Week in Review

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Week in Review

08/24/2024

For the week 8/18-8/23

[Posted 4:30 PM ET, Friday]

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Edition 1,323

Vice President Kamala Harris had one mission Thursday night at the Democratic National Convention, her introduction to America. Have viewers thinking at the end of her address, ‘I can see her as president, even if I don’t agree with her policies.’  And can Harris improve Democrats’ chances down-ballot.  You’d have to say on these two fronts, it was mission accomplished.

I get into the details below, but we also still have the rather important issue that Harris has yet to sit down for even one comprehensive interview to face difficult questions about her flip-flops on policy in recent years, such as dropping her opposition to fracking and her support for Medicare for All, which were defining features of her 2019 presidential campaign.

But Sept. 10, the vice president is squaring off in a debate with Donald Trump, and the ABC News moderators are not going to let Harris off the hook.  She will be forced to answer some basic questions, including on her rise to power without a single primary vote!   And of course, Trump will be ready to pounce.

For now, I cover Joe Biden’s swan song down below, but following is the meat of the DNC in the Windy City....

Tuesday night, Barack and Michelle Obama delivered blistering critiques of Donald Trump while painting Vice President Harris as the heir of their historic political legacy.

They said the groundbreaking candidacy of the first woman of color to lead a major party presidential ticket had returned joy and hope to national politics.  But they also offered rebukes of the Republican standard-bearer.

The former first lady began her remarks by describing the energy that she said was currently coursing through the party, stirring memories of a central theme of Obama’s 2008 run.

“America, hope is making a comeback,” she said to rapturous applause.

Later, Barack Obama drew similar parallels.

“I’m feeling hopeful because this convention has always been pretty good to kids with funny names who believe in a country where anything is possible,” he said.

But, in targeting Trump, who led a multiyear campaign to question the birthplace of her husband, the former first lady said:

“For years, Donald Trump did everything in his power to try to make people fear us,” adding that “his limited, narrow view of the world made him feel threatened by the existence of two hardworking, highly educated, successful people who happen to be Black.”

Playing off of a remark in the first presidential debate, Michelle also issued a barb, saying Trump might not realize that “the job he’s currently seeking might just be one of those Black jobs.”

Barack mocked Trump suggestively over his obsession with crowd size and called him a danger to the nation.

But the crowd was most riveted by Michelle Obama, who delivered a sharp rejoinder to her 2016 call that “when they go low, we go high.”

“Going small,” Obama said, “is never the answer.  Going small is the opposite of what we teach our children.  Going small is petty, it’s unhealthy, and quite frankly, it’s unpresidential.”

And she pointedly jabbed Trump.

“It’s his same old con: doubling down on ugly, misogynistic, racist lies as a substitute for real ideas and solutions that will actually make people’s lives better,” she said.

Editorial / Wall Street Journal

“This is a polarized country in a polarized age, and Mr. Trump is part of the story, especially his madness after the 2020 election. But Americans who will nonetheless vote for Mr. Trump aren’t aching for dictatorship.  They’re looking at the alternative, and they don’t see Democrats as sinless guardians of U.S. institutions.

“When Democrats lose, they have a habit of escalating by demanding to change the rules: end the filibuster; override voting laws in 50 states; abolish the Electoral College; restructure the Supreme Court; and grant D.C. statehood to add two new safe Democratic Senate seats.  Don’t bet that a President Harris and a Democratic Congress wouldn’t do it.”

Wednesday night, Tim Walz introduced himself to America, delegates in the packed arena waving signs that read “Coach Walz” – as the crowd chanted “coach, coach, coach!”

His speech, which was good, was heavy on his personal story, as he told the crowd that he was “ready to turn the page on these guys,” referring to Donald Trump and running mate JD Vance.  “So say it with me: ‘We are not going back.’”

Walz repurposed some of the zingers he gave in Philadelphia, Pa., earlier this month after being chosen as Kamala’s running mate.

“In Minnesota, we respect our neighbors and the personal choices they make,” he said.  “And even if we wouldn’t make the same choices for ourselves, we’ve got a Golden Rule – mind your own damn business!”

Personal freedom has become a common refrain among Democrats at the convention and in pivoting to it, Walz described “the hell of infertility.”

IVF fertility treatment has become entangled in America’s debate over abortion rights and Walz has repeatedly alluded to the process on the campaign trail when talking about his family’s story, which he has been describing incorrectly, giving Republicans a clear shot at his credibility.

His wife, Gwen, recently clarified that they went through a different procedure.

On the convention stage, Walz said he wanted to talk about their struggle having children because this election was about “freedom.”

“When we Democrats talk about freedom, we mean your freedom to make a better life for yourself and the people you love,” he said.

“The freedom to make your own health care decisions.  And, yeah, your kids’ freedom to go to school without worrying they’ll be shot dead in the halls.”

Editorial / Wall Street Journal, Part II

“Kamala Harris takes the Chicago stage on Thursday in the culmination of one of the most audacious bets in recent political history: That in 100 days Democrats can turn the co-pilot of an unpopular Presidency into the reincarnation of Barack Obama’s movement for hope and change.  On present course they might even pull it off.

“That’s the message that Michelle and Barack Obama were selling as they extolled Ms. Harris in their Tuesday speeches in Chicago.  And it’s no accident that the Vice President has recruited Mr. Obama’s campaign operatives to advise, if not entirely take over, her campaign.  Out go the bad memories of her association with Joe Biden, and in come the gauzy slogans about ‘our future,’ the ‘contagious power of hope,’ and ‘fighting on behalf of people who need a voice and a champion.’

“Ms. Harris is no longer the Vice President who failed to secure the border.  She’ll now be tough on illegal migration.

“She’s no longer the Veep who said ‘Bidenomics is working’ while inflation reached a 40-year high. She’s now the candidate who will reduce your family’s food bill by going after your grocer for ‘price gouging.’

“She’s no longer the candidate of 2020 who questioned the need for cash bail and blamed police for urban violence. She’s now the tough prosecutor who as California Attorney General dared to investigate...Exxon.

“She’s no longer the presidential candidate of 2019 who wanted to ban fracking, endorsed Medicare for All, and questioned whether the current Immigration and Customs Enforcement agency should exist.  Her campaign suggests she’s changed her views on all that, although she hasn’t said why – or even been asked.  Americans are expected to take her expedient leap from the left to the center on faith.

“The Democratic Party has a history of nominating candidates who are relatively unknown and offer hope and change.  Jimmy Carter was a one-term Georgia Governor who promised a more honest politics in 1976.  Bill Clinton was ‘the man from Hope,’ Ark., whose character flaws were overlooked in 1992.  Mr. Obama was a first-term Senator promising to unite the country in 2008.  His divisiveness in office paved the way for Donald Trump.

“The difference this time is that all of those men were more vetted than Ms. Harris, who was handed the Democratic nomination without a primary contest. She hasn’t done an interview of note since her elevation as the nominee, much less one with any hard questions. Her speeches are scripted and more Teleprompter-safe even than the remarks of the declining President Biden. She is the least known presidential nominee in modern times.  What does she really believe?

“On domestic policy, it’s possible to infer that she’d pursue President Biden’s agenda, perhaps even more aggressively....

“Foreign policy is where the Vice President’s known unknowns are most troubling.  The U.S. faces the greatest security risks since the end of the Cold War, and probably since World War II....

“Yet Ms. Harris hasn’t had to explain her security views on much of anything....

“The Vice President can try to slipstream behind Mr. Biden’s foreign policy for the rest of the campaign, but as President her personal instincts and decision-making will be paramount.  She hasn’t explained to the public what her core principles are, or even who she relies on for foreign-policy advice.

“Perhaps Ms. Harris has qualities of leadership we haven’t observed.  Vice Presidents called on unexpectedly have sometimes risen to the occasion, as Harry Truman and Gerald Ford did.  Perhaps, too, she will show some of those qualities in Thursday’s speech or in the campaign to come.  But so far she is a vessel for the triumph of hope over experience, whom Americans are expected to embrace mainly because she isn’t Donald Trump.”

Well, last night, Thursday, Kamala Harris largely met the moment.  She hit the key notes her campaign wanted, though no soaring rhetoric or policy details, not that you would expect them in a speech of this kind.

The ground-breaking was in the nature of the candidate herself – the first woman of color to become a major party’s presidential nominee.

“Never let anyone tell you who you are,” Harris said. “You show them who you are.”

The vice president, however, never referred to her potential status as the first woman president, let alone first Black female to occupy the Oval Office.

She talked of her middle class upbringing and becoming a lawyer – and prosecutor.

“My entire career, I have only had one client,” she said.  “The people.”

The vice president called for unity and a pathway beyond the “bitterness, cynicism and divisive battles” of modern American politics.

She said the U.S. had a “precious, fleeting” opportunity to “chart a new path forward,” but gave no details.

Harris spoke in generalities and of a focus on lowering the costs of “everyday needs” – including healthcare, housing and groceries.  She framed abortion rights as preserving freedom.

“America cannot truly be prosperous unless Americans are fully able to make their own decisions about their own lives, especially about matters of heart and home,” she said.

At least in the speech, Harris presented herself as a center-left moderate.

What some of us found surprising was her emphasis, near the end of the speech, on foreign policy, though she linked herself with President Biden when it came to Israel and the Gaza War, saying the scale of the Palestinians’ suffering was “heartbreaking.”  Which was hardly enough for the protesters outside all week (handled well by the Chicago police).

She also voiced her strong support for Ukraine.

When it came to Donald Trump, she called him an “unserious man,” adding, “But the consequences of putting Donald Trump back in the White House are extremely serious.”

Trump himself was a busy beaver on social media throughout the convention.  Wednesday night he criticized Democratic Governor Josh Shapiro:

“The highly overrated Jewish Governor of the Great Commonwealth of Pennsylvania, Josh Shapiro, made a really bad and poorly delivered speech,” Trump wrote following Shapiro’s rousing address.  ‘I have done more for Israel than any President...Shapiro has done nothing for Israel, and never will.”

