For the week 5/12-5/16

[Posted 4:30 PM ET, Friday]

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

Edition 1,360

President Trump was on an excellent adventure to the Middle East this week, a classic business trip, the president claiming $2 trillion in new deals.  Who the heck knows how much of it was already baked in and predated and what is really new, and depending on each nation’s economy, you can always pull them back, especially if oil prices stay low, this being OPEC after all, but it made for good theater and Trump ate up the pageantry, though the girls ‘hair-flipping’ in the UAE creeped me out royally, especially knowing of the human rights issues in the region.

As one example, Trump sealed $300 billion in agreements with the Saudis, with an eye toward doubling that within four years, which enabled him to say “$600 billion,” the size of the Saudi economy something like one Trillion.

Understand the Saudis are running record deficits, owing in no small part to Crown Prince Mohammed bin Salman’s dream project, Neom, an entirely new city being built in the desert.

And I can’t help but add this tidbit from Defense One:

“China’s Mideast tech deals increasingly belie the narrative of close U.S.-Gulf security cooperation, write BluePath Labs’ Tye Graham and New America’s Peter W. Singer in the latest edition of ‘The China Intelligence.’

“ ‘The Persian Gulf is quickly turning into China’s favorite testbed for the next-generation of digital infrastructure,’ they write.  ‘The result not only runs counter to the narrative of close U.S.-Gulf cooperation, but also presents major security challenges. The United States bases many of its regional forces within or near the same urban areas now wired by Chinese gear.’”

The following is directly from the report by Graham and Singer:

“Qatar offered an initial glimpse of the model with the February unveiling of a strategic partnership with Huawei of a ‘smart campus’ in Doha’s Media City that stores news footage and government data inside a sovereign cloud while facial-recognition gates control every doorway.

“Saudi Arabia has cleared the way for the Riyadh Cloud Region and a $400 million investment package from Huawei in the Fall of 2024 that folds neatly into Saudi Vision 2030 strategy.

“The United Arab Emirates, an early adopter of Chinese 5G, has for years been building a city-wide surveillance program with support and technology from Huawei and other Chinese tech firms like Hikvision and Dahua Technology.  [Ed. I admit I never heard of the last two.]  Officials in Dubai claim that this panopticon will allow police to phase out routine street patrols in favor of sensor-driven response teams.”

Eegads, to this last one…but you get the picture.  Engagement is better than not engaging, but naivete can be a killer.  Those going full bore on everything Donald Trump is doing to cut deals that will ‘help bring America business and jobs,’ need to keep their eyes wide open and understand the history of the Middle East is rather dirty.

And one more on the topic…this from Bloomberg today:

“President Donald Trump’s flurry of artificial intelligence deals during his tour of the Middle East is opening a rift within his own administration as China hawks grow increasingly concerned the projects are putting U.S. national security and economic interests at risk.”

It’s about the chips from the likes of Nvidia and Advanced Micro Devices, the most coveted technology of the AI age.

“Some senior administration officials are seeking to slow down the deals over concerns the U.S. hasn’t imposed sufficient guardrails to prevent American chips shipped to the Gulf from ultimately benefiting China, which has deep ties in the region, according to people familiar with the matter. While the UAE and Saudi accords include high-level language barring Chinese firms from accessing those chips, these officials argue too many details are still unresolved and the deals shouldn’t be announced without legally binding provisions, the people said.”

Of course the technology will be shared with Beijing…or it will be stolen.

On the other hand, at least new guidance issued by the Commerce Department this week on the use of Huawei Technologies’ latest Ascend chips have introduced fresh uncertainty into China’s investment spree in AI infrastructure.

Under the new guidance, the use of Ascend chips “anywhere in the world” could be interpreted as a violation of American export controls, with penalties ranging from fines to imprisonment.

But I just told you Huawei has its fingerprints all over the infrastructure of the very countries Trump is cutting deals with!

—

Trade War….

Going back to Saturday, with U.S. and Chinese negotiators meeting in Geneva for a first time since the two sides imposed massive tariffs on each other, essentially shutting down most trade between the two, President Trump posted on Truth Social after the first day of talks:

“A very good meeting today with China, in Switzerland.  Many things discussed, much agreed to.  A total reset negotiated in a friendly, but constructive manner.  We want to see, for the good of both China and the U.S., an opening up to China to American business.  GREAT PROGRESS MADE!!!”

China’s state-run news agency Xinhua described Saturday’s meetings as “an important step toward resolving the dispute” between the two world powers.

The talks then continued Sunday, led by China’s vice-premier He Lifeng and Treasury Secretary Scott Bessent.

After the second day, Sec. Bessent and U.S. Trade Representative Jamieson Greer said there was “substantial progress.”

“It’s important to understand how quickly we were able to come to an agreement, which reflects that perhaps the differences were not as large as maybe thought,” Greer told reporters.  “That being said, there was a lot of groundwork that went into these two days.”

Bessent said the talks were “productive.”

Fears of empty shelves certainly contributed to the urgency of the meetings for the White House. Trump and his economic team have gotten pleas from retail executives who explained in meetings with senior officials that the result of sustained high tariffs would be pandemic-level shortages and supply-chain shocks.

Chinese President Xi Jinping was seeking to fortify his nation’s economy ahead of the talks, but China’s economy is weakening. Xi also sent China’s public-security minister, Wang Xiaohong, to show the seriousness of the talks from Beijing’s standpoint.

Trump had opened the door for lower tariffs, suggesting Friday that they would go down from 145% to 80%, and that was seen as a signal to Bessent to get an agreement that would lower China’s tariff rate to around that level.

Sunday evening, global markets rallied on the positive vibes.

And then markets boomed when we learned early Monday that the U.S. and China had agreed to suspend most tariffs on each other’s’ goods pending further negotiations.

Trump’s “reciprocal” tariffs on China would fall to 10% from 125%, though the extra 20% “fentanyl” tariff would remain, so effectively 30%.

Beijing is cutting its retaliatory levies on U.S. good to 10% from 125%.

The ‘catch’ was that the reductions would last for 90 days while the two sides begin further talks to nail down specifics; such talks to be led by Bessent and Greer on the U.S. side, and Vice Premier He Lifeng for China.

A 30% tariff on China is still substantial, but better than 145%.

“We are in agreement that neither side wants to decouple,” Sec. Bessent said, adding that “we had a very robust and productive discussion on steps forward on fentanyl” and that talks might lead to “purchasing agreements” by China.

[Such purchasing agreements in Trump I, such as on agriculture, ended up falling woefully short of China’s promised purchases.]

“The consensus from both delegations this weekend was neither side wants a decoupling,” Bessent said in Geneva.  “We concluded that we have shared interests and we both have an interest in balanced trade.”

China has always handled relations with the U.S. based on the principles of mutual respect, the official Xinhua News Agency reported, citing a white paper on national security.  China is committed to the stable development of relations with the U.S., it said, and imposing pressure and threats are not the right way to deal with China.

While markets greeted the reports of progress with glee, history suggests that it could take a long time to reach a detailed agreement, if one is even possible.  In 2018, the two sides agreed to put their dispute “on hold” after a round of negotiations, but the U.S. soon backed away from that deal, leading to more than 18 months of further tariffs and talks before the signing of the “Phase One” trade deal in January 2020.

And as noted earlier, China failed to live up to the purchase agreement in that deal.

Chinese and U.S. negotiators agreed during their weekend talks to set a “trade consultation mechanism,” Vice-Premier He Lifeng told reporters.  A sparse joint statement following the talks said the two sides pledged to take these measures as talks continued in a “spirit of mutual openness, continued communication, cooperation and mutual respect.”

Analysts were skeptical, as am I.

“It’s a more civilized way to divorce.  The bifurcation will continue,” said Alicia Garcia Herrero, chief economist for Asia Pacific at the investment bank Natixis.

“The deal is not a solution.  It’s a smoothing of the impact of the bifurcation, just to happen more slowly and less costly.  This meeting is basically an attempt, hopefully successful, of avoiding a global recession,” she said.

As of Monday, the two leaders had not spoken since a call before Trump became president in January.

Chinese state media sought to show Beijing as emerging victorious from the talks.  “What the U.S. really needs to do at this moment is to cherish China’s goodwill,” said a commentary in Xinhua published after the talks concluded.  “This kind of goodwill and patience has its limits and it will never be used on those who repress and blackmail us without pause or have no qualms about going back on their word.”

Hu Xijin, the highly influential former editor of the state-run Global Times, on Monday wrote that China “had not given one inch in terms of its principles.”  “I think this turning point is precisely the result of China’s courage to fight,” he wrote on the microblog Weibo.

The Chinese Commerce Ministry said in a statement Monday, it hopes the U.S. “will thoroughly correct the wrong practice of unilateral tariff increases” and work to maintain a stable development of bilateral trade relations.

The ministry said the U.S.-China joint statement on levies is “an important step for the two sides to resolve differences” through dialogue, and that consumers and producers in both countries have expected such a move.

For now, China’s exports to the U.S. should rebound sharply, but inflation concerns remain…because it’s still 30%.  But retailers like Best Buy and Mattel will be able to stock up on inventory, while shipping and freight stocks should enjoy a boom.

Tuesday, President Xi called for countries to stand together to promote global peace and stability, stressing in a veiled reference to the U.S. that “there were no winners in tariff wars.”

In his first public remarks since the trade talks in Geneva, Xi told leaders from Latin America and the Caribbean that “bullying or hegemonism only leads to self-isolation.”

“The world is undergoing a century of rapid change, with multiple risks compounding one another. Only through solidarity and cooperation can countries maintain world peace and stability,” he said.

China was willing to work with countries in the face of rising geopolitical tensions and bloc confrontations and the “surging undercurrents of unilateralism and protectionism,” he said.

Rich Lowry / New York Post

“Never mind.

