For the week 8/4-8/8

[Posted 4:20 PM ET, Friday]

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Edition 1,372

This coming week is likely to be dominated by talk surrounding a potential meeting between President Trump and Vladimir Putin, Ukraine just a bystander.  There are incredible risks for the West if Trump were to sell out Kyiv.  Hopefully that is not the case.

But we know what Putin wants.  Full control of Ukraine, full stop.

*This afternoon, however, Bloomberg is reporting that Washington and Moscow are “aiming to reach a deal to halt the war in Ukraine that would lock in Russia’s occupation of territory seized during its military invasion, according to people familiar with the matter….

“Putin is demanding that Ukraine cede its entire eastern Donbas area to Russia as well as Crimea, which his forces illegally annexed in 2014.  That would require (Zelensky) to order a withdrawal of troops from parts of the Luhansk and Donetsk regions still held by Kyiv, handing Russia a victory that its army couldn’t achieve militarily since the start of the full-scale invasion in February 2022.

“Such an outcome would represent a major win for Putin… Zelensky risks being presented with a take-it-or-leave-it deal to accept the loss of Ukrainian territory, while Europe fears it would be left to monitor a ceasefire as Putin rebuilds his forces.”

This would be an unmitigated disaster.  We’ll see.

Meanwhile, there is serious confusion over the trade “frameworks” Trump reached with the likes of Japan and the European Union, for starters.

In Japan, frustrations are mounting as Tokyo and Washington seem to have different interpretations of the key component of the new trade deal, tariffs on autos.

Prime Minister Shigeru Ishiba, fighting for his political survival, had to try to explain the vague deal reached between himself and President Trump on July 23, telling lawmakers:

“The other party [Trump] is not a normal person,” asserting that his counterpart doesn’t play by the rules of conventional trade agreements and unilaterally changes the rules.  “In negotiations like this, implementation is far more difficult than reaching an agreement.”

None of the provisions of the “deal” reached between Ishiba and Trump was committed to a formal document, and the fact sheets released by both have conflicting information.

And then there’s the issue of the $550 billion investment plan that Japan pledged in exchange for lower tariffs.

“I got a signing bonus from Japan of $550 billion – that’s our money. It’s our money to invest, as we like,” Trump told CNBC.

Ishiba maintains the process would be led by Japanese companies and backed by financial institutions affiliated with the Japanese government, which would offer up to $550 billion in equity investments, loans and loan guarantees.

As Ryo Sahashi, international politics professor at the University of Tokyo’s Institute for Advanced Studies on Asia, told the Washington Post, the differences have revealed the fragility of agreements with the Trump administration and how “incredible, untrustworthy” Washington can be.

It’s kind of laughable.  Much more on both Putin and trade “deals” down below.

—

Gerrymandering, or the redrawing of congressional districts to give the majority party in a state an advantage in upcoming elections, is basically as old as the Republic and is legal, as the Supreme Court has ruled.  But it’s illegal if a redrawing is found to be racist, to put it as simply as possible, and the Supremes have ruled even recently on same.

I just have to start out this week, however, in reference to the situation in Texas and their pre-2026 midterm redistricting battle that there is a simple solution, as a Wall Street Journal editorial I refer to below states…Congress needs to rule that redistricting can occur only once every ten years, in conjunction with the census.  That takes most of the politics out of it, and it benefits both parties.

Elections have consequences, including state house and senate races.

I live in a district, N.J. 7, represented by Republican Tom Kean Jr. these days, a man I’ve voted for, that is absurd from a map standpoint, stretching from the far eastern part of the state, all the way west to the Pennsylvania border.

But lots of districts in America are stupid when you gaze at a map, and it all comes down to gerrymandering, and if you’re the party in power, you can go through with the process, though many states have ‘independent’ commissions to oversee the redrawing…yet we know that too becomes political.

—

Wall Street and the Economy

The reverberations from President Trump’s sacking of the commissioner of the Bureau of Labor Statistics last Friday, Erika McEntarfer, continued throughout the weekend and all this week.

McEntarfer was appointed to her post by Joe Biden in 2023 and confirmed 86-8 in the Senate in 2024, after a long government career in which she served under presidents of both parties, including Trump.

Trump’s labor secretary said the firing would “ensure the American People can trust” the government’s jobs data.  Others disagreed: “If you want people to stop trusting the numbers,” one economist said, “firing the person who is confirmed by the Senate to make sure those numbers are trustworthy is a real good way to do it.”

Megan Leonhardt / Wall Street Journal

“President Donald Trump said that he ordered his team to fire Bureau of Labor Statistics Commissioner Erika McEntarfer, accusing her of releasing inaccurate employment data. But swings in the monthly jobs numbers and subsequent revisions are nothing new.

“ ‘I was just informed that our Country’s ‘Jobs Numbers’ are being produced by a Biden Appointee, Dr. Erika McEntarfer, the Commissioner of Labor Statistics,’ Trump wrote in a social media post Friday afternoon.  ‘I have directed my Team to fire this Biden Political Appointee, IMMEDIATELY.  She will be replaced with someone much more competent and qualified.’

“The order comes hours after the BLS published its monthly release of employment data, which includes a count on the number of jobs added by employers over the course of the month, as well as the official unemployment rate, among other key labor statistics.

“The BLS reported that the U.S. added 73,000 jobs in July and revised lower the payroll gains for May and June by 258,000.  It was the largest revision of data across two months going back to 2013, not counting revisions during the volatile 2020 Covid-19 pandemic era. Much of the May and June revisions were driven by updates to government payrolls and some seasonal moves in education workers.

“Trump called the revisions a ‘huge mistake’ and said that ‘similar things happened in the first part of the year, always to the negative.’  There have been both positive and negative revisions throughout the year. It is common for the payroll numbers to be revised multiple times during the year.

“Trump said he was ordering the dismissal because employment data ‘must be fair and accurate, they can’t be manipulated for political purposes.’  He didn’t provide evidence to support those accusations….

“Labor Secretary Lori Chavez-DeRemer wrote on social media Friday that she agreed ‘wholeheartedly’ with Trump. ‘A recent string of major revisions have come to light and raised concerns about decisions being made by the Biden-appointed Labor Commissioner,’ Chavez-DeRemer wrote.  ‘I support the President’s decision to replace Biden’s Commissioner and ensure the American People can trust the important and influential data coming from BLS.’

“Chavez-DeRemer noted that Deputy Commissioner William Wiatrowski will serve as acting commissioner during the search for McEntarfer’s replacement.

“Leading economic organizations derided the termination on Friday, calling Trump’s attacks ‘baseless’ and merely attempting to shift the blame for unwelcome economic news.

“ ‘This rationale for firing Dr. McEntarfer is without merit and undermines the credibility of federal economic statistics that are a cornerstone of intelligent economic decision-making by businesses, families, and policymakers, reads a statement released by the Friends of the BLS, a partnership between the American Statistical Association, Center for Regional Economic Competitiveness, Council of Professional Associations on Federal Statistics, and the National Association of Business Economics.

“The organization added that politicizing the work of the agency and its workers does a ‘great disservice’ and called on Congress to respond immediately….

“To produce the monthly payroll growth metrics, the BLS uses the establishment survey, also known as the payroll survey, to collect responses from approximately 121,000 businesses and government agencies. The bureau publishes an initial preliminary estimate of employment, hours, and earnings on a monthly basis typically on the first Friday of the succeeding month.

“Estimates are then revised twice more, as additional responses and information becomes available, before undergoing an annual benchmarking process. This year, the BLS will release the preliminary benchmark revisions to establishment survey data on Sept. 9 at 10 a.m. Eastern.

“While the size of May and June’s revisions was surprising, there are non-political reasons for the wide swings. Economists have warned for years that declining initial response rates from employers, for instance, could create more volatility within the employment data….

“The July payroll numbers are only a preliminary estimate. The response rate to the July payroll survey was 57.6% versus an average of 72.4% for July in the previous 10 years, write the economists at Brean Capital. That indicates that revisions to this data are likely in coming months.

“In addition to the monthly employment data, the BLS is responsible for producing a wide swath of economic indicators, including the monthly inflation gauge, the consumer price index, and a wholesale price growth measure called the producer price index.”

And there are others.

So this is the background.

Editorial / Wall Street Journal…Friday night, 5:45 PM ET (after I posted)

“President Trump has now imposed his new tariff regime on the world, and the triumphalism is palpable in MAGA land. But maybe hold the euphoria, as this week’s reports on jobs and the economy suggest the new golden age may take a while to appear….

“Employers aren’t laying off workers, but they have all but stopped new hiring.  Notably, most of the new jobs are in healthcare and social assistance, which rely heavily on government spending.  This continues the Biden-era trend that Trumponomics was supposed to change.  Not so far.

“The much-advertised rebirth of U.S. manufacturing also hasn’t arrived. The economy shed 11,000 manufacturing jobs in July, following a loss of 26,000 in May and June.  The ISM Manufacturing Index fell again in July to 48, the fifth straight month below 50.

“One labor market problem may be the crackdown on migrant workers. The foreign-born workforce has fallen by about a million since Mr. Trump took office. The National Foundation for American Policy, a nonpartisan think tank, says immigrants accounted for over half of the labor force increase in each of the last three decades.  Fewer workers means fewer new jobs as employers conclude they can’t fill them.

“How much of this jobs and growth slowdown owes to Mr. Trump’s tariffs?  It’s hard to say for sure. But it has occurred in the wake of Mr. Trump’s April 2 tariff shock, his rapid backtrack from the highest rates, and then his willy-nilly threats and deal-making with the world. The policy uncertainty has surely affected business hiring and investment.  How can you hire or invest if you don’t know what your cost of goods will be, or from which supplier you will be able to buy at a competitive price?

“On that score, Mr. Trump’s latest tariff blast…hasn’t put an end to the uncertainty.  Much of the world will now pay 15%, if Mr. Trump sticks to his deals. But some of the biggest U.S. trading partners – Mexico, Canada, China and India – remain in tariff limbo. Brazil will pay 50%, though it has a trade surplus with the U.S.  And what did Switzerland ever do to Mr. Trump to deserve 39%?  Charge too much for a watch?

