For the week 2/16-2/20

[Posted 4:30 PM ET, Friday]

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Edition 1,400

President Trump said Thursday that the world will find out “over the next, probably, 10 days” whether the U.S. will reach a deal with Iran on its nuclear program or take military action.

At the first meeting of his Board of Peace in Washington, D.C., Trump said of negotiations with Iran amid his massive military buildup in the region: “We have to make a meaningful deal otherwise bad things will happen.”

Iran has said U.S. bases in the region would be legitimate targets if used in any attacks against the regime.

The Wall Street Journal reported Thursday night that the president was “weighing an initial limited military strike on Iran to force it to meet his demands for a nuclear deal, a first step that would be designed to pressure Tehran into an agreement but fall short of a full-scale attack that could inspire a major retaliation.” [Alexander Ward / WSJ]

David E. Sanger / New York Times

“When President George W. Bush began preparing the country for the invasion of Iraq, he traveled the country making the case that Saddam Hussein’s government, and its weapons posed an unacceptable threat to the United States.

“Speaking in Cincinnati’s Union Terminal one October night in 2002, he warned that Iraq could attack the United States ‘on any given day’ with chemical or biological weapons.  He compared the urgency of the moment to the 1962 Cuban Missile Crisis, declaring doing nothing was ‘the riskiest of all options.’

“Most of Mr. Bush’s arguments turned out to be fanciful, based on selective intelligence and in some cases outright false claims. The war that followed is now considered by many historians as one of the greatest American strategic errors of modern times.

“But if Mr. Bush made a false case, President Trump, facing a decision about whether to unleash a second major military assault on Iran in less than a year, has made almost no case at all.

“With two carrier groups and dozens of fighter jets, bombers and refueling aircraft now massing within striking distance of Iran, Mr. Trump is threatening another attack. He is doing so without providing assessments about the urgency of the threat or any explanation of why he needs to strike again after claiming the nuclear sites he targeted had been ‘obliterated.’”

Well, President Trump has an opportunity to explain to the nation on Tuesday during his State of the Union Address what the buildup is all about, but the administration would rather highlight the economy and his ‘win’ on the affordability issue, a highly suspect argument.

Should he opt, however, to strike Iran prior to the SOU, regardless of whether it is limited or not, it risks retaliation, perhaps of the major variety, and the risk of U.S. casualties, which Trump certainly wouldn’t want as he stands before the American people, and a Congress he hadn’t come to prior with any explanation for the urgency of striking Iran today.

So, personally, I’d be surprised if we see any action before Wednesday….or the following weekend, which would be ten days.  There are all kinds of other operational issues, such as weather, pleas from our allies in the region, new intelligence….

Barak Ravid of Axios reported Wednesday that Trump “is closer to a major war in the Middle East than most Americans realize,” adding that “sources noted it would likely be a joint U.S.-Israeli campaign that’s much broader in scope – and more existential for the regime – than the Israeli-led 12-day war last June.”

“With the attention of Congress and the public otherwise occupied, there is little public debate about what could be the most consequential U.S. military intervention in the Middle East in at least a decade,” Ravid warns.  And “Such a war would have a dramatic influence on the entire region and major implications for the remaining three years of the Trump presidency.”  [Defense One]

—

Munich Security Conference

In my opening last week, I noted the annual Munich Security Conference (MSC) and the opening speech made Friday by German Chancellor Friedrich Merz, who said leaders need to “repair trans-Atlantic trust together – not just for Europe’s sake, but for America’s, too.”

“Being part of NATO isn’t only Europe’s competitive advantage, it’s also the U.S.’ competitive advantage,” he said.

The next day, Secretary of State Marco Rubio said Washington will retain Europe as a key partner if it reverses “foolish but voluntary” policies on security, trade, migration and a “climate cult.”

A year earlier, Vice President JD Vance upbraided European leaders at the MSC for embracing what he called the politics of “civilization erasure.”

Saturday, Rubio repeated many of the same arguments but in a more upbeat fashion, insisting the destiny of the U.S. “is and always will be intertwined with yours.”

MSC chairman Wolfgang Ischinger called it a message of “reassurance and partnership.”

Rubio’s offer of transatlantic cooperation was conditional, reflected in EU leaders’ stony faces and uncertain applause, but he wasn’t Vance.

“We in America have no interest in being polite and orderly caretakers of the West’s managed decline,” said Rubio. “We do not seek to separate but to revitalize an old friendship and renew the greatest civilization in human history.”

A year into the second Trump term, Rubio said the U.S. viewed itself as a “child of Europe,’ built by Italian forefathers, German settlers and the “hardy clan from the hills of Ulster” whose descendants included Theodore Roosevelt and Neil Armstrong: “We are part of one civilization, western civilization. We are bound to one another by the deepest bonds nations can share.”

The Trump administration was interested in European allies that shared this pride in its achievements, added Rubio, not allies “that exist to operate a global welfare state and atone for the purported sins of past generations.”

After his address that was notable for what it excluded – Venezuela, the Middle East, Sudan – Rubio was asked whether he thought Russia was playing for time in peace talks with Ukraine.

In advance of this week’s third round of negotiations in Geneva, Rubio said it was impossible to say for sure.

“I don’t think anyone in this room would be against a negotiated settlement to this war,” he said, “as long as the conditions are just and sustainable.”

Chinese Foreign Minister Wang Yi, addressing the same audience, said China and the U.S. can get along well but whether the goal can be reached will ultimately depend on the United States.

Wang said China sought to find the right way for the two superpowers to get along well through dialogue and consultation, and would continue on this path in the interest “of our own peoples” and in line with the expectation of the international community.

“But whether we can achieve that goal ultimately depends on the United States,” Wang said.

He said China was encouraged that President Trump had shown respect for President Xi Jinping and the Chinese people.

“He has stressed that the U.S. and China working together can get a lot of great things done, and the two presidents can make the fantastic relationship between the United States and China even better,” Wang said.

“But I’m not sure whether all people in the United States share this view,” he said.

I don’t.

He said some in the U.S. were “cobbling together all these small, exclusive circles, and they’re trying to split Taiwan from China and stepping on China’s red lines, which would vey much likely push China and the United States toward conflict.”

A rather dark view, but likely.

Sunday, EU foreign policy chef Kaja Kallas addressed the MSC and alluded to criticism in the U.S. national security strategy released in December, which asserted that economic stagnation in Europe “is eclipsed by the real and more stark prospect of civilizational erasure.”  It suggested that Europe is being enfeebled by its immigration policies, declining birth rates, “censorship of free speech and suppression of political opposition” and a “loss of national identities and self-confidence.”

“Contrary to what some may say, woke, decadent Europe is still not facing civilizational erasure,” Kallas told the conference.  “In fact, people still want to join our club and not just fellow Europeans,” she added, saying she was told when visiting Canada last year that many people there have an interest in joining the EU.

“We are, you know, pushing humanity forward, trying to defend human rights and all this, which is also bringing prosperity for people. So that’s why it’s very hard for me to believe these accusations.”

British Prime Minister Keir Starmer said Saturday that Europe must defend “the vibrant, free and diverse societies that we represent, showing that people who look different to each other can live peacefully together, that this isn’t against the tenor of our times.”

“Rather, it is what makes us strong,” he said.

Kallas said Rubio’s speech sent an important message that America and Europe are and will remain intertwined.

“It is also clear that we don’t see eye to eye on all the issues and this will remain the case as well, but I think we can work from there,” she said.

Editorial / Wall Street Journal

“The Trump Administration has rattled America’s friends in Europe, sometimes for the better (defense spending) but often for the worse (Greenland). Secretary of State Marco Rubio offered a more conciliatory message in a speech this weekend, but the underlying theme remains one of very tough love for the Continent.

“Mr. Rubio at the Munich Security Conference recalled the Cold War when much of the world ‘lived behind an Iron Curtain and the rest looked like it would soon follow.’  The West was thought to be in ‘terminal decline’ but ‘our predecessors recognized that decline was a choice, and it was a choice they refused to make.’

“America and Europe are now at another inflection point.  Mr. Rubio offered the Administration’s by now familiar critique about Europe’s policy mistakes on mass migration, defense, climate and energy.

“But he rooted that criticism in the shared history and values of Western civilization.  ‘We are connected spiritually and we are connected culturally,’ he said.  ‘We believe that Europe must survive, because the two great wars of the last century serve for us as history’s constant reminder that ultimately, our destiny is and will always be intertwined with yours.’

“Mr. Rubio outlined a renewed trans-Atlantic alliance ‘ready to defend our people, to safeguard our interests, and to preserve the freedom of action that allows us to shape our own destiny – not one that exists to operate a global welfare state and atone for the purported sins of past generations.’