“President Trump’s 145% tariffs on China ran smack into Stein’s law, the late economist Herb Staine’s famous axiom that ‘if something cannot go on forever, it will stop.’

“What was effectively an instant embargo on the biggest importer into the United States wasn’t sustainable, and sure enough, it’s not going to be sustained.

“The U.S. and China have mutually agreed to back off a tit-for-tat trade war that quickly spiraled into territory that meant wanton economic destruction for both sides….

“If it always seemed likely that there’d be a fig-leaf deal with China, there isn’t even a fig leaf here – just a promise to keep talking and perhaps fashion one later.

“The problem with tariffs is that they are a way of harming a foreign trade partner via imposing pain on your own businesses and consumers.

“The 145% tariff was hitting Beijing hard, but also was due to impose severe costs on U.S. concerns dependent on Chinese manufacturing.

“Small businesses were looking at potential extinction, and retailers warning of empty store shelves.

“When the president of the United States is musing about little girls having to make do with fewer dolls, it’s not a reassuring signal about the direction of U.S. economic policy….

“While markets are relieved that the 145% tariffs are off for now, we aren’t in a great place.

“A 30% tariff on China, plus the other tariffs that are in play around the globe, means we still have lurched into the highest U.S. tariff regime since the 1930s.

“Earlier this year, there was a surge of imports in anticipation of Trump’s tariffs, in the phenomenon known as front-loading.

“Then, imports were basically shut off as the 145% tariffs took hold.

“And now there will be more front-loading to avoid what comes next.

“An on-again-off-again-on-again approach forces U.S. economic actors to deal with wildly gyrating uncertainty for no good reason.

“Who knows what will happen in 90 days?

“The Soviet Union was governed by Five-Year Plans; now, we are governed by 90-Day Pauses.

“Trump prides himself on his deal-making, but he hasn’t gotten anything from the UK or China over the last week that he couldn’t have achieved with much less disruption.

“We could have gotten an outline of a trade deal with the Brits by working with them behind closed doors, and we could have gotten a 30% tariff on China by imposing one at the outset.

“There is no doubt that China is a hostile power and bad economic actor, and we should be putting our relationship on a different basis.

“The risk is that Trump, by tariffing everyone, friend or foe, has made it harder for us to deepen relationships with our allies and isolate our adversary.

“As Robert Atkinson of the Information Technology and Innovation Foundation points out, the current tack will also hamper the most strategically important, technologically advanced U.S. firms that are all globally integrated.

“The Trump tariffs will increase their costs by making imported inputs more expensive, while limiting their foreign markets by inviting foreign retaliation for Trump’s tariffs.

“This is not a winning formula, and if China gets an upper hand as a result, there will be no easy do-over.”

Editorial / Wall Street Journal

“Rarely has an economic policy been repudiated as soundly, and as quickly, as President Trump’s Liberation Day tariffs – and by Mr. Trump’s own hand. Witness the agreement Monday morning to scale back his punitive tariffs on China – his second major retreat in less than a week.  This is a win for economic reality, and for American prosperity.

“Make that a partial win for reality.  The Administration agreed to scrap most of the 145% tariff Mr. Trump imposed on Chinese goods on April 2 and later. What remains is his new 10% global base-line tariff, plus the separate 20% levy putatively tied to China’s role in the fentanyl trade, for a total rate of 30%.  In exchange, Beijing will reduce its retaliatory tariff to 10% from 125%. The deal is good for 90 days to start, as negotiations continue.

“Investors are cheering at this border-tax reprieve, since this is a step back from mutual assured trade destruction….

“The 30% tariff is still exceptionally high for a major trading partner, but the 90-day rollback spares both sides from what looked like an impending economic crackup.  U.S. consumers were facing widespread shortages, while China feared growing unemployment.

“As with last week’s modest British agreement, the China is more surrender than Trump victory.  Apart from the tariff rollback, neither side announced any broader concessions on the substantive trade issues that weigh on the U.S.-China relationship. Those include China’s barriers to American firms, especially in services such as digital and financial, and its chronic intellectual-property theft.

“Many of these bad Chinese practices have become worse under President Xi Jinping’s strong-arm economic management.  One tragedy of Mr. Trump’s shoot-America-in-the-foot-first approach is that he’s hurt his chances of rallying a united front of countries against Beijing’s mercantilism.  By targeting allies with tariffs, Mr. Trump has eroded trust in America’s economic and political reliability.

“Beijing now also has the benefit of concrete experience to reassure the Communist Party that Washington would struggle to impose economic sanctions in a crisis such as a Chinese blockade or invasion of Taiwan.  If there’s a silver lining to the tariff fiasco, it’s the timely reminder to Congress to get serious about true military deterrence again….

“So after weeks of market turmoil, the economy is left with higher trade costs and greater uncertainty for business, but at least a step back from Smoot-Hawley 2.0.  Investors, businesses and households probably would welcome this outcome, which is considerably better than Mr. Trump’s initial plan.

“But a 10% across-the-board tariff is still four times the average U.S. tariff rate before Mr. Trump took office…

“If there’s a silver lining to this turmoil, it is that markets have forced Mr. Trump to back down from his fever dream that high tariff walls will usher in a new ‘golden age.’  The age didn’t last two months, and it was more leaden than golden.  White House aide Peter Navarro, the main architect with Mr. Trump of the Liberation Day fiasco, has been repudiated.

“Mr. Trump will not want to admit it, but he started a trade war with Adam Smith and lost.  He’s not the first President to learn that lesson.”

Friday, President Trump said the U.S. will set tariff rates for its trading partners within the next few weeks.  He explained that the administration cannot negotiate trade deals with all countries at once due to limited capacity.

“I think we’re going to be very fair. But it’s not possible to meet the number of people that want to see us,” the president said during a meeting with business executives in the United Arab Emirates.

Trump added Treasury Secretary Bessent and Commerce Secretary Lutnick “will be sending letters out essentially telling people” what “they’ll be paying to do business in the United States.”

China’s state-backed Global Times said Friday the 90-day U.S. tariff truce is too short and should be extended.

Trump World, cont’d….

—As President Trump toured the Middle East, specifically Saudi Arabia, the United Arab Emirates and Qatar, you had three countries that stand out for their warm embrace of Trump Inc.

In the past year, Trump-branded residential towers have been launched in Dubai and Jeddah, Saudi Arabia, and a developer in April unveiled a Trump luxury golf resort at a state-owned project in Qatar at an event featuring Eric Trump and a Qatari minister.

A UAE state and royal family fund earlier this month used $2 billion of a new crypto stablecoin issued by Trump’s World Liberty Financial to invest in a crypto exchange.

Sovereign or royal funds from all three states have committed more than $3.5 billion to a private-equity fund run by Jared Kushner, Trump’s son-in-law.

In addition, state-backed funds from Qatar and the UAE were major investors in a $6 billion fundraising round for Elon Musk’s xAI.  In February, Dubai tapped his Boring Company to build an 11-mile tunnel network.

At the same time, Trump’s team has been in talks with Saudi Arabia, UAE and Qatar on defense, artificial intelligence and other deals they desire in exchange for pledges of a wave of Gulf investment in the U.S.

Saudi Arabia has committed a $600 billion package, and the UAE has pledged to inject $1.4 trillion into the U.S. over the next decade.

White House spokeswoman Karolina Leavitt said last week that it was “ridiculous” to suggest “that President Trump is doing anything for his own benefit,” and that he was re-elected because Americans trust “he acts in the best interest of our country.”

[Pause for laughter….]

You just start with World Liberty Financial, the cryptocurrency company, which has sold Trump meme coin tokens and is controlled by an entity with Trump family ownership. Eric Trump sits on the board.  The president is described on World Liberty’s website as its “Chief Crypto Advocate” in its section on its “Team.”

You can go on and on.  Of course, the Gulf states are happy to play ball with Trump to gain influence in Washington.

And then you have the plane…the administration in talks with the Qatari government about accepting a plane that would serve as a temporary replacement for the U.S.’s aging Air Force One jets – and later be donated to Trump’s presidential library for his use.

It’s a $400 million luxury Boeing 747-8 jet from the Qatari royal family that is only the latest example of an increasingly no-holds-barred atmosphere.  Not only would Trump be able to use the plane while in office, as Boeing finishes building a new generation of presidential aircraft, but the plan is to transfer it to his presidential foundation once he leaves the White House.

[Federal law allows officials to accept personal gifts below a certain amount, currently set at $480.]

While a Qatari government spokesperson said the plan for the plane is under consideration – Trump confirmed the arrangement on Truth Social:

“So the fact that the Defense Department is getting a GIFT, FREE OF CHARGE, of a 747 aircraft to replace the 40 year old Air Force One, temporarily, in a very public and transparent transaction, so bothers the Crooked Democrats that they insist we pay, TOP DOLLAR, for the plane.  Anybody can do that! The Dems are World Class Losers!!! MAGA””

Of course there are a number of questions concerning accepting such a gift, starting off with national security. Who can vouch for the safety of the plane? Who will inspect every inch of the plane to be sure it’s not bugged?  To break the plane down, which is what would be required, would take years conceivably.

However, a military contractor called L3Harris, in Texas, is supposedly the company involved in retrofitting the plane and they say the work can begin once the government approves how the plane is being acquired, and that it could be ready by the end of the year, according to reports.

But as Defense One’s Audrey Decker reported Tuesday, overhauling the 747-8 to meet the rigorous standards required of a U.S. presidential aircraft would take years and cost hundreds of millions of dollars.  Remember, in addition to carrying the president around the world, presidential jets are part of the nuclear command and control structure so the president can fight a nuclear war.