“Mr. Trump and his supporters are hailing the trade deals as the dawn of a new world trading order that will be better for American workers….

“But what matters will be the economic results over time. The U.S. economy is resilient, and perhaps it can absorb a new tariff rate from 15%-20%, up from 2.4% when he took office in January….

“But the tariff tax increase in dollar terms at Mr. Trump’s current rates will be close to $360 billion a year. That’s among the largest tax increases in recent history. Republicans have spent decades building credibility as the antitax party, but now they’re going along with Mr. Trump’s tariffs on the fiction that only foreigners will pay them.  Let’s see how well that plays when prices on tariffed goods increase.”

The Journal also notes that re: the firing of McEntarfer:

“BLS has its problems, but the timing suggests he’s shooting the messenger. There are bound to be monthly revisions when tariff and deportation policies are so volatile.

“Mr. Trump’s other scapegoat is the Federal Reserve, which he says has been too late to cut interest rates. Maybe that will prove to be true, but the Fed also has to navigate Mr. Trump’s tariff uncertainty and the large fact that inflation is still above its 2% target. Every public opinion poll says voters remain unhappy about the price increases they’re paying.

“A saving grace, we hope, is that the new tax law and deregulation will reduce business costs and lift investment.  But Mr. Trump can help by stopping his trade war.  If he won’t roll back his tariffs, at least he can declare that he’s content with where they are and has no plans for more.”

McEntarfer’s predecessor weighed in, calling it an unfounded move that will undermine a key data set on the economy.

“This is damaging,” William Beach, whom Trump picked in his first term to head the BLS, said on CNN’s “State of the Union” Sunday.

“I don’t know that there’s any grounds at all for this firing,” he said, whom McEntarfer replaced in January 2024.  “And it really hurts the statistical system. It undermines credibility in BLS.”

Studies indicate that the agency’s data is more accurate than 20 or 30 years ago, including any revisions of the initial data, Beach said.  Even so, he said he’ll trust future BLS data because people working for the agency are “some of the most loyal Americans you can imagine,” making the bureau “the finest statistical agency in the entire world.”

Bank of America Corp. CEO Brian Moynihan, speaking Sunday on CBS’ “Face the Nation,” urged the U.S. government to improve its data collection to avoid revisions that engender distrust.

“We watch what consumers really do. We watch what businesses really do,” Moynihan said, while not addressing the politics of the firing.  “They can get this data, I think, other ways, and I think that’s where the focus should be.”

Kevin Hassett, Trump’s chief economic adviser at the White House, alleged that the large jobs data revisions were poorly explained and were evidence enough for a “fresh set of eyes” at BLS. He sought to contradict Beach’s portrayal of the agency as politically neutral.

“The bottom line is that there were people involved in creating these numbers,” Hassett said on NBC’s “Meet the Press.”

Pressed on whether Trump would fire anyone offering data he disagreed with, Hassett, who heads the National Economic Council, disagreed.

“No, absolutely not,” he said. “The president wants his own people there so that when we see the numbers, they’re more transparent and more reliable.”

As I was able to squeeze in last Friday before posting, President Trump said “today’s Jobs Numbers were RIGGED in order to make the Republicans, and ME, look bad.”

Shortly thereafter he fired McEntarfer.

Hasset claimed without evidence on “Fox News Sunday” that there are “partisan patterns” in the jobless data and that “data can’t be propaganda.”

Former Treasury Secretary Larry Summers said on ABC’s “This Week” that Trump’s claims that the jobs numbers were rigged were “a preposterous charge.”

“There is no conceivable way that the head of the BLS could have manipulated this number,” Summers said.  “This is the stuff of democracies giving way to authoritarianism.”

Trump Sunday afternoon in a Truth Social post, repeated his assertions, without evidence, that recent BLS reports were a “SCAM!”  He added: “She had the biggest miscalculations in over 50 years.”

Harvard economist Jason Furman, who chaired Barack Obama’s Council of Economic Advisers, wrote online: “Reliable economic data is a key strength of the US economy. I don’t think Trump will be able to fake the data given the procedures.  But there is now a risk, plus an awful appearance.”

McEntarfer said in a social media post Sunday: “It has been the honor of my life to serve as Commissioner of BLS alongside the many dedicated civil servants tasked with measuring a vast and dynamic economy.”

Editorial / Wall Street Journal, Sunday p.m.

“We had our say Saturday about President Trump’s dubious decision to fire the head of the Bureau of Labor Statistics after a lousy July jobs report, and the world has piled on.  But it’s worth noting the burden of the advisers who have had to support the President’s claim that the data were ‘rigged.’

“Start with Labor Secretary Lori Chavez-DeRemer, who told Bloomberg TV early on Friday that, even though the jobs data was revised downward for May and June, ‘we’re seeing positive job growth.’  Ok, sometimes in politics you have to look at a rotten apple and call it merely overripe.

“But then Mr. Trump fired the BLS director, who reports to Ms. Chavez-DeRemer. She snapped to attention.  ‘I agree wholeheartedly with @POTUS that our jobs numbers must be fair, accurate, and never manipulated for political purposes,’ she tweeted.

“So were the jobs data that were ‘positive’ in the morning rigged by the afternoon?  We realize the troops have to support the commander, but Ms. Chavez-DeRemer isn’t making a name for herself as a credible spokesperson for labor policy or data.

“Or consider Jamieson Greer, the U.S. trade rep, who was asked on CBS’ ‘Face the Nation’ Sunday about the decline in manufacturing jobs. Mr. Greer replied, ‘Yeah, I saw that and my own view is that I think a lot of companies were waiting to see if the tax bill was going to come through with the expensing for capital goods and things like that.’

“That’s plausible, but then host Margaret Brennan pointed out that Mr. Trump had said the jobs data was fake.  Mr. Greer had to scramble to echo the boss: ‘Well, I think you know, and I saw what the President did, and he also talked about the, just the record from BLS, you know, last year.’

“As Allysia Finley writes nearby, the BLS job revisions are best explained by a decline in business response rates, not political bias. The reality of slowing job growth is clear to anyone paying attention, no matter the official statistics.  Mr. Trump’s data denial is one more reason fewer Americans will trust the government.”

To go back to last August, the Biden presidency, the BLS reported rising unemployment and a cooling jobs market.  Later that month the bureau reported that the economy had created 818,000 fewer jobs than it had previously reported from April 2023 through March 2024, marking the largest annual revision to federal jobs data in 15 years.

“STOCK MARKETS ARE CRASHING, JOBS NUMBERS ARE TERRIBLE, WE ARE HEADING TO WORLD WAR III, AND WE HAVE TWO OF THE MOST INCOMPETENT LEADERS IN HISTORY,” Trump posted to Truth Social on Aug. 5, 2024, as he campaigned to replace Vice President Harris.  “THIS IS NOT GOOD!!!” [Washington Post]

I covered all of this, last August in my “Week in Reviews” of 8/3/24 and 8/24/24.

WIR 8/3/24….

To add a little more meat, the July 2024 jobs report, as I put it, “was awful, vs. expectations.  Just 114,000 jobs created, when consensus was at 175,000, the worst figure since December 2020.  June was revised downward from 206,000 to 179,000.

“The July unemployment rate rose to 4.3% vs. 4.1% prior, and the highest number since Oct. 2021….

“All of this weighed by the Fed argues for not just a 25-basis point cut in the funds rate in September, but many are now talking of a 50-bp cut.”

And then WIR 8/24/24….

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

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

These are the facts! And I’ve been doing this for 26 ½ years…every week, same format.  As I like to say, I don’t suffer fools gladly.

—

Meanwhile, Federal Reserve governor Adriana Kugler, who was scheduled to step down in January, announced she was resigning effective Aug. 8 to go back into academia.

Whoever Trump nominates to succeed her may ultimately replace Jerome Powell as chair, whose term ends next May.

Back to Friday night, after I posted, President Trump posted on Truth Social:

“ ‘Too Late’ Powell should resign, just like Adriana Kugler, a Biden Appointee, resigned. She knew he was doing the wrong thing on Interest Rates.  He should resign, also!”

Thursday, Trump nominated Council of Economic Advisers Chair Stephen Miran to fill Kugler’s seat, but only through January, giving the president more time to think about a replacement for Powell.

Miran has to be approved by the Senate, which isn’t likely before the Federal Open Market Committee’s September meeting (9/16-17), but he’d be in place for the October and December gatherings.

That said, Wall Street’s odds of a September rate cut are up to 90%.

—

On the issue of trade, it was back in April that the Trump administration promised “90 deals in 90 days,” and we have frameworks with eight major trading partners, including the 15% tariffs on the European Union, Japan and South Korea.

But as I keep harping on, these are “framework” deals.  These aren’t trade agreements.

By week’s end, Trump had plowed ahead with sweeping tariffs on 90 countries, following through on his months-long push to upend the global trading system, with more than a few concerned over the impact.

The average tariff rate on imports from other countries is now around 15 percent – a significant jump from the roughly 2 percent average last year.

Trump took to Truth Social Wednesday evening.

“RECIPROCAL TARIFFS TAKE EFFECT AT MIDNIGHT TONIGHT! BILLIONS OF DOLLARS, LARGELY FROM COUNTRIES THAT HAVE TAKEN ADVANTAGE OF THE UNITED STATES FOR MANY YEARS, LAUGHING ALL THE WAY, WILL START FLOWING INTO THE USA. THE ONLY THING THAT CAN STOP AMERICA’S GREATNESS WOULD BE A RADICAL LEFT COURT THAT WANTS TO SEE OUR COUNTRY FAIL!”

Earlier, the president hit India with a 50% tariff, which will take effect on Aug. 27 unless it stops buying Russian oil.

Trump also threatened a 100% tariff on foreign-made computer chips as he pushes tech firms to invest in the U.S. [More below on this aspect.]

Export-dependent economies in Southeast Asia were among the hardest-hit by the new tariffs.

Manufacturing-focused Laos and Myanmar faced some of the highest levies at 40%. Some experts said Trump appears to have targeted countries with close trade ties with China.

Swiss officials were flummoxed, wondering why they were targeted with a 39% tariff rate that threatens to hit the country’s economy hard.  The Swiss president flew to Washington, unscheduled, looking for a meeting with Trump and didn’t get one.

