For the week 2/23-2/27

[Posted 4:30 PM ET, Friday]

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Edition 1,401

President Trump this afternoon, before boarding Air Force One for a flight to Texas and a speech on the economy, said he’s “not happy” about talks with Iran (which I discuss in detail below) while saying that “there’s always a risk” that U.S. airstrikes could result in another drawn-out war in the Middle East.

“I’m not happy with the fact that they’re not willing to give us what we have to have. I’m not thrilled with that. We’ll see what happens,” Trump said.

The president added “we haven’t made a final decision” on whether to follow through with threatened strikes amid his massive military buildup in the region.

“We’re not exactly happy with the way they’re negotiating. They cannot have nuclear weapons,” he said.

Because of all the uncertainty over Iran, the price of West Texas Intermediate (WTI) hit $67 today and I can’t help but point out that the price of regular gasoline, currently $2.98 for a nationwide average as reported by AAA, will likely hit $3.00 a gallon next week.  That’s just a little below the price a year ago.

But there’s a reason why yours truly is the only one who lists the price of diesel as well each week down below.  Not to beat a dead horse, but the price of diesel has everything to do with the cost of the goods you pick up at your grocery and drug stores.  And it’s been going up, sports fans, and is now higher than last year.

Back in Aug. of 2021, WTI was in the $60s.  Then on Feb. 24, 2022, Russia launched its full-scale invasion of Ukraine and oil soared, ditto diesel.

Oil had been rising ahead of that Feb., into the $80s amid fears Vladimir Putin was going to pull the trigger, and then it surged when he did.  The week after the invasion, WTI went from $91.95 on Feb. 25 to $115.00 on March 4, 2022.  It would peak the first two weeks in June 2022, at the $120 level on a weekly closing basis. And it’s in that time frame that AAA’s nationwide price for regular gas hit its all-time high of $5.01 (June 14, 2022), and diesel $5.81 (June 19, 2022).

When I set up my legal pad each week for this column, I write these two figures down each time.

It’s important because it was June 2022 that the consumer price index, CPI, hit a record 9.1% so often referred to by Republicans.  The soaring inflation of the Biden administration had a lot to do with some of his policies, but it was also pandemic (supply chain)- and Russia-related.  These are just facts.  It’s what this column has been about since day one.  [The CPI, by the way, which was 2.4% on headline for this January, was also 2.4% in June 2024.]

I’ve always covered the big topics in great detail, boring the hell out of many of you, but it’s been about creating a definitive record and history of our times.

Such as this….

—

Tariff Chaos

President Trump, in the following announcement on Truth Social Saturday AM, said he is imposing a new 15% global tariff on all imports entering the U.S., effective immediately, replacing the 10% global tariff he announced Friday after the Supreme Court ruled that much of his existing tariff regime was illegal.

President Trump:

“Based on a thorough, detailed, and complete review of the ridiculous, poorly written, and extraordinarily anti-American decision on Tariffs issued yesterday, after MANY months of contemplation, by the United States Supreme Court, please let this statement serve to represent that I, as President of the United States of America, will be, effective immediately, raising the 10% Worldwide Tariff on Countries, many of which have been ‘ripping’ the U.S. off for decades, without retribution (until I came along!), to the fully allowed, and legally tested, 15% level. During the next short number of months, the Trump Administration will determine and issue the new and legally permissible Tariffs, which will continue our extraordinarily successful process of Making America Great Again – GREATER THAN EVER BEFORE!!!  Thank you for your attention to this matter. President DONALD J. TRUMP”

To impose the new tariff, Trump is turning to a legal tool called Section 122 of the Trade Act of 1974, which has never been used before for tariffs, but allows a president to impose tariffs of up to 15% for as long as 150 days to address problems caused by persistent trade deficits.

For now, the law buys Trump and his trade team time to work on more individualized tariffs using other legal means.

The new tariff applies broadly, much like the 10% global tariffs he put in place in April with the International Emergency Economic Powers Act, which the Supreme Court struck down.

The European Commission requested “full clarity” from the United States and asked its trade partner to fulfill its commitments after the Supreme Court struck down some of Trump’s most sweeping tariffs…and then Trump’s move on Saturday to impose the global tariff of 15%. The European Union’s executive arm said the current situation is not conducive to delivering “fair, balanced, and mutually beneficial” trans-Atlantic trade and investment, as agreed to by both sides and spelled out in the EU-U.S. Joint Statement of August 2025.

American and EU officials sealed a trade deal last year that imposes a 15% import tax on 70% of European goods exported to the U.S.  The European Commission handles trade for the 27 EU member countries.  “A deal is a deal,” the European Commission said.  “As the United States’ largest trading partner, the EU expects the U.S. to honor its commitments set out in the Joint Statement – just as the EU stands by its commitments.”

European Central Bank President Christine Lagarde said Trump’s latest tariff moves risk upsetting the previously negotiated “equilibrium” between the EU and the U.S. and could pose a new headwind to the economy.

It’s “critically important” to have clarity about the future of the trade relationship, Lagarde told CBS’ “Face the Nation.”

“You want to know the rules of the road before you get in the car,” Lagarde said.  “It’s the same with trade.”

The European Parliament’s trade chief on Sunday said he’ll propose freezing ratification of the EU’s trade deal with the U.S. in light of the “chaos” on the other side of the Atlantic.

Jamieson Greer, Trump’s top trade negotiator, said in a CBS News interview Sunday that the U.S. plans to stand by its trade deals and expects its partners to do the same.

Those deals – which the administration made with partners including China, the EU, Japan and South Korea – remain in place, Greer said on “Face the Nation.” He sought to separate those arrangements from the planned 15% global tariff announced by Trump.

“We want them to understand these deals are going to be good deals,” Greer said.  “We’re going to stand by them. We expect our partners to stand by them.”

But the UK is at risk of becoming the biggest loser in the aftermath of the Supreme Court’s decision.

Britain had enjoyed a relatively lower reciprocal tariff rate at 10% compared with other countries – giving it a competitive advantage – but Trump’s promise to reimpose the levies at 15% for all nations means businesses may now face even higher duties.  The UK will see the largest increase as a result, followed by Italy and Singapore, according to Global Trade Alert, while Brazil, China and India stand to benefit the most.

UK officials are now anxiously trying to persuade the U.S. administration to exempt it from the higher rate. The British Chambers of Commerce estimates that it will raise the cost on UK exports to the U.S. by as much as $4 billion and will impact 40,000 British companies.

As President Trump prepares for his summit with Chinese President Xi Jinping in Beijing, first week in April, however, Xi is suddenly in the driver’s seat.  The new 15% tariff rate is a lot better than the up to 145% rate at the peak, before the U.S. and China reached various truce agreements.

The White House said the new charge wouldn’t stack on top of tariffs imposed under Section 232, according to its statement last Friday.  That means sectors such as cars and steel that are already subject to 25% to 50% won’t be hit with another 15%.

The White House didn’t address whether the new tariff applies on top of existing Section 301 tariffs.  The “reciprocal” tariffs on China that the court struck down did stack on top of Section 301 tariffs imposed on some Chinese goods.

For its part, India said it was postponing talks in the U.S. this week that were to be for the purpose of finalizing an interim trade deal after the Supreme Court’s ruling, saying it wanted more clarity.

Treasury Secretary Scott Bessent also said Sunday the U.S. was in contact with its foreign trading partners “and they like the tariff deals.”

“So, you know, they’re not going to be changed,” Bessent said on Fox News.

Representative Don Bacon, a Republican tariff skeptic who has praised the Supreme Court ruling, said in a social media post that Trump’s new 15% tariff order “will not endure.”

“It is not Constitutional,” Bacon said on X.  “It’s not only terrible policy, but it is also bad politics.”

Greer signaled that US. Trade partners shouldn’t count on tariff relief based on the Supreme Court ruling.

Trump then posted on Truth Social Monday AM, after the market had been open about 20 minutes….

“As President, I do not have to go back to Congress to get approval of Tariffs.  It has already been gotten, in many forms, a long time ago!  They were also just reaffirmed by the ridiculous and poorly crafted supreme court decision!  President DJT” [The president opting to use ‘lower case’ for the Supreme Court…he’s so clever….]

After all this, the stock market tanked on Monday.

Some of the new tariffs Trump wants to impose do require congressional approval to extend beyond five months.  Others require months of investigations before they can be put into place.  In both cases, that pushes key tariff decisions into the summer, just months before the midterm elections, with many Republicans in the House in particular likely to be especially sensitive to complaints about inflation and affordability.

Well, Tuesday, U.S. Customs and Border Protection announced that the U.S. is imposing a new tariff from Tuesday of 10% on all goods not covered by exemptions, the rate first announced by President Trump last Friday rather than the 15% he promised a day later.

The Financial Times quoted a White House official as saying the increase up to 15% would come later.

Editorial / Wall Street Journal

“A 6-3 Supreme Court majority on Friday struck down President Trump’s sweeping emergency tariffs (Learning Resources v. Trump) in a monumental vindication of the Constitution’s separation of powers.  You might call it the real tariff Liberation Day.