However, the president is commander in chief, and he has the final say. He wants to use it by the end of the year.  Trump posted on Truth Social Tuesday night:

“The Boeing 747 is being given to the United States Air Force/Department of Defense, NOT TO ME!  It is a gift from a Nation, Qatar, that we have successfully defended for many years.  It will be used by our Government as a temporary Air Force One, until such time as our new Boeings, which are very late on delivery, arrive. Why should our military, and therefore our taxpayers, be forced to pay hundreds of millions of Dollars when they can get it for FREE from a country that wants to reward us for a job well done.  This big savings will be spent, instead, to MAKE AMERICA GREAT AGAIN!  Only a FOOL would not accept this gift on behalf of our Country. Thank you for your attention to this mater!”

I’m sorry…this is beyond idiotic.  He literally would hop on it tomorrow, no checks, no nuthin’.

Meanwhile, Boeing…get your freakin’ act together!!! [Three exclamation points is indeed empowering.]

Editorial / Wall Street Journal

“President Trump likes flying close to the sun regarding his family business, and the flight is closer than ever in his second term.  Is no one advising Mr. Trump that his family’s crypto plans are inviting trouble?

“Mr. Trump said last month that he’ll host a dinner with the top 220 holders of his $TRUMP meme coin at his Washington, D.C.-area golf club on May 22.  Step right up and invest in the Trump crypto enterprise for a chance to rub elbows with the leader of the free world. The President says all of this is above board. But it nonetheless raises the appearance of a conflict of interest in selling access to the President.

“The Trump Organization and affiliates hold 80% of $TRUMP coin tokens, which are subject to a three-year unlocking period. Any price appreciation caused by frenzied buying boosts the Trump family fortune, at least on paper. The Trump family businesses and their partners have benefited from more than $300 million in revenue generated by trading in the coin, according to the blockchain firm Chainalysis.  A percentage of each trade is routed to crypto wallets linked to the coin’s creators, similar to a transaction fee.

“When Mr. Trump issued his meme coin days before his inauguration, he said the point was to ‘have fun.’  As we noted at the time, the venture creates political risks and ethical conflicts. Bloomberg News last week reported that all but six of the top 25 holders of the $TRUMP coin that have registered on the website’s leaderboard have bought the coins using foreign exchanges that claim to exclude U.S. customers.

“This suggests most of the buyers are overseas. Foreigners are prohibited from contributing to U.S. political campaigns, but there’s no bar on them buying stock in a politician’s business.  That’s effectively what foreign buyers of Mr. Trump’s tokens are doing. Might some be trying to buy goodwill with the Trump Administration?

“Then there’s the Trump family’s other crypto venture, World Liberty Financial, which has raised $550 million through token sales since October….

“DWF Labs, a crypto firm based in the United Arab Emirates, announced last month that it had bought $25 million of World Liberty Financial’s tokens.  ‘Our visibility in the U.S. has been increased because of this deal,’ a DWF Labs managing partner told the New York Times.  ‘We would like to have direct dialogue with the policymakers.’  No doubt.

“Zach Witkoff, son of Trump diplomatic envoy Steve Witkoff, co-founded World Liberty Financial and helps run its day-to-day operations.  Could he make the ‘dialogue’ happen by pinging his dad, another co-founder?  The younger Witkoff said this month that Abu Dhabi would use World Liberty Financial’s newly minted stablecoin to invest $2 billion in the crypto exchange Binance….

“Binance in 2023 pleaded guilty to violating U.S. anti-money laundering laws and sanctions.  Its co-founder Changpeng Zhao also pleaded guilty to violating the Bank Secrecy Act.  Media reports say Mr. Zhao is seeking a presidential pardon.

“Zach Witkoff also met last month with Pakistan’s Prime Minister Shehbaz Sharif and army chief of staff Asi Munir. Afterward, World Liberty Financial announced a deal with the Pakistan government to accelerate crypto adoption in the country….

“Expect the press to spend the next four years chasing stories about the Trump crypto family. The political optics are awful especially in light of the Trump border taxes.  The Democratic midterm campaign ads write themselves: Millions in secretive crypto profits for the Trump family, but Mr. Trump’s famous ‘two dolls’ and ‘five pencils’ for everyone else.”

—

Wall Street and the Economy

The prospect of much lower-than-expected tariffs and a 90-day window for further talks opened the possibility that the worst damage to the economy may be averted.

Following his speech in Riyadh, President Trump posted on Truth Social:

“No Inflation, and Prices of Gasoline, Energy, Groceries, and practically everything else, are DOWN!!! THE FED must lower the RATE, like Europe and China have done.  What is wrong with Too Late Powell?  Not fair to America, which is ready to blossom?  Just let it all happen, it will be a beautiful thing!”

But Thursday, as I detail below, Walmart said the cost of tariffs was forcing the company to hike prices on all sorts of goods, and if Walmart is doing it, everybody else can. Rising prices can be contagious.  Momentum builds as companies both see a window to greedily blame the hikes on the environment, or react to the fear that their own costs could spiral out of control.

Trump has rolled back some of his biggest tariffs, but several have stuck and started to hit importers – particularly those relying on goods from China.

Still, there’s little clarity over how the existing levies might impact the economy or the trajectory the global trade war will take in the coming months.

Fed Governor Michael Barr said the economy is on solid ground, but warned tariff-related supply-chain disruptions could lead to lower growth and higher inflation.

Federal Reserve Chair Jerome Powell in a speech Thursday, warned about “more frequent, and potentially more persistent, supply shocks.”  In theory, the Fed can ignore short-term shortages and price increases because they’ll blow over.  But in practice, they often lead to bigger problems.

JPMorgan Chase & Co. CEO Jamie Dimon said recession remains a possibility.

“Hopefully we’ll avoid it, but I wouldn’t take it off the table at this point,” Dimon said in a Bloomberg interview Thursday.  “If there is a recession, I don’t know how big it would be or how long it would last.”

The bond market resumed its chaotic path this week, with the 10-year Treasury rising to 4.53%, from last Friday’s 4.38%, but then fell back after weak economic data Thursday amid talk the Fed will still lower its rates twice this year.

As to the economic data, April’s consumer price index was a little softer than expected, 0.2%, up 2.3% vs. a year ago when 2.4% was expected; 2.3% the slowest annual pace since early 2021, per the Bureau of Labor Statistics.  On core, ex-food and energy, the CPI was 0.2%, 2.8%, the latter key figure the same as the month prior.

But economists warned that this could be the final lull before a likely surge in consumer prices stemming from the tariffs.  It was welcome news, however, even for a month or two, for the White House and the Federal Reserve, though few expect the reprieve to last.

At least for April, egg prices fell, and gas prices were down, too.  Used car and truck prices fell, while new vehicle prices were flat.  Airfares dropped.

But furniture costs rose, alongside motor vehicle insurance, which to me has always been the killer item seldom highlighted.

[‘Motor vehicle maintenance and repair,’ up 5.6% from a year ago, feeds into auto insurance, up 6.4% Y/Y, and with the tariffs on auto parts, the former category is going to get more of a look going forward, and then its impact on the cost of car insurance, sports fans.]

Producer prices for April came in soft, -0.5% and up 2.4% year-over-year, and -0.4% and 3.1% on core, the last figure a tick higher than consensus.

April retail sales were 0.1%, ditto ex-autos, basically in line.  April industrial production was unchanged when 0.2% was forecast.

April housing starts came in as estimated, 1.361 million, which was up slightly from March’s revised 1.339 million annualized units.

And today, we had another awful reading on consumer sentiment from the University of Michigan, down to 50.8, the lowest since July 2022. [But reminder, sentiment readings often do not reflect the actual economic data.]

The Atlanta Fed’s GDPNow forecast for second-quarter growth is 2.4%.

Freddie Mac’s 30-year fixed-rate mortgage rose to 6.81%.

No real market-moving economic releases next week.

—

On the budget front, this was a key week and every legislative workday before Memorial Day will reveal whether House Republicans can come up with a plan that satisfied President Trump’s pledges to cut taxes, shrink government, hike defense spending (though I noted last week this is a sham increase), strengthen border security and protect entitlements.

“The wheels can come off multiple times in this process, and often do.  In the end, we’ve got to make sure we get it back on the rails, and I think there’s enough commitment to doing that that we’ll figure it out,” Senate Majority Leader John Thune (R-S.C.) said after conferring with Speaker Mike Johnson last week about difficulties in the House.

A planned Friday vote in the House Budget Committee to advance the megabill was increasingly in peril, with at least three hard-liners pledging to oppose the party-line legislation.

The three hard-lines – Reps. Ralph Norman (S.C.), Josh Brecheen (OK) and Chip Roy (TX) met with the Congressional Budget Office Thursday, where they were upset to learn that the CBO wouldn’t have cost estimates for the Energy and Commerce Committee’s portion of the bill ready until early next week.

That leaves huge questions for already-skeptical hard-liners over how much in savings is actually contained in the Medicaid overhaul approved by Energy and Commerce earlier this week.

Medicaid is a huge issue*, and the budget Committee needed to get its markup passed Friday, to then set the stage for a vote on the package on the House floor next week in time to meet Speaker Johnson’s Memorial Day deadline.

Aside from Medicaid and taxes, clean energy tax credits and SALT, or the state and local tax deduction, are the other big sticking points in negotiations.

*According to the CBO estimate, 8.6 million people would lose insurance based on the GOP’s plan – stoking concerns among members in both chambers.

And then conservatives on the Budget Committee late this morning blocked their party’s megabill from reaching the floor, five Republicans joining Democrats in voting against, 16 to 21.

“This bill falls profoundly short; it does not do what we say it does with respect to deficits,” Rep. Roy said.  “Deficits will go up in the first half of the 10-year budget window, and we all know it’s true, and we shouldn’t do that.  We shouldn’t say that we’re doing something we’re not doing.”

Estimates on how the bill would add to the deficit over the next decade range from $2.5 trillion to $3.3 trillion.

The bill isn’t dead, necessarily, and let’s assume something eventually passes the House.

Then the bill goes to the Senate, and the Senate will basically rip it up, come up with their own package and tell the House to take it or leave it.

