Week in Review

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Week in Review

02/19/2022

For the week 2/14-2/18

[Posted 9:15 PM ET, Friday]

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Edition 1,192

I went out on the limb last week in giving my predictions on an invasion, and I could just as easily use that opening a second time.

But there are differences, big differences, in where we were last Friday night compared with where we stand tonight.

Instead of an estimated 100,000 to 130,000 Russian troops on the border with Ukraine, there are 155,000 to 190,000.

And it would appear as I go to post that a false flag operation in eastern Ukraine, Luhansk, is underway, with two ‘reported’ explosions in the region within 40 minutes, one on a gas pipeline (these are separate from the staged car bombing this afternoon).  I have much more on this angle below.

New satellite imagery shows a large deployment of helicopters in Northwest Belarus and a battle group deployment of tanks, personnel carriers and support equipment at an airfield in Belarus, 16 miles from the Ukraine border.

Tomorrow, Russian President Vladimir Putin is personally overseeing large-scale military drills, including ballistic and cruise missiles, a none too subtle reminder to the world that, first and foremost, Russia is a nuclear power.

Ukrainian President Volodymyr Zelensky is slated to fly to Munich, Germany, tomorrow for a major security conference.  The United States has urged him not to go for security reasons.  His plane could be shot down.  Or he could be prohibited in some fashion from returning to Kyiv.  It is hoped Zelensky has a change of heart tomorrow morning.

Late this afternoon, President Biden addressed the nation from the White House and said he is convinced Putin has decided to invade Ukraine.

“As of this moment, I am convinced he has made the decision.  We have reason to believe that.  We believe that they will target Ukraine’s capital Kyiv.”  The president cited U.S. intelligence but provided no details to support his assertion.  Biden said diplomacy remains open to prevent war until Putin actually begins an attack.

NATO Secretary General Jens Stoltenberg said in an interview on Thursday the West will have to live, on some level, with this more aggressive Russia.

“Regardless of whether Russia invades Ukraine or not, what we have seen so far I’m afraid represents a new normal because what we have seen is that Russia has been willing to amass large numbers of combat ready troops to try to intimidate and threaten Ukraine, but also try to threaten NATO allies,” he said.

President Biden is receiving solid marks for his recent actions regarding the crisis.  Senate Minority Leader Mitch McConnell, talking about comments Biden had made early in the week:

“(The president) was right to emphasize that the world will not shrug or stand idly by if Vladimir Putin tries to invade his neighbor, or redraw the map of Europe through deadly force,” McConnell said.

He added that Biden would have “overwhelming bipartisan support to use his existing executive authorities for tough sanctions against Russia in the event of conflict.”

But at the same time, McConnell blamed Biden for weakness in the U.S. withdrawal from Afghanistan, rightfully so.

“But for the catastrophe in Afghanistan, there’s not a doubt in my mind – not a doubt in my mind – that the Russians wouldn’t be on the border of Ukraine with 100,000 or more troops, had we not indicated to the rest of the world we were pulling the plug on Afghanistan and going home,” McConnell told reporters on Tuesday.

Lawmakers have so far failed to pass a bipartisan slate of sanctions against Moscow.  The House and Senate are both scheduled to be out of session next week around the Presidents’ Day holiday.

Meanwhile, the sham Beijing Olympics end Sunday.  An invasion of any sort in Ukraine is going to benefit Chinese President Xi Jinping.  I would look for him to immediately begin to take advantage of a distracted West and launch record-level incursions into Taiwan’s airspace, that could quickly escalate from there.

Also look for North Korea’s Kim Jong Un to test a long-range ballistic missile, with the conclusion of the Winter Games. 

For its part, Wall Street is closed Monday.  As in I’ll be shocked if Tuesday is a good one for the markets.

Lastly, you know the drill.  Make sure you have some cash at home and keep the gas tank at least half-filled for a while.  Just in case there are cyberattacks on our financial system and/or energy grid.

Editorial / The Economist

“The news, for a moment, seemed encouraging.  In a stage-managed television appearance on February 14th Vladimir Putin grunted a terse ‘good’ to the proposal of his foreign minister that, despite warnings by the West of an imminent invasion of Ukraine, diplomacy should continue.  A day later Russia’s defense ministry said that some of the 180,000 or so troops it has deployed at its borders with Ukraine are to be withdrawn to barracks, having completed their military exercises which, it has always maintained, is why they were there in the first place.