“It’s hard to overstate the importance of the Court’s decision for the law and the economy.  Had Mr. Trump prevailed, future Presidents could have used emergency powers to bypass Congress and impose border taxes with little constraint.

“As Chief Justice John Roberts explains in the majority opinion, ‘Recognizing the taxing power’s unique importance, and having just fought a revolution motivated in large part by ‘taxation without representation,’ the Framers gave Congress ‘alone…access to the pockets of the people.’’….

“Mr. Trump lashed out Friday at the Justices who ruled against him.  But he vindicated their reasoning by invoking another trade law, Section 122, to impose a 10% tariff across the board. That law expressly grants the President authority to impose a border tax of up to 15% to remedy a balance-of-payments deficit for 150 days, after which he must get Congress’ approval.  This tariff is also bad policy but it’s legal.  [Ed. The Journal wrote this before Trump’s Saturday announcement increasing the broad tariff to 15%.]

“The tariff law ruling also gives the lie to the Democratic charge that the current Court is a rubber stamp for Mr. Trump.  The Court has now shown it is willing to block abuses of executive power by Presidents of both parties. This is exactly what the Constitution calls on the Justices to do.”

Separately, the Journal also opined on Trump’s behavior:

“President Trump owes the Supreme Court an apology – to the individual Justices he smeared on Friday and the institution itself.  Mr. Trump doubtless won’t offer one, but his rant in response to his tariff defeat at the Court was arguably the worst moment of his Presidency.

“Granted Mr. Trump is angry that the Court voted 6-3 to overturn his signature ‘emergency’ tariff policy.  Other Presidents have criticized the Court when they didn’t like a ruling. But Mr. Trump lit into the Justices who voted against him as traitors bought by foreign interests….

“He called the liberals a ‘disgrace to our nation.’  But he heaped particular vitriol on the three conservatives.  They ‘think they’re being ‘politically correct,’ which has happened before, far too often, with certain members of this Court,’ Mr. Trump said.  ‘When, in fact, they’re just being fools and lapdogs for the RINOs and the radical left Democrats – and…they’re very unpatriotic and disloyal to our Constitution.  It’s my opinion that the Court has been swayed by foreign interests.’

“This is ugly even by Mr. Trump’s standards.  He’s accusing them of betraying the U.S. at the behest of nefarious interests he didn’t identify, no doubt because they don’t exist.  Asked about Justices Gorsuch and Barrett, whom he appointed, Mr. Trump called them ‘an embarrassment to their families.’

“This is rhetoric that could cause some deranged Trump acolyte to turn to violence against a Justice. It’s as bad as Sen. Chuck Schumer’s threat in 2020 that Justices Gorsuch and Brett Kavanaugh had ‘released the whirlwind and you will pay the price!’  Recall the nut who stalked Justice Kavanaugh’s home in 2022, after the leak of the Court’s draft opinion overturning Roe v. Wade.  We hope all nine Justices appear next week at the State of the Union address as a show of self-protective solidarity.

“This is the same Court that ruled Mr. Trump’s way on presidential immunity, which was more personally consequential for this President.  Mr. Trump shouldn’t have been surprised by the Court.  We warned from the start that this would be the result of his unlawful resort to IEEPA.  The fault doesn’t lie with the Justices but with his own tariff obsessions.”

—

President Trump, in a record one hour, 48-minute State of the Union address, beating his own record of last year, declared the country is booming, his opponents are “crazy” and his administration is engaged in unprecedented levels of “winning,” even as polls show deep skepticism of his leadership heading into the critical midterm election.

As you’d expect, the speech was highly partisan, a defense of his policies as he grapples with a major setback on tariffs from the Supreme Court, strong opposition to his immigration enforcement tactics, and other challenges at home and abroad.

“We have achieved a transformation like no one has ever seen before, and a turnaround for the ages,” Trump said, while lashing out at Democrats he accused of “destroying our country.”

Trump pulled out all his showman tricks, bringing out the gold medal-winning men’s U.S. hockey team, while awarding two congressional medals of honor and a number of purple hearts.

The president has a low approval rating on his handling of the economy, but he declared, “The economy is roaring like never before.”

Actually, it grew 2.2% in 2025, vs. 2.8% in 2024.

Trump claimed victory in bringing down the cost of living, pointing to gas and grocery prices, mortgage rates, and rent.

Trump blamed Democrats for high costs, saying, “You caused that problem.”

“Their policies created the high prices.  Our policies are rapidly ending them,” Trump added.  “We are doing really well.  Those prices are plummeting.”

The president said tariffs were “saving the country” through the “kind of money we’re taking in” and implausibly said tariff revenue could one day replace the nation’s income tax, “taking a great financial burden off the people that I love.”  But Trump’s new tariff approach is premised on a legal authority never before used by a president for tariffs and is likely to be challenged in court.

But, following Friday’s Supreme Court ruling, Tuesday evening, during his speech, the president referred to the tariffs’ decision as an “unfortunate ruling,” and avoided attacking the justices by name.

The president repeatedly called Democrats “sick people,” criticized them for not standing to show support for his immigration policies, and told them, “You should be ashamed of yourself.”

He also accused them of voter fraud.

“They want to cheat.  They have cheated, and their policy is so bad that the only way they can get elected is to cheat, and we’re going to stop it,” Trump said.

Virginia Gov. Abigail Spanberger tore into Trump on issues ranging from affordability to immigration in the Democratic response to the address.

“Small businesses have suffered.  Farmers have suffered – some losing entire markets.  Everyday Americans are paying the price,” she said of Trump’s tariff efforts.  “And even though the Supreme Court struck these tariffs down four days ago, the damage to us, the American people, has already been done.”

Editorial / Wall Street Journal

“(Mr. Trump) seems to have given up on getting anything done in this Congress. He pressed ideas that have little chance of passing, such as the SAVE America Act, which would require proof of citizenship, often a birth certificate or passport, when registering to vote.  He also asked Congress to fiddle with a retirement subsidy program passed by Democrats for Americans without a 401(k) or pension.

“But immigration reform?  Nothing but more enforcement and nothing to expand legal pathways to ease the labor shortage.  Permitting reform needed for energy and public works?  We didn’t hear it.  Mr. Trump also made no case for increasing defense spending and appears to have dropped his target of $1.5 trillion a year for the military. He’s fooling the public by saying the U.S. deterrent force is stronger than it really is.

“Many of his ideas would be more likely to pass in a Democratic Congress.  Those include drug price controls, banning corporations from buying homes, and punishing health insurance companies. But Democrats won’t vote for these proposals this year because they don’t want to give Mr. Trump anything he can call a victory.  Congress might pass more limits on stock trading by Members, but that will do nothing for Americans other than indulge populist resentment.

“The larger goal of the speech was to remind voters why they shouldn’t risk returning Democrats to power. The polls show independents and even many Republicans have turned sour on the President, as voter memories of the Biden era fade. He’s right to remind Americans that Democrats wanted a huge tax increase that Republicans prevented. He’s also right that all signs suggest Democrats in Congress will return to their habits of income redistribution and progressive cultural diktats.

“Mr. Trump is betting that this contrast, and the legislative victories of 2025, will be enough to save the House and Senate (which is increasingly in jeopardy). In light of his scarce agenda, this is the only real bet he has.”

—

Wall Street and the Economy

Monday, Federal Reserve Gov. Christopher Waller said solid job gains in January could mean the central bank can skip a rate cut at its next meeting in March, a decision that would likely spur further attacks by President Trump.

At the same time, Waller said last month’s pickup in hiring, when employers added a more-than-expected 130,000 jobs, could have been a one-time gain. He said he would need to see a similarly positive report next month to conclude the job market, which he noted was very weak in 2025, is improving.

Waller’s hedging is a notable shift from January, when he was one of the two Fed governors to dissent against the central bank’s decision to hold its key rate steady after three rate cuts at the end of last year.

Waller also said that the Supreme Court’s decision to strike down many of Trump’s tariffs would likely have only a limited impact on the economy and inflation and therefore wouldn’t affect his view on rates.

The ruling could have “a positive impact on spending and investment,” he said, but “how large the impact may be and how long it could last is unclear.”

Waller also noted that the White House is seeking to reimpose the tariffs using other laws, creating “considerable uncertainty over to what extent tariffs will continue.”

If February’s jobs report is similar to last month’s, “indicating that downside risks to the labor market have diminished, it may be appropriate” to keep the Fed’s funds rate “at current levels and watch for continued progress on inflation and strength in the labor market,” Waller said in remarks to a conference held by the National Association for Business Economists.

“But if the good labor market news of January is revised away or evaporates in February,” he continued, “a cut should be made at the March meeting.”

“As things stand today, I rate these two possible outcomes as close to a coin flip,” Waller added.

The Fed governor also addressed a conundrum many economists have identified about the current economy: Growth is relatively solid, yet employers added few, if any, jobs last year. Waller said he thinks even the meager gains reported earlier this month for last year will be eventually revised to below zero.

“This would be the first time in my career, my life, that I saw an economy growing like this, and zero job growth,” Waller said.  “I don’t even know quite how to think about this.”  He added that hiring could pick up this year and largely resolve the contradiction.

