Week in Review

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Week in Review

01/22/2022

For the week 1/17-1/21

[Posted 9:00 PM ET, Friday]

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Edition 1,188

Wall Street was off Monday for the Martin Luther King Day holiday and then spent the rest of the week throwing up all over itself, the market’s worst week since the start of the pandemic, details below.

What surprised me was how it took until today before some of the talking heads on CNBC began tying the ugly start to 2022, in part, to the Russia-Ukraine crisis.  I have a lot below on this as well but just understand I’ve been following the temperatures in eastern Ukraine and it’s true, they have been slightly above normal the last month or so, but now we have days of below freezing weather ahead in the region, so Vladimir Putin has the frozen ground he seeks for his tanks.

There is also word tonight that the United States is rushing more defensive equipment to Ukraine to counter Russia’s rapid escalation, including in Belarus, which is close to Kyiv. President Biden authorized the State Department to allow the transfer of U.S.-provided equipment already in the hands of allies, according to Defense One.  This includes Javelin anti-armor missiles from Estonia and Stinger anti-aircraft missiles and related equipment from Lithuania and Latvia.

And the Pentagon is searching its own bases and forces in Europe for equipment that could be quickly moved in.

In President Biden’s beyond embarrassing press conference Wednesday, he acted like a pundit, not a president, when he stupidly talked of Putin and a “minor incursion” into Ukraine, adding, “My guess is he will invade, he has to do something.”

This is right…Putin will do something, militarily.  But you don’t give Vlad the Impaler the green light to do so when you are the Leader of the Free World!

CNN’s Matthew Chance was watching the presser from Ukraine and he said the immediate response from officials in Kyiv was that they “watched the remarks with horror…shocked (Biden) would give Putin a green light…to give him the green light to do what he wants at his pleasure.”

I was watching and immediately thought, Joe Biden basically gave Xi Jinping the green light as well, to do as he sees fit when it comes to Taiwan.

What I can’t figure out is how the Olympics, which will be a disaster on so many levels, factors into the timing…whether it is Ukraine or Taiwan.  Putin and Xi are in constant communication.  Does Xi care if Putin invades during the Games?  Does Putin have to wait until after? 

When the Games end, do Putin and Xi act at the same time?  Does that give Ukraine too much time to get more defensive, and potentially, offensive, weaponry to give its soldiers more of a chance to hold the ground for a while?  Just what kind of weaponry is Putin really going to use?  What of Kaliningrad, the Russian enclave that sits on the border of Poland and Lithuania?

There are serious career individuals in Washington and capitals throughout Europe, as well as Tokyo, Seoul and Taipei thinking about such potentialities. 

And as if the above isn’t enough, it wouldn’t be a bad time for Kim Jong Un to fire off a long-range ballistic missile to create another distraction (not to hit the U.S., but to scare the living daylights out of all of us).

And there’s Iran….

Anything can happen the next two months.

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On a separate topic, while I cover the Pandemic in detail below, including some good bits of news, I was reading a piece in Barron’s by Josh Nathan-Kazis on the long-term heathcare crisis we face in this country, and I’m sure in much of the rest of the world that has been dealing with Covid.

“Each wave of Covid-19 has hit Washington state’s hospitals harder than the last. Now, two years into the pandemic, most of the nurses who worked at the emergency department at Harborview Medical Center in Seattle have left, and the department is having trouble finding enough nurses to treat its patients.

“ ‘We do not have the same nursing staff, essentially, that we had even last summer,’ says Dr. Steve Mitchell, medical director of the department.  ‘We’ve had to close certain beds in our emergency department because we don’t have the nurses to be able to help manage them.’

“The number of patients in Washington’s hospitals with Covid-19 is higher than ever.  Some hospitals in the state are already operating at 150% of their licensed bed capacity, Mitchell says, and patients are being treated in hallways and breezeways and spaces normally used as recovery rooms for surgery patients.

“ ‘This is our worst point,’ he says.  ‘March 2020 was hard.  But we are in a much worse situation now than we have ever been.’

“The number of people hospitalized with Covid-19 in the U.S. is higher than ever, and the wave of patients is hitting a hospital system that is reeling after two years of nonstop pressure….

“The acute crisis might be short-lived, but it offers an uncomfortable window into a healthcare system wounded by the pandemic.  Even after the Omicron wave, the staffing shortage will remain.  That will have implications for patient care, and for the healthcare industry at large, that could linger for years.”

You don’t need me to tell you nurses are the key to the whole system.

The CEO of the hospital company Tenet Healthcare, Saum Sutaria, said at an investor conference last week: “There are structural changes that have happened to the labor market.  It’s naïve to say that nothing has changed that won’t impact us going forward even if…Omicron were to disappear in February.”

Every region of the country has a similar story.  The only good part of the Omicron angle is that while the death tolls below still tell a grim story, in many parts of the nation the wave has been less intense and that has eased the psychological burden on the nursing staffs.

But the long-term problem is here to stay.  For now, all I can say, having dealt way too much with nurses in 2021 in relation to our beloved Dr. Bortrum, God bless you all!

Biden Agenda…and his first year….

Republicans in the Senate on Wednesday blocked a Democratic bid to push through new voting rights protections, delivering another major blow to President Biden’s domestic agenda.  Democrats needed at least 10 Republicans to overcome a filibuster, and when Majority Leader Chuck Schumer made a last-chance bid to temporarily change those rules to allow a simple majority vote on the bill, they lost two Democrats, Joe Manchin (WV) and Kyrsten Sinema (AZ) in an attempt to change the filibuster rules.

“Let this change happen in this way and the Senate will be a body without rules,” Manchin said.  “We don’t have to change the rules to make our case to the American people for voting rights.”

President Biden at his news conference conceded he was resigned to defeat on the election initiative and that he’d have to break it up – as well as his economic agenda – to get any part of it through Congress.

“There are a number of things we can do, but I also think we will be able to get significant pieces of legislation if we don’t get it all now,” Biden said.

Senate Minority Leader Mitch McConnell (R-Ky.) called the Democrats’ effort “a sad spectacle” and “a direct assault on the core identity of the Senate” by Schumer.  He said his Democratic colleagues should be focused on issues like inflation, the pandemic, rising homicides, the southern border and Russia’s flirtation with war.

“This administration and this Senate majority are focused on none of it,” McConnell said on the floor.  “Instead, they’ve been consumed by a fake panic over election laws that seems to exist only in their imaginations.”

--Various opinions (both sides) on Biden’s press conference and his first year….

Editorial / New York Post

“If President Joe Biden’s press conference Wednesday was supposed to inspire confidence, it failed – horribly.

“Even though he spent most of it clearly calling on reporters from a list of ‘safe’ questioners provided by his staff, he stumbled and bumbled and all too often made no sense at all.  Plus, he repeated his bizarre ‘whisper shout’ gimmick to emphasize certain points – when what it actually emphasizes is his age.

“On that note, he kept walking down memory lane, reminiscing about how ‘in my day’ cable news was like that; the Republican Party was like this, and so on.  He’s fighting old wars in his head, or maybe just confused about the modern world.

“Yet he couldn’t remember what he said last week, insisting he hadn’t compared opponents of end-running the Senate filibuster rules to pass the nationalize-election-laws bill to Bull Connor and Jefferson Davis.  Yet minutes later he warned those same (Democratic!) senators that their supposedly infamous position will stick with them all the rest of their days.

“Then there was his ‘confession’ at the end that he ‘forgot’ he’s president, not a senator, as implicit explanation for his disastrous first year.  But earlier he’d insisted he’s done more than any other president in history. What the fudge?

“His answers on Ukraine were particularly confused.

“The issue is pretty straightforward: Vladimir Putin is threatening an invasion and will do it if he thinks he can get away with it; at the least, he’ll try to get the West to bribe him by promising him much of what he wants without any fighting.

“Biden seemed to offer one bribe by volunteering that NATO won’t make Ukraine a member any time soon. Even if true, why limit your options?

“Worse, at one point the prez suggested Putin ‘has no choice’ but to invade because he’s boxed himself in.  At least, we think that’s what Biden said, but his syntax made it impossible to say for sure.

“Then, too, he outright said Putin would win, albeit at a heavy price: ‘The cost of going into Ukraine in terms of physical loss of life for the Russians – they’ll be able to prevail over time, but it’s going to be heavy.’

“Oh, and Biden suggested Russia might well get away with ‘a minor incursion.’ That’s an invitation to take one piece of Ukraine now – and more pieces later. What a disaster.  No wonder his staff does everything it can to keep him away from the press.”

Editorial / Washington Post

“President Biden on Wednesday closed a mixed year of both successes and frustrated hopes.  At a news conference, Mr. Biden acknowledged ‘challenges’ but also boasted of ‘enormous progress’ fighting the pandemic and passing major legislation, saying that he would ‘stay on this track.’  In fact, despite his substantial achievements, his presidency could use a reset.

“To be clear: Americans should be grateful every day that Mr. Biden is in office rather than former president Donald Trump and the band of incompetents who used to run the government.  One can only imagine how much worse off the country would be if Mr. Trump were still dispensing bizarre medical advice from the White House, running a Russia-friendly foreign policy as the Kremlin prepares to invade Ukraine, or continuing to deny climate change.  Mr. Biden has also restored integrity to the Oval Office, neither lying nor abusing his authority the way Mr. Trump did. And the president can claim some important accomplishments.  Most Americans are vaccinated. His Covid-19 aid bill alleviated child poverty during the worst of the pandemic. The country is only beginning to see the benefits of the $1 trillion bipartisan infrastructure bill that will fund massive investments in green energy, highways, bridges and rail, which passed under his leadership.

“But when the president entered office, expectations ran high.  New vaccines would tame the coronavirus and reignite the economy, and the Democrats’ majorities in Congress would draft transformative social legislation.  When congressional Democrats quickly passed the massive Covid-19 aid bill and the Biden administration ran an orderly vaccine rollout, hopes rose even higher. Yet in recent weeks, the Omicron variant has set records for new cases in the United States, job numbers are volatile, inflation is up, and the Democrats’ $2 trillion Build Back Better plan has stalled in the Senate.

“This history shows that the president controls only so much.  He can do little about inflation and even less about the viral genetic mutations that lead to new coronavirus variants.

“But that is not the whole story.  Mr. Biden, who ran as a longtime Senate veteran able to get the executive branch and Congress working again, has committed several unforced errors.