Trump was more on message after Vice President Harris’ speech, calling into Fox News.

“The biggest reaction is, why didn’t she do the things she’s complaining about,” the former president said.  “All of these things that she talked about, we’re going to do this, we’re going to do that.  We’re going to do everything.  But she didn’t do any of it.”

Trump also called Harris “lazy,” a rather obvious trope.

Editorial / Wall Street Journal

“Kamala Harris introduced herself to the American public on Thursday, and her presentation was much like this week’s Democratic convention: well delivered, confident and optimistic, and mostly devoid of policy substance.  Whether she can keep this up, unexplained and unexposed, for the next 12 weeks will determine whether she becomes America’s 47th President.

“The Vice President spoke with authority and admirable brevity at 37 minutes. She opened with a lengthy account of her own biography, relying heavily on the story of her mother’s lessons and resilience as a divorced single parent.  It’s not an unusual American story, which may have been the point as she tries to convince voters to take a risk on someone they know little about.

“But she then turned to the main business at hand, which was to make the case that the real risk is re-electing Donald Trump. Her attack was a mix of truth and falsehoods – truth about his effort to overturn the 2020 election, but falsehoods that he intends to cut Medicare and Social Security and that Project 2025 is his agenda.  He has repeatedly disavowed the latter and has shown no plan or interest in touching entitlements despite their looming bankruptcy.

“Her largest distortion concerned abortion, claiming that Mr. Trump wants to pass a national ban on ‘reproductive rights,’ which is the euphemism Democrats now use for abortion. Mr. Trump has stated time and again that abortion should be a state issue and he won’t sign a national ban.  Ms. Harris said Thursday that she is the one who wants a national law reimposing a nationwide abortion right.

“Ms. Harris attempted to lay out a vision for her Presidency, but it was mostly empty platitudes. She will provide ‘opportunity,’ though she didn’t say how. She will solve the housing crisis, without saying how or explaining why there is a crisis on her watch. And she will reduce prices, without a repeat of her recent proposal to impose price controls.

“The lack of specificity is part of a strategy to separate herself from the Biden-Harris years by calling for a vague ‘new way forward.’  The idea seems to be that the less specific she is, the less chance she will be associated with the unpopular parts of the Biden tax-regulate-and-spend agenda that produced a decline in real American incomes.  Until she disavows this agenda, voters can assume they are also her proposals.

“The Vice President wisely devoted several minutes on foreign policy to meet the test of being Commander in Chief. And if forceful delivery is the measure, she passed the test.  The substance was less compelling....

“The speech and the convention are likely to give Ms. Harris a boost in the polls, though they also leave an opening for Mr. Trump on her flight from substance....

“The Republican will have to smoke out the Vice President on her policy views, which she will attempt to disguise until the end.  Calling her ‘comrade Kamala’ won’t do it, nor will labels like ‘Marxist’ and ‘Communist.’....

“He’ll have a chance in the debate, and it may be his only one given how the press will keep Ms. Harris in a protective cocoon.

“Nikki Haley said during the GOP primaries that the first party to elevate a younger nominee would win the election.  GOP voters didn’t listen and nominated Mr. Trump for the third time, perhaps confident that he could beat an enfeebled Joe Biden.  But Democrats, always more pragmatically ruthless, saw the polls going south and told Joe to go.

“Ms. Harris is eminently beatable, but Mr. Trump will need to do more than repeat his stale lines from 2016.  If he can’t make voters see that Ms. Harris’ views on energy, taxes, spending and so much more are out of step with middle America, he will lose.”

Peggy Noonan / Wall Street Journal

“Kamala Harris’ speech was fine, and delivered with assurance... It stuck to resume values and life experiences, rather than a sharing of her thinking.  I’m not sure it advanced her position with those who aren’t already with her.

“There is a small but persistent cloud that follows her, which can be distilled down to the idea that she was swiftly and mysteriously elevated to her current position, that we don’t know everything about how that happened, and that people aren’t fully comfortable with it.  I don’t think she succeeded in lightening or removing the cloud....

“The convention’s overall impression was summed up by a relative who, watching on the second night, observed: ‘This is what they’re saying: ‘We’re a grand coalition, we’re more of a vibe than a party, and we’re not him.’  Plenty of people will want to join that.’....

“Something else. The Democratic Party has more substantial characters of recent American history to parade around on stage. The Clintons, the Obamas, Jesse Jackson, who, whatever your view of him, was there, on the balcony at the Lorraine Motel, where Martin Luther King was shot. This conveyed a party with a storied past, and if you join it you’re joining something real.  The Republican Party, in its great toppling, has rejected its past. You lose something when you cast your history aside, and all you’ve got for prime time is Trump sons.

“And now the race.  It’s a toss-up, no one knows where this is going.”

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I posted last Friday shortly after Kamala Harris’ speech touting her economic platform, vowing to build “an opportunity economy” if elected, an economic agenda seeking to tackle residual inflation with sweeping new subsidies and tax benefits for poor and middle-class Americans.  The plan includes aggressive and costly initiatives that – if passed into law by Congress – would provide a $25,000 subsidy to first-time home buyers, significantly expand tax credits for parents and cap out-of-pocket prescription drug prices.

Harris put her agenda squarely to the left of President Biden on some key aspects of economic policy.

Where Biden focused on insufficient investments in infrastructure, green-energy technologies, and a tax system that favors the accumulation of wealth over work, Harris is calling for governmental intervention at a micro level on issues popular with her base, such as rolling back medical debt, and expanding on a Biden push to eliminate federally backed student debt.

She did have a good campaign line when she said in North Carolina: “I think that if you want to know who someone cares about, look at who they fight for.

“Donald Trump fights for billionaires and large corporations. I will fight to give money back to working and middle-class Americans.”

But her big issue was attacking “price gouging,” which is ludicrous. 

Price gouging is what you and I think of after a natural disaster, when convenience stores and  supermarkets jack up the price of water threefold, or the price of consumer staples.  Or it’s the hordes of out-of-state contractors taking advantage of the lack of help and charging $3,000 for a job that normally costs $500.

Or it’s gas stations jacking prices beyond what the oil and gas market warrants just because they can in such an emergency.

That’s price gouging.

The term that Harris should be using is “collusion.”  Companies unfairly collude all the time.  Back to the gas station example, you know in your area how some of them collude on price.  [This is not the oil companies’ fault; I hasten to add.]

There have been examples of collusion in air fares, grocery items, drug prices...all investigated by the federal government since you and I have been alive, and before then.

She’s needlessly confusing voters with her misuse of the term price gouging.  Because it’s just not happening at the grocery store!  Collusion, maybe, in some cases.

Just my opinion.

Everyone with any knowledge of the American economy these days, especially post-pandemic, also knows that the rise in prices, whether at the grocery store or for a Big Mac, is due to the fact that production and labor costs have soared.  The higher cost of a Big Mac you know is largely all about labor, or the cost of your meal at Applebee’s.

Alas, when we stopped going to McDonald’s and Applebee’s, or stopped buying premium cereal, everyone and their mother was forced to offer $5 special meal deals, or $10 deals, in the case of an Applebee’s, to get you back in their establishments.  Same thing with groceries.  I’m buying generic store brands and saving 50%.  They may not taste quite as good, but in such a case, just add a bunch of salt or sugar, he typed with a smile.

For a more professional opinion, Ryan Sweet, chief U.S. economist at Oxford Economics, a research firm, said in an interview with Barron’s that when it comes to Harris’ plan:

“I don’t really buy into the argument that corporate profits are behind the bulk of the increase in inflation, either this year or since the end of the pandemic.” Rather he and other mainstream economists speak of too much demand in the economy, fueled by government support for households, colliding with supply-chain problems and other pandemic mishaps to cause prices to spike.

Donald Trump, at a campaign rally in Wilkes-Barre, Pa., Saturday, ripped Vice President Harris’s plan to slap socialist price controls on groceries, saying she’s gone “full Communist.”

Trump compared Harris’ economic proposals to reduce inflation that “Comrade Kamala” announced a day earlier – which includes cracking down on price gouging – to infamously failed communist plans pushed in Venezuela and the Soviet Union.

“In her speech yesterday [Ed. a week ago Friday], Kamala went full Communist,” Trump told a packed house of supporters.

“She wants to destroy our country. After causing catastrophic inflation, Comrade Kamala announced that she wants to institute socialist price controls,” Trump said.

Food prices have surged more than 20% nationwide during the Biden-Harris administration. 

“What they are doing is a communist takeover of our country,” Trump said of the Harris proposal.

And Trump had a good line, addressing Harris’ ‘first 100 days.’

“Day one for Kamala was three and a half years ago. So why didn’t she do it then?  So this is day 1,305.”

To address high prices, Trump said he would sign an executive order on his first day sworn in as president “directing every cabinet secretary and agency head to use every power we have to drive prices down, but we’re going to drive them down in a capitalist way, not in a communist way,” which was a bit nonsensical.

Trump praised a Washington Post editorial ripping Harris’ proposal.  To wit, from the Post:

“Vice President Kamala Harris’ speech Friday was an opportunity to get specific with voters about how a Harris presidency would manage an economy that many feel is not working well for them.  Unfortunately, instead of delivering a substantial plan, she squandered the moment on populist gimmicks.

“Americans are clearly still anxious and angry about the high cost of groceries, housing and even $5.29 Big Macs.  While the inflation rate has cooled substantially since the 2022 peak, an ostensible Biden-Harris administration accomplishment, prices remain elevated relative to the Trump years. So it’s a real political issue for Ms. Harris.  One way to handle it might be to level with voters, telling them that inflation spiked in 2021 mainly because the pandemic snarled supply chains, and that the Federal Reserve’s policies, which the Biden-Harris administration supported, are working to slow it.  The vice president instead opted for a less forthright route: Blaming big business. She vowed to go after ‘price gouging’ by grocery stores, landlords, pharmaceutical companies and other supposed corporate perpetrators by having the Federal Trade Commission enforce a vaguely defined ‘federal ban on price gouging.’