“He also made a crucial point that the alliance shouldn’t be constrained by multilateral institutions ‘beyond its control.’  He mentioned the United Nations in particular for its failure to stop any recent conflict of note.  The Administration’s liberal internationalist critics, at home and in Europe, too often mistake this critique for U.S. unilateralism when it is practical realism.

“Mr. Rubio’s speech won praise in Munich and from nearly every corner of President Trump’s domestic coalition. It is amusing to watch some on the right suggest Mr. Rubio is inventing some new foreign policy cocktail, as if the world began yesterday.

“Mr. Rubio is drawing directly from Ronald Reagan’s playbook of ‘conservative internationalism’ – unapologetic about U.S. leadership and the superiority of freedom; anchored by threats to the American people and their interests; wary that diplomacy and commerce by themselves can resolve the world’s differences.

“This worldview still represents the best formula for dealing with the accumulating threats to the U.S., namely an axis among China, Russia, North Korea and Iran.  Mr. Trump wants America to be a big player in every region, but his greatest failure as President is that he won’t, or can’t, articulate his larger principles….

“The big caveat to Mr. Rubio’s message is Ukraine, which like it or not is the current front line of Western civilization. On that score it wasn’t reassuring that after Munich Mr. Rubio headed to Hungary and Slovakia, Russia’s two best friends in Europe.

“The U.S. continues to behave like a moderator of the Ukraine-Russia war, rather than taking the side of the West.  Mr. Rubio’s good words about shared values won’t mean much if a rotten ‘peace’ is imposed on Ukraine.”

–One side note from Munich…Rep. Alexandria Ocasio-Cortez (D-N.Y.) received a mixed response to her appearance there, putting a possible vulnerability on display despite her status as a rising star in the Democratic Party.

Ocasio-Cortez was one of the potential 2028 presidential contenders who visited the conference, slamming the Trump administration’s moves on foreign policy.

But AOC stumbled when questioned on issues like Taiwan and Venezuela, with Trump chiming in on her struggles, telling reporters on Air Force One on Monday that it wasn’t a “good look” for the country.

—

Wall Street and the Economy

U.S. Treasury yields rose a bit Wednesday, following release of the ‘minutes’ from the last Federal Reserve Open Market Committee’s meeting, Jan. 27-28, wherein some Fed officials signaled renewed worries over inflation, with “several” policymakers suggesting the central bank may need to raise interest rates if inflation stays above their goal.

“Several participants indicated that they would have supported a two-sided description of the committee’s future interest-rate decisions, reflecting the possibility that upward adjustments to the target range for the federal funds rate could be appropriate if inflation remains at above-target levels,” a record of the central bank’s January meeting showed.

The FOMC voted 10-2 at the meeting to hold the benchmark federal funds rate in a range of 3.5%-3.75%.

The minutes further signaled that one group of policymakers was embracing a view less open to additional rate cuts, at least in the near term.

“Several participants cautioned that easing policy further in the context of elevated inflation readings could be misinterpreted as implying diminished policymaker commitment to the 2% inflation objective,” the minutes said.

In the here and now, Federal Reserve Governor Michael Barr, a permanent voting member on the Federal Open Market Committee, said on Tuesday another central bank interest rate cut could come somewhere well down the road amid ongoing risks to the U.S. inflation outlook.

“Based on current conditions and the data in hand, it will likely be appropriate to hold rates steady for some time as we assess incoming data, the evolving outlook, and the balance of risks,” Barr said in the text of a speech before a gathering in New York.

“The prudent course for monetary policy right now is to take the time necessary to assess conditions as they evolve,” Barr said, adding “I would like to see evidence that goods price inflation is sustainably retreating before considering reducing the policy rate further, provided labor market conditions remain stable.”

Barr said that while it is reasonable to expect that the tariff pressures that have driven up inflation will abate, the price pressure situation remains one of concern.

“There are many reasons to be concerned that inflation will remain elevated,” he said. “I see the risk of persistent inflation above our 2% target as significant, which means we need to remain vigilant.”

Barr also noted in his remarks that the job market has stabilized, but at the same time, the hiring situation is in a “delicate balance” and “the labor market could be especially vulnerable to negative shocks.”

An extensive piece in the Wall Street Journal over the weekend noted: “After holding the line on prices for several months, companies – big and small – have begun a new round of increases, in some cases by high-single-digit percentage points.

“Companies had raised prices last year after tariffs hoisted costs. Yet starting in the fall, many firms held off on increases and sometimes offered discounts to capture holiday shoppers.

“The pricing break is over.  Many companies typically raise prices at the start of the new year. Yet increases appeared to be stronger than normal for January for electronics, appliances and other durable goods, said UBS economist Alan Detmeister.

“Some companies have pointed a finger at tariffs for their increases, while others, especially small businesses, also blame higher wages and hefty health-insurance costs that firms said they can’t absorb or share with suppliers.”

Editorial / Wall Street Journal

“No matter how often President Trump insists his tariffs are taxing foreigners to enrich the U.S., economic studies keep showing that Americans actually pay the bill.  [Last] Thursday it was the New York Federal Reserve’s turn.  In an analysis on the bank’s website, four researchers write that last year ‘nearly 90 percent of the tariffs’ economic burden fell on U.S. firms and consumers.’

“They reach that conclusion by examining import data, to see whether foreign suppliers cut their prices in response to Mr. Trump’s added tariff costs.  Over the first eight months of 2025, ‘94 percent of the tariff incidence was borne by the U.S.,’ the analysis says, meaning ‘a 10 percent tariff caused only a 0.6 percentage point decline in foreign export prices.’”

But then on CNBC Wednesday, Kevin Hassett, director of the National Economic Council (and once thought to be a leading choice to replace Jerome Powell as Fed Chair, before President Trump nominated Kevin Warsh) opted to slam the New York Fed research as “the worst paper I’ve ever seen in the history of the Federal Reserve System” and suggested the people who wrote and published it should be “disciplined.”

As the Wall Street Journal observed in a new editorial: “Disciplined how? Put in stocks?  For a tariff paper?”

“The Fed analysis aligns with other research into the distribution of tariff costs from Harvard economists and Germany’s Kiel Institute – and with common sense.  There isn’t widespread evidence that foreign producers are cutting their prices to offset the tariffs, the main mechanism by which foreigners would ‘pay’ for the border taxes….

“The attack on the Fed over this research is a symptom of the political problem the White House is encountering from tariffs.  Thirteen months into Mr. Trump’s term and with elections looming, opinion polls show voters remain worried about the economy. This implies they don’t see a payoff from the tariffs (other than what they’re paying at the stores).

“Mr. Trump’s ire at current Fed Chairman Jerome Powell increased the more Mr. Powell warned that tariffs might raise prices. The Administration may be trying to warn Kevin Warsh…away from a similar approach.

“Here’s a better idea: If your tariff policy is so unpopular that you have to bully the central bank into not talking about it, maybe it’s time for a new policy.”

And then this morning, in a long-awaited decision, the Supreme Court ruled that Trump’s global tariffs are illegal.

The 6-3 decision, written by Chief Justice John Roberts, didn’t directly address whether the government will have to pay back the tariff revenue it has already collected, but it is the first time the high court has definitively struck down one of Trump’s second-term policies.  In other areas, the court’s conservative majority has granted the president wide latitude to deploy executive power as he sees fit…but this time, three conservatives and three liberals, said Trump has gone too far in enacting the sweeping tariffs without clear authorization from Congress.

“The president asserts the extraordinary power to unilaterally impose tariffs of unlimited amount, duration, and scope. In light of the breadth, history, and constitutional context of that asserted authority, he must identify clear congressional authorization to exercise it,” the chief justice wrote.

The case involved two categories of tariffs.  Trump imposed one category on virtually every country in the world to repair perceived trade deficits, and the other set of tariffs on Mexico, Canada and China was because of their responsibility for the flow of illegal fentanyl into the U.S.

The court rejected Trump’s argument that a 1977 law, the International Emergency Economic Powers Act, implicitly authorized both groups of tariffs.

“Had Congress intended to convey the distinct and extraordinary power to impose tariffs, it would have done so expressly,” Roberts wrote.

President Trump has claimed that a decision against the tariffs would be “the biggest threat in history” to U.S. national security and “would literally destroy the United States of America.”

The Supreme Court majority didn’t address the issue of refunds, which will likely be litigated in the lower courts.

Justice Brett Kavanaugh, in dissent with Justices Clarence Thomas and Samuel Alito, said refunding tariffs already collected could be a “mess” with “significant consequences for the U.S. Treasury.”

Going way back, when the court took up the issue, I actually thought they would rule in favor of the tariffs to avoid Kavanaugh’s “mess,” a logistical nightmare, while also severely admonishing both the president and Congress.