On the economic data front…we had a release today on January producer prices and it was not good; the PPI up 0.5%, 2.9% year-over-year, while on core, ex-food and energy, the figures were 0.8% and 3.6%…all four numbers far above consensus.  Not exactly conducive to the Fed lowering rates, certainly not at the Mar 17-18 meeting.

In other data, the Chicago manufacturing PMI for February came in at a hot, better-than-expected, 57.7 (50 the dividing line between growth and contraction).

The S&P Case-Shiller 20-City Home Price Index rose 1.4% year-over-year in December, matching November’s pace and market expectations.  However, annual price growth remains close to its weakest level in more than two years, highlighting continued cooling in the U.S. housing market.  Home price gains also trailed consumer inflation, which stood at 2.7% in December.

Chicago led major markets for a third straight month with a 5.3% annual gain, followed by New York at 5.1%.  Tampa posted the steepest decline, down 2.9% and marking its 14th consecutive month of falling annual prices.  Phoenix, Dallas and Miami were all down 1.5%.

But speaking of housing, Freddie Mac’s 30-year fixed-rate mortgage hit 5.98% this week (released every Thursday), the first time below 6.00% since Sept. 2022.

The Atlanta Fed’s GDPNow barometer for first-quarter growth is at 3.0%.

Next week it’s all about February’s jobs report.

Europe and Asia

We had a final look at January inflation in the eurozone, up 1.7%, down from 2.0% in December.  A year earlier the rate was 2.5%.  The core rate, ex-food and energy, was only 2.1%, down from 2.3% in December and 2.7% a year ago. [Eurostat]

Headline inflation….

Germany 2.1%, France 0.4%, Italy 1.0%, Spain 2.4%, Netherlands 2.2%, Ireland 2.5%.

China…no data…still on Lunar New Year holiday, which extends beyond the formal dates for it.

Prior to next week’s biggest annual political meeting, however, the National People’s Congress, nine military officials were removed from an updated list of deputies from the People’s Liberation Army (PLA) and People’s Armed Police delegation, reducing the total to 243.

Among the deputies removed were five full generals, one lieutenant general and three major generals.  No explanation was given, but further evidence of President Xi’s ongoing purge of the military.

Japan: January retail sales rose a far better than expected 1.8% year-over-year.

But the trade spat between China and Japan escalated further as China added 20 Japanese entities to its export control list and 20 more to a watch list scrutinizing the trade of select goods, increasing the economic pressure on Tokyo in a move that widens the scope of the countries’ prolonged diplomatic row to include some of Japan’s largest companies.

Chinese exporters are banned from shipping dual-use goods – items with military and civilian applications – to the firms and institutions on the export control list, Beijing’s Ministry of Commerce said in a statement announcing the additions on Tuesday.

It’s about Japanese Prime Minister Takaichi’s pronouncements on Taiwan that has upset China to no need.  When he meets with President Xi in Beijing, Donald Trump needs to have the guts to bring up the topic in a way that Xi fully understands.  The United States will retain a large presence in the region and will honor its defense agreements.  It’s that simple.

Street Bytes

—An absolutely crazy week for equities. The Nasdaq was up or down 1%+ each day (oops, -0.9% today at the close).  Friday’s debacle was mostly over concerns in the private-credit market, but also AI and potential large-scale job losses over time, as well as the situation in the Middle East and oil prices, that could put a dent in any rate cut hopes, at least in the interim.

For the week, the Dow Jones fell 1.3% to 48977, the S&P 500 -0.4%, and Nasdaq down 1.0%.

—U.S. Treasury Yields

6-mo. 3.61%  2-yr. 3.38%  10-yr. 3.96%  30-yr. 4.63%

Not only was today’s close below 4.00% on the 10-year the first time since Nov. 2025, on a weekly basis, it is the first close below 4.00% since Oct. 2024!  [You can look it up, but don’t bother…I record it weekly, myself, so you don’t have to.]

All about the above-noted credit concerns, geopolitical issues, and turbulence in the equity markets.  Certainly, the move otherwise isn’t warranted after the lousy inflation data.

—Investors were anxiously waiting for Nvidia’s results after the close on Thursday, and the company didn’t disappoint, but the stock fell, and ended up having a really lousy week.

The chip maker that best represents the AI boom reported net income of $43 billion, up from $22.1 billion in the year-earlier quarter, on sales of $68.1 billion, up 73% from $39.3 billion a year earlier, easily beating consensus estimates, which were at net income of $37.5bn and revenue of $66.1 billion for the quarter.

Data center hardware – the chips and networking equipment that Nvidia sells to AI and cloud-computing companies – accounted for 91.4% of the quarter’s sales, or $62.3 billion, and the segment’s revenue grew slightly faster than the company’s overall sales.

“The simple way to think about it is, computing has changed,” Nvidia CEO Jensen Huang said on Wednesday’s earnings calls with investors.  “In this new world of AI, compute equals revenues… I am certain at this point that we’ve reached the inflection point” where agentic AI is upending how business is done worldwide and selling AI tools is starting to generate real profits.

“Computing demand is growing exponentially,” Huang said.  “The agentic AI inflection point has arrived.”

With each passing quarter, the pressure grows on Nvidia – which at a market value of nearly $5 trillion is the world’s largest publicly traded company – to beat the Street’s expectations.

Nvidia’s gross margins, which have been rising steadily for the past year, hit 75% in the January quarter, up from 73% a year earlier, in line with analysts’ predictions.

The company said it expected $78 billion in revenue in the current quarter, significantly higher than the $72.9 billion predicted by analysts, and gross margins of 75%.  The better-than-expected revenue and rosy guidance nonetheless nudged the stock up about one percent.

In recent months, investors have sent tech stocks on a wild ride as worries about the AI trade have risen, then subsided, then resurfaced….

The biggest buyers of Nvidia’s chips include ChatGPT -maker OpenAI, Oracle, Microsoft, Meta Platforms, Google parent Alphabet and Amazon.com.  In recent months, investors have grown concerned over OpenAI’s fundraising abilities and rising competition from other chip designers, including Google and makers of custom chips.

—Salesforce shares rose a bit after the software company reported better-than-expected fourth-quarter financials, with adjusted earnings of $3.81 on revenue of $11.2 billion.  The Street was at $3.05 a share on revenue of $11.19 billion.

CEO Mark Benioff said in the earnings release that Salesforce now expects to hit $63 billion in revenue in fiscal 2030 due to the rising demand for agentic AI.  That’s above the target of $60 billion the company gave at its investor day in October.

Salesforce said it expects fiscal 2027 revenue to be between $45.8 billion and $46.2 billion. While that’s a 10% to 11% increase from the previous year, it underwhelmed Wall Street, especially with analyst estimates of $46.1 billion.

First-quarter adjusted earnings are forecast to be between $3.11 a share and $3.13, with the Street at $3.01 a share.  Revenue is expected to be between $11.03bn and $11.08bn, slightly above current consensus of $11.01bn.

Software firms need to prove they can stand up to AI competition with their own product offerings.  For Salesforce, that’s its Agentforce platform.

“We’ve rebuilt Salesforce to become the operating system for the Agentic Enterprise, bringing humans and agents together on one trusted platform. And the more intelligence moves to where work happens, the more valuable Salesforce becomes,” Benioff said.

But Salesforce stock is down nearly 40% over the past 12 months.

—Anthropic PBC has been roiling Wall Street for weeks now with the release of new tools attached to its Claude AI model, severely impacting the stocks of cybersecurity companies, among others.

On the cybersecurity side, Anthropic said the new tool “scans codebases for security vulnerabilities and suggests targeted software patches for human review.”

OpenAI and Alphabet Inc. have also been releasing potentially ‘disruptive tools.’  Investors are fretting that the ability to “vibe code” – use AI to write software code – will allow users to create their own applications, diminishing demand for legacy products, weighing on companies’ growth, margins, and pricing power.

Anthropic calls Claude a “thinking partner” with which users can tackle “any big, bold, bewildering challenge.” Users can deploy Claude to chat, generate code, visualize data, search the web, or create content, among other tasks.

“Out of the box, Claude is a capable generalist,” the company said.  “But when you plug in your tools, context, and knowledge, it becomes something more: a specialist who knows your work the way you do.”

Monday, a report by Citrini Research sparked new worries about the economic fallout from AI and stocks struggled.  The report painted a dark portrait of a future in which technological change inspires a race to the bottom in white-collar knowledge work.  Concerns of hyperscalers overspending are out.  Worries of software-industry disruption don’t go far enough.   The “global intelligence crisis” is about to hit.

“For the entirety of modern economic history, human intelligence has been the scarce input,” Citrini wrote in a post it described as a scenario date June 2028, not a prediction.  “We are now experiencing the unwind of that premium.”

Fears of AI disruption have rolled across software, private credit, insurance and wealth-management firms in recent weeks.

Tuesday, Anthropic unveiled a host of new enterprise capabilities for Claude AI, including plugins designed for specific departments within an organization, such as human resources and investment banking.