“Never mind that many stores are currently slashing prices in response to renewed consumer bargain hunting.  Ms. Harris says she’ll target companies that make ‘excessive’ profits, whatever that means.  (It’s hard to see how groceries, a notoriously low-margin business, would qualify.)  Thankfully, this gambit by Ms. Harris has been met with almost instant skepticism, with many critics citing President Richard M. Nixon’s failed price controls from the 1970s.  Whether the Harris proposal wins over voters remains to be seen, but if sound economic analysis still matters, it won’t.”

The Wall Street Journal editorial board, on the issue of fixing food prices, notes:

“Fixing prices is a recipe for shortages, as controls would discourage grocery suppliers. Voila, empty store shelves. Price controls have led to shortages everywhere they’ve been tried, from Moscow to Caracas....

“If Ms. Harris really believes in this price-fixing, she lacks the most basic understanding of economics.  If she is merely floating it to be able to get ‘price gouging’ into a speech, her cynicism is also telling.”

Back to the former president, it wasn’t all policy at the Wilkes-Barre rally.  Nope.

“You don’t mind if I go off teleprompter for a second, do you?  Joe Biden hates her.”

When he began musing on Harris’ recent image on the cover of Time magazine, he commented on the picture’s resemblance to classic Hollywood icons Sophia Loren and Elizabeth Taylor and then took issue with a Wall Street Journal columnist [Ed. Peggy Noonan] remarking earlier this month on Harris’ beauty.

“I am much better looking than her,” Trump said, drawing laughs from the crowd.  “I’m a better looking person than Kamala.”

Trump repeatedly described Harris as a “lunatic” and mocked her laugh.  “As soon as she laughs, the election’s over,” he said.

Trump took issue with the way his style is typically portrayed in news reports.

“They will say he’s rambling. I don’t ramble.  I’m a really smart guy,” he said.

Back to Trump’s economic agenda, he has doubled down on past promises to use presidential authority to impose tariffs, saying he would impose rates as high as 20% on imports, up from an earlier proposal of 10%, which would aggravate inflation and slam lower-income people in particular.

Neither candidate has talked realistically about how they would pay for their various plans, including Trump’s proposed elimination of taxes on Social Security benefits, which would hasten the date when the plan’s trust fund runs out of money, and increase deficits further.

Casey B. Mulligan / Wall Street Journal

“Much of America’s inflation since 2020 has resulted from one word: ‘Yea.’  That’s what Vice President Kamla Harris said, twice, breaking Senate ties to advance the American Rescue Plan of 2021 and the Inflation Reduction Act of 2022.  These laws didn’t reduce inflation; they caused it.

“Together, they increased federal spending by more than $3 trillion. A new study from the Committee to Unleash Prosperity finds that such a fiscal surprise translates to at least 6% higher consumer prices in an economy the size of the U.S.  Therefore, Ms. Harris’ two votes were responsible for at least half of the excess inflation (beyond 2% annually) that occurred between 2020 and 2024.

“If Ms. Harris had gotten her way fully, inflation would have been even worse.  While a senator, Ms. Harris introduced in 2020 the Monthly Economic Crisis Support Act, which would have paid most U.S. residents $2,000 a month until three months after the pandemic emergency’s official end.  Had that bill become law, payments would have continued through August 2023 and cost an additional $15 trillion.  Cumulative inflation would have been more than 50%, rather than 20%, between December 2020 and July 2024.”

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Russia-Ukraine

--Saturday, Ukrainian President Volodymyr Zelensky urged Kyiv’s allies to lift the remaining restrictions on using Western weapons to attack targets deeper into Russia, including in Kursk, saying his troops could deprive Moscow of “any ability to advance and cause destruction” if granted sufficient long-range capabilities.

“It is crucial that our partners remove barriers that hinder us from weakening Russian positions in the way this war demands. ...The bravery of our soldiers and the resilience of our combat brigades compensate for the lack of essential decisions from our partners,” Zelensky said in a post on X.

--We then learned the ‘official’ goal of the Ukrainian incursion into Russia’s Kursk region.  President Zelensky said in his nightly address on Sunday that the Ukrainians aimed to create a buffer zone that can prevent future attacks on his nation from across the border, and that Ukraine is capturing a large number of Russian prisoners of war that it hopes to exchange for captured Ukrainians.

“It is now our primary task in defensive operations overall: to destroy as much Russian war potential as possible and conduct maximum counteroffensive actions.  This includes creating a buffer zone on the aggressor’s territory – our operation in the Kursk region.”

Zelensky said Monday that he believes Ukraine’s actions would help to dispel Western fears of offering more robust military aid to Kyiv. Some allies have been handing over weapons slowly and imposing limits on how they can be used, fearing that crossing a Russian “red line” could lead to escalation, even nuclear escalation.

“We have now achieved an extremely important ideological shift: the naïve and illusory concept of so-called ‘red lines’ regarding Russia that dominated the assessments of the war by some of our partners has crumbled these days somewhere near Sudzha,” the president said, referring to a seized Russian town now under Ukrainian control.

--Wednesday, Russia said Moscow came under the largest attack yet by Ukrainian drones since the start of fighting in 2022 and that it destroyed all of them.

Russia destroyed 45 Ukrainian drones overnight, Russia’s Ministry of Defense said.  It said 11 were destroyed over the Moscow region, 23 over the Bryansk region, six over Belgorod, three over Kaluga and two over Kursk.

“This was one of the biggest attempts of all time to attack Moscow using drones,” Moscow Mayor Sergey Sobyanin said on his Telegram channel.

Alexander Bogomaz, the governor of the Bryansk region, said there was a “mass” attack on his region but that 23 drones were destroyed.

--As for the incursion, the Institute for the Study of War, a think-tank based in Washington, said Tuesday that the Ukrainians have made additional advances.  It noted that Ukrainian forces appear to be striking Russian pontoon bridges and pontoon engineering equipment over the Seym River in an area west of the Kursk oblast.

Earlier, Ukrainian forces either destroyed or damaged all three bridges over the Seym, week three of the incursion.  Such a move by Kyiv could potentially trap Russian forces between the river, the Ukrainian advance and the Ukrainian border.

As of Tuesday, Ukraine’s army had captured 1,263 square kilometers (488 square miles) and 93 settlements, according to Ukraine’s top military commander, Gen. Oleksandr Syrskyi.

President Zelensky later said in a video address that the Ukrainian army was achieving “set goals” in Kursk.

While exact figures, including on casualties, aren’t known, The Economist reported Ukraine has expanded its forces in Kursk to 10,000-20,000 soldiers, far more than the initial estimate of 1,000.  If true, that’s a lot of firepower no longer able to help out in the embattled eastern Donbas, as described further below.

As Jack Watling of the Royal United Services Institute wrote in the Guardian:

“Ukraine’s wider military position remains precarious, and the autumn looks to be politically challenging.  Kyiv must strike a balance, preparing for the loss of critical supplies without burning its ability to fight on.”

A year ago this week, President Putin strode onto a stage in the Kursk region to commemorate the 80th anniversary of one of the Soviet army’s proudest moments in World War II.  Putin called the Battle of Kursk “one of the great feats of our people.”  Now?  A year later?

Putin and his military were caught unprepared by the offensive and reportedly he is drafting conscripts to repel some of Ukraine’s most battle-hardened units.

Putin, though, has a history of responding slowly to various crises in his tenure, and he has continued to play down the attack.  But Ukraine’s firing 45 drones at regions other than Kursk was yet another signal to the Russian people, the war has come home.

The president and his officials have referred to “the events in the Kursk region” as a “situation,” or “provocation.”  State media fell into line, showing evacuees queueing for aid or donating blood, as if the events in Kursk were a humanitarian disaster and not the largest attack on Russia since World War II.

Putin has always portrayed himself as the only person who could guarantee Russia’s security and stability.  That image has suffered a big hit since the war began.

Think about it.  Yevgeny Prigozhin launched a brief uprising last year, and gunmen stormed a Moscow concert hall and killed 145 people in March.

Now, more than 122,000 have been forced to evacuate the Kursk region.

The incursion into Russia has raised morale in Ukraine and changed the dynamic of the fighting.

But...Ukraine continues to lose ground in its eastern industrial region of Donbas.  The key city of Pokrovsk is under severe threat.

Wednesday, the Institute for the Study of War, citing Russian media, wrote: “Russian state TV channels are notably covering Ukraine’s incursion in Kursk Oblast as a limited operation, while actively contrasting it with Russian advances in the Pokrovsk direction, which Russia media is painting as major victories.”

Pokrovsk is a gateway to larger cities Dnipro and Zaporizhzhia. On Monday, officials advised residents to leave as soon as they can, with Russian forces as close as 10 kilometers away.

--Among other developments during the week, A Russian oil depot was in flames for at least three days following a Ukrainian drone attack over the weekend in the southern Rostov city of Proletarsk.  The AP reported “there are 500 firefighters involved in the operation, and 41 of them already have been hospitalized with injuries,” the AP citing Russian state media.

Russia unleashed missile and drone attacks on Ukrainian energy infrastructure Monday, causing “a huge fire in the west of the country,” in the Ternopil region, “resulting in an increase in chlorine levels in the air,” Reuters reported.

And then early Thursday, Ukraine used aerial drones to attack an airbase in Russia’s Volgograd region, the strike targeting warehouses containing fuel and glide bombs to degrade Russia’s air power.  Unconfirmed video posted on Russian social media purported to show the Marinovka Air Base ablaze.  Russia’s defense ministry said it had repelled drones over five other regions overnight.