Last week, Trump boosted the tariff rate on Canada from 25% to 35%, though most Canadian exports to the U.S. will dodge the import tax due to an existing trade treaty, the United States-Mexico-Canada Agreement (USMCA).

Higher tariffs on Mexico were paused for another 90 days as negotiations continue to strike a trade deal.

Bottom line, American companies must decide whether to eat the higher cost of importing goods or pass them along to consumers.  Many major corporations have signaled that prices for goods will increase.

“I’ve had retailers telling me that they think their prices will have to change in the fall. As their initial contracts change, their input price is higher [and] goods will go higher, too,” Sen. Rand Paul told The Hill recently.

Meanwhile, confusion hangs over various details of a trade deal struck between the U.S. and Japan, sparking concern in Japan over its enforcement, particularly regarding cars.  The Trump administration’s rhetoric over all its trade ‘framework’ arrangements has often shown discrepancies with its partners, casting doubt over their viability.

“There are all sorts of debates over the tariffs, but we have reached an agreement,” Japan’s Prime Minister Shigeru Ishiba said during a press conference on Wednesday.  “As stated by U.S. government officials involved in previous U.S.-Japan trade negotiations, it is much, much more difficult to implement the deal than agree on it.”

U.S. auto tariffs on Japan are now set at 27.5% – a combination of a previous 2.5% rate and a new 25% applied by President Trump. Although a cut to 15%, per the U.S.-Japan agreement, would lessen the blow, that rate would still impact a sector that has long been a mainstay of Japan’s economy.

Another question is whether the across-the-board 15% tariff is stacked on top of existing rates or whether all current levies will be standardized to 15%, in another potential divergence of the U.S. and Japan’s understandings of the trade deal.

Although Japanese trade negotiator Ryosei Akazawa has claimed that levies will be cut off at 15% rather then added on top of current rates, an executive order released last week indicated that the 15% cut off applied only to the European Union and would not be implemented for Japan.

“There are many details involved with this tariff rate, so we are seeking to discuss these points in detail,” Akazawa said.

This week, Toyota Motor warned of a $9.5 billion hit to profits from U.S. tariffs.  The automaker said that while they are subject to the 15% tariff, a timeframe for the change to go into effect has yet to be announced.

—

There was little economic data this week of import, but the ISM’s July service sector PMI, 50.1, spooked Wall Street on Tuesday, as it was just above the 50 dividing line between growth and contraction, and well below expectations.

The number says the service sector stagnated last month – faced with tepid demand and rising costs, with firms often reducing headcount.

The employment index component dropped to 46.4, contracting for the fourth time in five months and marking one of the lowest readings since the pandemic.

“Continued expansion of activity in new orders index together with a slight improvement in the backlog of orders index highlight the resilience of the U.S. services sector,” Steve Miller, chair of the ISM Services Business Survey Committee, said on a conference call.  “No question, however, the tariffs are raising prices-paid, a potential driver of future inflation.”

Separately, Factory orders for June fell 4.8%.

The Atlanta Fed’s GDPNow very early reading for third quarter growth is at 2.5%.

Freddie Mac’s 30-year fixed-rate mortgage declined 9 basis points to 6.63%.

Next week, major inflation data for July…CPI and PPI…as well as a report on retail sales.

We will also have a treasury statement on the budget picture.

Europe and Asia

—S&P Global/Hamburg Commercial Bank released the July service sector readings for the eurozone, with the overall figure at 51.0 vs. 50.5 in June.

Germany 50.6
France 48.5
Italy 52.3
Spain 55.1
Ireland 50.9

UK 51.8

Dr. Cyrus de la Rubia, Chief Economist at HCB:

“This could turn out to be a good summer for service providers. In Italy and Spain, business activity rose more sharply in July than in the previous month, while Germany, after several challenging months, has clawed its way back into growth territory. The standout performer is Spain, where the Purchasing Managers’ Index jumped by more than three points – pointing to a third quarter that’s off to an exceptionally strong start.

“France, by contrast, is the only one of the four major eurozone economies where the private services sector is contracting. Worse still, the downturn deepened.  One key factor is the government’s plan for sweeping budget cuts, which could weigh heavily on economic growth. Speculation is mounting that the administration may face a vote of no confidence, adding to the already high level of uncertainty. While Spain is stepping on the gas. France is firmly on the brakes.”

Retail trade for the month of June in the EA20 rose by 0.3% over May; up 3.1% from a year ago. [Eurostat]

Industrial producer prices in June for the euro area increased by 0.8% over May; 0.6% year-over-year. [Eurostat]

–The Bank of England lowered its key interest rate for the fifth time in a year as it seeks to balance a recent pickup in inflation against a cooling jobs market, a challenge that also confronts the Federal Reserve.

The central bank lowered its key rate to 4% from 4.25%, having made the first cut in this series in August 2024, when borrowing costs stood at 5.25%.  Policymakers repeated their pledge to continue to remove the restraints they have placed on economic activity at a “careful and gradual” pace.

“It was a finely balanced decision,” said BOE Gov. Andrew Bailey.  “Interest rates are still on a downward path.”

But opposition to a cut was strong.  Four members wanted to leave the key rate unchanged, while five supported the eventual move.

The UK’s inflation rate rose to 3.6% in June from 3.4% in May, while the unemployment rate picked up to 4.7% in the three months through May.

Turning to Asia…China’s private Caixin service sector reading for July was a solid 52.6 vs. 50.6 prior.

And then we had release of July exports, stronger than expected, up 7.2% vs. 5.8% prior year-over-year.  [Imports up 4.1%.]

This marked the fastest pace of outbound shipments since April, supported by a temporary easing of tariff pressures ahead of the August deadline.  Manufacturers capitalized on a fragile tariff truce between Beijing and Washington to ramp up shipments – particularly to Southeast Asia – before tougher U.S. duties targeting transshipments come into effect.

Exports to the EU rose 9.2% and ASEAN 16.6%.  In contrast, exports to the U.S. fell for the fourth consecutive month, dropping 21.7% year-over-year, after a 16.1% decline in June.

Japan’s July service sector PMI was 53.6 vs. 51.7 prior.

But June household spending, a key metric here, fell 5.2% over May, up 1.3% year-over-year, both well below consensus.

Japan’s government cut its growth forecast for this fiscal year (ending March 2026) on Thursday as U.S. tariffs slow capital expenditure and persistent inflation weighs on private consumption, threatening a fragile economic recovery.

In revised estimates presented at a meeting of Japan’s top economic council, the government cut its inflation-adjusted GDP forecast to 0.7% from 1.2% projected in January.

Separately, new data released Wednesday by the Ministry of Internal Affairs and Communications showed the number of Japanese nationals fell by 908,574 in 2024.  Almost a million more deaths than births were recorded, representing the steepest annual population decline since government surveys began in 1968.

Prime Minister Ishiba has described the demographic crisis of Japan’s ageing population as a “quiet emergency,” pledging family-friendly policies such as free childcare and more flexible work hours.

But efforts to reverse the perennially low birth rates among Japanese women have so far made little impact.

The number of births – 686,061 – was the lowest figure since records began in 1899 – while nearly 1.6 million died.

The number of foreign residents reached a record high of 3.6 million people as of Jan. 1, 2025, representing nearly 3% of Japan’s population.  The country needs far more, but culturally, that’s an issue.

Street Bytes

–Put me in the ‘I think this current rally is irrational’ camp.  I know that there are some real positives to the Big Beautiful Bill for business, but that’s down the road.

I also admit that forever in this column, I often put too much emphasis on my geopolitical fears, but I just think we have some August surprises coming, and growing inflation, and the market by any measure is stretched.

This week, however, we hit new record highs, with Nasdaq closing today at a new record, 21450, up 3.8%; the S&P 500 tied its record close of 6389, up 2.4%; and the Dow Jones rose 1.4%.

A huge rally in Apple shares helped all three major averages.

—U.S. Treasury Yields

6-mo. 4.11%  2-yr. 3.76%  10-yr. 4.28%  30-yr. 4.86%

The 2- and 10-year yields rose 8 and 7 basis points, respectively, this week.  But next Tuesday’s CPI report could move the market further.  Plus, yes, with this week’s increased tariffs, there is more uncertainty on Wall Street, and it’s not necessarily a reason for a flight to quality.

—Crude oil was buffeted by crosscurrents, with growing concerns about a supply glut following OPEC+’s decision to increase output, while at the same time you had the potential impact of tighter Russian oil supply.

OPEC+ agreed to boost production by 547,000 barrels per day in September, completing the reversal of a 2.2 million-barrel-per-day cut made by eight member countries in 2023.

Meanwhile, fresh pressure on India to stop purchasing Russian oil – as Washington seeks to push Moscow toward a peace deal with Ukraine – is raising concerns about potential disruptions to global supply flows.

President Trump said on Monday that he would “substantially raise” tariffs on India over its continued imports of Russian oil.

In the end, West Texas Intermediate fell about $3.50 to $63.72.

—Spot gold hit an intraday record today following news of fresh U.S. tariffs.  According to the Financial Times, the U.S. Customs and Border Protection agency ruled that one-kilo and 100-ounce gold bars should be classified under a customs code subject to levies – contradicting industry expectations that these bars would be exempted. The move will hit Switzerland (again) especially hard, as gold ranks among its largest exports to the U.S.

A new executive order from the White House clarifying the situation is due out shortly.

—AMD reported its second-quarter results after the bell on Tuesday, and the shares fell hard on the open the next morning, after the company missed on adjusted EPS while beating analysts’ expectations on revenue. The company also provided better-than-anticipated Q3 guidance of between $8.4 billion and $9 billion with the Street at $8.3bn.

The announcement comes ahead of rival and market leader Nvidia’s earnings report in a few weeks.

For the quarter, AMD saw adjusted EPS of $0.48 on revenue of $7.7 billion. Wall Street was expecting earnings per share of $0.49 on revenue of $7.4 billion.

For the current quarter, AMD guided to a revenue range with $8.7 billion at the midpoint, versus consensus at $8.32 billion.