IBM shares had their worst day in more than 25 years on Monday, after Anthropic said its Claude Code tool can help modernize Cobol, a dated programming language that’s run on IBM computers.

The stock plunged 13% in its biggest single-day percentage loss since October 2000.  With the decline, IBM shares have fallen 27% in February, on track for its biggest one-month slide since at least 1868, according to Bloomberg.

“Modernizing a Cobol system once required armies of consultants spending years mapping workflows,” Anthropic wrote in a blog post. “Tools like Claude Code can automate the exploration and analysis phases that consume most of the effort in Cobol modernization.”

IBM defended the company’s prospects saying its core mainframe computer business offers a platform that provides the same quality of performance and security for various programming languages and not just Cobol.

A significant chunk of IBM’s revenue remains tied to its mainframe business. These massive customer-owned servers run some applications on Cobol, a coding language that’s older than those now common in the rest of the technology industry. Mainframes are still purchased by customers with high reliability needs, such as those in finance or government.

Separately, the Pentagon delivered an ultimatum to Anthropic, the only AI company currently operating on classified military systems, ordering the firm to bend to its demands by Friday.

If the firm fails to agree by 5:01 p.m. on Friday, Defense Secretary Pete Hegseth said the Trump administration would invoke the Defense Production Act, compelling the use of its model by the military and labeling the company a supply chain risk, according to a senior Pentagon official. That step would put Anthropic’s government contracts at risk.

But one step prevents the government from using the company’s products, while the other would force the company to let the government use the products.

Or as Anthropic CEO Dario Amodei put it, the DOD “threats are inherently contradictory: one labels us a security risk; the other labels Claude as essential to national security.”

Anthropic then said it wouldn’t back down, refusing to accept the military’s proposal and reiterating it doesn’t let users deploy its Claude models in scenarios involving mass domestic surveillance or autonomous weapons.

Amodei addressed the company’s red lines in a public statement Thursday. “We cannot in good conscience accede to their request,” he said. The company said the military’s latest proposal would effectively undo the guardrails.

—Jack Dorsey’s Block is cutting 4,000 employees, reducing its workforce by nearly half, in a move the financial technology firm is describing as a bet on artificial intelligence changing the future of labor productivity.

Block has been restructuring its business model and staffing since 2024 as the company’s stock has lagged.  At the same time, the company has invested heavily in AI tools to run more efficiently, including building its own tool called Goose.

Dorsey, co-founder of the fin tech payments company, said in a call with analysts that he believes many companies will ultimately have to make similar moves due to AI.

“I don’t think we’re early to this realization,” he said. “I think most companies are late.  Within the next year, I believe the majority of companies will reach the same conclusion and make similar structural changes.  I’d rather get there honestly and on our own terms than be forced into it reactively.”

[Sounds like the above-noted Citrini Research report, doesn’t it?]

The shares rallied.

Anthropic CEO Amodei has said AI would wipe out half of all white-collar jobs in the next five years, as reported by Bloomberg, while Microsoft head of AI Mustafa Suleyman recently predicted AI can replace most white-collar work in the next 12 to 18 months. [OpenAI’s Sam Altman, on the other hand, expresses optimism that young people will find newer, exciting jobs due to AI.]

But as Bloomberg noted: “In the near term, however, AI’s impact is murkier.  Multiple studies last year found employees were using AI to produce ‘workslop,’ undercutting productivity rather than boosting it.”

—Meta Platforms has agreed to buy 6 gigawatts’ worth of artificial intelligence computing power from Advanced Micro Devices in a deal valued at more than $100 billion that could result in Meta owning as much as 10% of AMD’s stock.

The deal, announced by the companies Tuesday, represents a coup for AMD in its effort to challenge Nvidia in the market for selling graphics processing units, or GPUs – the microchips powering the AI boom.

Under the agreement, Meta will buy enough of AMD’s latest chips, known as the MI450 series, to power data centers using up to 6 gigawatts of computing power over the next five years. Each gigawatt of computing power means several tens of billions of dollars in revenue for AMD, the company said.  Meta is expected to deploy the first gigawatt starting later this year.

As part of the arrangement, AMD has agreed to give Meta warrants to buy up to 160 million AMD shares – or roughly 10% of the company – for $0.01 apiece, as long as certain milestones are met.

The full stock award is conditional on a rise in AMD’s share price.  Meta would only receive the final tranche of shares once AMD’s stock hits $600. It closed at $196.60 Monday.

With a limited number of large buyers of their chips, both Nvidia and AMD have been using their novel financing mechanisms to lock key customers into long-term agreements to use their technology.

—Home Depot’s fiscal fourth-quarter performance was muted, hampered by an extra week in the prior-year period and ongoing caution by American consumers amid a weak housing market. But the home improvement retailer’s adjusted earnings and revenue managed to top Wall Street’s expectations.

HD earned $2.57 billion, with adjusted earnings of $2.72 per share, better than the $2.53 the Street had forecast.

Revenue totaled $38.2 billion, down from $39.7 billion a year earlier.  The extra week in the prior-year period added about $2.5bn of revenue.  Consensus was at $38.09bn.

Sales at stores open at least a year edged up 0.4%.  In the U.S., comparable store sales climbed 0.3%.

CEO Ted Decker said in a statement on Tuesday that Home Depot’s quarterly results “were largely in-line with our expectations, reflecting the lack of storm activity in the third quarter and ongoing consumer uncertainty and pressure in housing. Adjusting for storms, underlying demand was relatively stable throughout the year.”

HD and other retailers have seen customers cut back on their spending amid concerns about inflation and economic uncertainty.

For fiscal 2026, Home Depot anticipates adjusted earnings to be approximately flat to up 4% from fiscal 2025’s $14.69 per share.  The company foresees sales growth of about 2.5% to 4.5% and comparable sales growth to be approximately flat to up 2%.

–Home Depot rival Lowe’s reported higher fourth-quarter sales as continued growth in its business supplying professional builders helped it to offset weakness in the home improvement market.

The company reported net income of $999 million, with adjusted earnings per share of $1.98, the Street at $1.94.

Sales jumped to $20.58 billion from $18.55 billion the year prior, with analysts expecting $20.34 billion.

Comparable sales rose 1.3%, which the company said was “driven by continued growth in Pro, online and home services sales, as well as strong holiday performance.” The Street expected comp sales growth of 0.2%.

But the shares fell about 3%, Wednesday, as the company guided for fiscal 2026 sales of $92 billion to $94 billion, comparable sales growth of flat to 2%, and adjusted EPS of $12.25 to $12.75 a share.

The home improvement market has sagged as a stalled housing market, high interest rates and economic uncertainty have led homeowners to delay remodeling and repair projects.

Lowe’s and Home Depot have both expanded their businesses supplying professional building and repair companies. In October, Lowe’s completed its $8.8 billion acquisition of Foundation Building Materials, marking a significant leap into the professional builder market following large acquisitions by Home Depot.

The two companies are competing for the more consistent spending of professional customers, particularly as consumers delay large remodels and do-it-yourself projects, analysts say.

—The East Coast blizzard Sunday/Monday led to chaos at major airports, with 3,440 cancellations into and out of the U.S. on Sunday, and another 5,700+ on Monday, 4,000+ of which were at Newark/Liberty, LaGuardia, JFK and Boston Logan.  [About 2,200 at the four on Sunday.]

Separately, in the span of mere hours on Sunday, the Department of Homeland Security said it was temporarily pausing two programs that speed up some travelers’ progress through airports, like the PreCheck lanes, the change blamed on the lack of funding for DHS due to the partial government shutdown.

But then hours later, it was ‘never mind.’  Carry on as before.

—TSA checkpoint numbers vs. 2025

2/26…125 percent of 2025 level
2/25…118
2/24…82
2/23…77…full blizzard impact…
2/22…114
2/21…89
2/20…107
2/19…125
2/18…99
2/17…83
2/16…116

—FedEx became one of the many large U.S. corporations to file a lawsuit for a “full refund” of President Trump’s emergency tariffs, following the Supreme Court ruling last Friday.

The decision has paved the way for companies to seek a refund on the additional import duties paid since they were introduced last year.

“Plaintiffs seek for themselves a full refund from Defendants of all IEEPA duties Plaintiffs have paid to the United States,” FedEx said in its lawsuit.

It said in its filing with the U.S. Court of International Trade that it had been responsible for paying the tariffs and was seeking redress for that.

Will the government refund the $134 billion-plus that it collected in illegitimate import taxes?  If so, how and when?  What new tariffs will be announced to supplement the 10 percent global tax in place as of Tuesday?

[According to a Wall Street Journal analysis, at least 1,800 companies have filed lawsuits seeking refunds.  There are many more to come.]

—Warner Bros. Discovery said Tuesday that a revised bid from Paramount, valuing the company at $31, could reasonably be expected to lead to a “superior proposal” to the deal it has signed with Netflix.

The announcement, which signals further talks, is the latest twist in a monthslong battle between the two media companies to buy a piece or all of Warner Bros. Discovery.

After a clamor from shareholders, Warner Bros. Discovery reopened talks with Paramount last week, saying it wanted to clarify details about the most recent bid.  It gave Paramount until Monday to deliver its best and final proposal.