“Officials, and the markets, breathed a small sigh of relief.  Alas, open-source intelligence soon showed that, although a few units were moving, many more were preparing to fight.  With the candor that has wrong-footed Mr. Putin, many Western security officials accused him of lying, redoubling their warnings of a looming Russian invasion.  Even if the troops pull back, this crisis is not yet over.  And, whatever happens, war or no war, Mr. Putin has damaged his country by engineering it.

“Plenty of Western observers would dispute that judgment. Without firing a shot, they point out, Mr. Putin has made himself the center of global attention, proving that Russia matters once more.  He has destabilized Ukraine and impressed on everyone that its future is his business.  He may yet win concessions from NATO for avoiding war. And at home he has underlined his statesmanship and distracted from economic hardship and the repression of opposition figures such as Alexei Navalny, who was this week once again hauled before a judge.

“Yet these gains are tactical.  Even as Mr. Putin has won them, in a longer-lasting and more strategic sense he has lost ground.

“For one thing, although all eyes are on Mr. Putin, he has galvanized his opponents.  Led by Joe Biden, who once called Mr. Putin ‘a killer’ and surely loathes the man who tried to deny him the presidency, the West has agreed on a tougher package of threatened sanctions than in 2014, when Russia annexed Crimea.  NATO, dismissed in 2019 by the French president as suffering ‘brain death,’ has found renewed purpose in protecting its Russia-facing flanks.  Having always preferred to keep their distance, Sweden and Finland, may even join the alliance. Germany, having unwisely backed the new Nord Stream 2 pipeline, has accepted that Russian gas is a liability it must deal with and that an invasion would kill off the project.  If Mr. Putin imagined that his threats would be met with Western mush, he has been disabused.

“Ukraine has indeed suffered.  But the crisis has also affirmed the popular sense among Ukrainians that their destiny lies with the West.  True, Mr. Putin has extracted assurances that Ukraine is not about to join NATO – but these were cheap, because membership was always remote.  What matters more is that, having been neglected in recent years, Ukraine is enjoying the West’s unprecedented diplomatic and military support.  Those bonds, forged in crisis, will not suddenly dissolve if Russian forces pull back.  Again, it is the opposite of what Mr. Putin wanted….

“As well as devastating Ukraine, war would do far greater harm to Russia than the threat of war. The West would be more galvanized and more determined to turn its back on Russian gas; Ukraine would become a running sore, bleeding Russia of money and men; and Mr. Putin would be a pariah.  Russia itself would be blighted, in the short run by sanctions and later by still deeper autarky and repression.

“Mr. Putin has painted himself into a corner.  He could lash out.  Yet a retreat now, with his ambitions thwarted, may only lead to an attack later.  By standing up to the threat he poses, the West has the best chance of deterring that fateful choice.”

Editorial / Wall Street Journal

“A Russian invasion of Ukraine would be a seminal event that accelerates the new world disorder. The signs have been building for years, but America and its allies are unprepared, as democracies usually are, for the trouble to come.  President Biden has a particular obligation to explain the stakes and unite the country as other Presidents have done to meet the challenge.

“The Biden Administration has done a decent rear-guard job of mobilizing Europe and NATO in opposition to Russia’s designs on Ukraine – despite his blunder in dropping Nord Stream 2 sanctions.  The allies are mostly on board the U.S. promise of ‘massive consequences’ if Russia invades, though we wonder how long Germany, France and Italy would stay the course. The weak Western sanctions after Russia’s invasion of Georgia in 2008, and Crimea in 2014, encouraged Vladimir Putin to believe Europe lacks the will to resist with anything serious.

“What Mr. Biden hasn’t done is explain to Americans the new global dangers and what must be done to protect U.S. interests. The problem goes far beyond Ukraine. China wants to capture Taiwan and dominate the Western Pacific.  The new Russia-China condominium means they’ll work together against U.S. interests. Iran is close to getting a nuclear weapon, and jihadists are far from vanquished.

“Advancing technology and its proliferation also put Americans at risk – at home and abroad. The cyberattack on the Colonial Pipeline last year was a modest show of the damage a foreign actor can inflict on the U.S. homeland.  Hypersonic and antisatellite weapons could take out U.S. defenses around the world in minutes and with little or no warning.  Imagine a high-tech Pearl Harbor.