So I don’t want to spend a lot of time on this until we see what the Senate comes up with.  But first the House GOP must pass something…almost anything…to keep the process going on Trump’s agenda.  The president has yet to exert a lot of pressure but that’s about to change.

And indeed, flying home from the Middle East, he posted on Truth Social:

“Republicans MUST UNITE behind, ‘THE ONE, BIG BEAUTIFUL BILL!’  Not only does it cut Taxes for ALL Americans, but it will kick millions of Illegal Aliens off of Medicaid to PROTECT it for those who are the ones in real need. The Country will suffer greatly without this Legislation, with their Taxes going up 65%.  It will be blamed on the Democrats, but that doesn’t help our Voters. We don’t need ‘GRANDSTANDERS’ in the Republican Party.  STOP TALKING, AND GET IT DONE!  It is time to fix the MESS that Biden and the Democrats gave us. Thank you for your attention to this matter!”

But the five Republicans voted ‘No’ anyway (one doing so for procedural reasons to make it easier to bring the bill back for a vote).

Related to the budget process, the Treasury Department issued its monthly budget deficit figures and in April, the key tax collection month, the surplus was a little better than consensus, $258.4 billion, which was versus $209.5 billion a year ago.  The deficit for October through April is $1.048.7 trillion, and knowing the patterns for the rest of the fiscal year, through September, the deficit will end up around $2 trillion.

Tariffs, i.e., ‘customs duties,’ brought in $15.6 billion for the month.

Europe and Asia

We had another flash first-quarter GDP estimate for the eurozone, unchanged from the first one just weeks ago, 0.3% compared with the previous quarter, 1.2% vs. a year ago. [Eurostat]

Industrial production in the EA20 for March increased by 2.6% over February, and up 3.6% from a year ago.  [Eurostat]

Turning to Asia…China’s April inflation was 0.1% over March, -0.1 year-over-year.  Producer prices fell 2.7% Y/Y.

Japan’s Cabinet Office reported the economy contracted by 0.7% on an annualized basis in Q1, underperforming market estimates of a 0.2% decline and marking a sharp reversal from an upwardly revised 2.4% growth in the fourth quarter, preliminary data showed.  It marked the first yearly decline in a year, as private consumption remained subdued.

March industrial production was up 0.2% over February.

Street Bytes

—Stocks soared early in the week after the U.S. and China agreed to slash punishingly high tariffs on each other’s goods, particularly tech shares, with Nasdaq up 7.2% on the week, the Dow 3.4% to 42654, and the S&P 500 surging 5.3%.

Off the April 8 lows, the S&P is up 19.6%, Nasdaq 25.8%!  Goodness gracious.

Both the Dow and S&P are now up for the year.

Next week, earnings reports from Home Depot and Target that will be informative.

—U.S. Treasury Yields

6-mo. 4.28%  2-yr. 3.98%  10-yr. 4.43%  30-yr. 4.89%

Yields ended higher on the week, though not nearly as high as earlier on amid renewed talk we could still get rate cuts.

—Oil rallied after the U.S. and China agreed to reduce tariffs, thus increasing global growth prospects.

But then crude fell back by week’s end, as global oversupply concerns dominated the discussion. Reports indicating that Iran is open to a deal with the U.S. in exchange for sanctions relief raised expectations that an agreement could increase Iranian oil inflows back into the global market. Saudi Arabia also voiced full support for the U.S.-Iran nuclear talks.

Further fueling supply concerns, EIA data showed a surprise 3.4 million barrel build in U.S. crude inventories last week.

—Saudi Aramco reported a decline in profit in the first quarter as lower crude prices put pressure on the finances of the world’s biggest oil exporter.

Net income slipped 4.6% to $26 billion in the quarter, according to a statement on Sunday.

As part of a previously announced plan, the company earlier this year decided to cut its dividend for 2025 by about a third to $85 billion.  While that helps ease some of the strain on Aramco, it lowers a key source of revenue for the Saudi government whose own finances are under increasing stress.

Oil’s decline in April will inflict more pain both on Aramco and the Saudi government despite the higher oil production.

And related to all the above, there was this bit from a piece in Bloomberg News by Kevin Crowley and David Wethe:

“The U.S. oil industry strongly supported Trump’s campaign for a second term, but some executives are now feeling shortchanged. The president’s trade policy has made buying and repairing equipment more expensive at the same time crude has tumbled more than 20% since his inauguration, further undermined by a surge in supply from OPEC.”

And the slide in crude prices is straining Republican strongholds like Texas, Oklahoma and North Dakota.

“You can’t have $50 oil and ‘Drill, Baby, Drill,’” said Andy Hendricks, the CEO of Patterson-UTI Energy Inc., which operates the second-largest fleet of U.S. onshore drilling rigs.  “Those two things are incompatible.”

Oil execs have been meeting with administration officials, and Texas Senator Ted Cruz, with a warning that the message the president is promoting, such as repeated praise for falling oil prices, risks pushing record U.S. production into decline.

Exxon Mobil and Chevron can ride out the storm, especially if less regulation down the road makes for easier permitting over the long term, but smaller independent producers who are the backbone of the U.S. shale industry are feeling the pain.

–As alluded to above, Walmart’s first-quarter profit slipped and it said it must raise prices due to higher costs from tariffs implemented by President Trump.

The nation’s largest retailer posted strong quarterly sales, Thursday, and said it expects sales growth of 3.5% to 4.5% in the second quarter.

Like many other U.S. companies, however, it did not issue a profit outlook for the quarter because of the chaotic environment, with stated U.S. tariff policies changing constantly.  The company maintained its full year guidance issued in February.

Walmart earned $4.45 billion, or 56 cents per share, in the quarter ended April 30, down from $5.1 billion, or 63 cents per share, in the same period last year.

Adjusted earnings of 61 cents exceeded the Street’s 58 cent projection.  Revenue rose 2.5% to $165.61 billion, just shy of analyst estimates.

WMT’s U.S. comparable sales rose 4.5% in the quarter, though that slowed from a 4.6% bump in the previous quarter.  Global e-commerce sales rose 22%, up from 16% in the previous quarter.

Retailers and importers had largely stopped shipping shoes, clothes, toys, and other items with the duties so high, but many will now resume importing from China in the narrow window, hoping to avoid sparse shelves this fall.  Yet many retailers say they must raise prices to tariff costs.  And they are also bracing for higher shipping costs fueled by a surge of companies scrambling to get their goods on ships to the U.S.

Walmart has built in hedges against some tariff threats.  Two-thirds of Walmart’s merchandise is sourced in the U.S., with groceries driving much of that.  Groceries account for roughly 60% of WMT’s U.S. business.

Still, Walmart isn’t immune and said it will have to raise prices even as it works to absorb the costs of the tariffs.

“We will do our best to keep our prices as low as possible but given the magnitude of the tariffs, even at the reduced levels announced this week, we aren’t able to absorb all the pressure given the reality of narrow retail margins,” said CEO Doub McMillon in a statement.

—President Trump signed an executive order Monday setting a 30-day deadline for drugmakers to electively lower the cost of prescription drugs in the U.S. or face new limits down the road over what the government will pay.

The order calls on the health department, led by Robert F. Kennedy Jr., to broker new price tags for drugs over the next month. If the deals are not reached, Kennedy will be tasked with developing a new rule that ties the prices the U.S. pays for medications to lower prices paid by other countries.

“We’re going to equalize,” Trump said during a Monday morning press conference. “We’re all going to pay the same.  We’re going to pay what Europe pays.”

But, it’s unclear what – if any – impact the president’s EO will have on millions of Americans who have private health insurance.  The federal government has the most power to shape the price it pays for drugs covered by Medicare and Medicaid.

The nation’s pharmaceutical lobby, which represents the top U.S. drugmakers, immediately pushed back against Trump’s order, calling it a “bad deal” for American patients.  Drugmakers have long argued that any threats to their profits could impact the research they do to develop new drugs.

“Importing foreign prices from socialist countries would be a bad deal for American patients and workers,” Stephen J. Ubl, the president and CEO of PhRMA, said in a statement.  “It would mean less treatments and cures and would jeopardize the hundreds of billions our member companies are planning to invest in America.”

President Trump wrote on Truth Social:

“Our Country will finally be treated fairly, and our citizens Healthcare Costs will be reduced by numbers never even thought of before…”

But in the post Trump also said: “Prescription Drug and Pharmaceutical prices will be REDUCED, almost immediately, by 30% to 80%.”

This scared the hell out of Big Pharm and the shares largely fell hard.  But then the actual EO came out and it was ‘elective,’ not mandated.

In his first term, Trump tried unsuccessfully to enact a version of this idea for Medicare, and a federal court blocked it, ruling that the administration had skipped steps in the policymaking process.

—Microsoft is laying off thousands of employees across various divisions around the world in an effort to shed layers of management.

Less than 3% of the software giant’s workforce would be eliminated, or fewer than 6,800 employees. The company had about 228,000 full-time workers worldwide as of June 30.

The company issued an optimistic forecast in April.

Microsoft eliminated 10,000 jobs in January 2023 as the world pulled out of the pandemic.

—China reopened itself to Boeing, after the two countries reached a temporary truce in their trade war.

Beijing told Chinese airlines that they can take delivery on pre-existing Boeing jet orders, according to people familiar with the situation.

Boeing shares have soared from an April 8 low of $139 to $205 this afternoon.

—Air traffic control issues continued to plague Newark Liberty International Airport, with the New York Times reporting that at the facility guiding planes to and from Newark on Monday evening, there were far fewer than the target of 14 controllers for most of the hours…like as few as three, with only one or two fully certified.

[There were 500 delays at Newark both Wednesday and Thursday, and most of these were of the multi-hour variety.]

Transportation Secretary Sean Duffy, who is my favorite administration figure thus far, said that Newark would see “several weeks” of reduced capacity as officials grapple with the spiraling delays and safety lapses.