Ukraine also struck a rail ferry on Thursday that carries fuel between the Russian mainland and the occupied Crimean Peninsula.

--The Wall Street Journal reported 50,000 Russians “have deserted or refused orders to fight,” citing rights activists.  That’s partly why officials have launched campaigns to punish draft dodgers and track down deserters, which often leads to imprisonment.

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Israel-Iran-Hezbollah-Hamas

--Secretary of State Antony Blinken left the Middle East late Tuesday having failed to secure a deal to halt fighting between Hamas and Israel, highlighting how the two sides remain sharply divided despite U.S. officials’ insistence that an agreement is close.

Blinken spent the day meeting with Egyptian and Qatari officials and reiterated that Israel had agreed to what he called a “bridging” agreement that would create space for the two sides to hammer out the details of a cease-fire introduced by President Biden in May.  Now it’s Hamas’ turn, he said.

“Time is of the essence,” Blinken told reporters on the airport tarmac in Doha, minutes before beginning the trip home to the U.S.  “Israel has now accepted that proposal – I heard that directly from Prime Minister Netanyahu yesterday – and we hope and expect Hamas will do the same.”

Hamas refused to even show up for the negotiations in Doha.  [Monday, it claimed a suicide bombing in Tel Aviv...a backpack of explosives going off early, killing only the bomber, but the blast could have inflicted mass casualties at a nearby synagogue or soccer stadium.]

Blinken has made nine trips to the region since Hamas’ Oct. 7 attack on Israel, and the result has been the same.

While he has vowed to “never give up,” with each passing day the risk of harm to the remaining hostages increases.

Wednesday, President Biden told Netanyahu that Israel must bring a ceasefire and hostage-release deal in Gaza “to closure,” according to the White House.  In a call, the leaders also discussed America’s support for Israel’s defense against Iran, which is still thought to be preparing a military strike.

Editorial / Wall Street Journal

“The main sticking point (to an agreement) is the Philadelphi Corridor, separating Gaza and Egypt.  Israel insists on keeping forces there to prevent Hamas from rearming. Hamas insists Israel leave, because it wants to rearm.  Neither the Palestinian Authority nor Egypt can be trusted to control the corridor and thwart Hamas.  Israel has discovered more than a dozen tunnels from Gaza into Egypt, including one big enough for military jeeps to pass through.

“The Biden Administration’s temptation will be to up the pressure on Israel, where it feels it has leverage, to concede on this.  The President wants the headlines before the November election to hail him as the statesman who ended the war.  But Israel can’t countenance a deal that would let Hamas go back to plotting and preparing for the next Oct. 7 massacre.”

--Israeli forces recovered the bodies of six Israeli hostages from the Khan Younis area of southern Gaza, as part of an operation overnight Monday, highlighting the plight of the scores of captives remaining in the enclave.

All but one of the six was already known to have died in captivity, though how they died was not revealed.

--A top commander in Hezbollah’s al-Hajj Radwan Force was killed on Saturday in southern Lebanon, the terrorist organization confirmed.

The Israel Defense Forces released aerial footage, showing the drone strike that is believed to have taken out Hussein Ibrahim Kassab.  Kassab was killed as he rode a motorcycle through the coastal city of Tyre.

The IDF said Kassab’s death marks the 412th killing of a Hezbollah operative since Oct. 7.

More than 530 people have been reported killed in Lebanon, among them at least 130 civilians, and 49 people in Israel, including 26 civilians. Almost 200,000 people have also been displaced on both sides of the border.

Hezbollah, in turn, launched 55 rockets at northern Israel on Saturday in response to a deadly Israeli airstrike overnight that left 10 people dead near the city of Nabatieh in south Lebanon.  The Lebanese health ministry claimed the ten victims were Syrian nationals and included a woman and her two children.  There were no reported injuries from the Hezbollah strikes.

Overnight Tuesday, Hezbollah launched dozens of rockets at the occupied Golan Heights after Israeli aircraft struck deep inside Lebanon, as fears of an all-out war persist.

The Israeli military said it hit Hezbollah weapons storage facilities in the Bekaa Valley.  The Lebanese health ministry said one person was killed and 30 injured.

--The Israeli military again ordered Palestinians to “immediately” leave parts of Deir al Balah, in central Gaza, on Wednesday, saying that it would act “forcefully” against militants in the area.  More than 150,000 displaced people have been living in the areas subject to the new evacuation orders, according to the United Nations. 

Nearly a dozen such orders issued just this month by the IDF have so far affected an estimated 250,000 people and further disrupted the already limited access to water in the enclave, as well as the movement of aid, the UN said.

Airstrikes in the area since Tuesday killed at least 28.

--Defense Minister Yoav Gallant said Wednesday that more than 150 tunnels had been demolished along the Egypt-Gaza border area, the aforementioned Philadelphi Corridor, and that Hamas’ Rafah Brigade had been defeated.  He said the Israeli military was “looking to the north now,” indicating that it was starting to wrap up a three-month offensive in southern Gaza.

--Turning to Iran, American intelligence agencies said on Monday that Tehran was responsible for hacking into former President Trump’s campaign and trying to breach the Biden-Harris campaign.

Longtime Trump adviser, Roger Stone, revealed that his Hotmail and Gmail accounts had been compromised.  That intrusion evidently allowed Iranian hackers to impersonate him and gain access to the emails of campaign aides.

The announcement was just another indication of how foreign intelligence organizations have mobilized to interfere in the 2024 election, with heightened partisan polarization here and escalating tensions abroad.

“Iran seeks to stoke discord and undermine confidence in our democratic institutions,” intelligence officials wrote in a joint statement from the FBI, the Office of the Director of National Intelligence and the Cybersecurity and Infrastructure Security Agency.

The Islamic republic has “demonstrated a longstanding interest in exploiting societal tensions through various means,” the officials added.

The joint statement did not specify how the agencies knew Iran was responsible.  But they expressed confidence that the Iranians used “social engineering” – posing as trusted members of an organization’s societal network – to people with direct access to the inner communications of the presidential campaigns in both parties.

The agencies didn’t specify which, if any, outcome Iran might favor in November.

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Wall Street and the Economy

Prior to Fed Chairman Jerome Powell’s annual speech today at the Jackson Hole Economic Symposium, we had a release of the Fed’s minutes from their July 30-31 meeting and several members of the Open Market Committee acknowledged there was a plausible case for cutting interest rates even then before the group unanimously voted to keep them steady.

“Several observed that the current progress on inflation and increases in the unemployment rate had provided a plausible case for reducing the target range 25 basis points at this meeting and that they could have supported such a decision,” the minutes showed.  “The vast majority observed that, if the data continued to come in about as expected, it would likely be appropriate to ease policy at the next meeting.”

Powell himself had said at the July 31 press conference after that the committee was looking for “greater confidence” that inflation is headed to its 2% target before beginning to cut rates.

“A majority of participants remarked that the risks to the employment goal had increased, and many participants noted that the risks to the inflation goal had decreased,” the minutes said.  “Some participants noted the risk that a further gradual easing in labor market conditions could transition to a more serious deterioration.”

Inflation has come down sharply, with the consumer price index falling from a peak of 9.1% to 2.9% in July.  Given the progress, the critical question facing Fed officials is no longer how much economic damage it will take to wrestle price increases back under control. It is whether they can finish the job without inflicting much damage at all and engineer a soft landing.

On the jobs front, we also had a big revision to the employment picture, with a periodic report from the Labor Department noting the economy added far fewer jobs in 2023 and early 2024 than previously reported, a sign that cracks in the labor market are more severe – and began forming earlier – than initially believed.

The Labor Department said monthly payroll figures overstated job growth by roughly 818,000 in the 12 months that ended in March.  That suggests employers added about 174,000 jobs per month during that period, down from the previously reported pace of about 240,000 jobs – a downward revision of about 28 percent.  That’s big.

The revisions, which are preliminary, are part of an annual process in which monthly estimates, based on surveys, are reconciled with more accurate but less timely records from state unemployment offices.  The new figures, once finalized, will be incorporated into official government employment statistics early next year.

For now, further ammunition for the Fed to begin reducing rates in September.

So that was the picture prior to Chair Powell’s address, with the drop-dead gorgeous Teton Mountains of Jackson Hole, Wyoming posing as the backdrop for the obligatory walk outside with other key bankers.

And Powell delivered what the markets wanted to hear, clearly signaling that the central bank was prepared to begin cutting rates in September.

While Powell stopped short of giving a clear hint how large of a cut is coming, he emphasized the Fed is prepared to adjust policy to protect the job market from weakening further and to keep the economy on a path for a soft landing.

“The time has come for policy to adjust,” Powell said.  “The direction of travel is clear, and the timing and pace of rate cuts will depend on incoming data, the evolving outlook, and the balance of risks.”

He then added: “We will do everything we can to support a strong labor market as we make further progress toward price stability.”

And he hinted the Fed is willing to cut rates quickly if the job market appears to be at risk.

“We do not seek or welcome further cooling in labor market conditions,” he said, later adding that a strong labor market could be maintained with “an appropriate dialing back of policy restraint.”

“The upside risks to inflation have diminished,” Powell said.  “And the downside risks to employment have increased.”

Will the Fed lower rates 25 or 50 basis points at the Sept. 17-18 confab?  I would say 25, for now, but we have a personal consumption expenditures index reading next Friday, the Fed’s preferred inflation barometer, a jobs report on Sept. 6, and another CPI release on Sept. 11, all prior to the decision.

Meanwhile, July existing home sales rose for the first time since February, 1.3% over June to a 3.95 million annualized pace, down 2.5% year-over-year, as reported by the National Association of Realtors. The median existing home price jumped 4.2% from a year earlier to $422,600.

July new home sales were far better than expected, 739,000, vs. a revised upward figure for June of 668,000, up 10.6%, the highest monthly change since August 2022.