“We are seeing robust demand across our computing and AI product portfolio and are well positioned to deliver significant growth in the second half of the year,” AMD CEO Lisa Su said in a press release.

AMD said it saw an $800 million impact from the Trump administration’s ban on the sale of the company’s MI308 AI chips to China.  That resulted in an operating loss of $155 million in the quarter.

Nvidia took a $4.5 billion write-down from the ban in Q1 and said it expects an $8bn hit in its second fiscal quarter.

AMD should benefit from the launch of its MI350 line of AI chips, designed to go toe-to-toe with Nvidia’s Blackwell-powered chips.  According to AMD, the MI350 line offers four times the AI compute performance and a 35X increase in inferencing capabilities versus its predecessors.

AMD’s Data Center segment revenue topped out at $3.2 billion, up 14% meeting the Street’s expectations.

But investors, while expecting a little more on the guidance front, are expressing concerns over the China prospects.

—Apple, with CEO Tim Cook standing alongside President Trump Wednesday, announced it was pledging $100 billion in additional investment in the United States, the company’s latest move to ramp up its domestic production and avoid the president’s threat of tariffs on its iPhones.

The White House called it a “significant acceleration” of Apple’s plan for more production in the United States and that the company has promised Trump to invest $600 billion domestically over the next four years.

The White House, and Apple, are also creating what it is calling the American Manufacturing Program, which will focus on bringing more of Apple’s supply chain and advanced manufacturing to the U.S.

Apple has made some promises in the past, including during the first Trump term and under Biden that it did not follow through on.

I keep asking myself, 1) How are we going to find the workers to build all these projects, including the AI-related projects every Big Tech company is committing to, and 2) Where will we get all the energy?  [Without putting the entire system, such as in Texas, where many of the energy (and water)-gulping projects are being built, at risk?]

Trump has been angered by Apple’s expansion in India, which Apple did to move production out of China to avoid increasing tariffs. And then the big tariffs were slapped on India with no clear statements on how that impacts Apple’s costs.

But Trump said Wednesday he would impose a 100% tariff on semiconductor imports, though he then cited Apple as an example of a company that won’t have to pay levies because of its investment in the U.S.

“If you’re building in the United States of America, there’s no charge,” Trump said.  “Even though you’re building and you’re not producing yet.”

—Taiwan Semiconductor Manufacturing Co., the maker of most of the world’s cutting-edge computer chips, told Taiwanese prosecutors of its suspicions that some current and former employees had been involved in stealing its trade secrets, the company said on Tuesday.

“TSMC recently detected unauthorized activities during routine monitoring, leading to the discovery of potential trade secret leaks,” said a spokeswoman for the company.

TSMC has taken disciplinary action against the people involved, and the case is being investigated by the Office of the High Prosecutor in Taiwan.

The possible leak of company secrets comes at a tense time between Taiwan and the United States as Trump weighed tariffs on semiconductors, Taiwan’s main export, on top of the 20% tariffs announced last week on the island’s other exports to the U.S.

TSMC makes chips for tech giants like Nvidia and Apple.

Last year, TSMC-made chips were found in a device from the Chinese telecommunications company Huawei, which was on a U.S. trade blacklist at the time and is now also on a restricted trade list in Taiwan.

But then TSMC’s shares hit a new high on Thursday as it will not have to pay a 100% tariff on sales to the U.S.

“TSMC is exempted from the chip tariffs because it has set up plants in the US,” Liu Chin-Ching minister in charge of the National Development Council, said in Taipei on Thursday.  As for other Taiwanese companies that may be affected by the levels, they “shall continue to stay ahead” if competitors face the same charges.

–There’s tremendous confusion over the chip tariffs overall. The European Union said its exempt under its agreement with Trump under which the U.S. set a 15% tariff for the vast majority of EU exports.

Olof Gill, spokesperson for the European Commission, the EU’s executive arm, said in a statement Thursday that Washington had made a commitment that the 15% ceiling would apply to EU exports of semiconductors, irrespective of other tariffs imposed by the U.S. on other exporters.  “We look forward to the U.S. implementing this commitment.”

Is this indeed the case?  To be continued….

—President Trump posted on Truth Social Thursday morning:

“The CEO of INTEL is highly CONFLICTED and must resign, immediately. There is no other solution to this problem. Thank you for your attention to this problem!”

Needless to say, this wasn’t good for Intel shares, which fell about 3%, Trump calling on CEO Lip-bu Tan to resign over his past ties to China, the latest challenge to hit the troubled chip maker.

The president appeared to be referencing Sen. Tom Cotton (R-Ark.) and his letter to the company’s board earlier this week.

Cotton questioned Tan’s ties to the Chinese government, including apparent connections to the country’s military and investments in other semiconductor companies.

“The new CEO of @intel reportedly has deep ties to the Chinese Communists,” Cotton wrote in a post on X accompanying the letter.  “U.S. companies who receive government grants should be responsible stewards of taxpayer dollars and adhere to strict security regulations. The board of @intel owes Congress an explanation.”

In response to Cotton’s letter, Intel defended Tan and dismissed suggestions that the company posed a threat to U.S. national security. Tan was born in Malaysia and later became an American citizen.

In his letter, Cotton, who is chair of the Intelligence Committee and a senior figure in Republican leadership, referenced Tan’s longtime position as CEO of Silicon Valley software company Cadence Design Systems, which recently agreed to pay $140 million for violating U.S. export restrictions by selling to China’s National University of Defense Technology.

Cotton and other national-security hawks worry about any advanced U.S. technology being sold in China and ultimately benefiting the military. At times this year, those concerns have taken a back seat to Trump’s desire to export U.S. technology from companies like Nvidia to much of the world.

—Caterpillar reported earnings that missed expectations but the company struck a positive tone on its sales outlook for the rest of the year.

The heavy-duty equipment maker reported adjusted earnings per share of $4.72 on revenue of $16.6 billion. Analysts were at $4.89 per share on revenue of $16.3bn.

Caterpillar said a 1% fall in sales from the same period a year ago was driven by prices, partially offset by higher sales volumes.  The company raised its revenue outlook slightly, saying it expects slightly higher sales for 2025, having previously guided for flat sales.

CAT’s expectations for its generators remain high, as that business will benefit from the growth in data centers to run artificial intelligence.  Power Generation sales rose 28% from the prior year.

Caterpillar forecast tariff expenses at $1.3 billion to $1.5 billion for 2025 overall, with $400 million to $500 million of costs during the third quarter.

—Palantir rallied anew after posting record revenue for the second quarter. The defense contractor and data analysis firm rose 8% after it reported quarterly revenue above $1 billion for the first time, well above expectations.

In the second quarter, Palantir posted earnings per share of $0.16, beating consensus of $0.14 and up 77% from the same quarter last year. The company’s revenue of $1.004 billion was up 48% year over year.

“The growth rate of our business has accelerated radically,” Palantir CEO Alex Karp said.  “Yet we see no reason to pause, to relent, here.”

U.S. commercial revenue came in at $306 million, growing 93% year over year, while U.S. government revenue for the quarter was $426 million, up 53% from the same quarter last year.  Both sectors were well above expectations.

Palantir raised its 2025 full-year revenue guidance to $4.14-$4.15 billion, above consensus.  The company also noted in its report that it closed $2.27 billion of total contract value in the quarter, up 140% from the same quarter last year.

In another boom to the company’s U.S. government business, Palantir announced last week that it signed a deal rolling up contracts with the U.S. Army for a value of up to $10 billion over the next decade.

But the shares are trading at an astronomical 230 times forward earnings, having more than doubled so far this year.

—Disney reported fiscal third quarter earnings on Wednesday that beat expectations, driven by continued strength in its domestic parks business and a year-over-year swing to profitability on its streaming unit.

However, steep declines in the company’s linear television business overshadowed some of that momentum and the shares fell over 3%.

Disney raised its full-year profit forecast to $5.85 a share, up from its May forecast of $5.75 and ahead of Wall Street expectations of $5.77.

Prior to its earnings update, Disney confirmed previous reports that ESPN has reached a preliminary deal to acquire key NFL Meda assets.

ESPN is launching a standalone streaming service on Aug. 21. [More below on the NFL arrangement.]

Disney reported revenue of $23.65 billion for the quarter, roughly in line with expectations and up 2% from the same period last year.

Adjusted earnings per share of $1.61 were ahead of the Street’s $1.46, and up from $1.39 a year ago.

But ongoing weakness in Disney’s linear networks business weighed on the quarter. Revenue in the segment fell 15% vs. a year ago while operating income dropped 28%. The decline in traditional TV, which includes ABC and Disney’s cable networks, overshadowed strength in other areas.

On the streaming front, Disney+ added 1.8 million subscribers in the quarter, falling short of the 2.05 million analysts had expected.

Disney’s direct-to-consumer segment, which includes Hulu and Disney+, posted a profit of $346 million, compared to a $19 million loss a year ago.

Meanwhile, the parks business continued to shine in the quarter.  Revenue of $9.09 billion beat expectations of $8.87 billion, with the company posting a 22% rise in operating income at its domestic parks. The gains were fueled by increased guest spending at theme parks, higher hotel occupancy, and a rise in cruise passenger volumes following the successful launch of the Disney Treasure late last year.

And recently the company announced plans to open a new theme park and resort in Abu Dhabi – its first major expansion into the Middle East and its seventh global resort.

So back to the NFL-ESPN move, the NFL will take a 10% stake in the ESPN sports empire in return for control of key media assets such as the NFL Network.

Neither Disney nor the NFL disclosed the value of the ESPN stake, but analysts have estimated ESPN’s valuation at $25-$30 billion.

The five-year deal will cost ESPN an average of $325 million per year, according to the Wall Street Journal.

The NFL is also going to have an equity stake in CBS after Skydance Media closes its deal to acquire the network’s parent Paramount Global this week.

Under the terms of the agreement, ESPN will add NFL Network to its stable of sports channels.  It will also distribute the NFL’s Red Zone channel to pay-TV operators.

Ahead of its confirmation, Morgan Stanley analyst Ben Swinburne wrote in a Monday note, “With the NFL as an investor, ESPN’s long-term future is incrementally more secure.”