Duffy said it could take three to four years to build new infrastructure to improve the system’s resilience, even as he suggested the safety concerns may not be limited to Newark.

United Airlines, which operated 68% of the flights at Newark, said it was putting bigger planes on its routes to make up for flight volume limits.

The transportation secretary’s plans are expected to cost tens of billions of dollars and require congressional approval.

But as you know, Congress is currently struggling with finding billions of dollars’ worth of cuts in federal spending to pay for President Trump’s proposed tax cuts.

–And now New Jersey has a transit strike, as NJ Transit engineers walked out late Thursday night as contract negotiations broke down.  The nation’s third-largest transit system ground to a halt, impacting hundreds of thousands.

It’s not a big deal for many on a Friday when you can work at home, but for those who must be at work, it sucks.  And Beyonce is coming to MetLife Stadium, following Shakira.  NJ Transit is the main (and best) way to attend events at the venue, traffic and parking normally horrendous.

—TSA checkpoint numbers vs. 2024

5/15…116 percent of 2024 levels
5/14…101
5/13…78
5/12…99
5/11…112
5/10…76
5/9…97
5/8…111

–Shares in UnitedHealth Group, a Dow Jones component, fell nearly 18% on Tuesday, after the company announced CEO Andrew Witty, 60, stepped down from his role for “personal reasons,” and the company suspended its 2025 guidance. Former CEO Stephen Hemsley, 72, is taking the helm.

UnitedHealth has been hammered in a number of ways: increased costs, political pressure over its size, and scrutiny by the Federal Trade Commission and Department of Justice. Congress has also put the spotlight on its market power as a large pharmacy benefits manager (PBM).  Furthermore, the company has faced questions about its use of artificial intelligence in claims processing and a large cybersecurity attack on its Change Healthcare subsidiary.

At the heart of UNH’s current financial troubles is a business that has long been an engine of its prosperity, the private Medicare plans known as Medicare Advantage.

In its call on Tuesday with analysts, UnitedHealth said it was still seeing unexpectedly high costs in its insurance unit, largely in outpatient and physician services, and that similar trends were emerging among “adjacent populations” with complicated health conditions.

The company said both its insurance operation and its physician groups were struggling with an influx of new Medicare enrollees with health needs whose diagnoses hadn’t been fully documented by their prior insurers.

And UNH suffered significant public backlash following the killing of former executive Brian Thompson in December, and investors are suing the company for downplaying the impact from that tragedy. Questions about claim denials and fury about overall insurance industry practices were directed at UnitedHealth in the aftermath of the killing.

But then Wednesday evening, the Wall Street Journal reported UNH was being investigated by the Justice Department for possible criminal Medicare fraud, people familiar with the matter said.

The healthcare-fraud unit of the Justice Department’s criminal division is overseeing the investigation, the people said, and it has been an active probe since at least last summer.

UNH shares fell another 15% on the news.  A stock that hit $630 on November 11 finished the week at $261. Ugh.  Repeat, it’s a Dow component so the performance recently is drastically impacting the average.

—Cisco Systems beat third-quarter earnings expectations Wednesday afternoon, and the shares rallied 5% Thursday.

Adjusted earnings per share were strong at 96 cents versus Wall Street’s consensus estimate of 92 cents, and up from 88 cents last year. Revenue for the quarter reached $14.15 billion, above expectations, and up 11% on the year.

Guidance for the fourth quarter also beat Wall Street’s consensus.

Revenue was boosted by strong results in Cisco’s largest business, networking hardware, which makes up about half of sales. But sales on the network security segment were below expectations.

—Coinbase Global said Thursday that it has refused to pay a $20 million ransom demand from cybercriminals who bribed the company’s overseas customer support agents to steal sensitive user data.

The cryptocurrency exchange estimated that the incident could cost from $180 million to $400 million, between fixing the underlying issues and reimbursing customers, according to a regulatory filing.

The disclosure sent the shares down 7% Thursday.  The data breach is a setback for the largest U.S. crypto exchange, which has cultivated a reputation for safety and largely avoided the type of attacks and thefts that have crippled many overseas exchanges.

The company said it received an email on Sunday from an unknown party who claimed to have obtained information about certain customer accounts.

Coinbase said it determined that the email was credible, and that while customer funds weren’t accessed, the stolen data included personal information such as names, addresses, phone numbers and email addresses; masked Social Security and bank-account numbers; government-ID images such as driver’s licenses and passports; and account data such as balance snapshots and transaction histories.

—Meta Platforms, Inc. shares fell after the company announced it is delaying the rollout of a flagship AI model, prompting internal concerns about the direction of its multibillion-dollar AI investments, according to a story in the Wall Street Journal.

Company engineers are struggling to significantly improve the capabilities of its “Behemoth” large-language model, leading to staff questions about whether improvements over prior versions are significant enough to justify public release, people familiar with the matter said.

—Two major Japanese automakers have warned that earnings will be hit hard by U.S. tariffs, underlining the risk of an industrywide downturn that could stunt Japan’s economic recovery.

Honda and Nissan both expect multibillion-dollar blows from the tariffs on foreign-made cars imposed by the Trump administration, as the two reported earnings on Tuesday and gave dim guidance for the year ahead.

Honda expects its net profit to drop 70% to $1.68 billion for the year ending March 2026.  Honda CEO Toshihiro Mibe said the company has already started looking at ways to boost production capacity in the U.S. in case tariffs remain in place for a long time.

A large portion of Honda cars sold in the U.S. are imported from Canada and Mexico.

Nissan expects the tariffs to increase costs substantially, affecting 300,000 units produced in Mexico and 120,000 vehicles made in Japan – nearly 45% of all its cars sold in the U.S.

The company racked up a loss of $4.5 billion for the fiscal year through March.

Nissan is also facing internal challenges, and it plans to reduce head count by 20,000, more than double what it originally announced.

The automaker is in urgent need of restructuring after a merger with Honda was scrapped in February.

—Deere & Co. jumped to a record after earnings beat the highest of analyst estimates, even as the world’s largest farm machinery maker trimmed its profit outlook for the year.

Net income dropped 22% from a year earlier to $6.64 a share in the three months ended in April, the company said in a statement. That was still above the $5.57 average of analyst estimates.  Net sales shrank 18%, also less than projected.

Deere shares jumped as much as 6.4% to $531 before falling back a little.

Tractor sales have been trending lower since a 2023 record as falling crop prices eroded farm income, leaving growers with less to spend on new equipment and causing inventories of machines to swell. President Trump’s tariffs have also weighed on sales and added to costs.

But while Deere gave a wide range for net income for 2025, owing to “heightened uncertainty,” the review implies a “less dire than feared tariff-impacted outlook,” as Citigroup put it.

—Charter Communications said on Friday it would buy privately held rival Cox Communications for $21.9 billion, uniting two of the largest U.S. cable and broadband operators as they battle streaming giants and mobile carriers for customers.

Media companies are considering options for their once lucrative cable TV businesses that are now in decline as millions of consumers pivot to streamers such as Netflix.

The merger will help Charter better bundle broadband and mobile services, as it tries to keep customers from switching to wireless providers such as T-Mobile that have their own internet plans.

—Dick’s Sporting Goods is buying the struggling footwear chain Foot Locker for about $2.4 billion, the second buyout of a major footwear company in as many weeks as business leaders struggle with uncertainty over how President Trump’s tariffs will impact companies that make many of their products overseas.

Dick’s said Thursday that it expects to run Foot Locker as a standalone unit and keep the Foot Locker brands, which include Kids Foot Locker, Champs Sports, WSS and Japanese sneaker brand atmos.

“Sports and sports culture continue to be incredibly powerful, and with this acquisition, we’ll create a new global platform that serves those ever evolving needs through iconic concepts consumers know and love, enhanced store designs and omnichannel experiences, as well as a product mix that appeals to our different customer bases,” Dick’s CEO Lauren Hobart said in a statement.

Skechers announced that it was being taken private earlier this month by an investment firm, 3G Capital, in a transaction worth more than $9 billion.

Foot Locker shareholders can choose to receive either $24 in cash or 0.1168 shares of Dick’s common stock for each Foot Locker share that they own.

About 97% of the clothes and shoes purchased in the U.S. are imported, predominantly from Asia, according to the American Apparel & Footwear Association.

Foot Locker has about 2,400 retail stores across 20 countries in North America, Europe, Asia, Australia and New Zealand.  The company had global sales of $8 billion last year.

The shares closed Wednesday at $12.87, so imagine how thrilled FL shareholders are now.

Dick’s stock dropped more than 13%.

–People taking Eli Lilly’s obesity drug, Zepbound, lost nearly 50% more weight than those using rival Novo Nordisk’s Wegovy in the first head-to-head study of the blockbuster medications.

Clinical trial participants who took tirzepatide, the drug sold as Zepbound, lost an average of 50 pounds over 72 weeks, while those who took semaglutide, or Wegovy, lost about 33 pounds. That’s according to the study funded by Lilly, which was published Sunday in the New England Journal of Medicine.

—U.S. egg prices, as noted above, fell for the first time in months but remain high as a dozen Grade A eggs are still running consumers $5.12 on average.

The overall cost of eggs dropped 12.7% last month, according to the Labor Department.

The decline is attributed in part to farmers’ collaboration with the U.S. Department of Agriculture to implement better measures to prevent the spread of bird flu at their farms.

Prices are also down because U.S. sellers are importing a higher number of eggs, and you have declining costs for energy and feed needed to heat and care for chickens.

Foreign Affairs

Russia/Ukraine: Leaders of Western nations including the United States demanded Saturday that Moscow implement an unconditional 30-day ceasefire in Ukraine starting May 12. If the Kremlin fails to comply, the leaders said they would strengthen sanctions against Russia’s banking and energy sectors.