“Top of the list was his chaotic withdrawal from Afghanistan, which resulted in the deaths of 13 American service members and consigned to Taliban rule a country into which the United States had invested vast resources.

“As Afghanistan unwound, Mr. Biden allowed progressive expectations to outrun the reality of what Democrats could accomplish with their slim congressional majorities.  Progressives talked of passing a Build Back Better bill running to several trillion dollars or more, using the Senate’s reconciliation procedure that allows taxing and spending legislation to duck the filibuster’s 60-vote requirement.  In fact, conservative Senate Democrats Joe Manchin III and Kyrsten Sinema would not support a bill that surpassed $2 trillion.  Once that reality sank in, Mr. Biden should have persuaded Democrats to prioritize a few programs to fund sustainably.  Instead, House Democrats refused to sacrifice programs to save others, approving a bill containing a large number of underfunded initiatives.  When Mr. Manchin balked publicly, the White House released a blistering statement that poisoned negotiations.

“On voting rights, Mr. Biden and congressional Democrats pushed for sweeping legislation that would end partisan gerrymandering and mandate voting-access measures, warning that failure to do so could leave U.S. democracy in severe danger.  This time, Mr. Manchin and Ms. Sinema supported the bill but did not favor changing Senate rules to pass it over a Republican filibuster.

“Even on the Omicron variant, the Biden administration could have been better prepared. It was foreseeable that the coronavirus would continue to mutate, perhaps in a way that made it more infectious and enabled it to evade vaccines.  The White House should have built rapid PCR testing infrastructure throughout the country in case this occurred, which it did this winter.  Instead, wait times are almost uselessly long for reliable results.

“In his second year, Mr. Biden must tack toward the practical.  Mr. Manchin had offered to support a $1.8 trillion Build Back Better proposal last month…before his talks with the White House collapsed. The president should have taken up Mr. Manchin then.  Mr. Biden should say yes to Mr. Manchin now, salvaging as much of that proposal as he can in direct talks with the West Virginia senator.  Progress could happen soon: Mr. Biden signaled Wednesday that he would substantially pare down the Build Back Better bill to match Mr. Manchin’s preferences….

“Meanwhile, the gravest threat to U.S. democracy is not vote denial but that administrators or elected officials will attempt to tamper with legitimate vote counts based on lies about fraud… A bipartisan group of senators is discussing a bill that would harden vote-counting procedures against partisan subversion.  Mr. Biden should foster these discussions….

“Mr. Biden’s first year was not as bleak as many reports have portrayed.  But he could have accomplished more.  He might yet do so if he behaves more like the pragmatic former senator he promised to be.”

Karl Rove / Wall Street Journal

“Anyone who’s served on a White House staff, Democrat or Republican, has some sympathy for what President Biden and his team are going through.  Crisis after crisis at home and abroad, a stalled legislative agenda, lousy polls, a divided party, plenty of critics – including usually friendly voices – and internal backbiting spilling into public view: Team Biden is beset by all this and more.

“For beleaguered West Wing denizens, there’s some good news.  Things will probably get better. The bad news? Not much better, and it won’t be enough.  Democrats will still suffer a whooping this fall.

“It’s a distant memory now, but 2020 unfolded well for Mr. Biden as he executed his unorthodox but brilliant campaign strategy – hide out in his Delaware basement while President Trump bollixed Covid and wore out his welcome with voters.  Mr. Biden made a few promises: He’d handle Covid better, bring America together, and just be normal.

“But after striking these notes in his inaugural and scoring initial political successes with reversing Trump regulations and passing a $1.9 trillion Covid relief bill, he became more ambitious.  The bigger his proposals and the more he moved left, the more praise he drew from the mainstream media and liberal intelligentsia… Mr. Biden liked being seen as more transformational than President Obama, ‘seeking a much more dramatic sea change.’  Caught up in the hype, Mr. Biden threw his weight behind the proposed Build Back Better Act to transform fundamentally America’s economy and climate policy, and joined the push for a federal takeover of local elections.

“The problem is that Americans are generally not fond of transformation, except for a few exceptional moments in our history. This isn’t one of them….

“The more (Biden) pushed for transformational change while holding a razor-thin House margin and a 50-50 Senate, the more negative public opinion grew….

“This happened in part because he hasn’t focused on problems that ordinary Americans face.  He wanted a smorgasbord of new welfare benefits in Build Back Better, few of which would help voters worried that prices were growing at the grocery store and gas pump much faster than their paychecks. And a federal takeover of elections is not as high a priority as jobs and wages….

“On Covid, Mr. Biden overpromised by predicting its end by July 4 and underdelivered when Omicron spiked this winter….

“Further, when the president heralds historic job gains, Americans know that’s baloney, and that the snap-back happened as businesses re-opened and people began living with Covid’s presence. It had nothing to do with government spending.  Then there are the millions who dropped out of the workforce.  That’s not good, yet Mr. Biden seems strangely unaware of its ramifications for America.  Maybe that’s why 64% think the country is headed in the wrong direction and only 28% believe it’s on the right track in the RealClearPolitics average.

“Presidents can recover from difficult moments like this, but there’s no easy way back.  Even a dramatic reset, shuffling Mr. Biden’s staff and upgrading his lackluster cabinet all seem unlikely to make a difference for the president.  For now, Team Biden is stuck riding it out. It’s their own damned fault.”

Marc A. Thiessen / Washington Post

“One of the most important lessons I learned as a presidential speechwriter is that when the president’s words to no match what the American people are seeing and experiencing, then Americans tune the president out….

“Recall that Biden became a national laughingstock when he delivered a speech calling his Afghanistan debacle an ‘extraordinary success.’ Then, earlier this month, he delivered another address bagging about the December jobs report.  The same jobs numbers CNN correctly declared ‘a major disappointment,’ Biden boasted that he had delivered ‘the sharpest one-year drop in unemployment in United States history’ (failing to mention the unemployment rate only measures people who are actually looking for work).  He crowed that he added ‘the most jobs in any calendar year by any president in history’ (failing to note that this is because the pandemic had forced record numbers of Americans out of work).  He bragged about ‘record wage gains’ (while failing to add that those gains were decimated by record inflation.)

“Americans who listened to Biden (which fewer and fewer are doing these days) thought to themselves: What planet is this guy living on?  It’s costing me more to fill my gas tank, heat my home and buy food – and my grocery store’s empty shelves look like the old Soviet Union.  I can’t get an appointment for a coronavirus test – and if I do get sick, they are rationing treatments.  I can’t go return to work because my children are back in online school.  I’m afraid to drive my car because my city has seen a surge in carjackings. But Biden thinks he’s doing one heck of a job?

“It’s one thing to oversell a jobs report, or even a foreign policy blunder.  Yet on Wednesday, Biden plans to present a revisionist history of the entire first year of his presidency.  Sorry, but you can’t boast about your Covid strategy when 55 percent disapprove of it.  You can’t brag about your economic performance when 60 percent say it has been dismal. You can’t crow about your foreign policy when 55 percent believe you’re doing a terrible job as commander in chief.  You can’t talk about how you’ve united the country, when a 49 percent plurality say you’ve done more to divide us. And you can’t say you’ve had a great first year in office when 63 percent say we’re on the wrong track.

“Here’s what you can do, Mr. President: Cancel the speech.”

Alas, the president didn’t.

--Senator Mitt Romney (R-UT) was on “Meet the Press” Sunday and was asked by Chuck Todd to describe the state of the nation.

“Well, there’s no question but that the nation is severely divided.  President Biden said he was going to try to unite the country.  Obviously (his) comments in Georgia (on voting rights) did not suggest he’s trying to pull us back together again.  He’s got to recognize that when he was elected, people were not looking for him to transform America. They were looking to get back to normal, to stop the crazy. And it seems like we’re continuing to see the kinds of policy and promotions that are not accepted by the American people.  Look, James Carville just said that, you know, he’s had a bad week, but not a bad year.  No, no, as a matter of fact, he’s had a bad year.  He’s had 52 weeks of bad weeks.  I mean, people are 7% poorer now because of Biden inflation.  Gasoline prices are, what 50% higher than they were when he took office. The border is a mess. Covid was resurgent, but he didn’t have a plan for the tests people needed to keep themselves safe. And then, of course, there was the disaster in Afghanistan. Russia’s now threatening Ukraine.  Things are not going well. And the president needs to stop and reset and say what is it he’s trying to accomplish.  And if it’s to try and transform America, he is not going to unite us.  Bringing us together means finding a way to work on a bipartisan basis.  He had one success, the infrastructure bill, and that was done by Republicans and Democrats in the Senate working together.  Build on that kind of success.”

--A new AP-NORC survey has only 45% of Americans approving of Biden’s handling of Covid-19, down from 57% in December and 66% in July 2021.

--I agree with the New York Times’ Bret Stephens that among the many things Joe Biden needs to do as part of a reset is bring in a new chief of staff.

“Ron Klain is a loyal assistant.  But the president needs a chief of staff who’s a peer,” Stephens noting James Baker and Howard Baker as prime examples.  “What’s Tom Daschle up to these days?”

Wall Street and the Economy

In his news conference on Wednesday, President Biden disturbingly said it was appropriate for the Federal Reserve to recalibrate the support it provides to the U.S. economy, in light of fast-rising prices and the strength of the recovery.

“Given the strength of our economy and recent price increases, it’s appropriate, as…Fed Chairman Powell has indicated, to recalibrate the support that is now necessary,” Biden said.  “The critical job of making sure that the elevated prices don’t become entrenched rests with the Federal Reserve, which has a dual mandate: full employment and stable prices.”

At the same time, Biden said, the White House and Congress could help contain inflation by moving to fix supply chain failures, encourage competition, and pass his Build Back Better spending bill that he says would cut childcare and other costs for families.

Now the Fed has signaled already it is raising interest rates three times this year and Chair Powell recently told those in the Senate overseeing his renomination that he would not allow inflation to become “entrenched,” and said a tighter policy stance was necessary to keep the economy growing.

But it was disturbing that the president highlighted the Fed in his formal remarks as it is traditionally supposed to be independent (though this hasn’t always been the case through history).

I’ll have much more to say about Powell and Co. after they gather for an important meeting next Tues. and Wed., when it is expected that he will telegraph March for the first rate hike.

Next week (Thurs.) we’ll have our first look at fourth-quarter GDP and the Atlanta Fed’s GDPNow barometer stands at 5.1%.