Warner Bros. Discovery then decided that Paramount’s latest proposal is a “Company Superior Proposal,” and gave Netflix four days to put forward a counterproposal, as agreed to in their deal.

Late Thursday, Netflix then declined to match Paramount Skydance’s $31 a share offer.  Netflix shares jumped 10% after its decision.

David Ellison, Chairman and CEO of Paramount, said in a statement: “We are pleased WBD’s Board has unanimously affirmed the superior value of our offer, which delivers to WBD shareholders superior value, certainty and speed to closing.”

Netflix CEO Ted Sarandos visited the White House on Thursday, according to multiple reports.  David Ellison was curiously a guest of Sen. Lindsey Graham (R-S.C.) at the State of the Union address.

After declining to counteroffer, Sarandos and his Netflix co-CEO Greg Peters called Warner Bros. a “world-class organization,” thinking management for running a fair and rigorous process, adding, “But this transaction was always a ‘nice to have’ at the right price, not a ‘must have’ at any price,” they said.

Netflix said its merger agreement remains in effect, and the Board continues to recommend in favor of the Netflix transaction and has not withdrawn or modified its recommendation.

—JPMorgan Chase told President Trump and his hospitality business in February 2021 it was closing their accounts at the bank, according to new documents released last Friday as part of a $5 billion lawsuit Trump has filed against the bank and CEO Jamie Dimon.

Several businesses cut ties with Trump after the Jan. 6, 2021, attack on the U.S. Capitol by his supporters, including two law firms that represented him and the Trump organization, and the PGA of America, which stripped Trump’s club in Bedminster, New Jersey, of the 2022 PGA Championship.

The bank did not list any specific reason for the account closures in its Feb. 19, 2021 letters to Trump and the Trump organization.  In one letter, the bank said it can sometimes “determine that a client’s interests are no longer served by maintaining a relationship with J.P. Morgan Private Bank.”

A spokesperson for Trump’s legal team said the disclosure of the letters are “a devastating concession that proves President Trump’s entire claim.”

Separately, Jamie Dimon, asked about fierce competition across the financial industry, said he’s starting to see parallels to the era before the 2008 financial crisis, when a rush to make loans ended disastrously.

“Unfortunately, we did see this in ’05, ’06 and ’07, almost the same thing – the rising tide was lifting all boats, everyone was making a lot of money,” Dimon told investors on Monday. While JPMorgan isn’t willing to make riskier loans to boost net interest income, he said, “I see a couple people doing some dumb things.  They’re just doing dumb things to create NII.”

Dimon, who led the largest U.S. bank through the 2008 financial crisis and scooped up two major competitors that collapsed, said he expects the credit cycle will eventually sour again – though he is not sure when.  The CEO has been warning for months about the potential deterioration in credit quality. When auto lender Tricolor Holdings and car-parts supplier First Brands Group imploded last year, he said that seeing one “cockroach” meant more would likely crop up.

In recent weeks, various industries have confronted the AI “scare trade,” as investors weigh how the new technology could disrupt markets.

“There’s always a surprise in a credit cycle,” Dimon said, adding that the surprise has often been which industry.  “This time around it might be software because of AI.”

–Speaking of software, Workday shares fell 9% (but rebounded much of the rest of the week) after the company reported solid fourth-quarter earnings results that were overshadowed by poor guidance and a disappointing year-end backlog of subscriptions, a combination that is likely to do nothing to dispel the negative sentiment around business software.

Management’s forecasts for the first quarter of fiscal 2027 and the full year weren’t as good as the past quarter which beat projections.  Guidance on subscription sales for both periods came in shy of analysts’ expectations and the outlook for adjusted operating income fell flat, while the year-end subscription backlog was a billion dollars below what analysts thought it would be.

—Dell Technologies’ financial results blew past expectations Thursday, thanks to strong AI demand.

The tech hardware maker posted adjusted earnings of $3.89 a share on revenue of $33.38 billion for the fourth quarter.  Analysts were at $3.53 a share from revenue of $31.67 billion.

Dell makes servers and networking equipment that companies use to help power their AI. Strong demand for that hardware has been a boon for the company.  Revenue for AI-optimized servers was $8.95 billion in the quarter, a 342% increase from the prior year.

“The AI opportunity is transforming our company,” Chief Operating Officer Jeff Clarke said in the earnings release.

Dell also said it expects first-quarter adjusted earnings to fall in a range with a midpoint of $2.90 a share, with revenue between $34.7 billion and $35.7 billion, which handily beats the Street’s estimates.

For the year, Dell said it expects earnings of $12.90 a share at the midpoint of its forecasted range on revenue between $138 billion and $142 billion.

The shares surged 15% at the open and finished up over 20%.

—From the Wall Street Journal: “Weeks after President Trump granted a pardon to convicted Binance founder Changpeng Zhao in October, executives at the crypto exchange dismantled a staff investigation into $1 billion that had recently moved through Binance to a network funding Iran-backed terror groups, according to company documents and people familiar with Binance’s operations.

“A trading account belonging to a close Binance business partner was identified as a primary channel that moved cryptocurrency to the Iranian network.

“Binance subsequently fired the investigators who had uncovered the transfer – and the network remained active….

“The episode echoed some of the same concerns that drew U.S. scrutiny in 2023, when prosecutors secured a plea deal with the world’s largest crypto exchange and a prison sentence for Zhao. Binance admitted to breaking sanctions and anti-money-laundering laws – violations that turned it into a money-laundering hub for criminals, terrorists and Iranian-sanction evaders.”

–Shares in Novo Nordisk fell anew after it slashed U.S. list prices for its popular weight-loss and diabetes drugs Wegovy and Ozempic by up to half starting next year.

Under the changes, both Ozempic and Wegovy will list for $675 a month, effective Jan. 1, 2027.  That is half of the current price tag for anti-obesity therapy Wegovy and a 34% cut for diabetes treatment Ozempic.  The price cuts will also apply to pill versions of both injections, including one sold as Rybelsus.

The reductions escalate a price war with archrival Eli Lilly in one of the fastest-growing, most hotly contested categories in pharmaceuticals.

Millions of patients are taking the so-called GLP-1 drugs, but price tags have deterred other potential customers either because their health plans aren’t covering the medicines or the out-of-pocket costs set by their plans are too high.

The January 2027 effective date of Novo Nordisk’s list-price cuts will coincide with the implementation of new, lower prices for the same drugs in the federal Medicare health-insurance program for the elderly.

The Medicare prices for Ozempic and Wegovy starting in January 2027 will be $274 for a 30-day supply.  The Medicare prices resulted from negotiations last year between the Medicare agency and Novo Nordisk.

—Domino’s Pizza beat Wall Street estimates for fourth-quarter U.S. same-store sales on Monday, as value-driven promotions and new menu items fueled demand, sending the pizza chain’s shares up.

The pizza chain joined McDonald’s, and Taco Bell-parent Yum Brands, which have also launched value meals to attract budget-conscious customers grappling with rising prices on daily essentials, including groceries and other food items.

Domino’s is offering more promotions to attract customers, including the relaunch of its “Best Deal Ever” at 9.99, as well as introducing fresh flavors and new menu items, such as Parmesan-stuffed crust pizza.

Quarterly U.S. same-store sales rose 3.7%, topping analysts’ estimates.  The company said it now expects U.S. same-store sales to grow by 3% in fiscal 2026, similar to last year, with growth higher in the first half than in the second.

CEO Russell Weiner said Domino’s expects to meaningfully increase its market share within the U.S. quick-service restaurant pizza category this year.

–The South China Morning Post reported: “Thailand led the list of destinations for Chinese tourists travelling overseas during this year’s extended Lunar New Year holiday, as former favorite Japan saw arrivals plummet amid a political dispute with China over Taiwan.”

China tourism to Japan plunged 50% from last year for the holiday which ran from Feb. 15 to 23.

Foreign Affairs

Iran:  Joint Chief Chairman Air Force Gen. Dan Caine, according to multiple reports, has said a war against Iran could be a prolonged and damaging conflict with numerous U.S. casualties.

But Trump posted on Truth Social late Monday that the reports are “incorrect.”

“General Caine, like all of us, would like not to see War but, if a decision is made on going against Iran at a Military level, it is his opinion that it will be something easily won.”

This is exactly the kind of talk that Gen. Caine would not want to see.

The Pentagon has already sent nearly half of its deployable U.S. air power to the region.  “Think air power on the order of the 1991 and 2003 Iraq war,” Robert Pape of the University of Chicago said Saturday.  “Never has the U.S. deployed this much force against a potential enemy and not launched strikes.”

President Trump then claimed in his State of the Union Address that Iran is working to reconstitute its nuclear program even as it negotiates with Washington, adding to speculation that he’s preparing for a fresh round of military strikes in the coming days.

Iranian officials are “again pursuing their sinister ambitions” after U.S. airstrikes devastated the country’s nuclear program last year, Trump said.