“We together demand this from Russia. We know that the United States supports us in this,” Ukrainian President Volodymyr Zelensky said.

In an extraordinary Saturday, a “coalition of the willing” stood alongside Zelensky in Kyiv, including British Prime Minister Keir Starmer, French President Emmanuel Macron, Polish Prime Minister Donald Tusk and Germany Chancellor Friedrich Merz, who courageously traveled to the Ukrainian capital.

The leaders’ meeting took place two days after the Western world marked the 80th anniversary of World War II, and against the backdrop of months of meetings between Russia and the U.S. that have yielded zero results.

The U.S. envoy to Ukraine, retired Lt. Gen. Keith Kellogg, reposted a picture of the five leaders on a call with President Turmp on Saturday, saying the 30-day ceasefire would start the process of ending the largest and longest war in Europe since World War II.

Kremlin spokesperson Dmitry Peskov described Europe’s demands as “contradictory” and “confrontational” in remarks to reporters Saturday, adding that President Vladimir Putin is open “to dialogue with any leaders to the extent that the leaders themselves are ready.”

Peskov also told ABC News on Saturday that Russia would only agree to a ceasefire once the West stopped supplying Ukraine with weapons.

But Starmer countered that Putin didn’t name conditions for the unilateral three-day ceasefire Russia declared on account of WW II Victory Day celebrations in Moscow on May 9.

“If he is serious about peace, then he has the chance to show it,” Starmer said of Putin.

The Western leaders’ announcement in Kyiv was backed by the U.S.  They said Washington has also agreed to strengthen sanctions against Russia’s banking and energy sectors, continuing military aid to Ukraine and not lifting sanctions until a peace deal was achieved.

Then on Sunday, Putin proposed direct talks with Ukraine aimed at ending the war, an initiative welcomed by Zelensky, who said Kyiv was willing to talk but Moscow must agree to a ceasefire.

“We are proposing that Kyiv resume direct negotiations without any preconditions,” Putin said in a televised statement from the Kremlin that began after 1:30 a.m. on Sunday, Moscow time.  “We offer the Kyiv authorities to resume negotiations already on Thursday, in Istanbul.”

Zelensky said in a statement on X it was “a positive sign that the Russians have finally begun to consider ending the war” but “the very first step in truly ending any war is a ceasefire.”

“We expect Russia to confirm a ceasefire – full, lasting and reliable – starting tomorrow, May 12th, and Ukraine is ready to meet,” he said.

“A potentially great day for Russia and Ukraine!” President Trump wrote on Truth Social.  “Think of the hundreds of thousands of lives that will be saved as this never ending ‘bloodbath’ hopefully comes to an end.”

Putin said that he does not rule out that during his proposed talks in Istanbul both sides will agree on “some new truces, a new ceasefire,” but one that would be the first step towards a “sustainable” peace.

Despite Putin’s call for peace talks, Russia on Sunday launched a drone attack on Kyiv and other parts of Ukraine, injuring one person in the Ukrainian capital and damaging several homes, Ukrainian officials said.

But Putin also said the talks should address the root causes of the war and he would speak to Turkish President Erdogan about facilitating the talks.

“Our proposal, as they say, is on the table.  The decision is now up to the Ukrainian authorities and their curators, who are guided, it seems, by their personal political ambitions, and not by the interests of their peoples.”

Russian officials have also proposed that the U.S. recognizes Russia’s control over parts of Ukraine and demanded that Ukraine remains neutral though Moscow has said it is not opposed to Kyiv’s ambitions to join the European Union (just not NATO).

Well, you could see this was going nowhere, despite some of the peace/ceasefire rhetoric.

President Trump in another post on Truth Social, Sunday:

“President Putin of Russia doesn’t want to have a Cease Fire Agreement with Ukraine, but rather wants to meet on Thursday, in Turkey, to negotiate a possible end to the BLOODBATH.  Ukraine should agree to his, IMMEDIATELY.  At least they will be able to determine whether or not a deal is possible, and if it is not, European leaders, and the U.S., will know where everything stands, and can proceed accordingly!  I’m starting to doubt that Ukraine will make a deal with Putin, who’s too busy celebrating the Victory of World War II, which could not have been won (not even close!) without the United States of America.  HAVE THE MEETING, NOW!!!”

President Zelensky wrote, “There is no point in prolonging the killings. And I will be waiting for Putin in Turkiye on Thursday.  Personally.”

But European leaders said Trump undermined their efforts from just the day before.

“In Kyiv and alongside President Trump, we made a clear proposal: an unconditional 30-day ceasefire starting on Monday,” Emmanuel Macron wrote on X.  “There can be no negotiations while weapons are speaking…. A ceasefire is needed now, so that talks can begin. For peace.”

Chancellor Merz said on X: “We expect Moscow to now agree to a ceasefire. This is essential before beginning a genuine dialogue.  Talks cannot begin until the weapons fall silent.”

But in agreeing to meet with Putin, Zelensky was essentially calling his bluff.

We move to Thursday, and Russia’s delegation arrived in Istanbul for the peace talks, with a Ukrainian delegation including President Zelensky arriving shortly after, though Zelensky was in Ankara.

No Vladimir Putin.  No Russian Foreign Minister Sergei Lavrov.  Clearly the Kremlin wasn’t serious, as we all knew would be the case.

Instead, the Russian delegation was led by an aide to Putin, Vladimir Medinsky, three other senior officials and some junior “experts.”

Zelensky met with Turkish President Erdogan.

President Trump said Thursday he was not surprised Putin was a no-show, brushing off Putin’s decision to not take part in the expected talks.

“I didn’t think it was possible for Putin to go if I’m not there,” Trump said in an exchange with reporters as he took part in a business roundtable with executives in Doha on the third day of his visit to the Middle East.

Trump earlier in the week floated potentially attending himself.  Trump noted Thursday that Secretary of State Rubio was already in the country for meetings with NATO counterparts.

President Zelensky accused Russia of sending “stand-in props” to the peace talks.

Russia’s foreign ministry hit back, calling Zelensky a “clown and loser.”

Kremlin spokesman Peskov said there are “no plans for Putin to travel to Turkey or meet Trump over the next few days.”

President Trump, speaking to reporters on Air Force One, said “Nothing will happen” until he, Trump, meets with Putin, and that he didn’t think Putin would go to Istanbul unless he was there; Trump implying he might still show up in Istanbul, though his aides said he wasn’t going.

Russia and Ukraine then held their first direct peace talks in three years in Istanbul today, Friday, but hopes for a breakthrough remained dim, with no Putin and Zelensky face-to-face.  Sec. of State Rubio played down expectations.

“We don’t have high expectations of what will happen tomorrow. And frankly, at this point, I think it’s abundantly clear that the only way we’re going to have a breakthrough here is between President Trump and President Putin,” Rubio told reporters in Antalya, Turkey, during a NATO meeting.

Zelensky said he sent a team headed by his defense minister to meet the Russian delegation, even though Moscow’s side does not include “anyone who actually makes decisions.”

And as it turned out, low expectations were met.

After less than two hours, a senior Ukrainian official told the Associated Press the Russian side introduced new “unacceptable demands.”

Both sides discussed a ceasefire and a meeting between their two heads of state, but Russian presidential aide Medinsky said both sides agreed to provide each other with detailed ceasefire proposals.

But during the talks, the Ukrainian official said Russia introduced new “unacceptable demands” to withdraw Ukrainian forces from huge swaths of territory.  The demands had not been previously discussed.

The official, who spoke on the condition of anonymity, said the Ukrainian side reiterated it remained focused on achieving real progress – an immediate ceasefire and a pathway to substantive diplomacy, “just like the U.S., European partners, and other countries proposed,” the official added.

At least the two sides agreed to exchange 1,000 prisoners of war each, according to the heads of both delegations, in what would be their biggest such swap since the war began.

President Trump spoke to President Zelensky and European leaders from Air Force One after the meeting.

Meanwhile, Ukrainian government and Western military analysts say Russian forces are preparing a fresh military offensive.

Editorial / Wall Street Journal

“Mr. Putin’s no-show is the latest evidence that the Russian isn’t serious about ending the war, and it’s no surprise.  Mr. Putin thinks Mr. Trump might abandon Ukraine and make it easier for him to keep taking Ukrainian territory.

“Since Mr. Trump’s inauguration, Mr. Putin has launched 346 missiles and more than 13,000 real and decoy drones at Ukraine, according to an Institute for the Study of War tally.  ‘Vladimir, STOP!’ Mr. Trump implored on social media after a Russian strike killed civilians in Kyiv late last month.  Mr. Putin hasn’t stopped. An attack on the capital last week killed civilians.

“As the summer months near, Russia seems to be preparing for a new offensive. Russia has gained some territory in Ukraine’s east over the winter but at great cost and with no strategic breakthroughs.  But Mr. Putin knows Ukraine will run out of its current stock of American munitions in weeks.

“Mr. Trump has made a sincere effort to broker an end to the war, but the President looks worse the longer Mr. Putin talks peace but prosecutes the war.  Mr. Trump doesn’t want the world to see him looking like a supplicant to the Kremlin.

“The best path to peace is to increase the pressure on Moscow.  Mr. Trump can start with secondary sanctions on countries that buy Russian energy….

“Mr. Trump could also announce his support for more military aid for Ukraine.  Then when Mr. Trump finally meets with Mr. Putin, Ukraine and Mr. Trump will be negotiating from a far stronger position.  Peace through strength, someone once called it.”

–Separately, a court in Moscow on Wednesday convicted one of the leaders of a prominent independent election monitoring group on charges of organizing the work of an “undesirable” organization and sentenced him to five years in prison.

Grigory Melkonyants, co-chair of Russia’s leading election watchdog Golos, has rejected the charges as politically motivated. The case against him is part of the monthslong crackdown on Kremlin critics and rights activists that the government ratcheted up after invading Ukraine in 2022.