Trump then strode into the White House press room this afternoon and he was not happy, and, frankly, his performance was beyond disgraceful.  He threatened even higher tariffs, while blasting Justices Gorsuch and Barrett, two of his own appointments, for siding with the majority, calling them “embarrassments to their families.”  Oh yeah, the psychos in our midst will glom on to that.

Moving on…Thursday, we had the trade data for December and it showed the deficit widening to $70.3 billion from $53 billion in November, above forecasts.  Considering all of 2025, the trade deficit slipped modestly in 2025, with the gap between the goods and services the U.S. sells other countries and what it buys from them narrowed to just over $901 billion from $904 billion in 2024, the Commerce Department reported.  The ‘goods’ shortfall in 2025 was the highest on record despite Trump’s tariffs.

Exports rose 6% last year, and imports rose nearly 5%.

The above was thus the background heading into Friday’s important data dump.  And the first look at fourth-quarter GDP was much less than expected, 1.4%*, vs. consensus of 2.5% to 3.0%.

*This will be revised twice over the coming two months.

So much for the 5%+ the administration was touting as recently as last week, even as the Atlanta Fed was reducing its GDPNow forecasts.

About 40 minutes before the GDP release, President Trump did some frontrunning/damage control, writing on Truth Social:

“The Democrat Shutdown cost the U.S.A. at least two points in GDP. That’s why they are doing it, in mini-form, again. No Shutdowns!  Also, LOWER INTEREST RATES.  ‘Too Late’ Powell is the WORST!!! President DJT”

In truth, last fall’s record government shutdown impacted GDP negatively to the tune of about 1%, so call the Q4 number 2.5%, which is solid, but it hurts the administration’s narrative as July-September quarter growth came in at 4.4%, and 3.8% in the second quarter of 2025.

A downturn in government and consumer spending contributed to the fourth-quarter figure, with consumer spending rising just 2.2%, a significant slowdown from the third quarter’s 3.5% gain.

In 2025, the economy grew 2.2%, measured from the fourth quarter of the prior year, slower than the 2.8% registered in 2024. [Some are writing 2024 was 2.4%, but they seem to be confusing GDP with GNP.]

Today we also had the Fed’s preferred inflation barometer, the PCE (personal consumption expenditures index), and this was not good.  Up 0.4%, 2.9% year-over-year on headline; and on the all-important core, ex-food and energy, up 0.4%, 3.0%…all four figures a tick higher than consensus.  The 3.0% on core is the highest since last April.

Separately, December personal income was in line with expectations, 0.3%, ditto consumption, 0.4%.

A Wall Street Journal survey of economists pegs 2026 GDP at 2.2%.

We also had some housing data. December housing starts rose to a 1.404 million annualized rate, better than expected, while December new home sales were also a little better than forecast, a 745,000 pace.

The Atlanta Fed’s first look at first-quarter growth is 3.1%.

Freddie Mac’s 30-year fixed-rate mortgage is down to 6.01%, the lowest since Sept. 2022.

Next week we receive the January producer price data.

Europe and Asia

We had flash PMIs for the month of February in the eurozone, with a composite reading of 51.9. Manufacturing 52.1; services 51.8 [50 the dividing line between growth and contraction.]

Germany: manufacturing 52.3; services 53.4
France: mfg. 51.6; services 49.6

UK: mfg. 53.6; services 53.9

No economic data from China this week due to the Lunar New Year holiday.  Stock and bond markets were closed.

Japan’s flash PMI readings for February had manufacturing at 52.8; services 53.8, both solid.

But earlier, the Cabinet Office released data on fourth-quarter GDP, up only 0.2% annualized vs. consensus of 1.6%, barely scraping back to growth from a larger revised 2.6% contraction in the previous quarter.

Separately, January exports surged 16.8% vs. 5.1% prior.  December industrial production rose 2.6% year-over-year.

And January inflation came in at 1.5% vs. 2.1% prior, ex-food and energy, however, its 2.6% vs. 2.9%.

Street Bytes

–I was frankly shocked at the market reaction to the Supreme Court’s ruling today, let alone Trump’s immediate pronouncement of new tariffs (while the administration figures out how to keep on what has already been negotiated), i.e, more confusion, let alone having a massive military force in the Middle East, locked and loaded.

In the end, however, for the holiday-shortened week, stocks finished up, the Dow Jones gaining 0.3% to 49625, the S&P 500 up 1.1% and Nasdaq, breaking a 5-week losing streak, rising 1.5%.

Next week the all-important earnings from Nvidia, as well as Home Depot.

—U.S. Treasury Yields

6-mo. 3.62%  2-yr. 3.48%  10-yr. 4.08%  30-yr. 4.72%

The interest-rate (Fed) sensitive 2-year yield rose 8 basis points on the week. Otherwise, not much across the rest of the yield curve despite the heavy news cycle.

—Walmart posted quarterly earnings on Thursday morning that slightly beat Wall Street’s estimates, giving a readout on the key holiday shopping season in its first report under new CEO John Furner.

The retailer, whose market cap recently eclipsed $1 trillion for the first time, reported adjusted earnings per share of $0.74 in the period, its fiscal Q4 2026, a tick higher than the Street’s forecast of $0.73.

Revenue increased 5.6% to $190.7 billion, basically in line with the consensus.

For fiscal year 2026, Walmart posted results that were also slightly above estimates.  Revenue came in at $713.2bn, also slightly above forecasts, whereas adjusted earnings per share came in at $2.64, a cent higher than expected.

The shares closed down 1% on the news.

Walmart issued conservative guidance. For the first quarter, the company expects revenue to grow in the range of 3.5% to 4.5%, alongside adjusted per-share earnings of $0.63 and $0.65.  That outlook undershoots the 5% growth and adjusted earnings of $0.69 each that Wall Street expected.

For the year, the retail giant expects revenue to increase in the range of 3.5% to 4.5%, alongside adjusted earnings of $2.75 to $2.85, also conservative compared to the Street’s consensus of nearly 5% growth, alongside adjusted earnings of $2.97.

That guidance is “subject to substantial uncertainty” linked to changes in global economic and geopolitical conditions, tariff and trade policies, customer demand and spending, inflation, interest rates, and world events, Walmart said in its release.

U.S. quarterly same-store sales grew 4.6% in Q4, with growth driven by e-commerce strength, with sales of the latter jumping 27% for its business, topping the 20% increase expected.  Walmart said the rise was driven by store-fulfilled pickup and delivery, advertising, and its marketplace, with sales through “expedited store-fulfilled delivery channels” up more than 50% in the quarter.

“The pace of change in retail is accelerating,” CEO John Furner said in Walmart’s release.  “Our financial results show that we’re not only embracing this change, we’re leading it.  For our customers and members, the future is fast, convenient, and personalized.”

By the way, Walmart prices for groceries grew less than 1% in the most recent quarter, while prices for general merchandise items rose 3.2%, a higher jump than the preceding quarter.

But with sales of $713.2 billion for its most recent full year, for the first time, Walmart was passed in annual revenue by Amazon.com, which had $716.9bn for its most recent full year.  Quite a feat for Amazon, from its beginnings as an online bookseller started in Jeff Bezos’ garage to the behemoth it is today.

—Deere & Co. shares surged another 11% as the world’s largest farm-machinery maker boosted its annual profit outlook, anticipating a long-awaited upturn in the agriculture economy.

“While the global large agriculture industry continues to experience challenges, we’re encouraged by the ongoing recovery in demand within both the construction and small agriculture segments,” CEO John May said in the company earnings statement Thursday.

“These positive developments reinforce our belief that 2026 represents the bottom of the current cycle and provides us with a strong foundation for accelerated growth going forward,” May said.

The company posted fiscal first-quarter net income of $656 million, or $2.42 a share, down from $869 million, or $3.19 a share, the year before, with analysts expecting $2.02.

Deere estimated net income between $4.5 billion and $5 billion for fiscal 2026, above Deere’s initial outlook in November, and above consensus.

The increased optimism comes as Chicago soybean prices have been rising amid a revival of U.S. exports to China, though I’ll bet you $5 that China doesn’t come close to the commitment it gave President Trump in taking in 12 million tons this season.

Sentiment among growers has plummeted while some industry leaders have criticized Trump’s policies as damaging to the farm economy, even as the administration is rolling out $12 billion in aid.

For Deere, its largest segment of production and precision agriculture – which caters to the world’s biggest farmers – remains under pressure as the company reaffirmed expectations for net sales declines of 5% to 10% this year.  The company increased its outlook for small agriculture and turf as well as construction and forestry.