“None of this is alarmist or far-fetched to anyone paying attention.  Yet most Americans seem indifferent or complacent about the risks.  Partly this is the result of fatigue at the wars in Iraq and Afghanistan.  The last three Presidents have also fed the desire, on the left and right, to come home, America.

“Barack Obama responded meekly to Mr. Putin’s advances and to Beijing’s in the South China Sea.  Donald Trump struck a stronger pose, and he increased defense spending, but he also fed the illusion that the U.S. could retreat from the world and remain safe.  Mr. Biden mostly ignored the world in the 2020 campaign, and his botched withdrawal from Afghanistan has convinced adversaries, and even many allies, that the U.S. is in retreat.

“But reality eventually bites, and now it is doing so on Mr. Biden’s watch.  Presidents have to respond to the world as it is, not as their campaign promises wanted it to be. The question is whether he will meet the moment as his predecessors did, or let the disorder spread.

“His first obligation is to explain the dangers, why they threaten the U.S., and what must be done in response.  This isn’t merely about human rights and democracy – Mr. Biden’s go-to themes.

“The spread of aggression and disorder threaten American freedom and prosperity.  No one is about to invade the homeland but cyberattacks could cripple chunks of the economy.  Allies that have long been at our side could turn away and appease the new rogues.  U.S. economic interests will be at risk….

“Above all, Mr. Biden will need to build bipartisan alliances on national security, as FDR and Harry Truman did at other hinge points in history.  Isolationist forces always emerge when the world becomes more dangerous, in the hope the U.S. can hide behind a Fortress America.  Mr. Biden will need to find allies in both parties to defeat that siren call….

“None of this will be easy in our divided politics, and there are those who believe Mr. Biden is too weak and spent to do it.  But you cope with disorder, and deter war, with the President you have.  Mr. Biden has three years left in his term, and the world’s rogues won’t wait until 2024 for the U.S. to get its act together.”

Biden Agenda

--In a 50-50 Senate, Democrats don’t have a winning hand in their bid to resurrect the party’s economic agenda.  Sen. Joe Manchin (D-WV), for example, supports raising some taxes, but Sen. Kyrsten Sinema (D-AZ) is opposed to doing so. 

Ergo, if the Dems are to get both to go along with a scaled-down version of Build Back Better, party leadership needs to work some magic.

Manchin has repeatedly said the party should focus an updated version of the bill on increasing government revenue.  Raising taxes enough to more than offset the bill’s spending would reduce the budget deficit and fight inflation, he said, in addressing his earlier concerns that led to his opposition on BBB.

Manchin is willing to raise the corporate tax rate to 25% from 21%, and increase the capital-gains rate to 28% from 23.8%, while increasing taxes on private-equity managers’ carried-interest income.

But Democrats abandoned those tax proposals last year because of opposition from Sinema.

--Joseph Epstein / Wall Street Journal

“When I listen to a speech by President Biden I am occasionally in agreement, often bored, rarely exhilarated and never inspired. I realize that he doesn’t write these speeches; few presidents since Abraham Lincoln have written their own speeches.  Ronald Reagan didn’t even write the sentence for which he is best remembered: ‘Mr. Gorbachev, tear down this wall.’  Peter Robinson, a speechwriter, did.

“Something central is missing from President Biden’s speeches, the same thing that is missing from the man.  It’s gravitas – that dignity, seriousness and convincing solemnity that powerful public utterances carry.  Mr. Biden simply doesn’t have gravitas in him.  In his political career he has always seemed less a public servant than an operator, less a president than a backroom politician.  Yet, thanks chiefly to American voters’ deep repugnance toward Donald Trump – surely more than half of Mr. Biden’s 81 million votes in 2020 weren’t for him but against Mr. Trump – Joe Biden ended up president.

“In his speeches Mr. Biden may quote his parents’ homey wisdom: ‘ ‘Joey,’ my dad said to me when I was a boy…’  He may lean in to the mic to whisper what he feels are home truths.  Yet the speeches, as he reads them off his teleprompter, never come alive. The true Joe Biden is the Joe Biden who says, in the manner of the home-improvement salesman, ‘Look, here’s the deal.’  The real Joe Biden can’t rise above even the hint of criticism from the press.  The most recent example was his hot-mic comment about a Fox White House reporter.  Mr. Biden called Peter Doocy ‘a stupid son of a bitch’ for asking a rather conventional question about inflation.