Golos has monitored for and exposed violations in every major election in Russia since it was founded in 2000.

You just know President Trump would love to have such power himself to go after his critics.

India/Pakistan: Going back to Saturday, Pakistan and India hinted at de-escalating their current conflict after firing missiles and drones at each other’s military sites hours earlier.

Pakistan’s foreign minister said his country would consider de-escalation if India stopped further attacks.  However, Ishaq Dar warned that if India launched any strikes, “our response will follow.”

Dar told Pakistan’s Geo News that he also conveyed this message to Secretary of State Marco Rubio, who contacted him after Rubio spoke to New Delhi earlier.

And then hours later, the two sides agreed to a full and immediate cease-fire in the worst violence between the two nuclear-armed rivals, after what President Trump described as a long night of U.S.-mediated talks.

In a post on Truth Social, Trump congratulated both countries “on using Common Sense and Great Intelligence.”

The cease-fire, which largely held the rest of the week, ends days of clashes in the wake of a militant attack in Indian-administered Kashmir that New Delhi blames on Islamabad.  Pakistan denied involvement in the attack on tourists that killed 26.

The United States has influence on both countries, but China has been pulling Pakistan into its orbit.  Nonetheless, Washington is seen as a trustworthy intermediary by both sides, and Secretary Rubio deserves a lot of the credit.

Satellite imagery showed there was less damage than what both sides have been reporting.  I told you last week the flow of misinformation on both sides was massive.

The conflict, which hopefully doesn’t reignite, did provide both sides a battlefield test of their drone capabilities.

And it needs to be noted that in New Delhi, many top officials were seething at the United States and President Trump for his post on Truth Social that caught key officials involved by surprise.

What really offended them was not simply the U.S. efforts to de-escalate, as talks between India and Pakistan had been underway behind the scenes.

Rather, it was Trump’s move to upstage Prime Minister Narendra Modi, undermine India’s longstanding policy to resolve the Kashmir territorial dispute through bilateral talks and – perhaps worst of all – put the sworn enemies on an equal footing, a move officials in New Delhi have resisted as the nation’s economy surges ahead of Pakistan.

An influential nationalist television anchor, Arnab Goswami, roared in a clip that went viral in India, “This is typical Trump overreach at a time when he doesn’t have a mandate to do so.  How on earth can Trump equalize between what has happened in Pahalgam [Ed. the site of the terror attack] and what has happened thereafter?  It’s a clear overstretch.” [BBC News]

One thing is for sure. India will hit back hard against any future attacks on civilians or cross-border provocations.

Pakistan met news of the ceasefire with fireworks and celebrations.

Later in the week, the Indian government disputed President Trump’s claim that the U.S.-mediated ceasefire came about in part because he had offered possible trade concessions.

An Indian foreign ministry spokesman said top leaders in New Delhi and Washington were in touch last week following the intense standoff with Pakistan, but that there was no conversation on trade.

Trump told reporters on Monday that he had offered to help both nations with trade if they agreed to de-escalate.

“I said, come on, we’re going to do a lot of trade with you guys.  Let’s stop it.  Let’s stop it. If you stop it, we’ll do a trade. If you don’t stop it, we’re not going to do any trade,” Trump said.

“And all of a sudden, they said, I think we’re going to stop,” Trump said.  Just another lie.

Israel/Gaza: In public, Israel has for months maintained that its blockade on food and fuel to Gaza did not pose a major threat to civilian life.  But in private, some senior Israeli officials have said that Palestinians in Gaza face widespread starvation unless aid deliveries are restored within weeks.

As reported by Defense One, Israeli military officers who monitor humanitarian conditions in Gaza have warned their commanders in recent days that unless the blockade is lifted quickly, many areas of the enclave are likely to run out of enough food to meet minimum daily nutritional needs.  They said that immediate steps were needed to ensure that the aid system could be reinstated fast enough to prevent starvation.

—Overnight on Tuesday and early Wednesday, at least 22 children were killed in Gaza in a series of Israeli air strikes on homes in northern Gaza, according to local hospitals.

The strikes killed at least 70 people in total, the Indonesian Hospital in Jabaliya reported.

The strikes came a day after Hamas released an Israeli-American hostage, an Israeli soldier, 21-year-old Edan Alexander, in a deal brokered by the United States, and as President Trump toured the Gulf states.

Overnight Wednesday, separate Israeli airstrikes, at least 10 as reported by the AP, hit the southern city of Khan Younis, killing at least another 50, with some body bags taken to the city’s Nasser Hospital containing the remains of multiple persons.  The hospital’s morgue confirmed 54 people had been killed, and just imagine the condition of many of those injured.

On Tuesday, Prime Minister Netanyahu said there was “no way” Israel would halt its war in Gaza, dimming hopes for a ceasefire.

Friday, Israeli strikes in Gaza killed at least 20 and then Palestinians reported that the Israeli military launched a large-scale ground, air, and sea assault on the north of Gaza, with troops advancing on the town of Beit Lahia. More than 100 have been killed, according to the Hamas-run civil defense agency.

Separately, Israel issued evacuation warnings on Wednesday for three seaports in Yemen after saying the Iran-aligned Houthis had fired a missile towards it, which was intercepted.

President Trump agreed to an Oman-mediated ceasefire deal with the group, which said the accord did not include Israel.

Iran: President Trump speaking from Riyadh Tuesday said he would never allow Iran to obtain a nuclear weapon.  But with talks underway on limiting Iran’s nuclear program in exchange for sanctions relief, he said he was ready for a deal and pushed Tehran to take the olive branch he was offering.

Iran and the U.S. held a fourth round of negotiations Sunday over Tehran’s rapidly advancing nuclear program.  The talks ran for some three hours in Muscat, the capital of Oman, which has been mediating the negotiations.

Syria: President Trump also announced plans Tuesday to lift sanctions against the new Syrian government and expressed in his strongest terms yet a willingness to negotiate with Iran, signaling a reordering of U.S. foreign policy in which there are no “permanent enemies.”

Trump in his speech at an investment forum in Riyadh declared his opposition to past U.S. interventions in the Middle East but also a willingness to use force to defend the United States and its allies.

“In fact, some of the closest friends of the United States of America are nations we fought wars against in generations past,” the president said.  “And now they’re our friends and our allies.”

Trump said the move on Syria was requested by the Saudi crown prince.

“Oh, what I do for the crown prince,” Trump said.

The decision offered an economic lifeline for a country devastated by nearly 14 years of civil war, let alone decades of dictatorship.

The Syrian sanctions date to the long, brutal reign of President Bashar al-Assad, who was ousted in December, and were intended to inflict major pain on his regime but led to devastating economic fallout for Syrian civilians.  They were left in place because of uncertainty about the intentions of Syria’s new leaders, who renounced a past affiliation with al-Qaeda.

The overture to Iran and the end of sanctions on Syria were blows to Israeli Prime Minister Benjamin Netanyahu, who was already smarting from Trump’s decision to skip a visit to Israel despite being in the region.  The Israeli leader has pushed a hard line on both issues and Israeli troops have been increasing rather liberally buffer zones with Syria, flat out taking territory not theirs.

Trump has also rejected Netanyahu’s desire for joint action to take out Iran’s nuclear facilities.

On Wednesday, Trump then met Syria’s new leader, Ahmed al-Sharaa, an Islamist formerly aligned with Islamic State in Iraq and al Qaeda who is still designated by Washington as a terrorist.  He came to power after leading the ouster of Assad.

It was apparently the first meeting between the presidents of the U.S. and Syria in 25 years.  The White House said the meeting lasted 33 minutes.

Turmp said after of al-Sharaa: He’s “very good, a young attractive guy, tough guy, [with a] strong past. He’s a fighter, he’s got a real shot at pulling it together.”

During their meeting, according to White House press secretary Karoline Leavitt, Trump gave al-Sharaa five instructions/demands:

Sign the Abraham Accords in order to normalize relations with Israel; tell all “foreign terrorists” to leave Syria; single out “Palestinian terrorists” to be deported; assist the United States in stopping the resurgence of ISIS; and on the same lines, assume the responsibility for detention centers relating to the group in northeast Syria.

Turkey: A Kurdish militant group that has waged a bloody insurgency against the Turkish state for four decades said on Monday that it would lay down its arms and disband, a decision that could reshape Turkish politics and reverberate in neighboring countries.

The announcement by the Kurdistan Workers’ Party, or P.K.K., came a few months after its imprisoned leader, Abdullah Ocalan, urged the group to disarm and disband.  In his February message, he said the group’s armed struggle had outlived its initial purpose and that further progress in the struggle for Kurdish rights could be achieved through politics.

The P.K.K. was originally a secessionist group seeking to create an independent state for Turkey’s Kurdish minority.

Random Musings

—Presidential approval ratings….

Gallup: 44% approve of President Trump’s job performance, while 53% disapprove.  37% of independents approve (Apr. 1-14).

Rasmussen: 51% approve, 48% disapprove (May 16).

—New Jersey’s gubernatorial election this fall will be one of the few races followed nationally as Gov. Phil Murphy (D) is term-limited and there is a total free-for-all on the Democratic side with our June primary fast approaching.

For the Republicans, Jack Ciattarelli, who has run for governor twice before and barely lost to Murphy last time, was 30 points in the lead in the last Rutgers-Eagleton poll and on Monday, he received President Trump’s endorsement.

I already voted absentee, having told you I no longer vote in person because there are no more bake sales!  This is a national disgrace.

Anyway, I stayed a registered Republican so I could vote same easily in the primaries and state Sen. Jon Bramnick got my vote.  I’ve met both Ciattarelli and Bramnick and like them both.

Whoever emerges out of the Democratic primary is going to be a strong candidate for their side.

In 2021, Ciattarelli lost to Murphy 51.2% to 48.0%.