The company has also been coping with rising tariff costs that have dragged down profit. Deere said in November that it expects tariff costs of about $300 million a quarter during fiscal 2026, or $1.2 billion for the year, up from $600 million in fiscal 2025.

—Berkshire Hathaway, according to its latest 13-F filing after the close of trading Tuesday, continued to trim its stakes in Bank of America and Apple in the fourth quarter and it initiated a new holding in the “failing” New York Times (as President Trump likes to call it, inaccurately), buying five million shares of the newspaper publishing company.

Berkshire also sold most of its holdings in Amazon.com in the period.  And it added to its stakes in Chevron and Chubb in the fourth quarter.

Investors were interested in the fourth-quarter Berkshire holdings since it was the last period during which Warren Buffett was CEO. He gave up that role to Greg Abel at year-end while remaining chairman.

Buffett has long had a soft spot for the newspaper business.  He liked the monopoly status of newspapers – which has been largely destroyed over the past 20 years, leaving the industry greatly shrunken and far less profitable.

New York Times has been an industry bright spot thanks to the success of the paper’s website and related web properties.  But the stake, $350 million, is small compared to other Berkshire holdings, the total portfolio worth about $300 billion.

Apple is still the largest holding, followed by American Express.

—U.S. automakers have been pumping the brakes on their electrical-vehicle businesses for months, and the costs are piling up.

Following years of investments into EV technology, the Detroit Big Three – GM, Ford and Stellantis – have announced more than $50 billion in combined write-downs.

EV sales fell more than 30% in the fourth quarter, after a $7,500 federal tax credit that had juiced U.S. sales expired in September.  Demand cratered for the highest-profile EVs, from Tesla’s Cybertruck to Ford’s much hyped electric pickup.  Automakers expect demand to remain muted this year.

GM, which is forging ahead with much of its EV strategy, albeit at a smaller scale, didn’t have as much to cancel and write down.  The company, for example, still aims to build big EV trucks.  But Ford is changing course.  The company now expects to make one low-cost EV pickup by 2027.

—TSA checkpoint numbers vs. 2025

2/19…N/A…incomplete data due to the partial govt. shutdown impacting the TSA…
2/18…N/A
2/17…N/A
2/16…116 percent of 2025 level
2/15…117
2/14…83
2/13…108
2/12…136

—Warner Bros. Discovery rejected Paramount Skydance’s latest $30-a-share hostile bid, but gave the Hollywood studio seven days to come up with a “best and final” offer for the owner of HBO Max and the “Harry Potter” franchise.

Paramount informally broached an even higher per-share price of $31, Warner Bros. said, apparently enticing the board to the table. But its response to Paramount indicates Warner Bros. prefers its deal with Netflix, and the odds of a switch are long.

Paramount has until next Monday, Feb. 23, to make a new offer, which Netflix is allowed to match under the terms of the merger agreement, Warner Bros. said.

“Our Board has not determined that your proposal is reasonably likely to result in a transaction that is superior to the Netflix merger,” Warner Bros. Chairman Samuel DiPiazza Jr. and CEO David Zaslav said in a letter sent to the Paramount board on Tuesday.

“We continue to recommend and remain fully committed to our transaction with Netflix.”

Warner Bros., which has rejected Paramount’s offers to buy the entire company, is moving forward with a vote on Netflix’s bid on March 20.

The merger, if approved, would take place after Warner Bros. spins off its Discovery Global cable operations, which include CNN, TLC, Food Network and HGTV, into a separate, publicly traded company.

Discovery Global could fetch between $1.33 per share and $6.86 a share, according to Warner Bros. estimates.

—General Mills cut its annual core sales and profit forecasts on Tuesday as the Cheerios cereal maker contends with a volatile economic backdrop and evolving consumer tastes.

Shares of General Mills, which left its annual outlook unchanged in December, fell 7% on Tuesday.

GIS and other packaged food companies are under pressure as lower-income shoppers, hit hardest by persistent inflation, trade down to value brands and private-label goods. At the same time, the industry is contending with evolving dietary preferences and a growing push toward healthier foods, accelerated by the broader adoption of GLP-1 weight-loss drugs.

“Cost of living and housing pressures are reshaping spending patterns, and value is a core expectation that is here to stay,” CEO Jeffrey Harmening said at the Consumer Analyst Group of New York on Tuesday.

Executives said the company’s cereal business, its second biggest revenue generator, was under pressure from increased competition from protein offerings at breakfast.  Earlier this month, PepsiCo cut prices on core brands such as Lay’s and Doritos by up to 15% following a consumer backlash against earlier price hikes, while Kraft Heinz paused its splitting plans and forecast weak annual earnings after missing quarterly results estimates on tepid demand.

General Mills now expects annual sales to be down 1.5% to 2%, compared with its previous range of down 1% to an increase of 1%.  It also sees adjusted earnings per share down 16% to 20% in constant currency, compared with its previous range of down 10% to 15%.

—Beef costs have risen faster than most other items in the consumer price index, with the broad beef and veal category up 15% over the past year as of January.  Uncooked ground beef reached a record after soaring by the most since June 2020 in government data released last Friday in the CPI report. [Steak prices are up 55% over the past five years, and ground beef, 69%.]

The gains are a standout from the rest of the consumer grocery basket, such as chicken prices, which rose only by 1.1% in the past 12 months, while milk was little changed.

President Trump has vowed to increase competition in beef processing and boosted Argentinian beef import quotas to ease supply, but the simple fact is the U.S. cattle herd has shrunk in recent years to the smallest since the early 1950s because of droughts and higher production costs that have made raising the animals more expensive.

At current levels, any expansion in the U.S. herd would at the earliest make it to the retail counter in 2028, according to Don Close, a senior animal protein analyst from Terrain Ag.

–Those of us in the New York metro area, specifically New York and New Jersey commuters, as well as Amtrak riders, recognize how important the huge Gateway Tunnel project is, but President Trump, who once supported it, went on social media to slam it, calling it a “future boondoggle” that could cost “many billions of dollars more” than budgeted, which drew a sharp rebuke from New Jersey Gov. Mikie Sherrill who blamed him for potential cost overruns.

In a Truth Social post that was shared on X on Monday, Trump said he was “opposed to the future boondoggle known as Gateway in New York/New Jersey because it will cost many billions of dollars more than projected.”

Trump also said Gateway would be “financially catastrophic for the region unless hard work and proper planning is done NOW to avoid insurmountable cost overruns.

“The federal government is willing to meet however to make sure this doesn’t happen,” Trump wrote.

Sherrill rebutted Trump. Saying Gateway was on time and budget until his administration froze already approved funding for the project last October.

“The only person who can make Gateway a boondoggle is Donald Trump,” the Democratic governor said in a statement.  “Until his illegal actions forced the project to shut down, threw 1,000 hard-working men and women off the job, and threatened the commutes of 200,000 people a day, Gateway was on time and on budget.”

Sen. Andy Kim (D-N.J.), called Trump’s comments “a completely unhinged tantrum from someone who didn’t get their way.”

The $16 billion Hudson River Tunnel Project will build two new tunnels and rehabilitate the existing 116-year-old rail tunnels. Boring the first tunnels through the Palisades in North Bergen was scheduled to start this year.

–Meanwhile, on the topic of New York, Mayor Zohran Mamdani on Tuesday proposed to raise property tax rates in New York City by nearly 10 percent, a measure he is preparing as a “last resort” to be deployed if he cannot persuade Gov. Kathy Hochul to raise income taxes on the wealthy.

The suggested 9.5 percent increase would affect more than 3 million single-family homes, co-ops and condos and over 100,000 commercial buildings, Mamdani said as he delivered his preliminary spending plan.

The mayor acknowledged that his proposal would not merely force the wealthy to pay more taxes, but would also be a “tax on working- and middle-class New Yorkers,” and stressed that this was not his first choice.

But New York City mayors have little authority to raise taxes without the governor’s and Legislature’s approval, and Mamdani said the city property tax increase was the only way to address a looming budget deficit projected to reach $5.4 billion over two years.

As the June 30 city budget deadline draws closer – Hochul has played down the likelihood of city property taxes rising.

—Anderson Cooper, who has reported for CBS’ “60 Minutes” for the past two decades in addition to his weeknight program on CNN, said Monday that he’s leaving the CBS broadcast to spend more time with his family.

He’s expected to finish the current broadcast season, which ends in May, but the moves come amid the overall turmoil at CBS and pressure from President Trump.

Foreign Affairs

Iran: Continuing from the opening….

Oil, gold and silver had a strong day, Wednesday, after Vice President JD Vance said Iran had failed to acknowledge core U.S. demands in talks in Geneva Tuesday, after which Washington said it had agreed to give Tehran two weeks to close the gaps between the sides.