The Atlanta Fed’s GDPNow barometer for third-quarter growth is at 2.0%, no fresh figures this week.

Freddie Mac’s 30-year fixed rate mortgage is 6.46%.

Europe and Asia

--The final euro area inflation rate for July was 2.6%, up from 2.5% in June. A year earlier, the rate was 5.3%.

Germany 2.6%, France 2.7%, Italy 1.6%, Spain 2.9%, Netherlands 3.5%, Ireland 1.5%.

--The flash eurozone PMI for August (courtesy of S&P Global and Hamburg Commercial Bank) was 51.2 for the composite, vs. July’s 50.2 (50 the dividing line between growth and contraction).  The manufacturing index was 45.7, services 53.3.

Germany: manufacturing 42.9; services 51.4
France: mfg. 42.1 (7-month low); services 55.0

UK: mfg. 54.2; services 53.5

Dr. Cyrus de la Rubia / Hamburg Commercial Bank:

“At first glance, this looks like a pleasant surprise: activity in the Eurozone picked up in August. But a closer look at the numbers reveals that the underlying fundamentals might be shakier than they appear. The boost largely comes from a surge in services activity in France, with the Business Activity Index jumping by almost five points, likely linked to the buzz surrounding the Olympic Games in Paris.  It’s doubtful this momentum will carry over into the coming months, however.  Meanwhile, the overall pace of growth in the services sector has slowed down in Germany, and the eurozone’s manufacturing sector remains in rapid decline.”

Turning to Asia...nothing of import on the economic data front from China this week.

Japan’s flash PMIs for August came in at 49.5 for manufacturing; 54.0 services.

July exports rose 10.3% year-over-year, worse than forecast; and imports were up 16.6% Y/Y, a little better than expected.

And the key inflation numbers for July had consumer prices up 2.8% year-over-year, unchanged from June, but ex-food and energy the figure was 1.9%, vs. 2.2% prior, and the first time below the Bank of Japan’s key 2% target since September 2022.

Street Bytes

--Stocks finished broadly higher a second week after an ugly stretch and it’s all about optimism that the Federal Reserve is about to embark on a series of rate cuts.  The Dow Jones rose 1.3% to 41175, just shy of its all-time high, while the S&P 500 and Nasdaq are nearing their highs after gains of 1.4%.

The big item for next week is Nvidia’s earnings, Wednesday.

--U.S. Treasury Yields

6-mo. 4.89%  2-yr. 3.91%  10-yr. 3.80%  30-yr. 4.10%

Treasuries rallied across the board, even before Powell’s remarks today.  Next Friday’s PCE will be important.

--The Iran-backed Houthis disabled another ship in the Red Sea on Wednesday.  At three in the morning, the commercial vessel was approached by about 16 men in two boats while transiting west of the Houthi-controlled port city of Hodeidah.  There was then a “brief exchange of small arms fire,” followed by a two-hour period of little notable activity, according to British maritime authorities.

Then the ship was hit by two projectiles at 5 a.m., and a third about 50 minutes later.  The vessel is now “drifting and not under command” while a fire was reported onboard, according to the Brits.

So it’s not like normal ship traffic in the Red Sea is going to resume anytime soon.

--We caught a break after Canadian National Railway and Canadian Pacific Kansas City shut down their rail networks and locked out nearly 10,000 workers after unsuccessful negotiations with a major labor union.

This set the stage for an unprecedented rail stoppage that could badly damage the Canadian economy and have a significant effect on cross-border trade with the United States.

But Thursday, the Canadian government moved, and the two sides agreed to binding arbitration, so it was back to work Friday.  A prolonged work stoppage would have severely impacted U.S. supply chains.

However, while Canadian National Railway was operating Friday, workers at Canadian Pacific Kansas City remained out, trains parked, as the union representing the railways’ 10,000 employees plans to challenge the government order to enter arbitration to resolve their contract dispute.

The Teamsters said the work stoppage remains ongoing, pending an order from the Canada Industrial Relations Board.  A hearing was scheduled for today but no word on how quickly the board will issue its decision.

--Target shares soared 12% Wednesday after the discount retailer shredded Wall Street profit forecasts, topping them by $0.39 a share on the back of renewed traffic to stores. Traffic increased by 3%, with all six departments at Target contributing to the improvement.

CEO Brian Cornell said the company’s comeback quarter reflects a steady dose of price cuts this summer on 5,000 daily essentials – items where Target was losing market share to rival Walmart for several quarters in a row.

“We feel great about the reaction that we’re seeing from the consumer based on the 5,000 items where we’ve seen price reductions,” Cornell told reporters on a call.  “It certainly contributed to traffic growth during the quarter – we expect that to continue over the balance of the year.”  He declined to say if more price cuts were coming.

Target stayed cautious with its full-year sales guidance as it enters the dueling peak seasons of back to school and the holidays.  But it did lift its full-year profit forecast amid the second quarter beat and improved traffic trends.

Net sales were up 2.7% year-over-year to $25.5 billion, slightly ahead of consensus.  Comparable sales rose 2%.

Third quarter earnings per share are projected to be $2.20 to $2.40, vs. estimates for $2.24.  Comp sales are expected to be unchanged to up 2%.  Full-year earnings are projected to be $9.00 to $9.70, vs. estimates for $9.22.

Target also highlighted that shrink (theft) increased by more than $500 million last year compared to 2022.  Profits took a $700 million hit from the issue in 2022.

But the company said it is making progress, as it employs locking cases for merchandise categories prone to theft.  Target’s CFO Michael Fiddelke noted: “The things that we feel good about are the progress we’re seeing in our partnerships at the federal and state and local level.”

Target did close nine stores last fall where the theft and organized retail crime issue were “threatening the safety of our team and guests, and contributing to unsustainable business performance,” the company said at the time.  Three of the stores were near San Francisco and Oakland, and three in Portland, Ore.

--Lowe’s lowered its full-year guidance after quarterly sales came in weaker than expected amid a shaky backdrop for home-renovation expenditures.

The home-improvement retailer said it now expects softer sales and adjusted earnings for 2024, citing macroeconomic pressure and weak demand from do-it-yourself homeowners, who make up about 75% of its customers.

Comparable sales were down 5.1% last quarter vs. the Street’s forecast of -4.4%, as customers bought fewer big-ticket items and poor weather conditions weighed on seasonal and other outdoor purchases.  The decline was partially offset by higher sales online and among professional customers. [Rival Home Depot had reported comp sales of -3.3% a week ago for the quarter.]

Revenue fell 5.5% to $23.59 billion, below analyst forecasts.  Adjusted earnings were $4.10 a share, a bit ahead of consensus of $3.97.

For 2024, Lowe’s now expects sales of $82.7 billion to $83.2 billion, with comp sales falling 3.5% to 4%.  Adjusted earnings are forecast to be between $11.70 to $11.90 a share.  It previously forecast revenue of $84 billion to $85 billion, with same-store sales dropping 2% to 3% year-over-year.

“We’re all aware that we have an environment of elevated interest rates and inflation, and because of that, the DIY customer is just on the sidelines waiting for some form of an inflection to take place,” CEO Marvin Ellison said on an earnings call.

--Boeing and its new CEO are facing another setback, forced to halt test flights of one of its upgraded large planes after discovering cracks in part of the jet’s structure that connects the engine to the fuselage.  It didn’t say how long the grounding might last, or whether it would affect delivery plans in 2025.

Boeing said that during scheduled maintenance, it found and replaced a component that didn’t perform as designed on the 777x, adding it will resume flight testing when ready.  It’s the first new manufacturing issue for CEO Kelly Ortberg, who took over from Dave Calhoun on Aug. 8.

Boeing has delivered more than 1,700 triple-seven jets over 30 years, and says this upgrade is the largest and most fuel-efficient twin-engine jet in the world, capable of carrying 426 passengers over long distances.

The new 777x was unveiled in 2013, with a goal to start delivering them by 2020, but it is years behind that schedule.

Boeing has orders for 540 of the 777x aircraft.  Wall Street expects 12 of them to be delivered in 2025 and 24 in 2026.  The company is still delivering older 777 planes.

Boeing is already dealing with a slowdown in the production of the MAX jets, a cap ordered by the Federal Aviation Administration after an emergency door plug blew out midflight on an Alaska Air 737 MAX 9 jet in January.

--TSA checkpoint numbers vs. 2023

8/22...106 percent of 2023 levels
8/21...106
8/20...107
8/19...108
8/18...110
8/17...104
8/16...106
8/15...105

--Nvidia’s much-anticipated earnings release is next week, but Monday, the stock soared 4% even as the company looked to be facing fiercer competition down the road from Advanced Micro Devices.

AMD, also up 4%, said it had agreed to pay nearly $5 billion to buy ZT Systems, a designer of data-center equipment.  AMD is hoping the acquisition helps it compete with NVDA as the next generation of data centers houses more numerous and powerful AI chips.  The move might also remove one of Nvidia’s infrastructure partners: ZT Systems announced a new server design housing Nvidia’s GB200 chips in June.

AMD CEO Lisa Su said ZT has more than $10 billion in annual sales, versus AMD’s $22.7bn last year. AMD plans to sell ZT’s manufacturing business and keep its system design business.  Su said ZT’s value is in helping set up the data centers that train AI systems.

While Nvidia is leading the chip industry in AI, others are trying to catch up.  AMD raised its forecast for AI chip sales to $4.5 billion after beating quarterly expectations last month.

ZT CEO Frank Zhang will stay at the company after the acquisition.

--General Motors is laying off 1,000 salaried workers in its software and services division.

--Facing competition from automakers with lower costs, Ford Motor Co. is shifting its electric vehicle strategy and now will focus on making two new electric pickup trucks and a new commercial van.  The company says all will cost less, have longer ranges and be profitable before taxes within a year of reaching showrooms.