—The Supreme Court wrestled on Thursday with the Trump administration’s complaints that federal judges have exceeded their authority in temporarily blocking some of his policy moves for the whole country.

Several of the justices appeared torn between two concerns. They appeared skeptical that single district judges should have the power to freeze executive actions throughout the nation.

But they also seemed troubled by the legality – and consequences – of the executive order underlying the case: an order issued by President Trump on his first day in office ending birthright citizenship, or the granting of automatic citizenship to all babies born in the United States.

This could be a truly historic ruling in the next six weeks or so.

—Gov. Gavin Newsom escalated California’s push to eradicate homeless encampments on Monday, calling on hundreds of cities, towns and counties to effectively ban tent camps on sidewalks, bike paths, parklands and other types of public property.

Newsom’s administration has spent tens of billions of dollars on programs to bring homeless people into housing and to emphasize treatment, but his move on Monday marks a tougher approach to one of the more visible aspects of the homelessness crisis.

California is home to about half of the nation’s unsheltered homeless population.  Last year, a record 187,000 people were homeless in the state, according to the Public Policy Institute of California. Two-thirds were living unsheltered in tents, cars or outdoors.

Newsom then called Wednesday for California to scale back health care for undocumented immigrants to help balance the state budget, retrenching on his desire to deliver “universal health care for all.”

All part of his chameleon-like transformation to a presidential candidate in 2028, but it will fail miserably.

—A group of nearly 50 White South Africans landed at Dulles International Airport on Monday as refugees, coming to the United States under a humanitarian designation meant for people fleeing war or persecution that the Trump administration has suspended for all other groups worldwide.

President Trump has said the Afrikaners – a minority group descended from Dutch settlers in South Africa – are facing racial discrimination due to a land redistribution law in that country that seeks to correct an imbalance in property ownership stemming from four decades of apartheid rule. No land seizures have been carried out under that law.

But Trump claimed Monday that a genocide was taking place in South Africa.

“Farmers are being killed,” the president said at a news conference.  “They happen to be White. Whether they’re White or Black, makes no difference to me. But White farmers are being brutally killed and their land is being confiscated in South Africa.”

South African officials have called the effort to cast the Afrikaner families as refugees a “politically motivated” ploy “designed to question South Africa’s constitutional democracy.”

“They can’t provide any proof of any prosecution because there’s not any,” Ronald Lamola, the country’s international relations and cooperation minister, said at a Monday news conference in Pretoria, South Africa’s administrative capital. “There is not any form of persecution to White South Africans.”

And such claims are “disinformation,” Lamola said.

In his first week in office, Trump suspended all refugee admissions to the U.S. and slashed funding for resettlement groups that help refugees find jobs and housing across the country.

Last week, Stephen Miller, Trump’s deputy chief of staff, told reporters that “what’s happening in South Africa fits the textbook definition of why the refugee program was created. This is persecution based on a protected characteristic, in this case, race.”

Advocates for other refugees seeking safe harbor in the U.S. expressed outrage over the effort.

Shawn VanDiver, president of #AfghanEvac – a nonprofit group whose volunteers include U.S. veterans of the wars in Afghanistan and Iraq – said the preference given to White South Africans creates the appearance that the U.S. government can’t be trusted when it promises a secure life in the U.S. to those who have risked their lives for the country during times of war.

VanDiver’s group works to help Afghans who worked for the U.S. as translators, drivers and other roles during the war and are now worried about Taliban retribution gain entry into the country.

“It’s just not immoral and disgusting.  It’s a threat to our national security abroad,” he said of the Trump administration’s effort.  “This contrast isn’t just political theater – it’s a fundamental question of whether U.S. refugee policy is rooted in principle or in politics. The hypocrisy is as clear as it is cruel.”

–The aforementioned Stephen Miller has indicated that the Trump administration is actively considering whether it can suspend habeas corpus, the right of an individual to challenge their detention in court.

When asked about suspending the writ of habeas corpus as part of its efforts to deport individuals from the United States, Miller told reporters Friday: “The Constitution is clear and that, of course, is the supreme law of the land, that the privilege of the writ of habeas corpus could be suspended in time of invasion.”

“So that’s an option we’re actively looking at,” he added.

Trump and his administration have repeatedly asserted that the U.S. is facing an “invasion” requiring the deportation of undocumented migrants under the Alien Enemies Act, a law that would allow the deportation of noncitizens with little to no due process.

The Constitution does not allow the suspension of habeas corpus solely because an “invasion” is declared by the executive branch.  The document states in Article I that it can be suspended only “in Cases of Rebellion or Invasion [when] the public Safety may require it.”

—The massive military parade planned for Washington on June 14, the U.S. Army’s 250th  anniversary, and President Trump’s birthday, will cost an estimated $25 million to $45 million and will involve dozens of warplanes, hundreds of Army vehicles and thousands of soldiers from across the country.

There are a lot of unhappy folks over this, especially at a time when Trump’s overhaul of the federal government includes slashing the Department of Veterans Affairs, so protests are being planned as well.

The last time troops paraded in D.C. was in 1991, when 800,000 people poured into the nation’s capital to honor Gulf War service members and watch a seven-block-long display of military equipment.

—There were 30,000 fewer U.S. drug overdose deaths in 2024 than the year before – the largest one-year decline ever recorded.

An estimated 80,000 people died from overdoses last year, according to provisional Centers for Disease Control and Prevention data released Wednesday. That’s down 27% from the 110,000 in 2023.

All but two states saw declines last year, with Nevada and South Dakota seeing small increases.

Still, annual overdose deaths are higher than they were before the Covid-19 pandemic.

—HHS Secretary Robert F. Kennedy Jr. appeared at a number of contentious congressional hearings on Wednesday, and he skirted a question about whether he would vaccinate his children if they were born now.

“Probably for measles,” Kennedy responded to the question, and then backpedaled, adding, “What I would say is: my opinions about vaccines are irrelevant.”

When pressed on whether he would vaccinate his children for chickenpox and Polio, Kennedy once again said he didn’t want to be giving advice.

“I don’t think people should be taking medical advice from me.”

Unreal.

—After spending the week calling Arab leaders “handsome,” “good looking,” and “attractive,” President Trump saw fit to post to Truth Social from Air Force One today:

“Has anyone noticed that, since I said, ‘I HATE TAYLOR SWIFT,’ she’s no longer ‘HOT?’”

Yup, the message was sent that the president thinks she is ugly.  [Just two years ago, Trump raved Swift was “beautiful.”]

What a freakin’ jerk.

—Pope Leo XIV, in his first Sunday noon blessing as pontiff, called for a just and lasting peace in Ukraine and an immediate ceasefire in Gaza with the release of hostages and delivery of humanitarian aid.

“I too address the world’s great powers by repeating the ever-present call ‘never again war,’” Leo said.

Leo quoted Pope Francis in denouncing the number of conflicts ravaging the globe today, saying it was a “third world war in pieces.”

“I carry in my heart the sufferings of the beloved Ukrainian people,” he said.  “Let everything possible be done to achieve genuine, just and lasting peace as soon as possible.”

He called for the release of war prisoners and the return of Ukrainian children to their families, and welcomed the ceasefire between India and Pakistan.

Saturday, in his first formal audience with the cardinals that elected him, Pope Leo laid out the vision of his papacy, repeatedly citing Francis and the Argentine pope’s own 2013 mission statement, making clear a commitment to making the Catholic Church more inclusive and attentive to the faithful and a church that looks out for the “least and rejected.”

Leo identified AI as one of the main issues facing humanity, saying it poses challenges to defending human dignity, justice and labor.

Leo explained the choice of his name: His namesake, Pope Leo XIII, was pope from 1878 to 1903 and laid the foundation for modern Catholic social thought. The late pope criticized both laissez-faire capitalism and state-centric socialism, giving shape to a distinctly Catholic vein of economic teaching.

Leo XIII addressed great social issues posed by the industrial revolution – workers’ rights and capitalism – in his famous encyclical Rerum Novarum.

“In our own day, the church offers everyone the treasury of its social teaching in response to another industrial revolution and to developments in the field of artificial intelligence that pose new challenges for the defense of human dignity, justice and labor,” said Leo XIV.

Madagascar Cardinal Desire Tsarahazana told reporters Saturday that on the final ballot, Cardinal Robert Francis Prevost received “more” than 100 votes, which suggests an extraordinary margin, well beyond the two-thirds, or 89 votes, necessary to be elected.

–Last Saturday, the borough of Utqiagvik, Alaska, in the northernmost part of the state, began its period of 84 days when the sun never sets.

Between November and January, it goes 64 days without witnessing a hint of direct daylight.

So I looked up the place to make sure I had the location right, and I didn’t know that 15 miles from Utqiagvik, pioneer Wiley Post and humorist/philosopher Will Rogers died when their plane went down on a flight to Siberia.

And now you know…the rest of the story….

—

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

Slava Ukraini.

God bless America.

—

Gold $3196…brutal week…
Oil $62.41

Bitcoin: $104,045 [4:00 PM ET, Friday]

Regular Gas: $3.19; Diesel: $3.55 [$3.60 – $3.92 yr. ago]

Returns for the week 5/12-5/16

Dow Jones  +3.4%  [42654]
S&P 500  +5.3%  [5958]
S&P MidCap  +4.8%
Russell 2000  +4.4%
Nasdaq  +7.2%  [19211]

Returns for the period 1/1/25-5/16/25

Dow Jones  +0.3%
S&P 500  +1.3%
S&P MidCap  -1.1%
Russell 2000  -5.3%
Nasdaq  -0.5%

Bulls 35.8
Bears 30.2…three weeks ago the split was 23.5 / 35.3…the 23.5 the lowest number of bulls since Nov. 2008.

Hang in there.  Enjoy the PGA Championship.

The new site is coming in about two weeks…the cost is higher than expected.  Hint, hint, he typed with a smile.

Brian Trumbore