“They’ve already developed missiles that can threaten Europe and our bases overseas, and they’re working to build missiles that will soon reach the United States of America,” Trump said.  “After Midnight Hammer, they were warned to make no future attempts to rebuild their weapons program, and in particular nuclear weapons, yet they continue. They’re starting it all over.”

That said, Trump added:

“They want to make a deal, but we haven’t heard those secret words: ‘We will never have a nuclear weapon.’”

Iran has long argued that its nuclear program is for purely peaceful purposes.  In a social media post earlier Tuesday, Iranian Foreign Minister Abbas Araghchi said his country will “under no circumstances ever develop a nuclear weapon.”

“A deal is within reach, but only if diplomacy is given priority,” Araghchi said.

Before the attacks in June, Iran had enough highly enriched material to quickly craft about a dozen warheads, if orders were given to weaponize its nuclear program.

Inspectors with the International Atomic Energy Agency haven’t verified the state of Iran’s stockpile of near-bomb-grade uranium or assessed the scope of damage dealt to enrichment facilities for more than eight months.

While negotiations are focused on the nuclear issue, Trump also pointed to Iran’s ballistic missile program, terrorist activity and support for proxies that have menaced the U.S. and its allies in the region.

Earlier Tuesday, Secretary of State Marco Rubio and CIA Director John Ratcliffe briefed senior lawmakers on Iran (the Gang of Eight), amid growing demands for the White House to explain its rationale for the military buildup, which has included aircraft carriers, guided missile destroyers, fighter jets and refueling tankers.

Foreign Minister Araghchi, appearing on CBS’ “Face the Nation, said, “I believe that still, there is a good chance to have a diplomatic solution which is based on a win-win game and a solution is at our reach.”

But when asked about U.S. Special Envoy Steve Witkoff’s assertion a day earlier that “zero enrichment” would be a non-negotiable term for a deal, Araghchi said, “First of all, enrichment is our right.”

Separately, the Financial Times reported on Sunday that Iran agreed to a $600 million deal to acquire thousands of advanced shoulder-fired missiles from Russia over the course of three years.

Thursday, U.S. and Iranian negotiators met again in Geneva, Switzerland, for a third round of talks on restricting Iran’s nuclear program.  U.S. and Iranian officials have made “significant progress,” the Omani foreign minister said, but the chances of a deal to avert a war remain unclear.

Badr Albusaidi, who acted as mediator, said the two sides planned to resume negotiations “soon” after consultations in their capitals, and technical-level discussions would take place next week in Vienna.

Foreign Minister Araghchi said “good progress” had been made and while there had been agreement on some issues, differences remained on others.

He said the next round of negotiations would happen in less than a week.

Nonetheless, the clock is still ticking. As I go to post, none of Iran’s proposals have been made public, though one reported option was for Iran to be allowed to enrich uranium at a minimal level after a three-to-five-year suspension, under international monitoring.

In return for a deal, Araghchi told Iranian television that the negotiators demanded the lifting of sanctions that have crippled Iran’s economy.

We then received Trump’s comments today.

Editorial / Wall Street Journal

“Negotiations resume Thursday, and no one can say Mr. Trump hasn’t tried diplomacy. But Itan’s leaders are dug in.  Nuclear ‘enrichment is our right,’ Foreign Minister Abbas Araghchi said Sunday.  Mr. Khamenei is convinced Iran needs a path to nuclear weapons and can’t admit he has impoverished his country for nothing.  The real problem in Iran is the nature of the regime and its revolutionary designs.

“Mr. Trump has put himself in a position where there is risk no matter what he decides. His way out is to explain why he thinks he must act now in Iran.  If he asks for support in advance from Congress and the public, he will have more allies if the war doesn’t go exactly as planned, which it rarely does.  The upside is a chance to weaken or topple a regime that promises ‘death to America,’ and to give the Middle East a new chance for peace.”

—

Russia/Ukraine:  Tuesday marked four years since Russia launched its full-scale invasion of Ukraine, Feb. 24, 2022.

With peace negotiations stalled, Russia has sought to portray its victory in Ukraine as inevitable. But losses among the Kremlin’s troops now number well over one million, and its grinding offensives advance at a few dozen yards a day at best, according to a recent analysis by the nonpartisan Center for Strategic and Intelligence Studies and the conclusions of several European defense-intelligence departments.

At the same time, long-range strikes by Ukraine, Western sanctions and ship seizures are pushing down prices for Russian oil that are critical for Moscow to sustain its military efforts.

Seth Jones, president of the defense and security department at CSIS, said that is why Vladimir Putin is dangling economic deals in front of Trump – to tempt him to cut off support to Ukraine or try to force Kyiv to hand over territory that his army hasn’t conquered.

“That’s the big breakthrough in a war that his military is unable to win,” Jones said of Putin. “The real hope is that the U.S. will come to their aid.”

Russian military casualties total some 1.2 million, of which as many as 325,000 have been killed, more than double the numbers for Ukraine, according to CSIS.  Ukraine’s top military commander. Gen. Oleksandr Syrskiy, said last week that Russia wasn’t able to replace its battlefield losses in 2025.

But Ukraine, too, is struggling to raise enough manpower.

The UK’s armed-forces minister, Alistair Carns, said Russia had been at war longer than in World War II and lost over 4,000 tanks, 10,000 armored vehicles and had its navy arguably destroyed by a country that never had a navy.

—In an interview with the BBC, Ukrainian President Volodymyr Zelensky said Putin has already started World War III, and the only answer was intense military and economic pressure to force him to step back.

“I believe that Putin has already started it. The question is how much territory he will be able to seize and how to stop him… Russia wants to impose on the world a different way of life and change the lives people have chosen for themselves.”

On the issue of abandoning the part of eastern Donetsk that Ukraine still holds – a line of towns Ukraine calls “fortress cities” – as well as more land in the southern regions of Kherson and Zaporizhzhia – in exchange for a ceasefire, Zelensky said:

“I see this differently. I don’t look at it simply as land. I see it as abandonment – weakening our positions, abandoning hundreds of thousands of our people who live there. That is how I see it. And I am sure that this ‘withdrawal’ would divide our society.”

But isn’t it a good price to pay if that satisfies Putin?  Do you think it would satisfy him?

Zelensky: “It would probably satisfy him for a while…he needs a pause…but once he recovers, our European partners say it could take three to five years.  In my opinion, he could recover in no more than a couple of years.  Where would he go next?  We do not know, but that he would want to continue [the war] is a fact.”

In his State of the Union address Tuesday, this was all President Trump said about the war in Ukraine, having listed the eight wars he claims he’s personally ended:

“And we’re working very hard to end the ninth war, the killing and slaughter between Russia and Ukraine, where 25,000 soldiers are dying each and every month – think of that, 25,000 soldiers are dying a month.  A war which would have never happened if I were president.  Would have never happened.”

That was it.

It’s real simple…it’s good vs. evil. But the president refuses to recognize this.

—Ahead of talks Thursday in Geneva between American and Ukrainian negotiators to prepare for the next round of trilateral peace negotiations, Russia pummeled cities across Ukraine with drone and missile strikes, wounding at least 20 people and damaging buildings in eight regions, including Kyiv, officials said.  President Zelensky said in a post on social media on Thursday that the Russian strikes had targeted gas infrastructure and power substations.

A strike overnight Saturday killed one person in the Kyiv region, the attack causing damage and fires to erupt in five districts in the suburbs of Kyiv.  Russia also struck energy infrastructure in the southern Odesa region, resulting in significant fires.

–Meanwhile, in Hungary, facing tough odds in an upcoming election, pro-Russian prime minister Viktor Orban is trying to convince voters that the greatest threat to the country is not economic stagnation – the focus of his top opponent – but neighboring Ukraine.

Orban is running an aggressive media campaign replete with disinformation whose central message is that Hungarians should refuse to align with the rest of Europe in supporting Ukraine against Russia’s invasion.  That path, he argues, risks bankrupting the country and getting its youth killed on the front lines.

Monday, Hungary blocked a new package of EU sanctions on Russia in response to interruptions in Russian oil supplies that pass through Ukraine, and vowed to veto any further pro-Ukraine policies until oil flows resume.

Hungary’s center-right opposition Tisza party has widened its lead over Orban’s Fidesz in February, a highly regarded poll showed on Wednesday, ahead of an April 12 election in which the veteran nationalist is seeking reelection.’

Tisza, led by former government insider Peter Magyar, has extended its lead over Fidesz to 20 percentage points among decided voters, up from a 12-point lead in a January survey, pollster Median said.

Magyar’s party, which was only launched in 2024, had the support of 55% of decided voters, up from 51% in January.

Support for Fidesz dropped to 35% from 39% a month ago, according to the survey conducted between Feb. 18 and 23.

North Korea: Leader Kim Jong Un warned that Pyongyang is ready for confrontation with the U.S. but left the door open for dialogue, depending on Washington’s stance.

The prospects for North Korea-U.S. relations hinge “entirely on the attitude of the United States,” he said on Wednesday. Pyongyang was prepared for both “peaceful coexistence or eternal confrontation,” but the choice lay with Washington.