Ford is losing billions on its current EVs but gave few details about the new products.  It did say production of its next-generation full-size electric pickup truck in Tennessee will be delayed 18 months, until 2027.

The company also says it won’t build fully electric three-row SUVs due to high battery costs, but instead will focus on making those vehicles as gas-electric hybrids.

“We’re committed to creating long-term value by building a competitive and profitable business,” Chief Financial Officer John Lawler said in a statement.

The company said it will cut capital spending on EVs.  It now will spend 30% of its annual capital budget to develop them rather than the current 40%.

Ford lost $2.46 billion on EVs in the first half of the year, dragging down profits from its gas-powered and commercial units.

U.S. electric vehicle sales rose 7% during the first half of the year to 599,134, Motorintelligence.com reported. EVs accounted for 7.6% of the U.S. new vehicle market, about the same as it was for all of last year.

Sales of gas-electric hybrids skyrocketed 35.3% from January through June to 715,768, eclipsing electric vehicle sales.

--A big rig caught fire Monday morning and shut down Interstate 80 in California in both directions for hours, with westbound lanes reopened 16 hours later, according to officials.  The truck caught fire around 3 a.m., about 70 miles northeast of Sacramento, as posted by California Highway Patrol.

The only reason why I’m writing this is because the semi-truck was a Tesla, as reported by KCRA and CBS.

According to KCRA, the truck drove off the road and crashed into a tree. Its battery then caught fire, shutting down the interstate after it released toxic fumes that were an inhalation danger.

It took multiple agencies to put out the fire.  Fire retardant needed to be airlifted to the scene to make sure the fire didn’t spread to the surrounding forest, a California Highway Patrol spokesman said.

Yes, a big lithium battery can cause big, very troubling fires.

Tesla delivered its first consignment of Semi electric trucks to Pepsi’s Frito Lay production facility in Modesto, California in December 2022.

--Macy’s reported another quarter of declining sales, a month after turning down a $6.9 billion buyout offer.

On Wednesday, Macy’s reported a 3.8% year-over-year decline in net sales to $4.9 billion, missing estimates of $5.06bn.  Same-store sales fell 4%, worse than the expected 0.3% drop.  As a result, Macy’s stock plummeted 12%.

Adjusted earnings of $0.53 did beat the Street’s expectations by a wide margin.  CEO Tony Spring called the quarterly results “strong” against a “challenging consumer environment” in the earnings release, but regarding the conversations around a potential buyout bid from one of its shareholders, Arkhouse, Macy’s said “continuing diligence is not warranted or in the best interest of shareholders,” citing, as before, the uncertainty around financing of the deal, a “less than compelling value proposed” ($24.80 per share), and the negotiation being a “significant distraction for the management team.”

Instead, Macy’s is doubling down on its turnaround strategy, dubbed “A Bold New Chapter.”

The strategy includes closing underperforming stores, improving remaining “going forward” locations, and investing in digital sales.

Spring said in the release that same-store sales have increased in the first 50 locations that Macy’s has prioritized.

Same store sales for its luxury subsidiary Bloomingdale’s dropped 1.1%, but jumped 2% for its cosmetics chain Bluemercury.

--With mortgage rates declining over the course of the summer (though that has yet to translate to a more active resales market), Toll Brothers forecast deliveries of 10,650 to 10,750 homes in its full fiscal year, compared with a previous forecast for 10,400 to 10,800 deliveries, according to a statement Tuesday. 

Purchase contracts for the three months through July rose 11% from the same period a year earlier to 2,490.  While that missed consensus of 2,790, the company said it has seen solid traffic this month and expects that momentum to continue through the current quarter.

“With mortgage rates at their lowest point in a year and trending lower, favorable demographics, and continued imbalance in the supply and demand of homes for sale, we are optimistic that demand will remain solid through the end of fiscal 2024 and into 2025,” CEO Douglas Yearley Jr. said in a statement.

--Gold futures set fresh record highs this week as optimism around U.S. interest-rate cuts grows and central banks continue to build reserves.

--At least one person was killed and six others, including a British software mogul, were missing on Monday after a sailing yacht carrying 22 people sank during a violent storm off the coast of Sicily, Italian officials said.

The yacht sank after a storm “with strong winds” struck around 5 a.m., according to the Italian Coast Guard.  The vessel had been anchored about a half mile off Porticello, about 12 miles east of the Sicilian capital, Palermo.

The managers of the boat said there were 12 guests and 10 crew onboard.

Aside from the human tragedy, this became an international story because among those missing was Mike Lynch, a British software mogul called at times “Britain’s Bill Gates,” or Steve Jobs, who was acquitted in the United States in June of fraud from the sale of his company, Autonomy Corp., to Hewlett Packard Co. 

Lynch was actually celebrating the acquittal on what was his yacht, according to reports.  The 59-year-old and his 18-year-old daughter were on board with a small group of his financial and legal advisers when the storm hit.

Even after his acquittal, Lynch was still fighting the Silicon Valley giant in a civil case in London, where a British judge held him responsible for creating the illusion of a company much larger and more successful than it really was.

To make the tragedy worse, Stephen Chamberlain, once Mike Lynch’s co-defendant in the U.S. trial, died after being hit by a car while out running in Cambridgeshire, his lawyer said.  Chamberlain was the former vice-president of finance at Autonomy.  He was hit on Saturday morning and placed on life support, Reuters reported.

By week’s end, all six bodies had been found.

Morgan Stanley International director Jonathan Bloomer and his wife, Judy, were also victims, as well as prominent American lawyer Chris Morvillo and his wife, Meda.

--In a report from insurance marketplace website Insurify, California was identified among the three states that could see auto insurance rates spike by more than 50% by year’s end.

In June 2023, the average annual cost for full coverage was $1,666 in the Golden State.  A year later, the average spiked to $2,417, up 45%, according to Insurify.

By year end that is projected to soar to an average of $2,681 (which has to be measured against Dec. 2023, which we are told the percentage difference then would be 54%).

Among the key factors for the increase is auto theft, with California accounting for the highest number of vehicle thefts last year.

[The other two states with expected 50% hikes in auto insurance are Minnesota and Missouri.]

--Federal prosecutors in New York are investigating whether a Western Asset Management executive allocated winning trades to favored accounts, as part of a criminal probe into a practice known as “cherry-picking.”

The probe is being led by the U.S. Attorney’s Office in Manhattan, which is investigating a trading practice that involves allocating lucrative trades to favored clients and less profitable trades to others. The Securities and Exchange Commission is also conducting a separate probe.

The investigation is still ongoing, and no charges have been filed against the company or individual employees.

Western Asset on Wednesday said that its co-chief investment officer Ken Leech, who manages some of the largest bond strategies in the U.S., was taking an immediate leave of absence after receiving a Wells notice from the SEC.  Western Asset said last month that it had been alerted to SEC and DOJ investigations.

Shares in Western Asset parent Franklin Templeton suffered their largest drop in four years after the company said the Wells Notice had been sent to a top executive.  [A Wells Notice informs a person or company involved in an investigation that the regulator intends to bring an action against them.]

Frankin said it would close its $2 billion macro-opportunities strategy, which Leech oversaw.

--The BBC reported that Starbucks’ new CEO, Brian Niccol, has come under fire after it was revealed he will commute almost 1,000 miles from his family home in Newport Beach, Calif., to the firm’s headquarters in Seattle on a corporate jet.

Not exactly in keeping with the company’s public stance on green issues and the lifestyles of its top executives.

Niccol is due to take the helm Sept. 9.  His job offer said he would not “be required to relocate to the company’s headquarters,” but added: “You agree to commute from your residence to the company’s headquarters...as is required to perform your duties and responsibilities.”

His contract states he will be able to use the company’s aircraft for “business related travel” and for “travel between [his] city of residence and the company’s headquarters.”

Starbucks is setting up an office in Newport Beach for Niccol to use when working from California.

Starbucks has a hybrid work policy that means employees have to be in the office at least three days a week.

The company has not confirmed whether the same rules will apply to Niccol or whether him working from the new remote office in California would fulfill those requirements.

--Scientists are warning that the bird flu virus that has bedeviled American farms is likely to find a firm foothold among dairy cattle.  And while the virus, H5N1, does not easily infect humans, and the risk to the public remains low, the longer the virus circulates in cattle, the more chances it gains to acquire the mutations necessary to set off an influenza pandemic.

“I think the window is closing on our ability to contain the outbreak,” said Dr. Krutika Kuppalli, an infectious-disease physician who worked at the World Health Organization until April.

As of Wednesday, infections have been reported in 192 herds of cattle in 13 states, and in 13 people.  Nine were workers at poultry farms close to dairy farms in Colorado.

“We need to understand the extent of the circulation in dairy cattle in the U.S., which we don’t,” said Dr. Maria Van Kerkhove, the acting director of pandemic preparedness and prevention at the W.H.O.

--Talk show legend Phil Donahue died Monday.  He was 88.  His wife of 44 years, actress Marlo Thomas, 86, who is best known for starring in the 1960s and ‘70s sitcom, “That Girl,” posted, “I’m sure by now you’ve heard the very sad news that I lost my sweetheart last night.”

Stalking the aisles, microphone in hand, Phil Donahue turned his show into a participation event, soliciting questions and comments from his studio audience on topics from human rights to orgies.

“The Phil Donahue Show” made its debut in 1967 on WLWD-TV in Dayton, Ohio, propelling Donahue on a 29-year syndicated run, much of it as the unchallenged king of daytime talk television.

Donahue had no opening monologues, no couch, no sidekick, no band – just the host and the guests, focused on a single topic.  He quickly realized from chatting with audience members during commercial breaks that some of them asked sharper questions than he did.  And so he began his practice of stalking the aisles, mic in hand, and letting those in the seats have their say.  He also opened the phone lines to those watching at home.