Ahead of the negotiations, Tehran has indicated it was willing to compromise around the edges of its nuclear program, including moving its near weapons-grade uranium offshore, people familiar with the matter said.

But speaking Tuesday evening, Vance said it was clear from his briefing from the talks that they hadn’t yielded any breakthrough, adding that military action remained an option.  The U.S. has demanded Iran end its enrichment of uranium, a central aspect of its nuclear work, which the White House fears gives Iran the capacity to build a nuclear weapon.

“One thing I will say about the negotiation this morning: In some ways, it went well – they agreed to meet afterwards. But in other ways, it was very clear that the president has set some red lines that the Iranians are not yet willing to actually acknowledge and work through,” Vance told Fox News, without providing further detail.

As negotiations resumed, Iran sent a veiled threat, carrying out military exercises in the strategic Strait of Hormuz.  News agencies affiliated with the country’s security agencies showed footage of cruise missiles being launched from trucks and boats Monday, as a tanker could be seen sailing in the background.

President Trump has assembled a massive force just off Iran’s coast, including the greatest amount of air power in the region since the 2003 invasion of Iraq. 

“I don’t think they want the consequences of not making a deal,” Trump told reporters late Monday, saying he would remain indirectly involved in Tuesday’s talks, which ended after 3 ½ hours of discussion.  “They want to make a deal.”

But Iranian Supreme Leader Ali Khamenei warned in a speech Tuesday ahead of the talks that Iran was prepared to retaliate against an American strike.  “More dangerous than the American warship is the weapon that can send it to the bottom of the sea,” he said.  The U.S. “may be struck so hard that it cannot get back up.”

By all analysis, Iran doesn’t have nearly the offensive capability it claims to, but ballistic and cruise missiles are still just that…they can be destructive.

Justin Crump of the risk intelligence firm Sibylline told the BBC: “What we are seeing isn’t just strike preparation” from the U.S. Navy near Iran, “but rather a broader deterrent deployment capable of being scaled up or down.”

“This means it has more depth and sustainability than the force packages arranged for either Venezuela or [the joint Israeli-U.S. operation] Midnight Hammer last year.  It’s designed to sustain an engagement and counter all potential responses against U.S. assets in the region and, of course, Israel.”

Editorial / Wall Street Journal

“After Iran violently suppressed protests in 2009, President Obama sought to trade U.S. silence for nuclear negotiations. Now Tehran is hoping President Trump will make the same mistake. That was the logic of Tuesday’s nuclear talks in Geneva. Though the military firepower that Mr. Trump has sent to the region leaves reason to wonder about his plans.

“The President promised to come to the aid of the Iranian people in January, as they were massacred by their rulers at greater scale than ever before. This should be a moment to confront the true nature of the Iranian regime. Yet U.S. officials are again mired in discussions about nuclear enrichment, stockpiled uranium and regional consortia.

“No wonder Iranian Foreign Minister Abbas Araghchi announced ‘good progress’ in Geneva.  While cautioning that a deal may not come quickly – as ever with this regime – Mr. Araghchi said the parties reached ‘a general understanding on a set of guiding principles.’

“A U.S. official stressed to us the vagueness of that formulation.  Vice President JD Vance said Tuesday that Mr. Trump ‘has set some red lines that the Iranians are not yet willing to acknowledge.’ The Omani mediator cited progress, but merely toward ‘identifying common goals and relevant technical issues.’  Another U.S. official said Iran promised ‘detailed proposals’ in the next two weeks….

“Mr. Trump prizes flexibility, and he could ignore any red line he has drawn, as Mr. Obama did at great cost in Syria. But given the ideas Iran has floated so far, a deal would likely require Mr. Trump to cave.  Why would he do that while the regime is afraid of its own people, badly weakened militarily by Israel and under financial pressure?

“The main concession Iran is discussing is to suspend uranium enrichment for a time.  But Iran isn’t enriching now, thanks to U.S. bombers, and it isn’t ready to resume. In exchange for that status quo, Tehran wants U.S. sanctions relief, which would be a lifeline to the regime and a betrayal of the protesters.

“Tehran is again talking up opportunities for U.S. investment, as if its state support for terrorism is a minor point that can be glossed over by Mr. Trump….

“Handing over its stockpile of enriched uranium from beneath the rubble is a necessary condition for any deal, but Iran’s regime wants Russia to hold it.  It also resists detailing and allowing verification of its past activities, which is a way to hide nuclear material.

“The fundamental error is thinking that the U.S. can stop the nuclear threat while reinforcing the regime’s hold on power, which is said to be a problem for the Iranians alone….

“Iran’s nuclear obstinacy is rooted in the nature of the regime.  Aggressive and revolutionary from the start, Iran’s regime has hardened into what the historian Ali M. Ansari calls an ‘Islamic security state.’  Nuclear, missiles, massacres and proxy militias are all fallout from its rule. They won’t end until the regime does.”

Israel: Israel’s cabinet on Sunday approved further measures to tighten its control over the occupied West Bank and make it easier for settlers to buy land, a move Palestinians called a ‘de-facto annexation.’

Israeli Prime Minister Benjamin Netanyahu, who is facing an election later this year, deems the establishment of any Palestinian state a security threat.  His ruling coalition, which has a large voter base in the settlements, includes many members who want Israel to annex the West Bank, land captured in the 1967 Middle East war to which Israel cites biblical and historical ties.

Ministers voted in favor of beginning a process of land registration for the first time since 1967, a week after approving another series of measures in the West Bank that drew international condemnation.

“We are continuing the revolution of settlement and strengthening our hold across all parts of our land,” said the vile, far-right Finance Minister Bezalel Smotrich.

Thomas L. Friedman / New York Times

“Let’s stop beating around the bush: Israel’s far-right government, led by Prime Minister Benjamin Netanyahu, is spitting in America’s face and telling us it’s raining.  It’s not raining. Bibi is playing both President Trump and American Jews for fools.  And if the U.S. lets him get away with it, we are fools.

“While keeping Trump focused on the Iranian missile and nuclear threat – which, though reduced, is still very real and will have to be dealt with diplomatically or militarily – Bibi is fundamentally threatening broader U.S. interests in the Middle East, not to mention the security of Jews all over the world.  In what way?  I cannot put it any more succinctly than Ehud Olmert, the former Israeli prime minister, did.

“ ‘A violent and criminal effort is underway to ethnically cleanse territories in the West Bank,’ he wrote in an essay in Haaretz this month.  ‘Gangs of armed settlers persecute, harm, wound and even kill Palestinians living there. The rampages include burning olive groves, houses and cars; breaking into homes; and physically assaulting people.’  He continued: ‘The rioters, the Jewish terrorists, storm Palestinians with hate and violence with one objective: to force them to flee from their homes. All this is done in the hopes that the land will then be prepared for Jewish settlement, en route to realizing the dream of annexing all the territories.’

“Israel’s accelerating attempts toward annexation of the West Bank and to permanently remain in Gaza – and deny Palestinians political rights in both areas – are as morally reckless and demographically insane as would be the U.S. annexing Mexico.

“If it were just Israelis who were going to be hurt by the crazy fantasy that some seven million Israeli Jews can control about seven million Palestinian Arabs in perpetuity, I might be tempted to say that if Israel’s leaders want to commit national suicide, I can’t stop them.

“But the effects will not be confined to Israel.  I believe that this messianically driven endeavor will make today’s Israel permanently indistinguishable from apartheid South Africa and will have seriously detrimental implications for both American interests and the interests and security of Jews all over the world.

“If Netanyahu’s government stays on this course, it will rip apart Jewish institutions everywhere as members of the Jewish diaspora are forced to decide whether to stand with or against an apartheidlike Israel. It will also accelerate the trend begun by Israel’s devastation of Gaza wherein growing numbers of young Democrats and Republicans in the U.S. are turning against Israel and, at the fringes, against Jews in general.

“Jewish parents around the globe will soon be in a position they never dreamed of: watching their children and grandchildren learn what it’s like to be Jewish in a world where the Jewish state is a pariah state….

“As I said when I began, Netanyahu has played Trump for a sucker, as well as the pro-Israel lobby led by the American Israel Public Affairs Committee and many other so-called American Jewish leaders.  He has gotten them to focus on Iran and ignore the fact that everything he is doing in Gaza, in the West Bank and inside Israel will strain ties between the U.S. and its major Middle East allies, including Egypt, Jordan, Saudi Arabia, the United Arab Emirates, Turkey and Qatar.”

I couldn’t agree with Mr. Friedman more.

Separately, there was a very ugly incident in the Israeli city of Bnei Brak where two female Israeli soldiers had to be rescued by police after being chased by a crowd of ultra-Orthodox Jewish men.