—TSA checkpoint numbers vs. 2024

8/7…113 percent of 2024 levels
8/6…104
8/5…87
8/4…102
8/3…117
8/2…94
8/1…104
7/31…110

—Warren Buffett’s Berkshire Hathaway reported a 4% drop in quarterly earnings after results from the conglomerate’s insurance businesses weakened from a year ago.

In a period that saw the S&P 500 index reach record highs, Berkshire added to its cash stockpile and refrained from purchasing its own shares.  The company, which maintains a large investment portfolio, was a net seller of stocks for an 11th straight quarter.

Berkshire, whose businesses include insurer GEICO and railroad BNSF Railway, posted net income of $12.37 billion, or $8,601 per Class A share equivalent, for the second quarter. That compared with a net income of $30.3 billion, or $21,122 a share, in the year-earlier period.

Berkshire’s cash pile grew to a record $344 billion, including equivalents, at the end of June.  The cash gives Buffett fuel to add new companies to his empire but also spotlights the firm’s challenges finding attractively priced investments.

Buffett, who retires as Berkshire’s chief executive in December, has in recent years refrained from large-scale acquisitions, sold some stocks from the portfolio and declined to buy back its shares.

He will cede control to Greg Abel, while remaining chairman.

—OpenAI is in early talks about a potential sale of stock for current and former employees at a valuation of about $500 billion, according to Bloomberg.

The company is targeting a secondary stock sale in the billions of dollars, according to Bloomberg’s source.

If the deal goes ahead, it would elevate OpenAI’s on-paper price tag by roughly two-thirds.  Its previous valuation stood at $300 billion in a $40 billion financing round led by SoftBank Group Corp.

Meanwhile, OpenAI launched its latest AI model, GPT-5, which is being touted as more capable at creative writing, coding, and reasoning through complex inquiries.  CEO Sam Altman told reporters it’s like talking to an expert on any topic.

OpenAI said Thursday that ChatGPT hit 700 million weekly active users this week – four times higher than last year.

—Eli Lilly reported better than expected earnings for the second quarter on Thursday, $15.56 billion in revenue, with earnings per share of $6.31, both handily beating the Street’s estimates.

Revenue in the U.S. alone was $10.81 billion, driven by a 46% increase in volume of sales of GLP-1 drugs Mounjaro and Zepbound. Weight-loss drug Zepbound has overtaken competitor and first-mover Novo Nordisk’s Wegovy.

But the shares fell a whopping 14% after what investors viewed as disappointing results from a late-stage trial of a GLP-1 pill called orforglipron.  The company reported a 25% patient drop-out rate at the higher dose.

And the amount lost in body weight among trial participants, 12%, was less than what some analysts were predicting: 13% to 15% or more.

That said, if the pill receives FDA approval, as currently expected, it is expected to be a big seller.  Novo Nordisk is also working on getting regulatory approval for its pill version of Ozempic and Wegovy.

–Going back to last Friday, I need to get a story down for the archives that was hitting as I was going to post…that being that a Florida jury found Tesla partly to blame over a fatal 2019 collision involving a vehicle equipped with the company’s driver-assistance software, awarding the plaintiffs nearly $329 million in damages.

It marks the first time a jury has awarded damages in a lawsuit related to Tesla’s driver-assistance feature and a major setback for the EV maker.  The jury concluded the company failed to provide sufficient warnings or instructions for its Autopilot feature in the 2019 Tesla Model S involved in the accident, making the car unreasonably dangerous.

Tesla has mostly avoided civil trials involving its driver-assistance technology.  It settled a lawsuit in 2024 that involved a crash in 2018. The automaker settled additional lawsuits in 2024 and 2025.

In June, Tesla launched a small robotaxi service in Austin, though each car has a Tesla safety driver in the front passenger seat in case of emergency.

Tesla is looking to expand its fleet to the San Francisco Bay Area, and is looking at Arizona, Florida and Nevada.

Separately, Tesla’s board has awarded Elon Musk with a new pay package worth about $29 billion, several months after a Delaware court rejected for a second time Musk’s 2018 performance award following a shareholder lawsuit.  Musk is currently appealing the order.

—McDonald’s reported a return to sales growth in the second quarter on Wednesday and the shares rose in response.

The company reported global comparable sales jumped 3.8%, more than the 2.5% increase that had been forecast, according to Bloomberg data.

U.S. same-store sales rose 2.5%, more than the 2.3% analysts expected and a marked turnaround from the 3.6% drop posted during the company’s first quarter reported back in May.  U.S. same-store sales fell 0.7% in the same period a year ago.

CEO Chris Kempczinski called this quarter “a testament to the power of compelling value, standout marketing, and menu innovation,” in the company’s earnings release.

Fiscal second quarter revenue clocked in higher than expected at $6.84 billion, with adjusted earnings per share of $3.19, both greater than consensus.

In the quarter, McDonald’s offered innovations like the McCrispy Chicken Strips, and marketing with its Minecraft Movie promotion.  And it launched the return of the Snack Wrap on July 10.  [Frankly, Burger King has for a while now had underrated snack wraps at the same $2.99 price.]

—Tyson Foods reported results Monday that were better than expected for its fiscal third quarter. A consumer focus on protein and a lack of immediate impact from Trump’s tariff policies boosted results.

“Consumers are prioritizing protein…over other foods, but they’re also prioritizing food as essential versus the non-essential things like apparel, …and bigger ticket items,” Tyson Foods CEO Donnie King said.

King added he didn’t see a material impact yet on beef, pork and chicken from tariffs.

In the quarter, Tyson reported sales grew 4% to $13.88 billion, topping forecasts for revenue to tally $13.55bn. Adjusted earnings per share were $0.91 in the quarter, ahead of consensus of $0.78.

The company said its sales for the fiscal year, which ends this current quarter, will rise 2% to 3% from last year, better than its previous forecast.

—Yum Brands on Tuesday reported disappointing revenue as its KFC and Pizza Hut restaurants suffered a dismal sales slump in the U.S.

The company reported adjusted earnings per share of $1.44, missing the Street’s estimates of $1.46, and revenue of $1.93bn, also below projections.

KFC, which has been struggling for months, and Pizza Hut, were hit by anxiety over the economy that has led consumers to grow more cautious and dine out less.

The company’s overall same-store sales jumped 2% during the quarter, with same-store sales at global KFC restaurants rising 2% – but in the U.S. they fell 5%.  New menu items and value options haven’t resonated with customers yet.

Pizza Hut’s global same-store sales fell 1% and plunged 5% in the U.S.

However, the crown jewel of Yum is Taco Bell, whose same-store sales grew 4%, helped by the reintroduction of its Crispy Chicken Nuggets and the launch of new Crispy Chicken products.  The chain has also been gaining market share from fast-casual restaurants and fast-food rivals.

—Molson Coors lowered its full-year sales and profit forecasts, citing weaker beer demand, rising aluminum costs and slower-than-expected market share gains.

The outlooks were overshadowed by a slight rise in profit and higher-than-expected sales in the second quarter.  Net income rose slightly to $428.7 million, or adjusted earnings of $2.05 a share, topping consensus of $1.82.

Sales fell 1.6% to $3.2 billion, with the Street at $3.09 billion.

Sales across the Americas, the company’s largest region, fell 2.8% to $2.5 billion.  Molson’s total volume of beer sold fell 7%, while brand volumes dropped 5.1%.

The maker of Miller Lite and Blue Moon had expected sentiment to improve throughout the year, but consumer confidence has remained relatively low due to geopolitical events, trade uncertainties and immigration policies, CEO Gavin Hattersley said on a call with analysts.

“These macro impacts in the U.S. have had a disproportionate effect on lower-income and Hispanic consumers,” he said.  As a result, these shoppers are limiting their spend on beer and are, at times, forgoing purchases entirely.

Concurrently, costs have climbed. Molson’s aluminum costs are expected to be up between $40 million and $55 million in 2025.

The Chicago-based brewer now expects net sales to fall 3% to 4% this year, compared with a prior outlook for a low single-digit decline.  Adjusted earnings are projected to be down 7% to 10%, compared with a previous forecast of low single-digit growth.

—Marriot International cut its full-year revenue growth forecast on Tuesday, signaling slow travel demand in the United States amid looming economic uncertainties.

Just more news of consumers cutting back on discretionary expenses (and buying tacos and protein instead).

The Bethesda, Md.-based company expects 2025 room revenue growth of 1.5% to 2.5%, with the midpoint below its previous forecast of 1.5% to 3.5% increase.

It expects 2025 adjusted profit to be between $9.85 and $10.08 per share.

Marriott has also taken a hit from lower government spending, which accounted for around 4% of its U.S. and Canada room nights in 2024.

Adjusted earnings came in at $2.65 per share, higher than $2.50 from a year ago.

Marriott’s upscale segments, which include brands such as Ritz-Carlton and Sheraton, cater to more economically resilient customers, helping to cushion the impact of slowing demand in its budget and select-service offerings.

—It’s been a strange summer in terms of travel plans and vacations.  Most Americans have pulled back, at least some, but luxury travel continues to boom.

Some tourist destinations such as Charleston, South Carolina, have seen a steady stream of tourists, according to local business leaders, but Las Vegas is experiencing a sharp slowdown.  Hotel occupancy in Vegas has fallen more than 12 percent year-over-year as of July 19, according to CoStar, a provider of real estate data and analytics, with a drop in international tourism hurting.

However, California parks are seeing record visits.

International travel to the U.S. by air was down 6.6% in June compared to last year, according to the International Trade Administration.

International arrivals of those staying more than one night are projected to fall 8.2 percent in 2025, according to Tourism Economics, a global analytics and advisory firm.

Irish tourism and leisure businesses reported a fifth successive monthly decline in activity levels last month but continued to increase prices amid a slowdown in growth across the wider services sector, AIB said on Wednesday.

Foreign Affairs

Russia/Ukraine:

—President Trump and Vladimir Putin have agreed to meet in the “coming days,” a Kremlin aide has said.

It follows Trump saying there was a “good chance” he could meet the Russian and Ukrainian leaders in person “very soon” to discuss ending the war in Ukraine.