This week we had a little data on the housing front, with December housing starts coming in at 1.702 million annualized, a little better than expected, while December existing home sales were less than forecast, a 6.10 million annualized pace, down 8.3% year-over-year.

This is a little confusing, I grant you.  That’s Dec. 2021 vs. Dec. 2020.  However, for the full year 2021, existing home sales totaled 6.12 million, an increase of 8.5% over the prior year.

[Total existing home sales are composed of completed transactions that include single-family homes, townhomes, condominiums and co-ops.]

The median existing home price (all housing types) for the month was $358,000, up 15.8% from Dec. 2020, which marks 118 straight months of year-over-year increases, the longest-running streak on record.

The figure on weekly jobless claims was 286,000, up big from the prior week but owing to Omicron disruptions.

Europe and Asia

On the eurozone data front….

The big story, like elsewhere around the world, is inflation and Eurostat reported the annual inflation rate was 5.0% in December for the euro area, up from 4.9% in November.  A year earlier, the rate was -0.3%.

Ex-food and energy the rate was 2.7% vs. 0.4% in Dec. 2020.

Germany came in at a troubling 5.7% (the government looking for 3.1% for 2022, per an announcement today), France 3.4%, Italy 4.2%, Spain 6.6%, Netherlands 6.4%, Ireland 5.7%, Greece 4.4%.

The UK reported inflation rising to the highest level in nearly 30 years last month, 5.4%, the highest since March 1992.  The Bank of England is expected to raise its main interest rate at a policy meeting Feb. 3.  Last month it became the world’s first major central bank to tighten policy since the start of the pandemic. The BoE sees a peak in inflation of about 6%, but some economists see 7%.  Inflation was just 0.6% in December 2020, and the BoE repeatedly had to revise up its forecast last year.

Eurostat also reported government debt declined slightly in the third quarter of 2021 for the euro area to 97.7% from 98.3% the prior quarter, though up from 96.6% a year earlier owing to pandemic-related issues.

Germany 69.4%, France 116.0%, Italy 155.3%, Spain 121.8%, Netherlands 52.6%, Greece 200.7%.

Brexit: British Prime Minister Boris Johnson on Wednesday dismissed calls to resign from opponents and some of his own lawmakers, fighting to save his premiership amid a deepening revolt inside his party over a series of lockdown parties in Downing Street.

Johnson, who in 2019 won his party’s biggest majority in more than 30 years, is now fighting to shore up his authority after a series of revelations about parties in his Downing Street residence.  He has repeatedly apologized for the gathering and said he was unaware of many of them.

However, he attended what he said he thought was a work event on May 20, 2020, to which staff had been told to “bring their own booze.”  Johnson said on Tuesday that nobody had told him this get together was against Covid rules, adding he had not lied to parliament about the party.

Johnson also denied an accusation by his former adviser, Dominic Cummings, that he had lied to parliament about a lockdown party, saying nobody had warned him the “bring your own booze” gathering might contravene Covid-19 rules.

“As he waded through the empty bottles and platters of sandwiches – he didn’t realize it was a party? Does the prime minister realize how ridiculous that sounds?” Keir Starmer, leader of the opposition Labour Party, told parliament.  “Every week, the prime minister offers absurd and frankly unbelievable defenses to the Downing Street parties, and each week it unravels.”

Support for Johnson and his party has plummeted after a series of revelations not just about the parties but other missteps.  His own former spokeswoman resigned after she was captured laughing and joking on camera about how to cast a Christmas party if asked about it by reporters.  Such was the revelry at one party that staff went to a supermarket to buy a suitcase of alcohol, spilled wine on carpets, and broke a swing used by the prime minister’s young son.

The Mirror said staff had bought a wine fridge for Friday gatherings, events that were regularly observed by Johnson as he walked to his apartment in the building.

“I expect my leaders to shoulder the responsibility for the actions they take,” Brexit-supporting Conservative lawmaker David Davis told parliament.  Davis cited a quote from a Conservative lawmaker, Leo Amery, to then Prime Minister Neville Chamberlain over his handling of war in 1940: “You have sat there too long for the good you have done. In the name of God, go.”

Asked directly by an opposition lawmaker if he would resign, Johnson said: “No.”

The problem is that toppling Johnson now would leave the UK in total limbo for months just as the West deal with the Ukraine crisis and rising inflation triggered by the pandemic.

To trigger a leadership challenge, 54 of the 360 Conservative MPs in parliament must write letters of no confidence to the chairman of the party’s 1922 Committee.  Thus far, only 20 or so Conservative lawmakers who won their seats at the last national election in 2019 plan to submit letters of no confidence in Johnson, the Telegraph reported.  An analysis by The Times newspaper showed that 58 Conservative lawmakers had openly criticized Johnson, but this doesn’t mean all 58 would take the next step.

I’ve told you that Foreign Secretary Liz Truss is a leading candidate to replace Johnson if it comes to that, but supposedly the bookmakers have Chancellor of the Exchequer Rishi Sunak as the favorite.

Meanwhile, London and Brussels agreed to intensify discussions about Northern Ireland, but talks with Liz Truss’ counterpart, European Commission Vice President Maros Sefcovic were overshadowed by perceptions about her own ambitions to succeed Boris Johnson.

The latest trade data shows some British-based retailers have stopped selling into the Irish Republic, following increased checks on goods moving from Great Britain to Ireland since the U.K. left the EU.  So Irish trade with Northern Ireland is surging because there are still no checks on goods moving between the two jurisdictions.

Turning to Asia…China reported its GDP for the fourth quarter, 4.0% year-over-year (1.6% quarter-over-quarter), and versus 4.9% for the third quarter.  For the full year, GDP rose 8.1% (remember, +18.3% in Q1 because of pandemic comparisons from Q1 2020), which exceeded the government’s target of “over 6%.”

December industrial production rose 4.3% year-over-year, though up 9.6% for the full year.  December retail sales rose 1.7% Y/Y, up 12.5% for 2021.  And fixed asset investment for the full year was up 4.9%.

The jobless rate was 5.1% last month.

All the above courtesy of the National Bureau of Statistics.

China saw an 11.4% decline in new real-estate projects in December, with overall property investment down 14%, year-over-year, according to Bloomberg.

China cut its benchmark lending rate for a second consecutive month on Thursday in the latest move to shore up the cooling economy, while also lowering a mortgage reference rate for the first time in nearly two years.

It’s a stark policy divergence with other major economies. China’s relatively stable prices mean policy makers have shifted to boosting growth.

The rate cut is also part of Beijing’s efforts to put a floor under growth in a crucial year of leadership transition for the world’s second-largest economy.

Lastly, the National Bureau of Statistics reported that the birth rate in mainland China in 2021 dropped to a record low of 7.52 births per 1,000 people.  In 2020, the figure was 8.52.

Japan reported exports for December rose 17.5% year-over-year (up 22.1% to the U.S.), while imports surged 41.1%.

Inflation in December came in at 0.8% annualized, but was down 0.7% ex-food and energy.

Street Bytes

--As alluded to above, stocks continued their losing ways with the S&P 500 and Nasdaq suffering their worst weeks since March 2020, down 5.7% and 7.6%, respectively.  Nasdaq is solidly in correction territory, down 12% already this year and 14.3% from its high.  The Dow Jones lost 4.6%.  All three have been down every week in 2022.

It’s all about inflation, Covid and supply-chain issues, and mixed earnings reports.  It’s also about looming increases in interest rates via central banks around the world.  Next week tech titans Microsoft and Apple report and some are hoping they provide some support.

Cryptocurrencies, the supposed ‘store of value,’ were crushed, with bitcoin below $37,000 tonight as I go to post (down from its Nov. 9 high of $69,000).

--U.S. Treasury Yields

6-mo. 0.34%  2-yr. 1.01%  10-yr. 1.76%  30-yr. 2.08%

The short end of the yield curve continued to edge up in anticipation of rate hikes down the road, while the long end, after seeing rates rise early in the week (to 1.86% on the 10-year), fell back on a flight to safety.

Ditto, that’s what happened across the pond.

Europe’s most closely watched government bond yield, the 10-year German bund, saw its yield turn positive for the first time since 2019 early on, part of a broad readjustment by investors to rising inflation and the global economic rebound from the pandemic.  The yield on the bund had been as low as -0.84% in March 2020.

However, by week’s end as global equity markets continued to crap out, the bund’s yield was back to -0.07%.

The European Central Bank has signaled it will cut back on some of its pandemic-era bond purchases, but unlike the Fed, it hasn’t committed to raising its benchmark interest rates, which are set at minus 0.5%.  Most believe the ECB will eventually have to play catch up to the Fed given the persistence of high inflation in the region.

--Oil touched its highest levels since October 2014 as the International Energy Agency said in its monthly report that the market looks tighter than previously thought, with demand proving resilient to Omicron.

The agency also said global stockpiles are falling rapidly as demand remains robust and the OPEC+ coalition struggles to revive output.  That’s a further indication that production could be lower, or consumption could be higher, than the market estimates, it said.

Additionally, unrest in the Middle East is back on the radar after a drone attack on oil facilities in the United Arab Emirates

The IEA said in its report that global oil inventories have plunged over the last 12 months.  Stockpiles are down by more than a billion barrels since the peak of May 2020 and are well below pre-pandemic levels, according to the report.

At the same time, the IEA raised its global demand growth outlook for full-year 2022 by 200,000 barrels per day to a growth of 3.3 million barrels per day for this year.

The IEA estimates an oil output increase of 4.4 million bpd from OPEC+, and 1.8m bpd from non-OPEC countries in 2022.

--We had the final earnings reports from the big banks this week.

Shares in Goldman Sachs fell hard, 7%, after reporting fourth-quarter profits declined by 13% from a year earlier, largely due to the bank preparing to pay out hefty pay packages to its well-compensated employees.  It’s the latest sign that wages are increasing sharply, particularly on Wall Street. 

The New York-based investment bank earned a profit of $3.94 billion, or $10.81 a share.  That’s down from $4.51 billion, or $12.08 a share, in the same period a year earlier.  The results missed analysts’ expectations, who were looking for $11.80.

While Goldman was able to grow revenues in the quarter, those gains were more than wiped out by the firm’s compensation expenses, some $4.4 billion for all of 2021.  The bank set aside $3.25 billion to cover compensation and benefits in the quarter, up 31% from a year earlier.

Revenue rose 7.6% to $12.64 billion from a year ago, with a 45% rise in investment banking revenue to $3.80 billion in the quarter.

