tuesday agreed with Donald Trump’s request to postpone his criminal sentencing in the hush money case, which was scheduled for next week, July 11, so that the judge overseeing the case could weigh whether a recent U.S. Supreme Court ruling might imperil his conviction, new court filings showed.

It is up to the judge to determine whether to postpone the sentencing, though with both sides in agreement, a delay seemed likely.  Judge Juan Merchan then announced sentencing would be delayed to Sept. 18, well after the Republican National Convention, which runs from July 15 to 18.

Judge Merchan also said he would rule Sept. 6 on whether the case should be set aside.

--Former New York City Mayor Rudy Giuliani was disbarred for his part in Donald Trump’s election interference efforts in 2020.

The New York Supreme Court announced the decision on Tuesday prohibiting Giuliani from practicing law, effective immediately.

Giuliani previously was suspended from being able to practice law while the New York court considered attorney discipline proceedings against him.

“The seriousness of (Giuliani’s) misconduct cannot be overstated,” the court wrote.  ‘(Giuliani) flagrantly misused his prominent position as the personal attorney for former President Trump and his campaign, through which (he) repeatedly and intentionally made false statements, some of which were perjurious, to the federal court, state lawmakers, the public...and this Court concerning the 2020 Presidential election, in which he baselessly attacked and undermined the integrity of this country’s electoral process.”

Giuliani, the court said, “not only deliberately violated some of the most fundamental tenets of the legal profession, but he also actively contributed to the national strife that has followed the 2020 Presidential election, for which he is entirely unrepentant.”

--A county in central Chinese province of Hunan was hit with the worst flooding in 70 years after torrential storms, with local authorities declaring it a “wartime” emergency situation.

One-third of Pingjiang – home to 1.15 million people in Hunan’s northeast, was under water as high as nine feet.

--Hurricane Beryl strengthened to Category 5 status late on Monday after it devastated the island of Carriacou in Grenada as the earliest Cat 4 storm in the Atlantic, though later in the day the National Hurricane Center in Miami said its winds had increased to Cat 5.

Initially, Grenada’s prime minister said one person had died but he could not yet say if there were other fatalities because authorities couldn’t assess the situation on the islands of Carriacou and Petite Martinque, where there were initial reports of major damage, with communications down.

We then learned other small islands in the area (Union and Mayreau) were essentially totally devastated.  Beryl then set its sites on Jamaica, which while heavily damaged, was lucky Beryl passed a little more south than feared.

In becoming a Cat 5, Beryl shattered the record for earliest Cat 5 by more than two weeks – Hurricane Emily on July 17, 2005.

As I go to post, the death toll stood at nine, but the destruction in the area of the Grenadines and St. Vincent, as well as Barbados, is unfathomable.

Having crossed Mexico’s Yucatan peninsula, Beryl should restrengthen into a hurricane, as it potentially gears up for a hit on the Corpus Christi, Texas, area...according to the forecast as I go to post.

--Extreme heat is on tap for the weekend and beyond, with some all-time records, not just records for the date, at risk of falling.

Las Vegas could see its all-time high of 117 eclipsed on Sunday.  Palm Springs’ record of 123 is in danger.

The temperature in Death Valley could skyrocket to 130 degrees next week, which if it does would set the record for the hottest temperature ever “reliably measured on earth,” according to Scientific American.

In much of the rest of the U.S., heat and high humidity are leading to dangerous heat index readings.

--Finally, a potentially sad update...the white bison born in Yellowstone National Park I wrote of last week, named Wakan Gli by the Lakota, has not been seen since the initial sighting.  This wouldn’t be unusual.  About 1 in 5 bison calves die shortly after birth.

But a bunch of stories spread on social media that the calf never existed, which park officials then had to refute.  My proprietary Global A-hole Meter just hit a new high of 55 (on a scale of 100).

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

Pray for Ukraine.

God bless America.

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Gold $2398
Oil $83.14...up a fourth straight week

Bitcoin: $56,520 [4:00 PM ET, Friday] ...hit $53,500 earlier in the week, lowest in more than four months.

Regular Gas: $3.51; Diesel: $3.84 [$3.52 - $3.84 yr. ago]

Returns for the week 7/1-7/5

Dow Jones  +0.7%  [39375]
S&P 500  +2.0%  [5567]
S&P MidCap N/A
Russell 2000 -1.0%
Nasdaq   +3.5%  [18352]

Returns for the period 1/1/24-7/5/24

Dow Jones  +4.5%
S&P 500  +16.7%
S&P MidCap  +4.1%
Russell 2000  -0.02%
Nasdaq  +22.3%

Bulls 63.1...danger territory
Bears 16.9

Hang in there. Stay hydrated.

Brian Trumbore

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