When asked at a White House briefing on Wednesday whether President Volodymyr Zelensky and Putin had agreed to a three-way summit, Trump said there was a “very good prospect,” but did not elaborate.

A deadline Trump has set for Russia to agree to a ceasefire in Ukraine or face more sweeping sanctions was due to expire on Friday.

Trump’s comments on Wednesday came after talks in Moscow between his envoy Steve Witkoff and President Putin, which Trump described as “highly productive.”

The Kremlin issued a vague statement on Wednesday about Witkoff’s visit to Moscow, calling the discussions “constructive” and noting that both sides had exchanged “signals.”

Trump told reporters Wednesday: “I don’t call it a breakthrough…we have been working at this for a long time. There are thousands of young people dying…I’m here to get the thing over with.”

Zelensky said he had spoken to Trump about Witkoff’s visit, with European leaders also on the call.

Zelensky has been warning that Russia would only make serious moves towards peace if it began to run out of money.

But then Thursday, Trump told reporters that Putin doesn’t have to meet with Zelensky in order for Trump to sit down with the Russian leader, walking back the statement from the day before.

“No, he would like to meet with me, and I’ll do whatever I can to stop the killing,” Trump said.

Putin said Thursday that he could meet Trump in the United Arab Emirates after a Kremlin adviser confirmed Russia was planning for the summit in the coming days.

Putin also dismissed the idea of meeting President Zelensky in the near term, saying that the circumstances were far from being ready for such a summit.

Russia has continued its large-scale air attacks on Ukraine despite Trump’s threats of sanctions.

In a meeting between Trump and Putin, Trump will need to sidestep concerns that Putin would use this to avoid the threat of sanctions on Russia’s energy customers and prolong peace negotiations so he can continue to attack Ukraine.

As pressure builds, Trump on Wednesday signed an executive order imposing an additional 25% tariff on Indian imports over its continued purchase of Russian oil, bringing the combined tariffs imposed by the United States on its ally to 50%.

The tariffs would go into effect 21 days after the signing of the order, meaning that both India and Russia might have time to negotiate with the administration on the import taxes.

Chinese President Xi Jinping held a phone call with Putin on Friday, state media said.

—Russian military leaders think the front line in Ukraine will likely “crumble” in two to three months. However, “The Russian military has a pervasive culture of lying and submitting overly positive reports to superior,” analysts at the Institute for the Study of War wrote Tuesday.

Relatedly, “The Kremlin likely assesses that projecting confidence in Russia’s ability to militarily defeat Ukraine in Western media outlets will generate fear and distrust in Ukrainian and Western society, further degrading Ukraine’s morale to continue defending against Russian aggression.”

—President Trump said in an interview with CNBC on Tuesday that Putin’s growing economic woes will eventually force him to end the invasion.  “If energy goes down low enough, Putin’s going to stop killing people,” Trump said.

“If you get energy down another $10 a barrel, he’s going to have no choice, because his economy stinks,” he added.

—Editorial / Wall Street Journal

“President Trump wants at long last to raise the pressure on Russia for a ceasefire in Ukraine, and on Wednesday he threatened India with a 50% tariff if it keeps buying Russia oil.  The puzzle is why the President is so far giving China a pass, though Beijing buys more Russian oil than does New Delhi.

“The new tariff is included in an executive order ‘Addressing Threats to the United States by the Government of the Russian Federation.’  India is a target because its purchases of Russian oil are a major source of revenue for Vladimir Putin’s war machine.  India has long bought Russian crude, but its purchases since Russia invaded Ukraine have increased enormously and help Mr. Putin continue his deadly rampage.

“India has ‘always bought a vast majority of their military equipment from Russia, and are Russia’s largest buyer of ENERGY, along with China, at a time when everyone wants Russia to STOP THE KILLING IN UKRAINE,’ Mr. Trump wrote on Truth Social.

“The executive order would add a 25% tax on India’s exports to the U.S. in three weeks if India doesn’t adjust its policy.  This would be on top of the 25% tariff that Mr. Trump has already applied to imports from India and is set to begin Thursday. Through June this year, India exported some $56.3 billion in goods to the U.S., making it the twelfth largest U.S. trading partner.  The exports include medical products, generic drugs and telephones, among other things.

“The 50% tariff will be among the highest U.S. levies on any country, but it’s far below the 500% that a Senate sanctions bill envisions for buyers of Russian oil. That bill has more than 80 co-sponsors, and it is headed for a possible vote in the Senate in September.  Mr. Trump can see that political train coming….

“India is on firmer ground when it says Mr. Trump is punishing India ‘for actions that several other countries are also taking in their own national interest.’ That means China, in particular, and so far Mr. Trump is sparing his friend Xi Jinping.

“This may be related to his attempt…to draw China away from its partnership with Russia.  But China is helping Russia with crucial technology for its war effort, and this week Ukraine showed evidence that Chinese mercenaries are fighting with the Russians near Kharkiv in Ukraine.

“Let’s hope Mr. Trump has a strategy here because several U.S. Presidents have devoted time and resources to courting India as a strategic counterweight to China in the Asia-Pacific. Walloping India with tariffs for buying Russian oil but giving China a pass won’t make more friends in Delhi.”

—George F. Will / Washington Post

“Donald Trump has announced himself ‘disappointed.’ He had such high hopes for Vladimir Putin.

“Putin’s response to Trump’s 50-day ultimatum – to agree to ‘a deal’ by Sept. 3 or face severe economic consequences – was intensified attacks on Ukraine population centers. Trump’s subsequent 10-day ultimatum, expiring Friday, seems to have been equally unavailing.  Putin aims to get not to negotiations but to Kyiv, because only extinguishing Ukraine’s nationhood can redeem his epochal blunder.

“Although Putin has been certified a ‘genius’ (by Trump; Putin has not reciprocated), not since Adolf Hitler invaded the Soviet Union 84 summers ago has a military undertaking been as comprehensively counterproductive for its initiator as Putin’s invasion of Ukraine. The results so far:

“NATO, the bane of Putin’s existence, has been enlarged, with the addition of Sweden and Finland making the alliance contiguous with an additional 800 miles of Russia’s border. NATO members, awakened from their slumbers, have committed to spending 3.5 percent of GDP on defense.  Lord Hastings Lionel Ismay, NATO’s first secretary general, famously said the alliance was created in 1949 to ‘keep the Soviet Union out, the Americans in, and the Germans down.’ The Soviet Union is gone, American forces are still in Europe, and Germany is rising militarily. With the European Union’s largest economy and a GDP more than twice as large as Russia’s, Germany now has a defense budget larger than Britain’s, and it soon could be twice as large.  One small expenditure underscores Putin’s big miscalculation: A German brigade (4,800 troops by the end of 2027) is stationed in Lithuania, on Putin’s border.

“A study by the Center for Strategic and International Studies estimates that Russia has suffered nearly 1 million troops killed or wounded as the price of seizing about one-fifth of Ukraine’s territory.  (Ukraine’s dead and wounded are estimated to be 400,000).  Putin instructed his invading troops, who were given only five days’ provisions, to pack their dress uniforms for a victory parade in Kyiv.  Three years later, Russia has resorted to its first conscription since World War II, and has enlisted felons and debtors….

“The most important consequence of Putin’s war has been to awaken the United States to how unprepared its defense industrial base is to produce the munitions, from artillery shells to missiles, required for protracted, high-intensity combat.  Hence the limited relevance to U.S. overall security of the B-2 bombers’ impressive power projection against Iran.

“ ‘The history of failure in war,’ said Gen. Douglas MacArthur, ‘can almost always be summed up in two words; ‘Too late.’  Too late in comprehending the deadly purpose of a potential enemy. Too late in realizing the mortal danger. Too late in preparedness. Too late in uniting all possible forces for resistance.’ Because of the European and U.S. blowback against Putin’s blunder, it is not too late to win the war by preserving Ukraine.  Defeat is not an inevitability; it would be a choice.

“Last February, as Russia’s aggression entered its fourth year, Trump, who has said Ukraine ‘started’ the war, resisted including in a Group of Seven statement the fact that Russia was the aggressor. He has compared Europe’s largest war since 1945 to ‘two young children fighting like crazy,’ and to a hockey game in which the referees allow the players to brawl for a while.

“But, having slight ballast of convictions, he moves where winds, whims and whisperers take him. Putin’s culminating blunder – he has disappointed the president – might drive Trump to Ukraine’s side.  This will unleash fury in MAGAdom’s MAGABMIMLH faction (Make America Great Again By Making It More Like Hungary).  But to govern is to choose, which always makes some factions unhappy.

“In this instance, it might be good that Trump takes everything personally.  This is the importance of his being disappointed.”

—Kyiv City’s Military Administration said the toll of an attack on the city last week rose to 32 after a man died of his injuries.

Wednesday, a Russian attack on a holiday camp in the central region of Zaporizhzhia left two dead and 12 wounded.

“There’s no military sense in this attack.  It’s just cruelty to scare people,” Zelensky said.

—Two-thirds of Russians favor ending the war at the current positions, while a quarter want to continue fighting, according to Denis Volkov, director of the independent Levada Center pollster in Moscow.

“For most Russians, the end of the war, but not a return to the former borders, is a welcome scenario,” he said.

A new Gallup poll found that Ukrainians are increasingly eager for a settlement that ends the war. About seven in 10 Ukrainians said in early July that their country should seek to negotiate a settlement as soon as possible.

Israel/Gaza:

–Early in the week, there were reports that Prime Minister Benjamin Netanyahu ordered a full military occupation of the Gaza Strip to force Hamas to free the hostages.

The expansion of the war would see the military, which already controls about 75% of Gaza, take over the remaining areas and conduct operations where the hostages are believed to be held, the Jerusalem Post first reported.

The move was reportedly made without the input of the Israeli military’s chief of staff Eyal Zamir – with Netanyahu instructing him to fall in line or resign, according to the internal memo sent out.

The decision to escalate the 21-month war comes despite calls from within Israel and around the world to find a diplomatic end to the fighting – with growing backlash over widespread hunger in Gaza and concern for the safety of the hostages.

Senior Israeli officials who discussed the occupation plan with Netanyahu believe that Hamas will not free the remaining 50 hostages (20 of whom are believed to be living) without being forced to surrender, local Channel 12 reported.