Overall for 2021, Goldman made $21.64 billion in profits, more than double what it earned in 2020.

--Morgan Stanley said its fourth-quarter profits rose 9% from a year ago, helped by a big jump in fee revenue from its growing asset and wealth management business.

The New York-based firm said Wednesday that it earned $3.7 billion in the quarter, up from $3.39bn in the same period a year ago.

Morgan Stanley like the rest faced higher wage and benefit expenses in the quarter.  As Goldman’s CEO said, wage inflation is everywhere, and it would have to keep paying employees higher salaries to keep them in house.

For the full year, MS set aside $24.6 billion to pay its well-compensated employees, an increase of 18% from a year earlier.

Investment banking revenues rose as companies turned to the Street to do deals as well as go public, while trading revenues were down, reflecting a quieter trading environment in the last months of 2021 compared to 2020.

The big growth in Morgan’s profits came in its wealth and asset management business, a longtime focus of CEO James Gorman.  The unit brought in $6.25 billion in revenue last quarter, up 37% from a year earlier.  MS did a couple large acquisitions in wealth and asset management in the past two years. The bank bought the online brokerage firm E-Trade in 2020 and purchased wealth management firm Eaton Vance in 2021.

The acquisitions brought hundreds of billions of dollars of new assets and client wealth under the Morgan Stanley brand.  Gorman has sought to expand the bank’s businesses into more steady forms of income instead of focusing on trading and investment banking, which can be seasonable and impacted by uncontrollable economic forces.

“Combined with Investment Management, we now have $6.5 trillion in client assets.  We have a sustainable business model with scale, capital flexibility, momentum and growth,” Gorman said in a statement.

--Bank of America said its profit rose 28% last quarter from a year earlier - $7.01 billion, up from $5.47bn in the same period a year earlier.

The Charlotte, North Carolina, based bank saw most of its businesses grow profits in the quarter, but much of the growth was in the investment banking division, which saw profits climb to $2.68bn from $1.67bn.

On the consumer banking side, profits rose to $3.12 billion from $2.59bn.  Consumers spent more on the bank’s credit and debit cards while expenses were lower.

Like its competitors, BofA is facing much higher compensation expenses.  The bank spent $36.1 billion on wages and benefits last year, up 10% from a year earlier.  BofA joined Goldman, JPMorgan Chase and Citi in saying they were expecting to see higher salary costs as they compete for talent.

For the full year, Bank of America posted a profit of $30.56bn, nearly double the $16.5bn it earned in 2020 when the pandemic hit the global economy.

--The world tourism industry barely improved last year compared to 2020, with all indicators staying well below pre-pandemic levels and industry professionals not expecting a full recovery before 2024, the World Tourism Organization said on Tuesday.

Rising vaccination rates and the easing of travel restrictions did allow for a small rebound in the second half of 2021, though the spread of the Omicron variant in December triggered another trip in both travel bookings and industry optimism.

Southern Mediterranean Europe, Central America and the Caribbean saw the biggest increases in tourist arrivals compared with 2020, but were still respectively 54%, 56% and 37% below the 2019 numbers.  Meanwhile the number of tourists in the Middle East and the Asia Pacific kept falling in 2021, tumbling to 79% and 94% below pre-pandemic levels respectively as many destinations remained closed to non-essential travel.

The tourism industry’s revenue barely surpassed half its 2019 levels.

--AT&T and Verizon Communications on Tuesday agreed to temporarily defer turning on some wireless towers near key airports to avert a significant disruption to U.S. flights as they roll out 5G service that will bring faster wireless service to tens of millions of people.

Despite the move, major foreign carriers including Air India and Japan’s biggest airline, ANA Holdings, said they had canceled some U.S.-bound flights because of possible 5G interference.

Editorial / Wall Street Journal

“It’s hard to know which is more messed up these days – air transportation, or the Biden Administration.  As another case in point, consider the clash between airlines and wireless carriers over 5G.

“Verizon and AT&T said Tuesday they’ll delay a 5G rollout planned for Wednesday after airlines complained it would disrupt flights across the country.  President Biden took credit for preventing anarchy in the skies, though his Administration created the mess.

“At issue is the C-band spectrum that carriers plan to use to blanket metro areas with 5G.  Carriers paid the U.S. government $80 billion for this valuable spectrum, but the Federal Aviation Administration now won’t let them use it. The agency says the signals could potentially interfere with plane altimeters that measure the distance to the ground.

“The Federal Communications Commission reviewed these concerns during notice-and-comment on its plan to repurpose C-band from satellite operators.  In March 2020, it approved a 258-page decision that included a safe buffer between the bands occupied by altimeters and 5G – larger than many other countries require.

“Yet some 20 months later, the FAA demanded to relitigate the FCC decision and took airlines and carriers hostage.  If Verizon and AT&T didn’t pause their 5G rollout, the FAA would order flights grounded or diverted.  AT&T and Verizon didn’t want to be blamed for that, so they twice agreed to scale back and delay their rollouts….

“On Sunday, the FAA said it had cleared only 45% of U.S. commercial airplanes to land in low-visibility conditions at only 48 of the 88 airports it deemed at highest risk from potential 5G interference.  This didn’t cover Boeing’s wide-bodied 777 and 787 models, which are flying in countries around the world with fewer 5G restrictions.

“This meant airlines would have to reroute or cancel thousands of flights.  The disruptions would cause immediate havoc while forgone 5G service wouldn’t be felt by Americans.  Wireless carriers would be blamed for the chaos, which is probably why they conceded Tuesday to more ‘voluntary’ and ‘temporary’ restrictions.

“ ‘At our sole discretion, we have voluntarily agreed to temporarily defer turning on a limited number of towers around certain airport runways as we continue to work with the aviation industry and the FAA to provide further information about our 5G deployment, since they have not utilized the two years they’ve had to responsibly plan for this deployment,’ AT&T said.

“That’s far too charitable to the FAA and Transportation Department.  Transportation Secretary Pete Buttigieg rolled FCC Chair Jessica Rosenworcel, who has supported the carriers’ 5G rollout behind the scenes.  And now he and Mr. Biden are portraying their blundering as a diplomatic victory.  This Administration needs less political spin and more competent governance.”

--United Airlines Holdings said the emergence of the Omicron variant of Covid dented near-term bookings and will slow its recovery, but said the setback is likely to be temporary.

UAL is scaling back its schedule in the first months of the year as it grapples with the variant’s impact on travel demand.  United said it now expects to fly less this year than it did in 2019, down 16% to 18%, instead of the 5% growth it had previously anticipated.

Still, robust holiday travel demand drove United’s fourth-quarter revenue to $8.2 billion, down nearly 25% from the same period in 2019 but the highest quarterly total since before the pandemic began to decimate travel demand. 

Wednesday, United reported a loss of $646 million for the fourth quarter, and $1.96 billion for the year.  The Q4 adjusted loss was less than expected by the Street.

United said bookings for this spring and beyond remain strong and that its expansion plans have merely been delayed until later in the year.

UAL has projected a decline in its operating revenue in the first quarter of 20% to 25% versus three years ago.

--American Airlines’ fourth-quarter results improved from last year and fared better than analysts’ consensus, but the impact of the Omicron variant has affected the timing of a full revenue recovery, and so the shares, like United’s, fell after the report.

American reported an adjusted net loss of $1.42 per share for the quarter ended Dec. 31, narrowing from a $3.86 per share loss last year.

Total operating revenue surged to $9.43 billion, the highest for any quarter since the start of the pandemic, from $4.03 billion, but revenue was down 17% from the same period in 2019.

Demand that’s impacted by Covid and elevated fuel prices is expected to continue to put pressure on the company’s shorter-term margins.  The airline expects revenue for the current quarter to be down roughly 20% to 22% and its capacity to be 8% to 10% lower compared with the same period in 2019.

Outgoing CEO Doug Parker, who is set to be succeeded by President Robert Isom at the end of March, told analysts the company expects to hire another 18,000 staff this year, after adding 16,000 new employees in 2021.

--TSA checkpoint travel numbers vs. 2019….

1/20…68 percent of 2019 levels
1/19…68
1/18…81
1/17…75
1/16…64
1/15…79
1/14…108…but low number (1,728,383)
1/13…82

--Toyota said on Tuesday it expects to miss its annual 9 million vehicle production target because competition for semiconductors meant it didn’t have enough to ramp up car output to offset production lost during the pandemic last year.  The world’s biggest car maker also could not predict how long the chip shortage would last.

Toyota and other automakers have been forced to curb production even as demand in key markets such as China has rebounded.  In addition to tackling chip shortages caused by Covid-19 supply-chain disruptions, car makers also have had to contend with soaring semiconductor demand at consumer electronic companies.

The maker of the Corolla compact sedan said it will build 700,000 cars globally in February, more than last year, but 150,000 fewer than it had initially planned.

--Intel has selected a site near Columbus, Ohio, for a new chip manufacturing complex that would cost at least $20 billion, ramping up an effort to increase U.S. production on computer chips amid lingering shortages, as noted above.

Intel said the new site would initially have two chip factories and would directly employ 3,000 people, while creating additional jobs in construction and at nearby businesses.

CEO Patrick Gelsinger said, “We will go bigger and broader” (up to $100bn) if Congress approves a spending package known as the CHIPS Act.  The move is Intel’s first to a new state for manufacturing in more than 40 years.  The company, based in Silicon Valley, has U.S. factories in Oregon, New Mexico and Arizona.  Last March, Gelsinger chose an existing complex near Phoenix for a $20 billion expansion, which is now underway.

The CHIPS Act, which was passed by the Senate with bipartisan support last June, would provide $52 billion in subsidies for the chip industry, including grants to companies that build new U.S. factories.  But the package has gotten caught up in House bickering over the Biden administration’s priorities.

--Netflix delivered its latest quarter of disappointing subscriber growth during the final three months of last year, a trend that management foresees continuing into the new year as tougher competition is undercutting the video streaming leader.

The Los Gatos, California, company added 8.3 million worldwide subscribers during the October-December period, about 200,000 fewer than management had forecast.  Besides releasing its fourth-quarter results Thursday, Netflix also projected an increase of 2.5 million subscribers during the first three months of this year, well below analysts’ expectations for a gain of 4 million.

The disappointing news caused Netflix’s stock price to plunge nearly 20% after the market had closed Thursday and the weakness carried into Friday, the shares finishing down nearly 22%.