“How does one achieve gravitas?  Some come to it naturally; some acquire it with the acquisition of education and culture. Gravitas often derives from pondering serious things in a serious manner.  Implicit in gravitas is the thoughtful understanding of pressing questions, problems and issues.  Reagan may not have written his best line, but there is little doubt that he truly, and rightly, believed that Soviet Communism was ‘an evil empire,’ and he acted on that belief in helping to bring it down.

“One of Mr. Biden’s problems is that we don’t know what he truly believes.  He ran for office as the great healer, the man who would bring the country back to the center after the stormy Trump years.  Yet since he attained office, that Joe Biden has disappeared, and now often appears to be the spokesman for the Democratic Party’s divisive left wing.

“He considers himself a champion of African-Americans, yet he eulogized Sen. Robert Byrd, a Klansman in his youth, and the longtime segregationist Sen. Strom Thurmond.  The man who now promises to appoint a black woman to the Supreme Court is the same man who warned in 2005 that if President Bush nominated Judge Janice Rogers Brown, ‘I can assure you that would be a very, very, very difficult fight and she probably would be filibustered.’

“The man who was chiefly responsible for the 1994 crime law is now strangely silent on the need to enforce punishment strictly for current-day criminals.  If the law of contradictions were enforced, Joe Biden would be serving a life sentence.

“Barack Obama may not have been your notion of a great president (he wasn’t mine), but he knew how to act presidential.  He never sullied the office with financial or sexual scandal.  The same can’t be said about Mr. Biden. He often speaks of his dead children, but of his living son Hunter, with the many accusations of corruption against him, not a word.

“We have at least three more years of President Biden, and possibly seven more if the Republicans allow Mr. Trump to run against him in 2024.  What with the conflicted messaging about the coronavirus, the out-of-control flow of illegal immigrants past the southern border, omnipresent crime in the streets, persistent inflation, and international challenges for world supremacy emerging from both Russia and China, strong leadership from the White House is urgently needed.

“Yet because Mr. Biden seems so without solid principles, so without clear policies, so unpresidential, the U.S. feels sadly leaderless.  Can there be any doubt that having so unpresidential a president has contributed greatly to the deflating sense of hopelessness that seems to have swept over the country?”

--David Axelrod / New York Times

“Right now, the White House is gearing up for the president’s first State of the Union address. His speechwriters are churning out drafts, gathering guidance from strategists and senior aides and contending with fervent pleas from every agency of the federal government for a paragraph in the speech – even a sentence – about their good works.

“The speech will command the largest television audience the president is likely to enjoy this year, and the temptation will be, as it always is, to herald his achievements and declare that we have navigated the storm.

“But, Mr. President, procced with caution.  Talk about the things you and Congress have done to help meet the challenges Americans are facing, for sure.  Lay out your goals for the future, absolutely.  Offer realistic hope for better days ahead. We desperately need it.  But recognize that we are still in the grips of a national trauma.  Polls show that the vast majority of Americans believe we are on the wrong track, and people will have little patience for lavish claims of progress that defy their lived experiences.

“Even if we are, objectively, in a stronger position than we were a year ago – closer to the end of this ordeal than the beginning – Americans are not celebrating.  Millions have lost loved ones; many continue to struggle with the effects of the virus.  Kids lost valuable time in the classroom, and parents have struggled to cope.  Health care workers are in crisis. And we all have felt the profound cost of our relative isolation, away from family and friends, offices and colleagues.

“Unsurprisingly, incidents of suicide, drug overdose deaths and violence in our homes and on the streets have grown dramatically.  Frustrations with masks, mandates and shifting rules have deepened our political divides.  Jobs have come roaring back, raising wages.  But those wage increases have been eaten up by inflation, the likes of which we have not seen in four decades.  And all the while, the rich have gotten richer.

“The state of the union is stressed. To claim otherwise – to highlight the progress we have made, without fully acknowledging the hard road we have traveled and the distance we need to go – would seem off-key and out of touch.  You simply cannot jawbone Americans into believing that things are better than they feel.

“At a news conference on the eve of his first anniversary in office, President Biden tried.  He energetically sold a litany of achievements – record job growth; a massive and complex vaccine mobilization; a historic rescue act and a landmark infrastructure bill, forged with bipartisan support.  He did acknowledge the trials this country has endured, but only sparingly.  He got the emphasis and proportions wrong, spending more time pitching his successes and touting progress than he did recognizing the grinding concerns that have sourced the mood of the country….