That view has put pressure on Netanyahu and his cabinet following the recent release of Hamas propaganda videos showing emaciated hostages suffering and begging for food and water inside the terror group’s tunnels.

Such action could also endanger the lives of the hostages, according to family member, with reports going around earlier this month that Hamas sent an order to its members to kill any captives in their custody if Israeli soldiers were closing in on them.

“A full occupation of the Strip is a death sentence for the living hostages and a security, humanitarian and diplomatic disaster,” Israeli lawmaker Gilad Kariv said in a statement.

The security cabinet then formally approved a plan early Friday morning, after 10 hours of deliberations, to take over Gaza City (not all of the Gaza Strip).

The plan lists five objectives, including disarming Hamas, returning all hostages, demilitarizing the Gaza Strip, taking security control of the territory, and establishing “an alternative civil administration that is neither Hamas nor the Palestinian Authority.

At a later stage, the military could potentially push into central areas of the enclave where Hamas is believed to be holding Israeli hostages and where Israeli troops have largely refrained from operating before.

But it was likely to take the military days, at least, to call up reserve forces, carry out troop deployments for a push into Gaza City and allow time for the forced evacuation of tens of thousands of Palestinians (as many as 800,000) from the new areas of combat.

The aforementioned Israeli military’s chief of staff, Lt. Gen. Zamir, has shared concerns about the exhaustion and fitness of reservists, and about the military’s becoming responsible for governing millions of Palestinians, according to reports.

Netanyahu could be using the threat of a full occupation as part of a strategy to try to force the group into making concessions in stalled ceasefire talks.

–For its part, Hamas reaffirmed that it will not agree to disarm unless a sovereign Palestinian state is established, in response to one of Israel’s key demands in talks about a ceasefire in Gaza.

The militants were responding to remarks it attributed to President Trump’s envoy, Steve Witkoff, that Hamas had “expressed its willingness” to lay down its weapons.

In recent days, Arab governments have urged Hamas to disarm and surrender control of Gaza, after a number of Western countries – including France and Canada – announced plans to recognize a state of Palestine.

Addressing hostage family members in Tel Aviv last weekend, Witkoff said: “President Trump now believes that everybody ought to come home at once – no piecemeal deals. That doesn’t work.”

—Twenty people were killed and more than 30 injured in central Gaza after four trucks overturned on a crowd, the Hamas-run civil defense agency said.

Crowds rushed to the vehicles on a road southeast of Deir al-Balah on Tuesday evening. They climbed on top of the trucks, causing the drivers to lose control, local journalists told the BBC.

The area was under Israeli military control and the roads were rugged and dangerous, a civil defense official said.

The private transport association now operating in Gaza said that 26 commercial trucks entered the territory on Tuesday.  Six were looted, and four of those overturned, resulting in deaths and injuries.

Israel announced that it would start to allow the gradual entry of goods into Gaza via the private sector to “increase the volume of aid” entering the enclave while reducing reliance on the UN.

The approved supplies include baby food, fruits, vegetables, hygiene products and basic staples.

—Even as global attention has turned to starvation in Gaza, as Reuters reported, the water crisis is just as severe according to aid groups.

“Though some water comes from small desalination units run by aid agencies, most is drawn from wells in a brackish aquifer that has been further polluted by sewage and chemicals seeping through the rubble, spreading diarrhea and hepatitis.

COGAT, the Israeli military agency responsible for coordinating aid in the Israeli-occupied Palestinian territories, says it operates two water pipelines in the Strip but Palestinian water officials say these have not been working recently.

–Finally, I had to pass along an item from Defense One, concerning an extensive ProPublica piece on an extraordinary inside account of Israel’s attack on Iran.  Israeli intelligence agents secretly recruited Iranian dissidents to attack their country from within as part of the devastating action.

Excerpt: “The attack had been planned for more than a year by the Mossad, the Israeli intelligence service.  Just nine months earlier, the spy agency had shocked the world with its technical prowess – executing a plot hatched in 2014 by its director at the time, Tamir Pardo, that crippled Hezbollah by detonating pagers booby-trapped with tiny but lethal amounts of explosives.

“(But) at 3 a.m. on June 13, S.T. and a foreign legion of roughly 70 commandos opened fire with drones and missiles on a carefully chosen list of anti-aircraft batteries and ballistic missile launchers.  (His handlers in the Mossad would only tell us his initials.) The next day, another group of Iranians and others recruited from the region launched a second wave of attacks inside Iran.”

China/Taiwan: Taiwan would run out of natural gas supplies in about 10 days if Beijing blockaded the island, according to a report published by the Center for Strategic and International Studies (CSIS), a Washington-based think tank.

The report also said that its coal supplies would be depleted in seven weeks and its oil reserves in 20 weeks.

The authors of the report analyzed 26 war-gaming scenarios to understand Taiwan’s military challenges in countering a blockade from Beijing.

They concluded that a blockade would not be a “low-cost, low-risk” option for Beijing because casualties would be high across all potential scenarios and there was a high chance of a blockade spiraling into a wider conflict.

In two of the “maximum escalation” scenarios, the United States would become involved and its missiles would strike mainland China.  In those scenarios, Chinese missiles would also strike Guam and Japan, it said.

“(A) blockade was likewise not a good precursor to invasion because the aggressive action put other countries on alert and, in some cases, resulted in the loss of Chinese assets that would be needed in the event of invasion,” the report said.

Random Musings

–Presidential approval ratings….

Gallup: 37% approve of President Trump’s job performance, while 59% disapprove.  29% of independents approve (July 7-21).

Rasmussen: 47% approve, 51% disapprove (Aug. 8).

–As alluded to above, Texas Republicans voted to track down and arrest dozens of Democratic legislators who have fled the state to block passage of a plan to re-draw electoral boundaries to favor Republicans.

The vote passed by 85 to 6, following Republican Gov. Greg Abbott’s threat of bribery charges against absent Democrats.

After the vote, the governor ordered state troopers “to locate, arrest, and return to the House chamber any member who has abandoned their duty to Texans.”

The proposed congressional map would create five more Republican-leaning seats in the U.S. House of Representatives.

At least two-thirds of the 150-member state legislative body in Texas must be present to proceed with the vote. The quorum became unreachable after more than 50 Democratic lawmakers left the state.

Editorial / Wall Street Journal

“Dozens of Texas Democrats skedaddled on Sunday, fleeing the state to prevent Republicans from passing a new U.S. House map that’s intended to net the GOP as many as five seats in the 2026 midterms. Denying a legislative quorum is an old tactic, yet it’s hard to maintain once absent legislators tire of hotel living.  But there’s no doubt Texas Republicans are escalating the gerrymander wars….

“Republican Texas Gov. Greg Abbott is threatening to ask the courts to find that they’ve abandoned their offices.

“Meantime, Democratic states are threatening to retaliate by redrawing their own House maps.  Illinois’s delegation has 14 Democrats to three Republicans, but (Gov. J.B.) Pritzker says trying to squeeze out that GOP trio is on the table. Govs. Gavin Newsom in California and Kathy Hochul in New York are making similar threats. The legal and procedural hurdles vary by state, but the partisan pressure to bulldoze them will be hard to resist.

“Gerrymandering is an old story in the U.S. political system, since the word was coined in 1812, but today’s map-makers are much more proficient thanks to computers and granular data. Both sides do it….

“This practice is bad for political competition, since each party draws itself ‘safe’ seats where voters reward loud, loyal partisans.  Nationwide, however, the gerrymanders in blue and red states are roughly balanced.  In the 2022 midterms, Democrats nearly won the House, even as Republican candidates comfortably received more votes.  A party that goes too far with gerrymandering, thinning out its margins in safe seats to try to win more overall, takes the risk of a wave election wipeout.

“That’s especially true at the end of a redistricting cycle, as voters move and the political issues and coalitions evolve.  A map drawn after the 2020 census might be a tight gerrymander two years later but chancier by decade’s end. States typically haven’t redistricted more often than that, except when under court order. What’s worrying is that if Texas and others have another go now, the new norm might be to re-gerrymander all the time.

“The trick is figuring out how to limit this in a way that both sides can see as fair….

“Some states have tried to hand redistricting to an ostensibly independent commission.  Yet then it’s a partisan proxy battle, and commissions that are evenly split can end up deadlocked….

“But there’s an element of mutual assured destruction here, and Democrats don’t want to limit their ability to gerrymander if Republicans aren’t going to quit, and vice versa.  That’s why a federal standard might be useful. States run their own voting processes, but Congress has broad power under the Constitution to regulate the ‘manner’ of House elections.  One option might be a law telling states they can’t redistrict mid-decade….

“(Telling) states they can only redistrict once per decade might de-escalate the gerrymander wars, and it would mainly ratify the status quo of recent years. Both parties could benefit from this kind of disarmament treaty, and voters most of all.”

Separately, California and New York have promised to retaliate with their own maps if Texas’ move goes through.

Democratic Gov. Hochul of New York said:

“If Republicans are willing to rewrite these rules to give themselves an advantage, then they’re leaving us no choice; we must do the same.  I’m tired of fighting this fight with my hands tied behind my back.  With all due respect to the good government groups, politics is a political process.”

Rep. Doug LaMalfa (R-Calif.), whose reelection could be at risk if California Democrats pursue new maps, told The Hill that constituents don’t want politicians manufacturing “a temporary gain by – any side – manipulating lines.”

—The Department of Health and Human Services is canceling contracts and pulling funding for some vaccines that are being developed to fight respiratory viruses like Covid-19 and the flu.

HHS Secretary Robert F. Kennedy Jr. announced in a statement Tuesday that 22 projects, totaling $500 million, to develop vaccines using mRNA technology will be halted.

Kennedy’s decision to terminate the projects is the latest in a string of decisions that have put the longtime vaccine critic’s doubts about shots into full effect at the nation’s health department. He has pulled back recommendations around the Covid-19 shots, fired that panel that makes vaccine recommendations, and refused to offer a vigorous endorsement of vaccinations as a measles outbreak worsened.

In a video, the health secretary said:

“To replace the troubled mRNA programs, we’re prioritizing the development of safer, broader vaccine strategies, like whole-virus vaccines and novel platforms that don’t collapse when viruses mutate.”