It capped a challenging year for the company after it reveled in eye-popping gains during the pandemic lockdowns of 2020 that drove homebound people to its service.

Netflix picked up 18.2 million worldwide subscribers during 2021, its slowest pace of annual growth in five years.  It came after the company gained more than 36 million subscribers during 2020.  The service now boasts nearly 222 million worldwide subscribers, more than any other video streaming leader.

But other services backed by big-pocketed rivals such as Walt Disney Co. and Apple have been making inroads in recent years and many other networks are moving into video streaming.  The escalating competition is one reason Netflix decided to expand into video games last year.

Netflix emphasized its service is still thriving in every country where it’s available, but investors are getting worried that the company may be nearing its peak in popularity.  The stock price has plummeted more than 40% from its peak of $700 reached in mid-November (Nov. 17).

The opportunities for future growth have become particularly tough in Netflix’s biggest market – the U.S. and Canada – where most households interesting in subscribing to the service already have an account.

Last week, Netflix raised its price by roughly 10% within the U.S. and Canada – a move that could cause some subscribers to cancel the service.

On the upside, Netflix is unveiling its fourth season of “Ozark,” one of the most popular series and a potential magnet for new subscribers.

--Microsoft Corp. said on Tuesday it was acquiring “Call of Duty” videogame maker Activision Blizzard for $68.7 billion in cash, the biggest deal in the sector that would help the Xbox maker become the third-largest gaming company on revenue.

Microsoft’s offer of $95 per share was a premium of 45% to Activision’s Friday close.

“Gaming is the most dynamic and exciting category in entertainment across all platforms today and will play a key role in the development of metaverse platforms,” Microsoft CEO Satya Nadella said in a statement.

Activision’s library of games such as “Call of Duty” and “Overwatch” gives Microsoft’s Xbox gaming platform an edge over Sony’s PlayStation, which has for years enjoyed a more steady stream of exclusive games.  [Sony shares fell 9% on Wednesday in response.]

Activision shares have slumped over 37% since hitting their record high last year, largely hurt by allegations of sexual harassment and other misconduct at the videogame company.  The company is still addressing those allegations and said on Monday it had fired or pushed out more than three dozen employees and disciplined another 40 since July.  Bobby Kotick will continue to serve as CEO of Activision Blizzard.

The sector is consolidating with larger firms buying up smaller players in recent years.  Last week, “Grand Theft Auto” video game maker Take-Two Interactive said it would buy Zynga for $11.04 billion in a cash-and-stock deal that will add popular mobile titles such as “Farmville” under its umbrella as demand surges for on-the-go gaming.

But the Microsoft move is going to receive a close look from antitrust enforcers in the U.S. and abroad at a time when they have stepped up scrutiny of proposed mergers, especially in the tech sector.  The company has largely avoided the spotlight recently as the Justice Department, the Federal Trade Commission and members of Congress have focused instead on alleged threats to competition presented by Alphabet’s Google, Amazon.com, Apple Inc. and Meta Platforms Inc.’s Facebook.

The Activision acquisition could, however, give Microsoft a turn in the hot seat, and for that reason, Activision shares closed today at about $81, well off the $95 acquisition price.

--Peloton Interactive, per a CNBC report on Thursday, was said to be pausing production of bikes and treadmills to cope with a slowdown in its business.  The company cut its 2022 forecast by about $1 billion and while it pushed back on the idea it was idling factories to save money, it confirmed the company was cutting jobs and “resetting” production.

The company has seen a slump in demand for its fitness classes and equipment as people venture out of their houses to hit gyms again following gradual easing of pandemic-related curbs.

Peloton shares finished the week at $27, down from a 52-week high of $166.

--Procter & Gamble Co. raised its annual sales forecast on Wednesday, as the consumer goods giant benefits from higher prices and resurgent demand for cleaning products due to a spike in Covid infections.

P&G said sales in its fabric & home care unit, the company’s biggest segment and home to brands such as Tide and Mr. Clean, rose 7% in its second quarter, while sales in the company’s personal health care business increased about 20% as a more intense flu season led to a rise in demand for respiratory products, the company said.

Overall net sales rose to $20.95 billion, above estimates.  The Gillette razor maker said it expects fiscal 2022 organic sales to rise 4% to 5%.  P&G also expects a hit of about $2.8 billion related to commodity, freight and foreign exchange headwinds this fiscal year, compared with a prior forecast of about $2.3 billion.

--Starbucks Corp. suspended Covid-19 vaccine-or-test requirements for U.S. employees that had been mandated by the government, according to a memo sent to workers on Tuesday, following an adverse U.S. Supreme Court ruling.  Earlier this month, the coffee giant had said it would require its around 220,000 U.S. employees to be fully vaccinated against Covid or undergo weekly testing.

The move follows a similar decision by General Electric Co., which originally told its 56,000 employees in the U.S. that they were required to get vaccinated or seek a religious or medical accommodation.  Last Friday it suspended its requirements.

--Apple Inc. will require retail and corporate employees to provide proof of a Covid-19 booster shot.  Starting Jan. 24 unvaccinated employees or those who haven’t submitted proof of vaccination will need negative Covid-19 tests to enter Apple workplaces, according to an internal email.

Citigroup is sticking with its vaccine mandate for its U.S. workers.  The bank said it had reached 99% compliance among its 65,000 employees in the U.S.

--Union Pacific shares moved higher Thursday after the company reported earnings of $1.71 billion, or $2.66 per share, in the last three months of 2021, up from $1.38 billion, $2.05 per share a year ago.  Revenue grew 12% to $5.73 billion.

Union Pacific hauled 4% less freight in Q4 as the computer chip shortage continued to hurt auto production and supply chain problems cribbed shipments of imported containers of goods.  The railroad also wrestled with crew shortages as Covid-19 spread through the workforce.

But the results exceeded Wall Street’s expectations.

“Although uncertainty remains around Covid variants and supply chain disruptions, we see a positive demand environment in 2022 and continued traction from business development efforts driving growth,” CEO Lance Fritz said in a prepared statement.

--Shares of Macau casino operators have surged after the city’s government unveiled draft revisions to its gambling laws last weekend that weren’t nearly as draconian as feared.

But now Macau needs visitors.  Gaming revenues last year plunged 70% from 2019, though they’ve picked up from the trough.  Macau has resumed quarantine-free travel with mainland China, but traveling to the semiautonomous Chinese city isn’t exactly hassle-free.  Visitor arrivals to Macau are still only a fifth of the levels seen in 2019.

--Government agricultural forecasters said they expect the smallest Florida orange crop since World War II, touching off a rally in juice futures that were already at their highest level in years because of the pandemic.

--Right-wing cable channel One America News Network – which has spread conspiracy theories about the 2020 election, the Jan. 6 Capitol riot and the safety of coronavirus vaccines – will be dropped by DirecTV, one of its largest television distributors later this year.

The move by a satellite and streaming network with about 15 million subscribers is a significant setback for OAN and its owners, the Herring family.  Losing its slot on the DirecTV lineup will almost certainly diminish the network’s overall audience and cut into its annual revenue.

This month, on the anniversary of the Jan. 6 attack, One America News ran a segment about “the patriotic demonstrations at the Capitol on Jan. 6” that suggested the attack was a so-called “false flag” operation by liberals intended to strip patriotic Americans of their liberties.

On the vaccine, one anchor, Pearson Sharp, told viewers: “The fallout from the coronavirus vaccine continues to grow, and the toll on human life is now worse than anyone could have imagined.”  [Michael Grynbaum / New York Times]

--NBC Sports’ play-by-play teams will not be reporting from the scene at the Winter Olympic Games in Beijing.  Teams instead will be based at the sports division’s studios in Stamford, Conn., rather than subject them to the risk of contracting the Omicron variant that has been on the rise in China.

Going in, the ratings for the Games were going to be miserable (my opinion) and this won’t help.  At the delayed Tokyo Games last summer, NBC did have teams on the scene for the major events such as gymnastics and swimming.

The Pandemic

Hospitalizations in New York and New Jersey continue to decline from peaks set about two weeks ago, though the number of patients in intensive care and those requiring ventilators is “steady,” as New Jersey Gov. Murphy said on Wednesday.

The government is making 400 million non-surgical “N95” masks available from its strategic national stockpile for free to the public starting next week, the White House announced.  CVS and Walgreens, which together have 19,000 stores, will distribute them.  I hope you ordered your free tests…covidtests.gov.

Meanwhile, the head of the World Health Organization issued a warning to world leaders that the coronavirus pandemic “is nowhere near over.”

Dr. Tedros Adhanom Ghebreyesus cautioned against the assumption that the newly dominant Omicron variant is significantly milder and has eliminated the threat posed by the virus.

While the variant may prove to be less severe on average, Dr. Tedros said, “the narrative that it is a mild disease is misleading.  Make no mistake, Omicron is causing hospitalizations and deaths, and even the less severe cases are inundating health facilities.”

He warned global leaders that “with the incredible growth of Omicron globally, new variants are likely to emerge, which is why tracking and assessment remain critical.”

Look at the U.S. death tolls below.  It’s still serious even as cases and hospitalizations wane in some areas.

Covid-19 death tolls, as of early tonight….

World…5,603,036
USA…887,640
Brazil…622,647
India…488,911
Russia…324,752
Mexico…302,390
Peru…203,994
UK…153,490
Indonesia…144,201
Italy…142,963
Iran…132,172
Colombia…131,824
France…128,347
Argentina…118,969
Germany…117,219
Poland…103,626
Ukraine…98,993
South Africa…93,349
Spain…91,741
Turkey…85,600
Romania…59,477
Philippines…53,309
Hungary…40,822
Chile…39,474
Czechia…36,997
Vietnam…36,443
Ecuador…34,287
Bulgaria…32,604
Canada…32,369
Malaysia…31,869
Pakistan…29,065
Belgium…28,759
Bangladesh…28,192
Tunisia…25,912
Iraq…24,277
Egypt…22,289
Greece…22,476
Thailand…22,003
Netherlands…21,200
Bolivia…20,504

[Source: worldometers.info]

U.S. daily death tolls…Mon. 468; Tues. 1,720; Wed. 2,374; Thurs. 2,700; Fri. 2,774.

Covid Bytes

--Interestingly, despite some signs of Covid peaking in parts of the world, and in the U.S., a new Gallup poll of U.S. adults, conducted online Jan. 3 through 14, found a steep rise in the percentage of Americans who said the pandemic is “getting worse,” as compared to fall 2021 data.