Over the years he moved from Dayton to Chicago, and then New York in 1985.  He interviewed presidential candidates, including a very pissed off Bill Clinton, who didn’t care for Donohue’s questioning on his sexcapades, and Hollywood stars.  He was among the first television hosts to explore the AIDS epidemic of the 1980s, and the first Western journalist to go to Chernobyl, in Ukraine, after the 1986 nuclear accident there.

Donahue won 20 Daytime Emmy Awards, including a lifetime achievement Emmy in 1996.

I had to smile when I heard of Donahue’s passing because my mother was often in the studio audience, in the front row.  I saw a line in his New York Times obituary that “People waited 18 months for studio tickets,” but not Mom!  She had a connection that I can’t recall exactly who it was, but my brother and I were always getting calls saying “look for me on Donahue” if we happened to be home, though Dad would also tape the episodes, so we watched them later.  It cracked us up.

The Times observed:

“His appeal to women was unmistakable.  He treated them like the adults they were, and on many days they made up 90 percent of his studio audience. ‘The average housewife is bright and inquisitive,’ he said in 1979, but television had treated her for too long ‘like some mental midget.’”

Alas, Donahue’s ratings dried up by the mid-1990s.  As early as the mid-1980s he had been overtaken by Oprah Winfrey.  He also lost audience share to the likes of Jerry Springer, Geraldo Rivera and Sally Jessy Raphael, “My illegitimate children,” Donahue called them.  Phil hung it up in 1996.

--“Alien: Romulus” won the box office last weekend, collecting $41.5 million at theaters in the U.S. and Canada, a strong total that solidified a turnaround in Disney’s movie division.  So far this summer (from May 1 to Sunday), Disney films have accounted for 42 percent of total ticket sales in the U.S. and Canada, according to Box Office Mojo, a film database.  Last summer, Disney had about a 27 percent market share.

With the successful release of “Alien: Romulus” (20th Century), the company has now delivered four consecutive hits.  In May, Disney rolled out “Kingdom of the Planet of the Apes,” a 20th  Century movie that cost about $160 million to make and collected nearly $400 million worldwide.  “Inside Out 2” (Pixar) arrived in June and has taken in $1.6 billion worldwide.  In July, “Deadpool & Wolverine” (Marvel) set a record for the largest R-rated opening in Hollywood history and has gone on to sell $1.1 billion in tickets.  More hits could follow with “Moana 2”, “Mufasa: The Lion King”, and “Captain America: Brave New World,” all coming out in the next few months.

--Finally, last week I missed the passing of Wally Amos, creator of Famous Amos Cookies.  He died of complications of dementia at the age of 88, according to his children Tuesday.

Wally Amos got started in 1975, taking a $250,000 loan from a few friends in Hollywood to start Famous Amos, one of the first brands to push high-quality cookies in its own stores.

Derived from a recipe he had learned from his aunt, his cookies used real ingredients, no coloring or chemicals added, and he kept them as close to handmade as possible, even as the company exploded into national distribution through the early 1980s.

What began with a single store in Los Angeles that made $300,000 in revenue its first year became by 1981 a $12 million company (about $42 million in today’s dollars), with dozens of Famous Amos stores across the country and packaged products sold in supermarkets and department stores like Bloomingdale’s.

All of his cookies – chocolate chip with peanut butter, chocolate chip with pecans, and butterscotch chips with pecan – were handmade at the store.

While the cookies were proclaimed to be delicious, it was Wally Amos who became a big draw himself; the ever-smiling energetic pitchman in a Panama hat and colorful shirts.

Amos started in the business world working in the mailroom at the William Morris talent agency.  By 1961, he had worked his way up to the title of junior agent – the first Black person to hold that position at the agency and one of the first in the country.  He later jumped at the opportunity to open his own agency in Los Angeles.

Among his initial investors were Marvin Gaye and Helen Reddy.

Eventually, however, he was forced to sell off large stakes of the company to private equity investors and he was forthcoming in saying he struggled once he lost control.

Foreign Affairs, Part II

China: China’s Coast Guard rammed several Philippine Coast Guard vessels in the South China Sea, ripping a hole in two of the vessels.

Chinese officials pointed the blame at the Philippines and accused them of “unprofessional and dangerous” behavior at sea and of “deliberately colliding” with the Chinese vessels.

Jonathan Malaya, assistant director-general of the Philippine government’s National Security Council, accused the Chinese coast guard of disinformation for saying that the Philippine coast guard ships rammed its vessels.

The incident occurred near Sabina Shoal, a disputed atoll in the Spratly Islands, where there are overlapping claims are also made by Vietnam and Taiwan.

Meanwhile, the Chinese navy has staged combat drills in the South China Sea featuring one of its most advanced amphibious warfare ships.

The Jinggang Shan, a Type 071 landing ship, “recently” took part in an extensive drill over several days, according to a post by the People’s Liberation Army’s Southern Theatre Command.

The ship is capable of carrying hundreds of troops and dispatching four hovercraft and 15 amphibious vehicles at the same time.

No doubt Taiwan is ‘gaming out’ how to deal with such a ship at various potential landing areas on the island.

U.S. Navy Adm. Sam Paparo, who is in charge of Indo-Pacific Command, observed of the tensions in the body of water: “The People’s Republic of China claims an absurd footprint of sea space that defies logic (and) that impinges not just on the Republic of the Philippines, but of every state within the South China Sea,” he said at a conference in Honolulu recently.

Chinese officials were reported to be very alarmed by a U.S. Army missile system sent to the Philippines back in April for exercises with regional allies, the Associated Press reported last weekend. But the missile system was reportedly never fired during the exercises and “may be transported out of the country next month,” the AP wrote.

--On a different issue, as reported by David Sanger of the New York Times:

“President Biden approved in March a highly classified nuclear strategic plan for the United States that, for the first time, reorients America’s deterrent strategy to focus on China’s rapid expansion in its nuclear arsenal.

“The shift comes as the Pentagon believes China’s stockpiles will rival the size and diversity of the United States’ and Russia’s over the next decade.

“The White House never announced that Mr. Biden had approved the revised strategy, called the ‘Nuclear Employment Guidance,’ which also newly seeks to prepare the United States for possible coordinated nuclear challenges from China, Russia and North Korea.  The document, updated every four years or so, is so highly classified that there are no electronic copies, only a small number of hard copies distributed to a few national security officials and Pentagon commanders.

A more detailed, unclassified notification to Congress is expected before Biden leaves office.

What’s truly scary is the thought of a need to deter China, Russia and North Korea simultaneously, and potentially Iran.

Whoever is sworn in next Jan. 20 will confront a more volatile nuclear landscape than the one that existed just a few years ago.

For those touting a better picture under Donald Trump, it was Trump, who after three in-person meetings with North Korea’s Kim Jong Un, said Kim would surrender his nuclear weapons. Instead, Kim doubled down, and now has as many as 60 weapons, officials estimate, and the fuel for many more.  Thus, it’s large enough to, in theory, coordinate threats with Russia and China.

Random Musings

--Presidential approval ratings....

Gallup: New numbers...43% approve of President Biden’s job performance, 53% disapprove; 37% of independents approve (Aug. 1-21).  Prior split, before he withdrew from the race, 36-58, 31.

Rasmussen: 43% approve, 56% disapprove (Aug. 23).

--A new CBS News/YouGov poll had Kamala Harris beating Donald Trump, nationally, among likely voters, 51-48.  But when looking at just the battleground states, it was 50-50.  [When you add in third-party candidates, there’s no real difference, as Robert F. Kennedy Jr. is down to just 2%.]

Among men, Trump beats Harris, 54-45.  Among women, Harris has a 56-44 advantage.

Under age 30, Harris has a 64-35 advantage.

With Blacks, Harris leads 82-17, and among Hispanics, 58-41.  With white voters, Trump leads 56-44.

The issues that are top of mind are the economy, 83%; inflation 76%; state of democracy, 74%; crime, 62%.

--A new Washington Post/ABC News/Ipsos national poll had Harris leading Trump 49% to 45% among registered voters in a head-to-head matchup.  When third-party candidates are included, Harris is at 47%, Trump 44% and RFK Jr. 5%.  In early July, Trump stood at 43%, Biden 42% and Kennedy 9%.

Biden’s job approval rating is 37%, 55% disapproving.

--Speaking of RFK Jr., he then withdrew from the presidential race in Arizona (and reportedly Pennsylvania) and then dropped out of the race overall this afternoon, ‘suspending his campaign’ and endorsing Donald Trump, and probably joining Trump at an event in Glendale, Arizona later.

The two have not always seen eye to eye, but Trump says he would be open to having the “brilliant” Mr. Kennedy in his cabinet if he wins.

For what?  I watched his announcement this afternoon and RFK’s comments on Ukraine and Putin were deeply disturbing.

It’s easy to say RFK speaks the truth on some topics, like with how Kamala Harris became the Democratic nominee, but you cannot conveniently forget this guy has been a crackpot for decades.  Look at his own family and how they disavowed him (again) this afternoon.

But can he end up being the difference in some battleground states in getting Trump over the line?  His support was already plummeting.  We’ll see where the polls are in about ten days.

--About two weeks ago, a New York Times/Siena College survey of likely voters in the battleground states of Pennsylvania, Michigan and Wisconsin had Kamala Harris ahead 50-46 in each of the three.

A new Times/Siena poll of likely voters in the four other battleground states had the following results:

Arizona...50-45 Harris
Georgia...50-46 Trump
Nevada...48-47 Trump
North Carolina...49-47 Harris

Previously, a Times/Siena poll of Arizona, Georgia and Nevada (they didn’t poll N.C.) had Trump leading Joe Biden 50% to 41%.

--A USA TODAY/Suffolk University poll of Black voters in the battleground states of Michigan and Pennsylvania has support for Kamala Harris surging, but she still has more to do to ease concerns of young, low-income and undecided Black voters about rising grocery bills and housing costs.