“Even if the Omicron wave has greatly receded by the time Mr. Biden speaks – which may be what the White House was hoping for when his address to Congress was delayed until March 1 – the lingering effects of the pandemic still will be with us.  The nation likely will still be in a funk, and its people will want to hear their president recognize why….

“What Americans want to hear is genuine understanding of what we have been through, together and a clear path forward – less about Mr. Biden’s accomplishments than about the heroic, unsung sacrifices so many have made to see their families and communities through.  They will want to hear less about his ‘transformative’ legislation than the specific, practical steps Mr. Biden has taken, and is recommending, to help reduce inflation, curb violent crime and, of course, effectively confront any future waves of the virus. They want it to be less about him than us….

“Middle-Class Joe is a nickname he earned over the years, a reflection of his values and sensibilities.  Many national politicians speak the language of Washington.  Mr. Biden, at his best, speaks American.

“Now, he needs to find that voice by telling the story of the ordeal so many Americans have shared, honoring their resilience and painting a credible, realistic picture of how we can all reclaim control of our lives.”

--Jake Tapper / CNN’s State of the Union, Feb. 13…blasting Joe Biden on Afghanistan.

TAPPER: A U.S. Army review of the chaotic U.S. exit from Afghanistan last summer was obtained by The Washington Post this past week.

In the review, the commander on the ground during the operation reported that the military would have been – quote – “much better prepared” to conduct a more orderly evacuation – quote – “if policy-makers had paid attention to the indicators of what was happening on the ground” – unquote.

A few days ago, NBC News asked President Biden about the accounts in these documents.

(BEGIN VIDEO CLIP)

LESTER HOLT, NBC NEWS: It interviewed many military officials and officers, who said the administration ignored the handwriting on the wall.

Another described trying to get folks in the embassy ready to evacuate, encountering people who were essentially in denial of the situation.

Does any of that ring true to you?

JOE BIDEN: No. No.  That’s not what I was told.

(END VIDEO CLIP)

TAPPER: “That’s not what I was told,” the president said, not what he was told.

The documents go into detail about how, in the views of the service members on the ground, the U.S. ambassador and others in the Biden administration did not see the security threat for what it really was and did not adequately prepare for withdrawal, that there was a lack of urgency in the White House’s National Security Council.

The day Kabul fell to the Taliban, U.S. troops were described as going room to room at the embassy, pushing State Department personnel to prepare, but some were – quote – “intoxicated and cowering in rooms” and others were – quote – “operating like it was day-to-day operations, with absolutely no sense of urgency or recognition of the situation” – unquote.

Now, President Biden’s denial of this reflects the same attitude seen in a Biden administration official quote about that allegation to The Washington Post – quote – “Were there any truth to it, we presumably would not be learning of it six months after the fact” – unquote.

Yes, that’s not how it works.  Bad information not flowing upward, that’s a longstanding tradition.  Almost 10 years ago, as then-President Obama prepared to try to leave Afghanistan, I asked him this question suggested by a soldier friend.

(BEGIN VIDEO CLIP)

TAPPER: Do you feel that the reporting you received from the Pentagon fully represents what the on-ground commanders assess?  Is there any disconnect between what leaders feel the public and president want to hear vs. what is actually occurring on the ground?

BARACK OBAMA: One of the things that I emphasize whenever I’m talking to John Allen, or the Joint Chiefs, or any of the officers who are in Afghanistan is, I can’t afford a whitewash.

I can’t afford not getting the very best information in order to make good decisions. I think the reports we get are relatively accurate, in the sense that there is real improvement.

(END VIDEO CLIP)

TAPPER: We know now the degree to which so many of these reports were whitewashes, so optimistic as to have been false.

The thing is, President Biden knew this then.  Biden has been a skeptic of the war in Afghanistan for years, precisely because he did not buy into the rosy scenarios from Foggy Bottom and from the Pentagon.

(BEGIN VIDEO CLIP)

HOLT: Are you rejecting the conclusions or the accounts that are in this Army report?

BIDEN: Yes, I am.

HOLT: So, they’re not true?

BIDEN: I’m rejecting them.

(END VIDEO CLIP)

TAPPER: It’s difficult to overstate how insulting Biden’s sweeping rejection is to so many service members and veterans, given the full content of the 2,000 pages of documents in this U.S. Army investigation, which CNN has also obtained.  Many accounts are from troops who were on the ground at the gates near the canal around the airport, noncommissioned officers, junior officers, Joes, people with little political motivation to lie, and heavy legal and moral obligation to tell the truth in sworn statements, people like the men and women that Biden visited with last November at Fort Bragg.