“Worry has jumped…and is now the highest it has been since last winter, before Covid-19 vaccines were readily available to the general public,” a summary of poll results says.

Americans’ optimism had increased when vaccines started rolling out and when case counts declined following the Delta surge.  But even though a winter spike in Omicron cases was coupled with good news about severe disease, over half of respondents said they think the pandemic is getting worse.

A majority of Americans (56%) said they avoided large crowds in the past week because of their concern about catching the coronavirus, a higher percentage than at any point since mass vaccine roll-outs went into effect in the spring, according to poll data.

It also found that less than one-in-five Americans say they have dined inside a restaurant in the previous 24 hours, down from late fall data.

But the level of mask wearing, around 72%, has leveled off, compared to rates of around 90% during the second half of 2020, which is surprising given the transmissibility of Omicron, researchers said.

After a brief period last summer and early fall of being a bit loose with my own mask wearing, for months now I am back to putting one on in grocery stores and other establishments.

--The World Health Organization’s chief scientist said this week there is no evidence at present that healthy children and adolescents need booster doses of Covid-19 vaccine.

Soumya Swaminathan, speaking at a news briefing on Tuesday, said that while there seems to be some waning of vaccine immunity over time against the rapidly spreading Omicron variant, more research needs to be done to ascertain who needs booster doses.  “There is no evidence right now that healthy children or healthy adolescents need boosters.  No evidence at all,” she said.

Israel has begun offering boosters to children as young as 12, and the U.S. FDA earlier authorized the use of a third dose of the Pfizer and BioNTech vaccine for children aged 12 to 15.

--People who had previously been infected with Covid-19 were better protected against the Delta variant than those who were vaccinated alone, suggesting that natural immunity was a more potent shield than vaccines against the variant, California and New York health officials reported on Wednesday.

Protection against Delta was highest, however, among people who were both vaccinated and had survived a previous Covid infection, and lowest among those who had never been infected or vaccinated, the study found.

Nevertheless, vaccination remains the safest strategy against Covid-19, according to the report published in the CDC’s Morbidity and Mortality Weekly Report.

The results do not apply to the Omicron variant of the virus, which now accounts for 99.5% of Covid-19 cases in the U.S.  “The evidence in this report does not change our vaccination recommendations,” said Dr. Ben Silk of the CDC and one of the study’s authors.  “We know that vaccination is still the safest way to protect yourself against Covid-19,” he said.

--A fourth dose of the Pfizer-BioNTech vaccine was insufficient to prevent infection with the Omicron variant, according to preliminary data from a trial in Israel released Monday.

Two weeks after the start of the trial of 154 medical personnel, researchers found the vaccine raised antibody levels.

But that only offered a partial defense against Omicron, according to the trial’s lead researcher. Vaccines which were more effective against previous variants offer less protection with Omicron. Still, those infected in the trial had only slight symptoms or none at all.

Last week, European Union regulators warned that frequent Covid-19 booster shots could weaken the immune system and may not be feasible.

--However, today, three large U.S. studies offered more evidence that Covid vaccines are standing up to Omicron.

The papers echo previous research – including studies in Germany, South Africa and the U.K. – indicating available vaccines are less effective against Omicron than earlier versions of the coronavirus, but also that boosters significantly improve protection.

Two of the articles were published online by the CDC, and the third was published in the Journal of the American Medical Association.

Among the conclusions, unvaccinated adults aged 65 or older are nearly 50 Xs (49) more likely to be hospitalized from Covid than their boosted peers.

Unvaccinated people between 50 and 64 years old were 44 times more likely to need hospitalization compared with their boosted counterparts.

--Germany registered more than 100,000 new Covid-19 infections in a 24-hour period, the country’s public health agency said on Wednesday, a record.

Germany has further tightened curbs to cut contamination, limiting access to bars and restaurants to people who have received their booster jabs or who are tested on top of being fully vaccinated or recovered.

Contact restrictions are also in place keeping private gatherings to 10 people, or two households if an unvaccinated person is present.

Omicron has become the dominant variant in Europe, with neighboring France recently averaging around 300,000 cases daily.

German Chancellor Olaf Scholz is seeking to introduce compulsory vaccinations to ramp up the immunity of the 83-million-strong population, of which 60 million are fully vaccinated.

But resistance has been growing in the country, with thousands protesting to rail against the government’s Covid strategy and planned vaccine mandate.

--Russia reported a record number of new coronavirus infections Friday as Omicron continues its rapid spread across the country.  The government reported a 27% rise in new infections in a single day.

--But Ireland’s government is lifting almost all Covid-19 restrictions, including a return to normal opening hours for hospitality and the end of the use of the digital pass for pubs and restaurants, which is huge.  I’ve heard from my friends there that demand is soaring on the tourism front (as in if you think you are going to get a tee-time on a top golf course this summer, it’s probably too late to book one).  Seriously.  Also you need to book your flights now.

--Japan, on the other hand, is mandating that restaurants and bars close early in Tokyo and other major metropolitan areas as the country widens its Covid-19 restrictions due to the Omicron variant, which has caused cases to surge to new highs in metropolitan areas.

While many Japanese adults are fully vaccinated against Covid-19, few have gotten a booster shot.

The Health Ministry on Friday approved Pfizer vaccinations for children aged 5-11.

Throughout the pandemic, Japan has resisted the use of lockdowns to limit the spread of the virus and has focused instead on requiring eateries to close early and not serve alcohol, and on urging the public to wear masks and practice social distancing, as the government seeks to minimize damage to the economy.

--Australia suffered its deadliest day of the pandemic as a fast-moving Omicron outbreak continued to push up hospitalization rates to record levels, even as daily infections eased slightly.

A total of 74 deaths were registered between New South Wales, Victoria and Queensland, Australia’s three most populous states, exceeding the previous high of 57.

--Hong Kong hamster owners have begun heeding the government’s call to surrender their pets for a massive cull sparked by suspicions of a possible animal-to-human transmission of Covid.

But the announcement was met with widespread opposition, with more than 25,000 signing a petition calling for it to be scrapped, though leading epidemiologists on Wednesday urged the general public to be understanding of the need to contain the health risk believed to be posed by the tiny rodents.

The health minister cited evidence of the first potential animal-to-human transmission of Covid-19 in the city at a local pet shop.

Seven hamsters returned a positive result when tested for the coronavirus. Two people, including an employee and a customer of the shop, were confirmed to have Covid.

Foreign Affairs

Russia/Ukraine:

At his Wednesday press conference, as noted above, President Biden said “Russia will be held accountable if it invades.”  But he then gave his detractors an opening when he warned that the U.S. response “depends on what [Russia] does.  It’s one thing if it’s a minor incursion and then we end up having a fight about what to do and not do, et cetera.”

Thursday, Ukrainian President Volodymyr Zelensky responded on Twitter there were no “minor incursions and small nations,” an unusually blunt response to President Biden’s comments.

“We want to remind the great powers that there are no minor incursions and small nations.  Just as there are no minor casualties and little grief from the loss of loved ones.  I say this as the president of a great power Ukraine,” Zelensky tweeted.

Ukraine’s Foreign Minister Dmytro Kuleba told the Wall Street Journal: “We should not give Putin the slightest chance to play with quasi-aggression or small incursion operations. This aggression was there since 2014.  This is the fact.”  However, he added, “We in Ukraine have no doubt that President Biden is committed to Ukraine.”

Republican Senator Ben Sasse (Neb.) told Reuters: “President Biden basically gave Putin a green light to invade Ukraine by yammering about the supposed insignificance of a ‘minor incursion.’  He projected weakness, not strength.”

Any Russian incursion into Ukraine would be a disaster for both countries and for the world at large, British Prime Minister Johnson said Thursday, adding that the United Kingdom stood behind the sovereignty of Ukraine.

“Be in no doubt that if Russia were to make any kind of incursion into Ukraine, or on any scale, whatever, I think that that would be a disaster, not just for Ukraine, but for Russia.  It would be a disaster for the world,” Johnson told broadcasters.  “The UK stands squarely behind the sovereignty and integrity of Ukraine.”

[Britain said on Monday it had begun supplying Ukraine with anti-tank weapons to help it defense itself.]

Thursday, President Biden attempted to clarify his comments of the day before.

“I’ve been absolutely clear with President Putin. He has no misunderstanding. If any – any – assembled Russian units move across the Ukrainian border, that is an invasion.  But it will be met with severe and coordinated economic response that I’ve discussed in detail with our allies, as well as laid out very clearly for President Putin.”

If Putin chooses to invade, Biden added, “Russia will pay a heavy price.”

Today, Secretary of State Blinken and Russian Foreign Minister Sergei Lavrov met in Geneva and there were no major breakthroughs at talks on Ukraine, but the two sides agreed to keep talking.

After the discussions, Blinken warned of a “swift, severe” response if Russia invades and Lavrov said Moscow was still waiting for a written response to demands for security guarantees.

But both said they were open to further dialogue, and Blinken saw grounds to hope that mutual security concerns could be addressed.

“Based on the conversations we’ve had – the extensive conversations – over the past week and today here in Geneva I think there are grounds for and a means to address some of the mutual concerns that we have about security,” Blinken said.

Lavrov said the ball was in Washington’s court, and Moscow would understand whether talks were on the right track once it had received a written response to its sweeping security demands from the United States.

Russia’s demands include a halt to the West’s eastward expansion and a pledge that Ukraine will never be allowed to join NATO.

Russia and the U.S. could hold another meeting next month to discuss Moscow’s demands for security guarantees.

Earlier, Ukraine’s Foreign Minster Kuleba told reporters Wednesday that Russia wants to sow panic and distrust and destabilize Ukraine’s financial system.

“The greatest achievement of Russia today will be the sowing of panic, distrust in Ukrainian society…destabilizing us from the inside, destabilizing our economy, our financial system,” he said.  “We must make every effort to prevent Russia from achieving this goal without even taking weapons out of our pockets.”

Meanwhile, Germany could find itself in a no-win situation if Russia invades Ukraine, pitting Berlin’s main gas supplier against its most important security allies.  Chancellor Scholz would face pressure from the United States and other Western allies to respond to any invasion by stopping the recently completed Nord Stream 2 pipeline from Russia to Germany going into operation.