In Michigan, Harris’ favorability rating climbed to 72% versus 16% unfavorability, compared to a favorable-unfavorable rating of 60% to 24% in June when Biden was in the race.  In Pennsylvania, it was up to 68% to 19% in August from 55% to 30% in June. The poll found 77% of those surveyed were now “very motivated” to vote for Harris while only 52% said the same for Biden in the earlier poll.  In Pennsylvania, 78% of Black voters were very motivated to vote for Harris, compared to 61% who said they were motivated to vote for Biden in June.

But Harris isn’t at the 13 to 1 ratio Biden received in 2020 and that she likely needs to win in these states.  “When you’re at 70% you need to win 92% according to the exit polls,” said Suffolk University’s David Paleologos.  “There’s still a ways to go.”

--Editorial / Wall Street Journal

“The hosannas will ring from the rafters for President Biden in Chicago on Monday, as Democratic convention-goers hail him as another FDR with a touch of George Washington for ‘voluntarily’ giving up power.  Then they will drop him like a passing fad.

“Such is the fate of a President most Americans regard as a failure, and who was headed for defeat in a rematch against Donald Trump. It’s a sad exit for a Presidency that could have been so much better had he honored his campaign promise to unite the country and be a ‘transition’ from the Trump era.

“Recall that Mr. Biden won the White House, on his third try, as the last, best alternative to defeat Bernie Sanders, Elizabeth Warren and his party’s left.  He campaigned against Mr. Trump as a national unifier who would shun the extremes and govern from the center.

“In office he has done the opposite.  After winning control of a 50-50 Senate in Georgia’s 2021 runoffs, Democrats saw a historic opportunity to pass, well, everything.  To keep progressives on side, Mr. Biden struck a Faustian bargain to pursue much of Mr. Sander’s agenda. To Ms. Warren he gave veto power over his financial regulators. Above all, he sublet his Presidency to Nancy Pelosi, Chuck Schumer and Democrats in Congress, who sought the greatest expansion of government since LBJ’s Great Society....

“Mr. Biden followed the left on border security, and the main result has been poisoning the chance for any immigration compromise. His failure to adapt on the border may be the mystery of his team.

“His foreign policy legacy won’t be complete until we see how the wars play out in Ukraine and the Middle East.  But we know his ignominious withdrawal from Afghanistan was a sign of national weakness that encouraged adversaries around the world.  He wasn’t able to deter Vladimir Putin from invading Ukraine, nor Iran and its proxies from threatening the very existence of Israel.

“Mr. Biden did better in the Pacific, notably in building an architecture of allies willing to resist Chinese domination.  The Aukus pact, expanded military ties with Japan, and closer ties with the Philippines are examples.

“But history’s harshest verdict may be that, with adversaries on the march, Mr. Biden proposed cuts in U.S. defense spending after inflation every year of his Presidency.  This will haunt the next President, whoever it is, if the new axis of adversaries in China, Russia, Iran and elsewhere seek to exploit a U.S. military without the means to meet its global commitments....

“Mr. Biden’s selfish plan to run for a second term was undone by a growing senescence he was unwilling to admit. Had he announced early in 2023 that he wouldn’t run again, both parties might have reset their primaries with younger nominees better able to address America’s growing challenges at home and abroad.

“In the end Mr. Biden was forced out of his re-election ambitions by Mrs. Pelosi and his fellow Democrats lest he take down the entire party this year.  His last-minute departure has left America with a choice between an untested Vice President who never had to seek a single primary vote and a former President who is disliked by more than half the public.

“Democrats will call this a triumph if Ms. Harris manages to win, but she or Mr. Trump will inherit a country more divided and dispirited than when Joe Biden was elected.  That is the unfortunate legacy of the Biden Presidency.”

--Joe Biden then gave his convention speech at the disgraceful, and disrespectful, hour of 11:30 p.m. ET (11:28), well out of prime time.  I was flipping back and forth between the DNC and Mets game, which ended at about 9:30, so I then left the convention on, and around the 10:00 hour, I was thinking, what are the Democrats doing?  The Republicans did a great job of staying on time in their convention.  The Democrats’ show was a train wreck on that front.  [They improved the rest of the week.]

I mean we all know Joe should have been on at 4:00 p.m., the outer limit of his attention span.   They could have had a live ‘soundcheck’ then that passed for the formal speech.

At 11:30, I was lying on the sofa, attempting to stay awake, and I largely did until the president wrapped nearly an hour later.

“Like many of you, I gave my heart and soul to this nation,” he said, towards the end of his address.

“Selecting Kamala was the very first decision I made when I became your nominee and it’s the best decision I made my whole career,” he said.  “She’s tough, she’s experienced, and she has enormous integrity.”

Otherwise, the president shouted at us a lot, as he has been prone to do the last two years in particular, and it doesn’t matter what he says the rest of his term, though all of us should be worrying about what could happen on the foreign policy front in the interim.

Editorial / Washington Post

“ ‘Our best days are not behind us; they’re before us,’ President Joe Biden declared to a rapturous crowd at the Democratic National Convention in Chicago.

“If he had his way, Mr. Biden would have spoken these words while accepting his party’s presidential nomination on Thursday night.  But the mood at the convention would have been grim – a divided party in the United Center – and a diminished Mr. Biden, at the head of a dispirited party, would likely have lost in November....

“It is Mr. Biden’s willingness to surrender power, albeit via internal machination rather than the ballot vox, that deserves special recognition.  It creates a powerful and, for Mr. Biden, favorable contrast with Mr. Trump – who refused to acknowledge defeat in 2020 and instead stirred up a mob in Washington on Jan. 6, 2021.  The last weeks have shown how Mr. Biden’s act created a pathway for a new generation of Democratic leaders.”

--Former New York Republican congressman George Santos, the disgraced creep who had a penchant for lying, pleaded guilty on Monday to wire fraud and aggravated identity theft.

While he will avoid a trial on a total of nearly two dozen charges – including money laundering and stealing public funds – it all but ensures he will face at least two years in prison and as long as 22 years.

Santos also had to cough up $373,750 in restitution and forfeit another $205,000 before his sentencing.

The outcome was welcome news to Republicans in New York, where the party is preparing to defend a half dozen swing seats that could decide the House majority.

While the party already lost control of Santos’s seat, representing parts of Queens and Long Island, to Democrats in a special election in February, held after Santos was expelled from Congress, a high-profile trial would have cast a shadow over other races on Long Island and in the Hudson Valley.

--The world’s oldest person, Maria Branyas Morera, died in her sleep last week at age 117, her family said in a post on X.

Branyas, an American-born Spaniard, was the eighth-oldest person in history, Guinness World Records said.

Branyas attributed her longevity to “luck and good genetics,” according to Guinness. She also cited “order, tranquility, good connection with family and friends, contact with nature, emotional stability, no worries, no regrets, lots of productivity, and staying away from toxic people.”

By the way, Branyas contracted Covid in 2020, age 113, but made a swift recovery.

--Speaking of Covid, the Food and Drug Administration approved new mRNA coronavirus vaccines Thursday, clearing the way for shots manufactured by Pfizer-BioNTech and Moderna to start hitting pharmacy shelves and doctor’s offices within a week.

I’ll definitely get one this fall, being old.

--A few weeks ago, we received word that the 13-month streak of record-breaking global warmth had ended.

From June 2023 until July 2024, air and ocean surface water temperatures averaged a quarter of a degree Celsius higher than records set only a few years previously.  But then air temps in July 2024 were slightly cooler than in the previous July (by just 0.04 degrees Celsius, according to the EU’s Copernicus Climate Change Service).

But the warm El Nino phase of the warming cycle began to kick in a year ago, reaching its peak around the end of 2023, and is now trending neutral, which is why the record-breaking streak has ended.

From Wired Magazine:

“The 2023-2024 El Nino was strong, but it wasn’t super-strong. It doesn’t fully explain the remarkable degree to which the past year broke temperature records. The exact influence of other factors has yet to be fully untangled.

“We know there is a small positive contribution from the sun, which is in a phase of its 11-year sunspot cycle in which it radiates fractionally more energy to the Earth.

“Methane (also a byproduct of the fossil fuel industry, alongside cattle and wetlands) is another important greenhouse gas, and its concentration in the air has risen more rapidly in the past decade than over the previous decade.

“Scientists are also assessing how much measures to clean up air pollution might be adding to warming, since certain particulate air pollutants can reflect sunlight and influence the formation of clouds.”

Now the good news.

“As the Pacific Ocean is now likely to revert toward La Nina conditions, global temperatures will continue to ease back but probably not to the levels seen prior to 2023-24.

“El Nino acts a bit like a ratchet on global warming. A big El Nino event breaks new records and establishes a new, higher norm for global temperatures.  That new normal reflects the underlying global warming trend.

“A plausible scenario is that global temperatures will fluctuate near the 1.4 degrees Celsius level for several years, until the next big El Nino event pushes the world above 1.5 degrees Celsius of warming, perhaps in the early 2030s.”

Enjoy the next few years of ‘normal’ global warming and think about moving to Nova Scotia or Edmonton by 2030.  Reminder: “That’s Canada...where all domestic beer is premium.”

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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 $2546...another all-time weekly closing high
Oil $74.90

Bitcoin: $63,571 [4:00 PM ET, Friday]

Regular Gas: $3.37; Diesel: $3.71 [$3.84 - $4.35 yr. ago]

Returns for the week 8/19-8/23

Dow Jones  +1.3%  [41175]
S&P 500  +1.4%  [5634]
S&P MidCap  +2.8%
Russell 2000  +3.5%
Nasdaq  +1.4%  [17877]

Returns for the period 1/1/24-8/23/24

Dow Jones  +9.2%
S&P 500  +18.1%
S&P MidCap  +11.3%
Russell 2000  +9.4%
Nasdaq  +19.1%

Bulls 44.6
Bears 21.5...no update this week.

Hang in there.

Brian Trumbore

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