Footage from the city showed the women running through streets strewn with rubbish and overturned bins as police officers formed a protective barrier.  More than 20 people were arrested.

Reports suggest the Israel Defense Forces (IDF) solders were wrongly believed to be trying to deliver army conscription orders.  Military service is mandatory for most Jewish Israelis, but ultra-Orthodox Jews have long been exempt. Moves to reform this have caused outrage among the community.

Prime Minister Netanyahu condemned the incident as “unacceptable.”

“This is an extreme minority that does not represent the entire Haredi [ultra-Orthodox] community,” Netanyahu said in a post on X.

“We will not allow anarchy, and we will not tolerate any harm to IDF servicemen and security forces who carry out their duties with dedication and determination.”

Russia/Ukraine: Peace talks between Ukraine and Russia in Geneva on Wednesday ended after only two hours, with Ukrainian President Volodymyr Zelensky describing them as “difficult” and accusing Russia of deliberately delaying progress toward a deal to end the four-year-old war.

The two days of U.S.-mediated peace talks took place as President Trump has twice in recent days suggested it was up to Ukraine and Zelensky to ensure the talks were successful, which is outrageous.

“We can see that progress has been made, but for now, positions differ because the negotiations were difficult,” Zelensky told reporters in a WhatsApp chat shortly after talks concluded.

Rustem Umerov, the head of Kyiv’s negotiating time, said separately that the second day had been “intensive and substantive.”  Both sides were working toward decisions that can be sent to their presidents, he said.

Russia’s chief negotiator, former culture minister Vladimir Medinsky, told reporters that further negotiations would be held soon, without specifying a date.  Earlier on Wednesday, Zelensky had accused of Russia of “trying to drag out negotiations that could already have reached the final stage.”

Ukrainian officials have routinely accused Moscow – which has carried out a winter bombing campaign against Ukraine’s energy system and pursued its battlefield offensive – of negotiating in bad faith.

In an interview with Axios published on Tuesday, Zelensky was quoted as saying that it was “not fair” Trump kept publicly calling on Ukraine, not Russia, to make concessions in negotiating terms for a peace Plan.

Trump had told reporters on Monday aboard Air Force One that “Ukraine better come to the table fast. That’s all I’m telling you.”

Zelensky also said any plan requiring Ukraine to give up territory that Russia had not captured in the eastern Donbas region would be rejected by Ukrainians if put to a referendum.

The talks came just days before the fourth anniversary of Russia’s 2022 invasion.

In an interview with “Piers Morgan Uncensored” posted on YouTube, Zelensky declared Wednesday that he has “trust” in President Trump and his ability to negotiate an end to the war, but at the same time doesn’t understand Trump’s “painful” relationship with Putin.

“I trust him [Trump]…and he really wants to end this war, and I trust that he really can end this war,” Zelensky said.  “But I don’t know, to speak about his relationship with Putin.”

Zelensky explained that he couldn’t “really estimate or understand” Trump’s relationship with the Russian strongman but that it’s not a “question of trust or not.”

“[They] have some relations, I’m sure and that’s why for me, sometimes it’s very, very painful that his attitude to Putin is sometimes, to put it, more good than Putin deserves,” the Ukrainian leader observed.

Reuters spoke to the heads of five European spy agencies in recent days, on condition of anonymity, and they all said Russia did not want to end the war quickly.  Four of them said Moscow was using the talks with the U.S. to push for sanctions relief and business deals.

The latest talks this week in Geneva are “negotiation theatre,” one European intel chief said.

–Meanwhile, Russia keeps bombing Ukraine and its energy facilities. Last Saturday, a Russia drone strike on the Black Sea port city of Odesa killed one person.

Overnight Monday, ahead of the peace talks in Geneva, Russia struck 12 Ukrainian regions.

“It was a combined strike, specially calculated to cause as much damage as possible to our energy sector,” Zelensky wrote on X, calling for diplomacy backed by “justice and strength.”

Ukraine’s deputy energy minister said three energy workers were killed when a Russian drone struck their car near the Sloviansk power plant, in a frontline area which Moscow wants Kyiv to cede in exchange for peace.

Power infrastructure supplying Odesa suffered “incredibly serious” damage, said private energy company DTEK.

“Repairs will take a long time to restore the equipment to working order,” the company said on social media.

Deputy Energy Minister Artem Nekrasov said homes in five regions had suffered power cuts as a result of the strikes, and also reported disruptions to heating supply in Odesa and Sumy, a regional capital in northern Ukraine near the Russian border.

Ukraine’s air force said Russia launched nearly 400 drones and 29 missiles.  Most were downed, but 13 targets in Ukraine were hit, it added.

Overnight Tuesday into Wednesday, Russia launched another 126 attack drones.

—China increased its support for Russia’s war in Ukraine in 2025 and is likely to deepen cooperation with Moscow further this year, Western officials said, casting doubt on efforts by European leaders to improve relations with Beijing, as reported by Bloomberg, in coordination with officials sharing their views on condition of anonymity.

President Xi Jinping has become more assertive and confident in his supporting Vladimir Putin, and attempts by the Europeans to persuade their Chinese counterparts to help end the war have become more challenging over the past year, the officials said.

“China could call Vladimir Putin and end this war tomorrow,” U.S. Ambassador to NATO Matthew Whitaker said during a panel late last Friday at the Munich Security Conference. “This war is being completely enabled by China.”

Chinese support is critical in its export of dual-use components and critical minerals used in Russian drone production, officials said.

—In a statement by the UK, Sweden, France, the Netherlands and Germany released Saturday, the five concluded it is “highly likely” that Russian opposition leader Alexei Navalny was killed by a rare toxin found in poison dart frogs, adding that Russia had the “means, motive and opportunity” to administer the deadly dose when Navalny died in an Arctic prison two years ago.

The statement provided official validation of the belief – widely held by Navalny’s family and thousands of his supporters – that he was murdered by Russian authorities, perhaps on a direct order from the Kremlin.

The statement said that the five NATO allies were “confident that Alexei Navalny was poisoned with a lethal toxin” following analysis of samples from him that confirmed the presence of epibatidine, a substance found in poison dart frogs in Soth America.

The substance is not found in nature in Russia, the statement said.  Russian authorities from the outset have claimed that Navalny died of “natural causes.”

“Given the toxicity of epibatidine and reported symptoms, poisoning was highly likely the cause of his death,” the allies said.  “Navalny died while held in prison, meaning Russia had the means, motive and opportunity to administer this poison to him.”

Russian Foreign Ministry spokeswoman Maria Zakharova dismissed the joint statement, saying it was intended to “distract attention from the pressing problems of the West.”

Navalny’s widow Yulia marked the two-year anniversary of his death, writing in a social media post: “We have achieved truth and we will achieve justice one day too.”

—George F. Will / Washington Post

“Who controls the past controls the future: who controls the present controls the past.” – George Orwell, “1984”

“When the 105-day war ended, almost 400,000 Soviet soldiers had been killed or wounded or were missing. The Kremlin reported minor losses.  Vladimir Putin, a Stalin admirer, should have studied the actual past that Stalin falsified.

“Stalin began the Winter War, a.k.a. the Russo-Finish War, on Nov. 30, 1939, as his then-ally Adolf Hitler had begun World War II in Europe three months earlier: by staging a fraudulent border incident.  Stalin, a dictator of a nation of 170 million, expected to quickly subdue Finland, a nation of 3.5 million.

“When Putin invaded Ukraine on Feb. 24, 2022, his troops were told to pack dress uniforms. There would be a victory parade a few days later in Kyiv.  In ‘The Winter Warriors,’ a just-published novel by Olivier Norek, Vyacheslav Molotov, Stalin’s close aide, tells a Red Army colonel that Stalin wants to celebrate his next birthday on the steps of Finland’s Parliament, ‘in precisely 20 days.’  A Soviet general had told Stalin 10 days should suffice.

“The war ended on March 13, 1940. The Soviet Union settled for about 10 percent of Finland’s territory.

“As the fifth year of Russia’s war to subdue Ukraine approaches, Putin has learned that the past is easier to control than the present.  He has a grim future if the United States and Europe press their advantages.

“A much-diminished Russia occupies just 20 percent of Ukrainian territory that Kyiv controlled four Februarys ago. Europe, which has not yet even completely weaned itself from Russian energy, is at least accustoming itself to the vocabulary of military seriousness.

“In 2024, every Swedish household received a booklet stating: ‘From the year you turn 16 until the end of the year you turn 70, you are part of Sweden’s total defence and required to serve in the event of war or the threat of war.’  Finland and Norway have long had military conscription.  Other nations are preparing infrastructures for mobilization. Donald Trump has endorsed legislation that would provide crushing economic penalties for nations that buy Russian oil….