So long as the U.S. respected North Korea’s nuclear-armed state status, which is enshrined in its constitution, there was “no reason not to get along,” Kim said late on Wednesday at the close of the ninth Workers’ Party congress.

If Washington continued its confrontational approach, however, he said Pyongyang would respond “proportionally.”

It had “more than sufficient means and methods” to do so, Kim added, vowing to develop more powerful weapons including submarine-launched intercontinental ballistic missiles (ICBMs).

“Further expanding and strengthening the national nuclear force and fully exercising our status as a nuclear weapons state is the unwavering will of our party,” he said.

Syria: The Wall Street Journal reported that U.S. intelligence agencies have concluded that 15,000 to 20,000 people, including Islamic State affiliates are now at large in Syria, after an exodus from a camp that held jidadists’ families, U.S. officials familiar with the estimate said.

Security experts have long warned that the wives of Islamic State fighters were effectively raising the next generation of militants at the sprawling Al-Hol facility. Security at the camp fell apart in recent weeks after Syria’s government routed the U.S.-backed Syrian Democratic Forces, which had guarded Al-Hol for years, raising concerns about the release of people who might have become radicalized during the years held behind the razor wire.

“Al-Hol’s chaotic dissolution has renewed questions from U.S. government officials, lawmakers and security analysts about the Trump administration’s decision to rapidly offload counterterrorism efforts in Syria to the country’s new leaders as America pulls its forces from the country.” [WSJ]

While former jihadist, President Ahmed al-Sharaa, has distanced himself from extremist groups and fought against Islamic State for years, his military and security forces still includes many hard-line Islamists.

The most dangerous suspects at Al-Hol were held at a separate annex and in a network of prisons across the country. The U.S. military moved some 5,700 Islamic State-affiliated prisoners from detention at a network of camps in Syria to Iraq after the government takeover of the northeast in January.

Mexico: Mexico’s military killed the country’s most powerful drug kingpin, Nemesio “Mencho” Oseguera, in the latest signal of the government’s escalation in its war against cartels amid intense pressure by the Trump administration to curb U.S.-bound drug trafficking.

Oseguera, a former Mexican cop, was the leader of the Jalisco New Generation Cartel, widely seen as the country’s most powerful organized-crime group and the top cocaine smuggler to the U.S.

Oseguera was known for sophisticated paramilitary tactics and the deployment of hundreds of well-equipped and well-trained gunmen.

The U.S. has a $15 million bounty of him.  Reports say he died after being seriously injured in clashes between his supporters and the army on Sunday.  Aided by U.S. intelligence, Mexican defense officials were tipped off to follow El Mencho’s mistress to get to his hideout.

The killing of El Mencho unleashed a torrent of violence across the country, blocking roads and setting fire to vehicles.  Disorder broke out in at least 20 of Mexico’s 31 states.

On Sunday, cartel fighters brought Mexico’s second-largest city, Jalisco’s state capital Guadalajara, to a standstill, with roadblocks closing off much of the city and cancelling flights.

[Guadalajara is slated to host a number of World Cup matches this summer.]

Mexico Security Secretary Omar Garcia Harfuch said Monday 25 members of the National Guard were left dead in Jalisco in six separate attacks after the killing of El Mencho.

Garcia Harfuch said that aside from El Mencho, a prison guard, an agent from the state prosecutor’s office and a woman whom the security secretary didn’t identify were killed.  He also said some 30 criminal suspects were killed in Jalisco and four others were killed in Michoacan.

Local and foreign governments warned their citizens to stay inside after the violence erupted, including in the popular resort town of Puerto Vallarta, which was described as a “war zone.”

The death of El Mencho could trigger a “total war” in Mexico, security expert David Saucedo told CNN.

“This didn’t seem to be just an operation to capture ‘El Mencho,’ but to exterminate him, to use lethal force to bring him down,” Saucedo said.  “In the criminal underworld, such actions are not simply overlooked.  The reaction is what we’re seeing now: narco-terrorism, blockades, and fires in grocery stores across Mexico,” he added.

The current violence is intended to paralyze economic activity and impose a national and international image cost on the government of leftist President Claudia Scheinbaum, Saucedo said.

Cuba: The government said a boat with 10 people near its coast early Wednesday was carrying weapons, and its occupants – Cubans living in the U.S. – were intent on entering the country to fight against the government.

The Cuban Coast Guard shot and killed four of the passengers while another six were injured and detained after the Florida-registered boat opened fire, according to an Interior Ministry statement.

Cuba’s government said most of the passengers had a known criminal record.  An eleventh person who had arrived earlier from the U.S. and planned to meet up with the group was detained within Cuba, according to the statement.

Those with previous records “are wanted by Cuban authorities for their involvement in promoting, planning, organizing, financing, supporting, or carrying out acts of terrorism within the national territory or in other countries,” the interior ministry said.

Seven of the 10 occupants were identified by name in the statement, which listed supplies on the boat that included assault rifles, Molotov cocktails, bullet-proof vests, telescopes and camouflage uniforms.

Secretary of State Marco Rubio told reports that he was made aware of the incident and that the U.S. is now gathering its own information to determine if the victims were American citizens or permanent residents. [One of the dead is a U.S. citizen, one of the wounded is as well, from early reporting.]

“Suffice it to say, it is highly unusual to see shootouts in open sea like that.  It’s not something that happens every day.  It’s something, frankly, that hasn’t happened with Cuba in a very long time,” Rubio said.

Pakistan/Afghanistan: A long-running conflict between the two has turned into what Pakistan declared Friday is “open war,” with attacks reported in Kabul and along the neighbors’ shared border.

“Our patience has run out and now there is an open war between us,” Defense Minister Khawaja Muhammad Asif said in a social media pot.

Pakistan has been pressing Taliban authorities in Kabul to halt what it says are attacks by Afghan forces and the Pakistani Taliban, a militant group based across the border.

Pakistan has responded “in full force” to recent attacks, striking Taliban border posts and hide-outs in Afghanistan and hitting targets in Kabul, according to Pakistan security forces.

A spokesman for the Taliban government in Afghanistan said Pakistan had carried out airstrikes in Kabul, Kandahar and Paktia, a southeastern province that borders Pakistan.

Pakistan declared a high alert in major cities, including the capital, Islamabad, warning of possible suicide attacks in response to the strike in Afghanistan.

The alleged death toll after one day, is 274 Taliban killed according to Pakistan, but the Taliban said only 13 militants had been killed in addition to 55 Pakistani soldiers and 19 border posts seized by the Taliban. Who knows where the truth lies….

Random Musings

—Presidential approval ratings….

Rasmussen: 45% approve, 53% disapprove (Feb. 27).

A new Washington Post-ABC poll had President Trump with a 39% approval rating, 60% disapproval.  The last time Trump’s disapproval touched 60% was shortly after the Jan. 6, 2021, attack on the Capitol.

His worst rating is on inflation – 32% approve of how he has dealt with the issue.  On the question of his handling of the economy overall, 41% approve.

By 48% to 29%, Americans say the economy has gotten worse, not better since Trump was inaugurated a year ago.

Trump’s tariff policies have never been popular with the public, and despite all he has done and said about them public opinion has not budged over the past year.  Today, 34% say they approve of his handling of tariffs, while 64% disapprove, identical to findings last April.

For Democrats, Trump’s relatively low standing provides opportunities for the upcoming midterm elections, but the party out of power has made little headway in persuading Americans that they have better ideas or policies to offer and are seen as no more in touch with the concerns of the average person.

Asked whether they trust Trump or Democrats in Congress to handle major issues, 33% cite the president, 31% say Democrats, 4% say both equally and a crucial 31% say neither.  In April, Trump led by 37% to 30% on this question.

A new CNN/SSRS poll has Trump’s job approval rating at just 36%, 63% disapproving.  When Trump addressed Congress last year for the first time since returning to the White House, his approval rating stood at a career-high 48% in CNN’s pre-speech polling.

Just 32% of Americans now say that Trump has had the right priorities, while 68% say he hasn’t paid enough attention to the country’s most important problems.  At the same time, Americans say, 61% to 38%, that Trump’s policies will move the country in the wrong direction rather than the right one.

Some of the steepest declines in the president’s approval rating include a 19-point drop in approval among Latino Americans and an 18-point drop among Americans younger than 45.  Among political independents, Trump’s approval rating has dropped 15 points over the past year to 26%, the lowest it’s been in either of his terms.

Strong approval among Republicans stands at 49% in the poll, down from 64% just after his address to Congress last year and the first time in this term it’s dipped below the 50% mark.

Asked to choose the issue they’d most like Trump to address in his State of the Union speech, 57% picked the economy and cost of living, more than quadrupling the share who want to hear him focus on any other individual topic, including immigration, the state of democracy, health care policy, crime or foreign policy.

—We have a big senate primary in Texas on Tuesday.  Incumbent Republican John Cornyn is in the battle for his life with Texas Attorney General Ken Paxton and Rep. Wesley Hunt (R).  A candidate needs to receive a majority of the vote to win a primary outright, so the top two candidates (Cornyn and Paxton) appear headed to a runoff in May.

But the race on the Democratic side is just as interesting…Rep. Jasmine Crockett vs. state Rep. James Talarico.