Infectious disease experts say the mRNA technology used in vaccines is safe, and they credit its development during the first Trump administration with slowing the 2020 pandemic.

“I don’t think I’ve seen a more dangerous decision in public health in my 50 years in the business,” said Mike Osterholm, one of the preeminent experts on infectious diseases and pandemic preparations in the world.

—Brian Driscoll, who briefly served as acting FBI director at the start of Trump’s second term and who refused to turn over a list of agents who worked on Jan. 6 cases, is being fired, leaving the bureau today.

“Last night I was informed that tomorrow will be my last day in the FBI. I understand that you may have a lot of questions regarding why, for which I currently have no answers. No cause has been articulated at this time,” Driscoll wrote in a note to staffers that one shared on LinkedIn.

“Please know that it has been the honor of my life to serve alongside each of you… Our collective sacrifices for those we serve is, and will always be, worth it. I regret nothing.  You are my heroes, and I remain in your debt,” he continued.

Steve Jensen, the assistant director in charge of the Washington Field Office, reportedly also was asked to leave, along with another agent who worked on a number of Trump-related cases.

The FBI Agents Association said in a statement that it was concerned by reports of the firings of senior leaders and that it was reviewing legal avenues to defend agents who were only doing their jobs.

“Agents are not given the option to pick and choose their cases, and these Agents carried out their assignments with professionalism and integrity,” the agents’ union said.  “Most importantly, they followed the law.”

—Thomas Friedman / New York Times…on the implication of the firing of Erika McEntarfer….

“Going forward, how many government bureaucrats are going to dare to pass along bad news when they know that their bosses – people like Treasury Secretary Scott Bessent, the director of the National Economic Council, Kevin Hassett, the Labor Secretary Chave-DeRemer and the U.S. trade representative Jamieson Greer – will not only fail to defend them but will actually offer them up as a sacrifice to Trump to keep their jobs?

“Shame on each and every one of them – particularly on Bessent, a former hedge fund manager, who knows better and did not step in. What a coward. As Bessent’s predecessor, Janet Yellen, the former Treasury secretary and also the former chair of the Federal Reserve – and a person with actual integrity – told my Times colleague Ben Casselman of the BLS firing: ‘This is the kind of thing you would only expect to see in a banana republic.’

“It is important to know how foreigners are looking at this. Bill Blain, a London-based bond trader who publishes a newsletter popular among market experts called Blain’s Morning Porridge, wrote on Monday: ‘Friday, Aug. 1 might go down in history as the day the U.S. Treasury market died. There was an art to reading U.S. data.  It relied on trust.  Now that is broken – if you can’t trust the data, what can you trust?’….

“(This) trend toward self-blinding is spreading to further corners of the government.

“One of America’s premier cyberwarriors, Jen Easterly, who was the director of the Cybersecurity and Infrastructure Security Agency during the Biden administration, had her appointment to a senior teaching position at the U.S. Military Academy at West Point revoked last week by Army Secretary Daniel Driscoll after Laura Loomer, a far-right conspiracy theorist, posted that Easterly was a Biden-era mole.

“Read that sentence again very slowly. The Army secretary, acting on the guidance of a loony Trump acolyte, revoked the teaching appointment of – anyone will tell you – one of America’s most skilled nonpartisan cyberwarriors, herself a graduate of West Point.

“And when you are done reading that, read Easterly’s response on LinkedIn: ‘As a lifelong independent, I’ve served our nation in peacetime and combat under Republican and Democratic administrations.  I’ve led missions at home and abroad to protect all Americans from vicious terrorists…I’ve worked my entire career not as a partisan, but as a patriot – not in pursuit of power, but in service to the country I love and in loyalty to the Constitution I swore to protect and defend, against all enemies.’

“And then she added this advice to the young West Pointers she will not have the honor of teaching: ‘Every member of the Long Gray Line knows the Cadet Prayer.  It asks that we ‘choose the harder right instead of the easier wrong.’  That line – so simple, yet so powerful – has been my North Star for more than three decades.  In boardrooms and war rooms.  In quiet moments of doubt and in public acts of leadership. The harder right is never easy.  That’s the whole point.’

“That is the woman Trump did not want teaching our next generation of fighters.  And that ethic – always choose the harder right instead of the easier wrong – is the ethic that Bessent, Hassett, Chavez-DeRemer and Greer know nothing of – not to mention Trump himself.

“That is why, dear reader, though I am a congenital optimist, for the first time I believe that if the behavior that this administration has exhibited in just its first six months continues and is amplified for its full four years, the America you know will be gone. And I don’t know how we will get it back.”

—The Justice Department tapped a grand jury to reinvestigate the intelligence community’s assessment of Russia’s efforts in the 2016 election, underscoring the lengths at which Donald Trump’s second-term administration is determined to avenge his central grievance of his first term.

Attorney General Pam Bondi on Monday signed an order directing a U.S. attorney to present evidence to the grand jury, a DOJ official said, and gave that person broad authority to also investigate outside the office’s jurisdiction.

Investigators, intelligence officials and lawmakers have already concluded that Russia interfered in the 2016 election to benefit Trump over Hillary Clinton. Special Counsel Robert Mueller didn’t establish that anyone affiliated with the Trump campaign knowingly conspired with Russia’s efforts.

Another special counsel (John Durham) and the Justice Department’s inspector general (Michael Horowitz) later spent years examining those investigations and faulted the FBI, in particular, for errors in its approach but didn’t prove any criminal scheme to undermine Trump.  A Senate Intelligence Committee report, chaired by then-Sen. Marco Rubio, found extensive evidence that Russia had an “extensive campaign” to sabotage the election in favor of Trump.

There is also the issue of statute of limitations, five years, for federal crimes.  Plus, former President Obama, as Trump himself has admitted, is protected by the very Supreme Court ruling the current president is taking advantage of with his executive orders and other moves.

But the DOJ is going after Obama officials.

–President Trump’s calling the Epstein case “a hoax” is beyond pathetic.

For starters, Ghislaine Maxwell was convicted and is serving 20 years, for crying out loud.

–We had a poll from Fairleigh Dickinson University on the New Jersey electorate that impacts the gubernatorial race in my state.  President Trump’s approval rating is only 37%, 55% disapprove.

Among independents, just 28% approve of his job performance, while 58% disapprove, according to the FDU poll.

In a separate FDU survey, however, Democrat Mikie Sherrill leads Republican Jack Ciattarelli in the race for governor by a 45-37 margin, with 16% of voters undecided.

—Brazil’s Supreme Court on Monday ordered the house arrest for former president Jair Bolsonaro, on trial for allegedly leading a coup attempt after losing the 2022 election.

Donald Trump isn’t happy.

–Parts of the Great Barrier Reef have suffered the largest annual decline in coral cover since records began nearly 40 years ago, a report from the Australian Institute of Marine Sciences found.

Reefs have been battered in recent months by tropical cyclones and outbreaks of crown-of-thorns starfish that feast on coral, but heat stress driven by climate change is the predominant reason, AIMS said.

AIMS warns the habitat may reach a tipping point where coral cover cannot recover fast enough between catastrophic events (including cyclones) and faces a “volatile” future.

Coral is vital to the planet.  Nicknamed the sea’s architect, it builds vast structures that house an estimated 25% of all marine species.

Bleaching happens when coral gets stressed and turns white because the water it lives in is too hot.

—France is dealing with its biggest wildfire since 1949, which has been sweeping through the sun-seared Aude region, where farmers had been reluctantly digging up vines, spurred on by declining wine consumption and state subsidies, thus removing a natural, moisture-filled brake against wildfires.

–It’s a little confusing but the Corporation for Public Broadcasting, which helps pay for PBS, NPR, 1,500 local radio and television stations as well as programs like “Sesame Street” and “Finding Your Roots,” said last Friday it would close after the withdrawal of government funding.

President Trump signed a bill on July 24 canceling about $1.1 billion that had been approved for public broadcasting.  The White House says the public media system is politically biased and an unnecessary expense.

Lawmakers with large rural constituencies voiced concern about what the cuts could mean for some local public stations in their state and warned some stations will have to close.

Congress passed legislation creating the body in 1967, several years after then-Federal Communications Commission Chairman Newton Minow described commercial television as a “vast wasteland” and called for programming in the public interest.

What was confusing is the headlines on CPB shutting down almost made it sound like PBS itself would be shutting down.  But the corporation doesn’t produce programming and it doesn’t own, operate or control any public broadcasting stations.

That said, no doubt scores of smaller public media outlets away from big cities won’t survive.  NPR’s president estimated as many as 80 NPR stations may close in the next year.

In many states, rural residents rely heavily on public media for weather updates and disaster alerts.

My initial reaction, I have to admit, was what happens to Ken Burns’ upcoming documentary on the American Revolution this fall?  Burns told PBS NewsHour that the corporation accounted for about 20% of his films’ budgets. He said he would make it up but projects receiving 50% to 75% of their funding from the organization won’t.

You can expect fundraising efforts across the spectrum of PBS and NPR to pick up bigly, but I am really looking forward to the Burns six-parter, which from what I’ve read sounds terrific, a la his “The Civil War” and “The Vietnam War,” for starters.

—

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

Slava Ukraini.

Reduce Switzerland’s tariff rate!

God bless America.

—

Gold $3458…a record weekly close….
Oil $63.72

Bitcoin: $116,473 [4:00 PM ET, Friday]

Regular Gas: $3.15; Diesel: $3.73 [$3.45 – $3.78 yr. ago]

Returns for the week 8/4-8/8

Dow Jones  +1.4%  [44175]
S&P 500  +2.4%  [6389]
S&P MidCap  +0.6%
Russell 2000  +2.3%
Nasdaq  +3.9%  [21450]

Returns for the period 1/1/25-8/8/25

Dow Jones  +3.8%
S&P 500  +8.6%
S&P MidCap +0.1%
Russell 2000  -0.6%
Nasdaq  +11.1%

Bulls 47.1
Bears 21.5

Hang in there.

RIP, astronaut Jim Lovell, 97…saw this minutes ago.  More next week.

Brian Trumbore