“Putin’s ‘special military operation’ in Ukraine (calling it a war can mean imprisonment) has lasted longer than Russia’s involvement in World War II.    By now, Putin has surely defined success down: a negotiated armistice that provides Ukraine with security ‘guarantees’ even more gossamer than those of the infamous 1994 Budapest Memorandum on Security Assurances.

“In it, Ukraine agreed to give up the almost 2,000 Soviet-era nuclear weapons (and ballistic missiles and strategic bombers) stationed on its soil.  Russia gave ‘assurances’ that it would ‘respect the independence and sovereignty and the existing borders of Ukraine,’ and would ‘refrain from the threat or use of force against the territorial integrity or political independence of Ukraine.’  Russia seized Crimea in 2014, and invaded Ukraine eight years later.

“Choices by Ukraine’s friends can deliver condign punishment to Putin for his Ukrainian blunder. These friends can at last choose to fund Ukraine with the approximately $300 billion in frozen Russian assets. They can intensify interdiction of the shadow fleet of tankers getting Russian oil to foreign buyers. And they can deny Putin a veto over security guarantees for Ukraine, including permanent troop deployments there. Otherwise, any agreement will be a sizzling fuse.”

China: A major U.S. arms-sales package for Taiwan is in limbo following pressure from President Xi and concerns among some in the Trump administration that greenlighting the weapons deal would derail the upcoming summit between the two leaders in Beijing in April.

Asked on Monday whether he planned to send more weapons to Taiwan, Trump said he had discussed the issue with Xi. “I’m talking to him about it.  We had a good conversation, and we’ll make a determination pretty soon,” he told reporters.

“We have a very good relationship with President Xi,” Trump added.

But Beijing was already angered over the $11.1 billion in arms sales for Taiwan that the U.S. unveiled in December.  Xi pressed Trump about the issue during their Feb. 4 phone call.  Trump wants to preserve a trade truce with Xi, an official told the Wall Street Journal, so the timing of an arms-sale decision is being carefully considered behind the scenes, the person said.

Congress hasn’t officially been notified of new arms sales, but a congressional aide said it had been expected to include Patriot antimissile interceptors and other weapons.

Editorial / Wall Street Journal

“The April summit between President Trump and his Chinese counterpart, Xi Jinping, is turning out to be a high stakes affair long before they meet. The Chinese President is trying to bully Mr. Trump into walking back planned sales of arms to Taiwan.

“U.S. officials are leaking that Mr. Xi was adamant in a recent phone call that Mr. Trump block further arms sales to the democratic island of some 23 million people.  The U.S. announced an $11.1 billion arms sale in December and another is in the works.

“Taiwan needs the arms for self-defense as China ramps up military pressure on the territory. China’s navy has staged exercises that look to U.S. officials as preparation for what could be a blockade of Taiwan, which supplies most of the world’s advanced semiconductors.  Mr. Xi has told his military to be ready by 2027 to take Taiwan by force if necessary.

“Mr. Xi knows the U.S. President wants a successful summit in China, and the Communist Party boss is using that as leverage.  Mr. Trump wants a stable Chinese relationship so the People’s Republic won’t again block the export of rare-earth minerals or refuse to purchase American farm good, especially soybeans.

“But giving in to Mr. Xi’s threats on Taiwan would send a dangerous signal about America’s reliability as an ally. The Taiwan Relations Act obligates the U.S. to supply defensive weapons to the island.  If Mr. Trump abdicates on that obligation, China will immediately use it to tell the Taiwanese people that America can’t be trusted to defend them. Japan, South Korea and the Philippines will also get the message that Mr. Trump’s priority in the Pacific is China, not their mutual defense.

“No one wants a war over Taiwan, but war is more likely if Mr. Xi concludes that President Trump can be intimidated for the sake of a smiling summit.”

Venezuela/Colombia: Three more alleged drug-trafficking boats were hit during the Presidents Day weekend, killing 11.  Meaning there have been more than 40 strikes since early September, killing at least 144 people.  The latest were in the eastern Pacific (2) and the Caribbean (1).

Random Musings

—Presidential approval ratings….

Gallup: 36% approve of President Trump’s job performance, while 59% disapprove.  25% of independents approve (Dec. 1-15). [Last Jan 21-27, following his inauguration, Gallup had Trump with a 47% approval rating, 48% disapproval, with 46% of independents approving.]

And it’s a wrap.  I missed that last Wednesday, the Gallup organization announced it would no longer track presidential approval ratings, ending a high-profile service that started in 1938.  Gallup said it would continue in tracking attitudes and policy issues.

This sucks.  Gallup was the gold standard…the first.  It was George Gallup, a statistician and founder of the American Institute of Public Opinion, who sent pollsters across Depression-era America to ask people – Do you approve or disapprove of the way Roosevelt is handling his job as president?

That’s how it began.  Why stop?  It is very clear, even though the Gallup folks won’t say so, that they feared political pressure and a lawsuit from President Trump.  Look at their final numbers.

In January, the New York Times released a new Times Siena Poll, which had Trump’s approval rating at 40%, down three percentage points since September 2025, and the president threatened to expand his pre-existing lawsuit for defamation.

In a post on Truth Social, Trump wrote: “The Times Siena Poll, which is always tremendously negative to me, especially just before the Election of 2024, where I won in a Landslide, will be added to my lawsuit against The Failing New York Times.”

Just pathetic.

Rasmussen: 47% approve, 51% disapprove (Feb. 20).

An NBC News poll from late last week had President Trump with a 39% approval rating, 61% disapproving.  The same survey found that 60% of respondents said they disapprove – either “strongly” or “somewhat” – of the way Trump has handled the issues of border security and immigration during his president.

The latest Reuters/Ipsos poll this week has Trump’s approval rating down to 34% from 36% in early January. About 57% of respondents said they disapprove of his handling of the economy, up from 55% in early January.

–I have to go back to last Friday and President Trump’s ‘rally’ in front of the troops at Fort Bragg, N.C.

Trump shared the stage with Michael Whatley, a former Republican National Committee chairman now running for Senate who holds no government position.  Trump used the platform to boost Whatley, attack Democrats and repeat previously announced military spending plans.

“You have to vote for us,” Trump told the troops, citing his restoration of the Fort Bragg name after Congress directed the Pentagon to rename military installations honoring Confederate officers.

“If we don’t’ win the midterms, they’ll take it off again,” Trump said. “They’ll take it off again. You can’t let that happen.”

Defense Department policy prohibits partisan political activity by active-duty service members. “The Army as an institution must be nonpartisan and appear so too,” the Army field manual reads. “Nonpartisanship assures the public trust that our Army will always serve the Constitution and our people loyally and responsively.”

A federal law known as the Hatch Act restricts government employees from campaigning in their official capacity.  The law does not apply to the president.

On Friday, Trump disparaged his predecessors as commander in chief.  “You’ve had a couple of good ones, not that many if you want to know the truth,” he said.  “But we support you more than any of them.”

—Robert F. Kennedy Jr. has been head of the Department of Health and Human Services for one year and new findings from the health care research nonprofit KFF show that 47% of Americans trust the U.S. Centers for Disease Control and Prevention “a great deal” or “a fair amount” to provide reliable vaccine information, down about 10 percentage points since the beginning of Trump’s second term.

Gallup surveys also show a drop in Americans who believe the CDC is doing a “good job,” from 40% in 2024 to 31% last year.

Two decades ago, more than 60% of Americans gave the CDC high marks, according to Gallup, but the number plummeted at the beginning of the Covid-19 pandemic, amid agency mistakes and guidance that some people didn’t like.

In 2020, the percentage of Americans who believed the CDC was doing at least a “good” job fell to 40% and then leveled off for a few years.

—Former President Obama for the first time commented on the racist video posted on President Trump’s social media, telling a podcast host that the “shame” and “decorum” that once guided public officials is now lost.

Liberal podcaster Brian Tyler Cohen asked Obama about the post and Obama responded by saying: “It’s important to recognize that the majority of the American people find this behavior deeply troubling.

“It is true that it gets attention.  It’s true that it’s a distraction.”

But Obama said that while travelling around the U.S., he found himself meeting people who “still believe in decency, courtesy, kindness.”

“There’s this sort of clown show that’s happening in social media and on television,” he continued.

“And what is true is that there doesn’t seem to be any shame about this among people who used to feel like you had to have some sort of decorum and a sense of propriety and respect for the office, right?

“That’s been lost.”

Obama didn’t mention Trump by name.

—Police in Britain on Thursday arrested Andrew Montbatten-Windsor, formerly known as Prince Andrew, over suspicions of misconduct in public office after accusations that he shared confidential information with Jeffrey Epstein while serving as a British trade envoy, according to the BBC.