Republicans are worried they will have a real race come November and that the national party will have to spend a ton of money to preserve the seat when other races across the country will also require huge funding to keep the majority.

—A 21-year-old man was shot and killed Sunday after breaching the secure perimeter at President Trump’s Mar-a-Lago residence in Florida, the Secret Service said.

The president and first lady were in Washington, D.C., over the weekend.

The man was seen at the north gate early Sunday morning and was “armed with a shotgun and in possession of a gasoline canister,” Palm Beach County Sheriff Ric Bradshaw told reporters.

The man came just inside the gate, and a sheriff’s deputy and two Secret Service agents confronted him. They asked him to drop the items.  “He put the gas can down and pointed the shotgun at the officers,” Bradshaw said.  The authorities shot him and he died at the scene, according to Bradshaw.

“Fortunately, nobody was in jeopardy inside because of the quick action that was taken by the deputies and the Secret Service,” Bradshaw said.

—A federal judge in Florida blocked public release of special counsel Jack Smith’s extensive report on the classified-documents case against President Donald Trump – a resounding victory for Trump’s efforts to block public viewing of what probably would be damaging details about his retention of classified materials after he left the White House in 2021.

The decision Monday morning from U.S. District Judge Aileen M. Cannon resulted from litigation that has dragged on for more than a year in her courtroom.  Cannon ruled that releasing the special counsel report could violate grand jury secrecy rules and could result in impugning the presumption of innocence for Trump and his co-defendants in a case that did not result in guilty verdicts.

–Related to the above, FBI Director Kash Patel continued his purge Thursday of FBI agents and staff tied to the probe into Trump’s alleged mishandling of classified documents, firing at least a dozen agents across the country this week.

The first batch of firings came Wednesday afternoon, according to three people familiar with the matter, who spoke to Reuters on the condition of anonymity to discuss a personnel matter. The firings occurred soon after Patel told Reuters in an interview that FBI investigators during the Biden administration obtained phone data for him and current White House Chief of Staff Susie Wiles.

The interview landed as Patel has been struggling to mitigate the political damage he incurred after videos emerged over the weekend of him drinking and partying with the U.S. men’s hockey team at the Olympics.

The firings are the latest example of Patel pushing out experienced FBI agents because they worked on one of the two federal investigations into Trump – the classified documents case, and the investigation into Trump’s efforts to thwart the results of the 2020 election.

Scores of agents have been fired since the start of the current Trump administration, all for doing their job!  The latest firings also apparently include experts in counterespionage matters.

Patel said in a statement to Reuters: “It is outrageous and deeply alarming that the previous FBI leadership secretly subpoenaed my own phone records – along with those of (Susie Wiles) – using flimsy pretexts and burying the entire process in prohibited case files designed to evade all oversight.”

I totally disagree.

—President Trump wrote on Truth Social over the weekend that he was going to send a boat filled with medical supplies to Greenland, alleging “many people” on the island are sick and “not being taken care of.”

Greenland’s Prime Minister Jens-Frederik Nielsen responded, “It’s going to be a no thanks from us,” and said that Greenland provides free healthcare for all citizens.

Trump claimed the ship was “on the way!!!”

The post included what appeared to be an illustrated or AI image of the USNS Mercy, one of two hospital ships operated by the U.S. Navy.  It turns out the ship wasn’t even available.

—British police on Monday arrested Peter Mandelson, a former UK ambassador to the United States, in a misconduct probe stemming from his ties with Jeffrey Epstein.

London’s Metropolitan Police force said “officers have arrested a 72-year-old man on suspicion of misconduct in public office” at an address in north London.

It did not name Mandelson, in keeping with British police practice, but the suspect in the case has previously been identified as Mandelson.

Police are investigating Mandelson over documents suggesting he passed sensitive government information to Epstein a decade and a half ago.   He does not face any allegations of sexual misconduct.

The arrest came four days after Andrew Mountbatten-Windsor, the former Prince Andrew, was arrested on suspicion of a similar offense related to his friendship with Epstein.

Many look at the British example of ‘accountability,’ and wonder why the same thing isn’t happening here.

—Savannah Guthrie made a new offer in a video posted Tuesday in which the “Today” show host offered $1 million for tips leading to her mother’s return, but acknowledging Nancy Guthrie may already be dead. If this is so, the family still needs to know where she is.

The family is also donating $500,000 to the National Center for Missing and Exploited Children, a nonprofit group that works to find missing children and stop children from being sexually exploited.

Nancy Guthrie was abducted from her home just north of Tucson, Ariz., early in the morning on Feb. 1 – “taken in the dark of night from her bed,” Savannah said in the video she posted on Tuesday morning.

—According to a Wall Street Journal exclusive report today: “Pollution from U.S. power plants rose last year, a rare uptick in an otherwise long-term downward trend, partly because of more coal being burned to generate electricity.

“Levels of sulfur dioxide emitted from power-plant stacks were up about 18%, with nitrogen oxide up 7% and carbon dioxide up 4%, according to an analysis of publicly available Environmental Protection Agency data viewed by The Wall Street Journal.

“The rise in emissions comes as President Trump has promoted the use of coal and worked to unwind Biden-era environmental regulations.  Earlier this month, the EPA reversed a finding that carbon dioxide poses a risk to public health and welfare.

“Last week, the agency repealed the Biden administration’s stricter emissions standards on mercury, arsenic and other air toxics, which would have applied to power plants and other sources….

“Coal generation increased 13% in 2025, compared with a 3% decline for natural gas, according to the Energy Information Administration.”

–That was a helluva Nor’easter we had in my area Sunday and Monday; a large swath of the East Coast from Maryland/Delaware on up.  Officially, New York’s Central Park registered 19.7 inches, placing it No. 9 among the “biggest” snowstorms on record.  Staten Island had 24 inches.  My general area had 20 (or more, not a lot of official data for my town, specifically).  Freehold, N.J., nearly 27 inches; Lyndhurst, N.J. nearly 30.  Islip, Long Island had a record 31 inches.

But an airport outside of Providence, R.I., had the biggest total…37.9 inches, with Providence recording its biggest snowfall in history, 35 inches.  [Parts of Providence had more…but if you call it 35, it broke its all-time snowstorm record by 9 inches!  Good lord.]

On Cape Cod, more than 85% of customers were without power at the peak.

—Editorial / Wall Street Journal

“There isn’t much that unifies all of America these days, but the Olympic overtime victories by the U.S. men’s and women’s hockey teams ought to qualify for anyone with a modicum of patriotic feeling.

“First the women won on a stellar goal by Megan Keller. The gold-medal game was closer than most expected since the U.S. team had rolled through the field and has been strong for a long time. But Team Canada put up a spirited fight.

“The victory by the men was even more special as the first U.S. Olympic gold medal in hockey since the 1980 ‘miracle on ice’ over the Soviets. The Canadian men have long been dominant and beat the Yanks in overtime in 2010. That made Sunday’s victory all the more satisfying for American hockey.

“The best moment was watching Jack Hughes – he of the gap-toothed hockey smile – celebrate in ecstatic fashion with his teammates after he slipped a shot through the legs of the Canadian goalie for the victory.

“Anyone who has experienced the thrill of a team victory after years of hard work knows such a moment is unlike few others in life.  Mr. Hughes, who plays professionally for the New Jersey Devils, may never have to buy a drink in New Jersey again.

“But the 24-year-old was even more impressive in his interview after the game on NBC.  He paid tribute to the team’s goalie, Connor Hellebuyck, who saved the day multiple times as Team Canada outplayed the Yanks for most of the third period.  And then Mr. Hughes said without a trace of cynical calculation.  ‘This is all about our country now. I love the USA. I love my teammates.  It’s unbelievable. The USA hockey brotherhood is so strong…I’m so proud to be American today.’

“Imagine that: An expression of unabashed patriotism from an American athlete.

“No doubt Canadians feel the loss to the U.S. more acutely amid President Trump’s jingoistic and needless attacks on their sovereignty.  But Mr. Hughes paid tribute to the Canadians, and his patriotism was born of passionate competition rather than politics. Yet given who else is likely to run, we could do worse than Jack Hughes for President.”

—

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

Slava Ukraini.

God bless America.

—

Gold $5270…Silver $93.70
Oil $67.30

Bitcoin $65,621 [4:00 PM ET, Friday]

Regular Gas: $2.98; Diesel: $3.75 [$3.12 – $3.67 yr. ago]

Returns for the week 2/23-2/27

Dow Jones  -1.3%  [48977]
S&P 500  -0.4%  [6878]
S&P MidCap  -0.9%
Russell 2000  -1.3%
Nasdaq  -1.0%  [22668]

Returns for the period 1/1/26-2/27/26

Dow Jones  +1.9%
S&P 500  +0.5%
S&P MidCap  +8.2%
Russell 2000  +6.0%
Nasdaq  -2.5%

Bulls 55.6
Bears 14.8*

*In all likelihood, this is the last time I’ll be reporting Bull/Bear readings…27 years…The subscription is $395, people.  No more.

Hang in there.

Brian Trumbore