But doing so would risk exacerbating a gas supply crunch in Europe that has been widely blamed on a dearth of gas flows from Russia and has caused energy prices in Europe to soar.  The price surge has hit companies and consumers across the region hard, not least the low-income workers in Germany that Scholz’s Social Democrats rely on for votes.

Any invasion of Ukraine would likely trigger new international sanctions, with measures against Nord Stream 2 widely seen as one of the strongest ways to put pressure on Moscow.  But Scholz faces disagreements in his coalition government about how far German sanctions on Nord Stream 2 should go if Russia attacks.  The Greens would like to scrap the project, as they oppose fossil fuels.  They also want to send a clear signal to Putin that military aggression abroad and undemocratic practices at home will not be rewarded with gas contracts.  The pro-business Free Democrats have signaled they prefer a tougher approach toward Russia as well.

Scholz’s defense minister, Christine Lambrecht, has said Nord Stream 2 should not be dragged into the Ukraine crisis.  So the European Union’s most populous country and biggest economy is in danger of looking divided, and Scholz risks looking weak if he does not show firm leadership in the crisis.

Lastly, Russian lawmakers called on parliament on Wednesday to appeal to President Putin to recognize two pro-Russian breakaway regions in eastern Ukraine as independent states – the Donetsk People’s Republic and the Luhansk People’s Republic, “as self-sufficient, sovereign and independent states.”

Both regions have adopted the Russian ruble as their official currency and schools there follow the Russian curriculum.

Bernard-Henri Levy / Wall Street Journal

“It would be very good if the sleepwalkers in France, America and the rest of the world would wake and hear Russian military expert Konstantin Sivkov musing about Russia’s ‘nuclear potential’ to ‘physically eliminate’ Europe and explaining that, at the end of this hypothetical nuclear war, ‘there will be…almost no survivors.’

“There remain, among supposedly enlightened Western thinkers, many fools who would accept the annexation of Crimea to avoid the annexation of Ukraine, and then the invasion of Ukraine to prevent an invasion of the Balkans, followed by the subjugation of the Balkans to ward off the Finlandization of the Baltic states, the neutralization of Poland, and even the placing under Russian tutelage of the great states of Western Europe. This is all reminiscent of the appeasement that produced the 1938 Munich Pact.

“Mr. Putin has declared war on Europe, and the West.  It is a cold war, a war deferred, with an Iron Curtain falling (for the moment) along the Ukrainian frontline.  But it is a war all the same.

“Its instigator now bears in history’s eyes the immense responsibility of having broken the taboo against war, which has preserved the safety of the European Continent twice devastated by world war. During the 80-odd days leading up to the presidential election in France, there should be no issue more pressing than this programmatic kidnapping, as Milan Kundera might put it, by one of our worst enemies.”

North Korea: North Korea said Thursday it would bolster defenses against the United States and consider restarting “all temporally-suspended activities,” an apparent reference to a self-imposed moratorium on testing its nuclear bombs and long-range missiles, state media KCNA reported.

Tensions have been rising over a recent series of North Korea missile tests, four thus far in 2022.  A U.S. push for fresh sanctions was followed by heated reaction from Pyongyang, raising the specter of a return to the period of so-called “fire and fury” threats of 2017. 

Kim Jong Un convened a meeting of the powerful politburo of the ruling Worker’s Party on Wednesday to discuss “important policy issues,” including countermeasures over “hostile” U.S. policy, KCNA said.  Washington’s policy and military threats had “reached a danger line,” citing joint U.S.-South Korea military exercises, the deployment of cutting-edge U.S. strategic weapons in the region, and the implementation of independent and UN sanctions.

According to KCNA, the politburo said, “We should make more thorough preparation for a long-term confrontation with the U.S. imperialists.”

North Korea has not tested its longest-range intercontinental ballistic missiles (ICBMs) or nuclear weapons since 2017, amid a flurry of diplomacy with Washington after the North test fired a ballistic missile capable of striking the U.S. mainland.  But it began testing a range of new short-range ballistic missiles after denuclearization talks stalled and slipped back into a standoff following a failed summit in 2019.

On a different front, China reestablished a railroad link with North Korea, giving a much-needed boost to Kim’s battered economy as the neighbors restored a service Pyongyang cut about a year and a half ago due to pandemic fears.

China: A member of China’s Olympics organizing committee warned that foreign athletes may face punishment for speech that violates Chinese law at the 2022 Winter Games, spotlighting concerns about the country’s restrictions on political expression.

“Any expression that is in line with the Olympic spirit I’m sure will be protected,” Yang Shu, deputy director general of international relations for the Beijing Organizing Committee, said in a news conference Tuesday.  “Any behavior or speech that is against the Olympic spirit, especially against the Chinese laws and regulations, are also subject to certain punishment.”

The above, broadly speaking, is in line with the International Olympic Committee’s established rule against political protest at the Games, and the IOC had announced before last year’s Summer Olympics in Tokyo that athletes staging protests there would be punished, ignoring U.S. calls to allow respectful protest for human rights issues.

But we’re talking China here.  If I were an athlete, I wouldn’t test them.  Speakers at a seminar hosted by Human Rights Watch on Tuesday actually advised athletes against criticizing China’s human rights record while in Beijing for their own safety.

There are also reports the U.S. and other countries have advised athletes to take “burner phones” to Beijing to avoid surveillance.

Meanwhile, China halted ticket sales to the general public for the Games and will instead invite groups of spectators to attend events.

Separately, one of China’s scientific satellites narrowly avoided colliding with a piece of orbital debris generated by Russia blowing up one of its old satellites, the Chinese space agency said.

The “extremely dangerous encounter” took place on Tuesday when the Tsinghua Science Satellite missed a piece of debris by 14.5 meters, the China National Space Administration’s debris center said on Wednesday.

The debris was generated by the anti-satellite missile test that Russia carried out in November, without letting the world know beforehand, and now it’s a risk to all nations operating in space.  An estimated 1,500 sizable pieces of debris are now in orbit.

Iran: The United States and its European allies said on Thursday that it was now just a matter of weeks to salvage the 2015 nuclear deal after a round of talks in which a French diplomatic source said there had been no progress on the core issues.

Indirect talks between Iran and the United States on reviving the deal resumed almost two months ago.  Western diplomats have previously indicated they were hoping to have a breakthrough over the next few weeks, but sharp differences remain with the toughest issues still unresolved.

Iran has rejected any deadline imposed by the Western Powers.  Diplomats and analysts say the longer Iran remains outside the deal, the more nuclear expertise it is gaining, shortening the time it will need to race to build a bomb if it chose to, thereby undermining the accord’s original purpose.

“We are indeed at a decisive moment,” U.S Secretary of State Blinken told a news conference after meeting French, German and British ministers in Berlin.  “There is real urgency and it’s really now a matter of weeks, where we determine whether or not we can return to mutual compliance with the agreement.’

The eighth round of talks, the first under Iran’s new hardline President Ebrahim Raisi, resumed on Dec. 27 after adding some new Iranian demands to a working text.

Iran’s chief demand is that the U.S. provide a guarantee that it won’t again quit the pact and reimpose sanctions, diplomats involved in talks in Austria say.

The U.S. has consistently said no president can legally tie the hands of a successor without a treaty that would need to garner the backing of two thirds of the Senate.  The U.S. has also said the current talks should remain focused on restoring the 2015 deal, not seeking new commitments on both sides.

China’s Foreign Minister Wang Yi blasted the U.S., saying Washington should assume the “main responsibility” and “correct its mistake” of backing away from the nuke deal as soon as possible.

“China firmly opposed the illegal unilateral sanctions against Iran, opposes using human rights and other issues as an excuse for political manipulation, and opposes gross interference in the internal affairs of Iran and other regional countries,” Wang said on Friday.

It would seem all parties agree…February is it.  This process will not proceed into March and beyond.  You can ignore President Biden’s talk of “some progress being made” at his Wednesday press conference.

Iraq: Gunmen from the Islamic State attacked an army barracks in a mountainous area north of Baghdad early Friday, killing 11 soldiers as they slept, Iraqi security officials said.

While ISIS was largely defeated in the country in 2017, it remains active through sleeper cells in many areas.

Yemen/UAE: Yemen’s Iran-aligned Houthi group attacked the United Arab Emirates in what it said was an operation using missiles and drones, setting off explosions in fuel trucks that killed three people, and causing a fire near the airport of Abu Dhabi, capital of the region’s commercial and tourism hub.

The strike on a leading Gulf Arab ally of the United States takes the war between the Houthi group and a Saudi-led coalition to a new level, and may hinder efforts to contain regional tensions as Washington and Tehran work on the nuclear deal.

But then we had this…at least 70 were killed, scores injured, in a retaliatory air strike by the Saudi coalition.  A detention center was hit in Saada, Yemen, a stronghold of the Houthis.  Many of the victims were children.

Tens of thousands of civilians, including more than 10,000 children, have been killed or wounded as a direct result of the fighting in the country.

Millions have been displaced and much of the population stands on the brink of famine.

The United States, in arming the coalition, bears some responsibility. 

Random Musings

--Presidential approval ratings….

Gallup: New one…40% approve of President Biden’s job performance, 56% disapprove; 33% of independents approve (Jan. 3-16).

Easily the worst numbers of the Biden presidency.  The splits on inauguration day were 57-37, 61% of independents.  A shocking decline and goodbye House and Senate for the Democrats come November.  Gallup is the oldest in their business and to me the most creditable, and these figures are deadly.

Rasmussen: 41% approve, 58% disapprove of Biden’s performance (Jan. 21).

A CBS News poll gave President Biden a 44% job approval rating, 56% disapproval.  Vice President Kamala Harris received the exact same ratings.

A new NBC News survey of adults had Biden with a 43% approval rating, 54% disapproving (44-54 among registered voters).

And an Associated Press-NORC Center for Public Affairs Research poll has Biden at 43% approval, 56% disapproval…so amazing consistency in all of these surveys.

--Trump World

The Supreme Court on Wednesday refused a request from former President Trump to block the release of White House records concerning the Jan. 6 attack on the Capitol, rejecting his claim of executive privilege and clearing the way for the House committee investigating the riot to receive the documents hours later.

The court, with only Justice Clarence Thomas noting a dissent, let stand an appeals court ruling that Trump’s desire to maintain the confidentiality of internal White House communications was outweighed by the need for a full accounting of the attack and the disruption of the certification of the 2020 electoral count.