While Mountbatten-Windsor’s links to Epstein have been known for years, and resulted in his being stripped of his royal titles last year, his arrest marks a new chapter in his public fall from grace and a true crisis for the royal family.

Previously, the late Virginia Giuffre, one of Epstein’s victims, said that the financier had trafficked her to the former Prince Andrew around 2001, when she was a teenager, and that he had sex with her multiple times.

Mountbatten-Windsor has repeatedly denied Giuffre’s accusations and has denied any wrongdoing in relation to his friendship with Epstein.

Yet in 2022, the former Prince Andrew paid Giuffre an undisclosed sum to settle a lawsuit in a New York court in which she said he had raped and sexually abused her when she was 17.  He didn’t admit to any of her accusations against him in the statement announcing the settlement.

The last senior royal arrested was King Charles I, in 1647. He was executed two years later.  Mountbatten-Windsor won’t be beheaded, but he could face up to life in prison.

Meanwhile, in the House of Windsor, it’s about getting through the next few months with minimal further damage to the brand.

–We note the passing of the Rev. Jesse Jackson, who died on Tuesday at the age of 84.

Jackson picked up the mantle of the Rev. Dr. Martin Luther King Jr. after his assassination in 1968 and ran strong races for president on the Democratic side in 1984 and 1988, but fell short in gaining the nomination.  His Democratic convention speeches were must-watch TV, regardless of your party of choice.

As Peter Applebome wrote in the New York Times:

“With his gospel of seeking common ground, his pleas to ‘keep hope alive’ and his demands for respect for those seldom accorded it, Mr. Jackson, particularly in his galvanizing speeches at the Democratic conventions in 1984 and 1988, enunciated a progressive vision that defined the soul of the Democratic Party, if not necessarily its policies, in the last decades of the 20th century.

“It was a vision, animated by the civil rights era, in which an inclusive coalition of people of color and others who had been at the periphery of American life would now move to the forefront and transform it.

“ ‘My constituency is the desperate, the damned, the disinherited, the disrespected and the despised,’ Mr. Jackson said in the rolling cadences of the pulpit at the 1984 Democratic National Convention in San Francisco. ‘They are restless and seek relief.”

“His transcendent rhetoric was inseparable from an imperfect human being whose ego, instinct for self-promotion and personal failings were a source of unending irritation to many friends and admirers and targets for derision by many critics.  Mr. Jackson, the writer and social commentator Stanley Crouch once said, ‘will be forever doomed by his determination to mythologize his life.’”

Editorial / Wall Street Journal

“We’ve often wondered how Jackson might have fared had his political message been more centrist and unifying, like that of candidate Barack Obama in 2004 and 2008 (as opposed to how Mr. Obama governed as President).

“Perhaps Jackson’s greatest legacy is that he proved the success of the civil-rights movement in opening political doors that were shut for too long to black Americans. His own life – rising from the segregated South of Jim Crow to the boardrooms of business and backrooms of politics – showed how far America had finally come in fulfilling the Declaration of Independence’s promise that all men are created equal.

“Many blacks were inspired by his campaigns less because of his ideology than because of his symbolic demonstration that a black candidate could aspire to be President, and come close to winning a party nomination. In that sense he really did pave the way for Mr. Obama, who was able to make it to the White House.”

—Editorial / New York Post

“Though rarely honored these days exactly on Feb. 22, his actual birth date, ‘Presidents Day’ is officially still Washington’s birthday. And that’s entirely right and proper, as our first chief executive deserves every American’s gratitude.

“Amid today’s bitter political discord, all should consider Washington’s example.

“Yes, he – and the entire generation of the Founders – achieved greatness none of their successors could hope to match.

“That’s due partly to the historical ferment he lived through, but also to (riffing off a fellow whose birthday we celebrated last month) the content of his character.

“Richard Brookhiser rescued this view of Washington in his landmark book, ‘Founding Father.’

“Hidden behind myth, written off by revisionists as just another dead, white, male salve-owner, Washington was in fact a man for the ages.

“Born a Virginia aristocrat, he carefully cultivated his virtues – self-control, moderation, civility; his strengths physical and moral – to become the most widely admired presence first in the 13 colonies, then in the whole nation.

“He created two American institutions.

“First was the army, which he commanded from 1775 to 1783, shaping a collection of untrained and undisciplined ragtag soldiers into a fighting force that defeated the world’s superpower, Great Britain.

“As president, he also set the future course of the U.S. government itself, carefully setting precedents that had to last – amid the discord of his day over the precise form our government should take.

“Yet his importance goes far beyond his resume.

“It was Washington who emphasized that America was a republic when he rebuked those who wanted a monarchy or an exalted president.

“He drove that point home by stepping down after two terms to sit ‘under his own vine and under his fig tree’ – his most-cited bit of scripture, from Micah 4:4.

‘ ‘Washington’s last service to his country was to stop serving,’ writes Brookhiser.

“He was also the only slaveholding founder to free his slaves.

“As Brookhiser wrote in these pages in 2012, ‘The principles of the American Revolution appear in the opening of the Declaration of Independence, but our enemies were not impressed. Samuel Johnson, the English writer and Tory, scoffed: ‘Why is it that the loudest yelps for liberty are heard from drivers of Negroes?’’

“ ‘At the end of his life,’ writes Brookhiser, ‘Washington decided to do something about it.

“ ‘In 1799 he drew up a will directing that this slaves – more than one hundred – be freed at his wife Martha’s death. Those who were too old to work would be supported by his estate; those who were too young would be educated and freed at age 25.  He singled out one man by name, William Lee, his former body servant, ‘for his faithful services during the Revolutionary War.’’

“That is: ‘Washington at the end of his life acknowledge his and Lee’s shared experience as veterans. Rightly so: They had both fought to uphold the principle that all men are created equal.’

“For all these reasons and more, there was no dissent when Henry Lee famously described Washington in death as ‘first in war, first in peace and first in the hearts of his countrymen.’

“Unlike other notable presidents – Lincoln, Jefferson, FDR, JFK, Reagan – Washington left no memorable lines which we continue to quote today. But, as Brookhiser tells us, ‘His life still has the power to inspire anyone who studies it.’  Give it a try.”

—President Trump on Truth Social, Monday PM:

“Happy President’s Day!  Prices and Inflation are Way Down. The Stock Market, and your 401k’s, are Way Up.  Our Military is Strong and Powerful, Our Law Enforcement is GREAT, and Our Border is 100% Secure.  Murders (YEAR 1900!) and Crime are at RECORD LOWS, and Our Country is Bigger, Better, and Stronger than EVER BEFORE!!! Working Hard – ENJOY YOUR DAY! President DJT”

—President Trump wrote on Truth Social Thursday night:

“Based on the tremendous interest shown, I will be directing the Secretary of War, and other relevant Departments and Agencies, to begin the process of identifying and releasing Government files related to alien and extraterrestrial life, unidentified aerial phenomena (UAP), and unidentified flying objects (UFOs), and any and all other information connected to these highly complex, but extremely interesting and important, matters.  GOD BLESS AMERICA!”

—With a series of strong storms pounding California, many parts of the Sierra Nevada range saw 5+ feet of snow, with more coming. Six backcountry skiers survived an avalanche in the Castle Peak area, northwest of Lake Tahoe, but nine others from their tour group were missing.

The sheriff’s office said Tuesday night that there were 15 skiers on the trip, including four guides.

The awful weather had been forecast for days, and why the tour company went through with the three-day expedition has many questioning the decision.

Wednesday, rescuers found eight bodies with the ninth presumed dead, the worst death toll from an avalanche in modern California history.

The flip side of the snow has been Oklahoma, where wildfires have been sweeping the plains, including the Gate, OK, area where I have some dear farmer friends from way back that I have visited on occasion and I pray they are OK.

—

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

Slava Ukraini.

God bless America.

—

Gold $5105…Silver $84.10…up $7 on the week…
Oil $66.50…highest weekly close since Aug. 1st.

Bitcoin $67,740 [4:00 PM ET, Friday]

Regular Gas: $2.93; Diesel: $3.69 [$3.16 – $3.69 yr. ago]

Returns for the week 2/16-2/20

Dow Jones  +0.3%  [49625]
S&P 500  +1.1%  [6909]
S&P MidCap  +1.2%
Russell 2000  +0.6%
Nasdaq  +1.5%  [22886]

Returns for the period 1/1/26-2/20/26

Dow Jones  +3.3%
S&P 500  +0.9%
S&P MidCap  +9.1%
Russell 2000  +7.3%
Nasdaq  -1.5%

Bulls 54.7
Bears 15.1

Hang in there.

Brian Trumbore