In an unsigned order, the majority wrote that Trump’s request for a stay while the case moved forward presented weighty issues, including “whether and in what circumstances a former president may obtain a court order preventing disclosure of privileged records from his tenure in office, in the face of a determination by the incumbent president to waive the privilege.”

“Because the court of appeals concluded that President Trump’s claims would have failed even if he were the incumbent, his status as a former president necessarily made no difference to the court’s decision,” the order said.

Within hours, the National Archives turned over hundreds of pages of documents to the committee.

Representative Bennie Thompson (D-Miss.), chairman of the committee, and Rep. Liz Cheney (R-Wy.), vice chairwoman, called the decision “a victory for the rule of law and American democracy.”

“Our work goes forward to uncover all the facts about the violence of Jan. 6 and its causes,” they said.

The committee has a short timetable to work with, desiring to get a report out months before the November elections, knowing that Republicans will shut the inquiry down if they win back the majority, as seems very clear will be the case.

--Separately, the congressional committee issued subpoenas on Tuesday to Rudy Giuliani and two other Trump lawyers, Sidney Powell and Jenna Ellis, demanding they hand over documents and sit for depositions on Feb. 8.  Rep. Thompson said in a statement the panel expects the lawyers to join the nearly 400 witnesses who have spoken with the Select Committee as part of their investigation.

According to reports today, Giuliani led the plot to install fake electors in 7 states.

And then the committee ‘invited’ Ivanka Trump to seek her cooperation as it tries to piece together a scramble inside the White House to persuade Donald Trump to denounce the attackers at the Capitol.

In a letter to Ivanka, the committee included an exchange of texts between Sean Hannity and Kayleigh McEnany a day after, Jan. 7, describing a five-point plan for approaching conversations with the president.

In public, Hannity and McEnany remained lock-step supporters of Trump, but their private exchanges showed a level of alarm among the president’s closest allies after the Jan. 6 riot.  The committee wants to know what Ivanka saw, since it’s a fact she went in to see her father at least twice that day, urging him to stop the violence.

--On a different matter, New York Attorney General Letitia James’ office late Tuesday told a court its investigators had uncovered evidence that Donald Trump’s company used “fraudulent or misleading” asset valuations to get loans and tax benefits.

The court filing said state authorities haven’t yet decided whether to bring a civil lawsuit in connection with the allegations, but that investigators need to question Trump and his two eldest children (Ivanka and Don Jr.) as part of the probe.

In the court documents, James’ office gave its most detailed accounting yet of a long-running investigation of allegations that Trump’s company exaggerated the value of assets to get favorable loan terms, or misstated what land was worth to slash its tax burden.

The Trump Organization, it said, had overstated the value of land donations made in New York and California on paperwork submitted to the IRS to justify several million dollars in tax deductions.

The company misreported the size of Trump’s Manhattan penthouse, saying it was nearly three times its actual size – a difference in value of about $200 million, James’ office said, citing deposition testimony from Trump’s longtime financial chief Allen Weisselberg, who was charged last year with tax fraud in a parallel criminal investigation.

Investigators, the court papers said, had “developed significant additional evidence indicating that the Trump Organization used fraudulent or misleading asset valuations to obtain a host of economic benefits, including loans, insurance coverage, and tax deductions.”

--The former president held his first political rally of the new year in Arizona on Friday, continuing to insist that he had won the 2020 election without evidence.

“I love Arizona. We had a tremendous victory in Arizona that was taken away and I just want to wish everybody a happy New Year.  We’re going to have, I think, a great year,” Trump said after taking the stage to loud cheers.

“Last year we had a rigged election and the proof is all over the place,” he continued.  “We have a lot of proof and they know it’s proof.  They always talk about the Big Lie – they’re the Big Lie.”

“The Big Lie is a lot of bullshit, that’s what it is,” he said to more cheers.

Trump’s claims came one day after officials from Arizona’s second-largest county concluded that none of the 151 cases they reviewed merited criminal charges.

“While PCAO’s investigation documented instances of these voters knowingly submitting more than one ballot, there is little to no evidence that they acted with the awareness that their actions would or could result in multiple votes being counted,” said Pima County Attorney Laura Conover in a statement on Friday.  “What our investigation revealed was the genuine confusion about the electoral process, particularly relating to mail-in and provisional ballots, and the genuine fear, for a variety of reasons, that their initial vote would not count.”

According to an investigation by the Associated Press, fewer than 200 cases of potential fraud in Arizona had been identified until last week, when election officials in Maricopa County – the state’s largest – said they had discovered 38 potential voting fraud cases during an exhaustive review of 2.1 million ballots.  Those cases were sent to the state attorney general’s office for review.

Trump also mentioned the Jan. 6 rioters, whom he said were being “persecuted” for expressing their First Amendment rights when they disrupted Congress’ certification of the electoral votes that would officially make Biden president.

“On top of it all, people are being persecuted for using freedom of speech to talk about the corrupt election but more and more information is coming out and it’s coming out far worse than anyone ever thought it could be.”

Trump said, “it would be a lot easier for me to go out and enjoy my life and say ‘you know what? We did great.’  You know I ran twice and I won twice and we did better the second time,” he claimed.

At the rally, Trump threw his support behind GOP gubernatorial candidate Kari Lake, who pushed Trump’s stolen election narrative and has threatened to throw the state’s top election official in prison.

Arizona Rep. Paul Gosar, a vehement Trump supporter and 2020 election results denier, also took the stage; Gosar despised by his own brothers, which tells you all you need to know about the congressman.

Personally, I’m glad I was in New Jersey, Saturday, watching the Bills demolish the Patriots, as much as I do love Arizona overall.

--New York Gov. Kathy Hochul holds an enormous lead in this year’s Democratic gubernatorial primary, while Mayor Eric Adams starts off with a 63% approval rating in a Siena college poll released Tuesday.

Hochul carries a 34-point advantage over her closest competitor, former Mayor Bill de Blasio, who made a surprise announcement on Tuesday that he would sit the campaign out.

Earlier, Attorney General Letitia James ended her run for governor last month.

In the Siena poll, Hochul had the support of 46% of Democrats.  Among those still left, New York City’s progressive public advocate, Jumaane Williams was at 11% and Rep. Tom Suozzi, a Long Island moderate, garnered 6%.

Ergo, it’s all Hochul.

As for Eric Adams, while he has a 63% favorability rating vs. 20% unfavorable, the poll was conducted before he drew criticism for naming his brother, Bernard, to a top NYPD post.

--As you saw last Sunday on “60 Minutes,” after almost 80 years historians have uncovered who betrayed Anne Frank’s family to the Nazis on Aug. 4, 1944, in a police raid in Amsterdam where the Frank family was hiding out for about two years to protect themselves from persecution.  Anne, the teenage diarist, and her elder sister Margot were taken to Auschwitz and later to the Bergen-Belsen camp, where they died in 1945 – just months before World War II ended.

Otto Frank was the only member of the family still alive when Auschwitz was liberated by Soviet troops. He later published his daughter’s chronicles, which have since been translated into more than 70 languages.

Now, a group of researchers led by a former FBI agent say they identified the individual who betrayed them, Arnold van den Bergh, a Jewish notary.  He may been privy to lists of addresses where Jewish people had been hiding through his work on the city’s Jewish Council, and that he may have divulged the information to protect his own family.

Like millions of Americans, I read “The Diary of Anne Frank” (also known as “The Diary of a Young Girl”) when I think I was in sixth grade.  When I was 10 years old in 1968, our family took its first of multiple trips to Europe and the first stop was Amsterdam, where we toured the Anne Frank House.

The team of researchers, led by retired FBI agent Vincent Pankoke, published the details of their investigation in a book, “The Betrayal of Anne Frank: A Cold Case Investigation,” by Canadian author Rosemary Sullivan.

--What a horrific scene we had over the weekend with the huge volcanic eruption, a series of them, that occurred in the waters off Tonga in the South Pacific.  The initial blast, captured on satellite, was heard over 1,400 miles away in New Zealand, which is just staggering to think of.  [The Washington Post said it was heard in Alaska, about 5,000 miles away!]

Satellite imagery captured “gravity waves” rippling outward, and within six hours of the initial blast, the ash and smoke plume from Hunga Tonga covered an area larger than New England.

Lightning detection networks and satellites tallied more than 60,000 strikes in 15 minutes following the volcano’s initial blast, corresponding to nearly 70 lightning strikes per second.  Few, if any, conventional thunderstorms could compare.

And you saw the tsunami waves of several feet in wide parts of the world, the waves killing two in Peru.

There was some good news.  The ash that has coated Tonga is acidic but not poisonous, according to the experts, which means the water captured in rainwater supplies would be better to drink in an emergency than any stagnant water that might be contaminated with bacteria.  New Zealand, Australia and others have been rushing emergency supplies to the island chain.

Huge volcanic eruptions can sometimes cause temporary global cooling as sulfur dioxide is pumped into the stratosphere, but initial satellite measurements indicate the amount of the material released was relatively insignificant (like 0.02 Fahrenheit worth), said an expert at Rutgers University.

--The “potentially hazardous” asteroid bigger than any building in the world that passed by Earth on Tuesday, 1.2 million miles away, 1994 PC1, had it hit would cause “complete catastrophe” and destroy nearly everything within a 25 mile radius of the impact, according to Franck Marchis, Chief Scientific Officer at Unistellar and Senior Planetary Astronomer at the SETI Institute.

“The amount of energy is 10,000 megatons of TNT. That’s more than a nuclear blast,” Marchis told USA TODAY. 

1994 PC1 is classified as “potentially hazardous” because it crosses Earth’s orbit.

Back on Jan. 17, 1933, the same asteroid was an estimated 699,000 miles away.

--In Monday’s big east coast snowstorm, at one point 4.6 inches of snow fell in one hour at the Buffalo International Airport, the region receiving about 18 inches overall.

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

God bless America.

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Gold $1836
Oil $84.83

Returns for the week 1/17-1/21

Dow Jones  -4.6%  [34265]
S&P 500  -5.7%  [4397]
S&P MidCap  -6.8%
Russell 2000  -8.1%
Nasdaq  -7.6%  [13768]

Returns for the period 1/1/22-1/21/22

Dow Jones  -5.7%
S&P 500  -7.7%
S&P MidCap  -8.7%
Russell 2000  -11.5%
Nasdaq  -12.0%

Bulls  43.7
Bears  23.0…no update this week.

Hang in there.

Brian Trumbore

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