(BEGIN VIDEO CLIP)

BIDEN: The thing that is amazing to me is how proud I am to be your commander in chief.  You are the most incredible group of women and men warriors that we have ever seen.

(END VIDEO CLIP)

TAPPER: People in that North Carolina crowd served with staff Sergeant Ryan Knauss, a special operations soldier stationed at Fort Bragg before deploying to Kabul.

Testimonies about what happened are a big chunk of the report.  And one details Knauss’ final moments.  He was one of 13 American service members killed during the Abbey Gate suicide bombing in August.  Though the name and rank are redacted from the record, it’s clear the service member giving the testimony knew Staff Sergeant Knauss.

He describes the chaos at the scene, the crowds of Afghans pushing and shoving their way into Abbey Gate.  He tells of being knocked to the ground by the explosion of the suicide bomber, getting up and dragging his unconscious, but still breathing teammate, Staff Sergeant Knauss, away from further danger, trying to keep him from choking on his swollen tongue.

He loads Knauss into the bed of a truck.  He clears his weapon and tucks it beside his teammate, and the truck drives away.

(BEGIN VIDEO CLIP)

BIDEN: You do so much and your families give so much. I really mean it from the bottom of my heart.

And so I just – we came because we wanted to thank you, tell you how much we care.

(END VIDEO CLIP)

TAPPER: I don’t doubt President Biden cares.

But I do not understand why he would not manifest that care into taking this investigation more seriously, absorbing the tragic details, contemplating the obvious failures of his administration, failures that cost lives.

Now, Biden always bristles at this because he feels confident that ending the war in Afghanistan was the right decision.  But that’s not the question at hand. It’s not whether, but how the war ended and what that means to the people who were there when it did finally end.

No part of these military interviews ring true because that’s not what I was told?

If this was not what you were told, then what was?  And don’t you have an obligation, sir, to be told?  Don’t you have an obligation to Ryan Knauss’ family, to his grieving mother?

(BEGIN VIDEO CLIP)

PAULA KNAUSS, MOTHER OF KILLED U.S. SOLDIER: They were sitting ducks.  How do I feel?  I feel grief, and I feel anger. I am angry for the waste of life.

(END VIDEO CLIP)

TAPPER: Isn’t that how you demonstrate how much you care?  Otherwise, isn’t it just words?

--According to a new CNN/SSRS poll, conducted in January and February, 45% of Democrats and Democratic-leaning voters wanted to see the party renominate Joe Biden in 2024, while 51% preferred a different candidate.

[Republican and Republican-leaning voters are about evenly split between wanting their party to nominate Donald Trump again (50%) or wanting a different candidate (49%).  A majority of Republicans (54%) favored Trump, compared with 38% of Republican-leaning independents.]

Wall Street and the Economy

After last week’s consumer price data for January, on Tuesday we had producer prices, higher than expected and up 9.7% for the last 12 months, a whopping 8.3% ex-food and energy.

January retail sales came in far hotter than expected, up 3.8%, 3.3% ex-autos, but this is one data point that isn’t adjusted for inflation, meaning higher retail sales figures can reflect higher prices rather than more purchases.  Many believe inflation will account for over 50% of retail sales in 2022, up from about a third in 2021.

Industrial production in the month was also stronger than forecast, up 1.4%.

January housing starts, however, were far less than expected, a 1.638 million annualized rate, rising mortgage rates having an impact on builders.  Existing home sales in the month, however, were better than forecast, up 6.7% from December to a seasonally adjusted annualized rate of 6.50 million, though this was down 2.3% from a year ago.  The median existing single family home price rose to $357,000, up 15.9% year over year, fueled by a 33% jump in homes in the $750,000 to $1 million range.

But the average rate on a 30-year fixed-rate mortgage loan was at 3.92% for the week ended Thursday, and depending on what is happening in Ukraine, or the latest from a Federal Reserve governor, we’ve seen the 30-year rate over 4.00%, the highest level since May 2019.  And that hurts affordability.

A red-hot housing market fueled close to $3.99 trillion in loan originations in 2021, just off a record high of $4.11 trillion in 2020. That figure is expected to decline to $2.6 trillion in 2022, according to the Mortgage Bankers Association.

With all the above, the Atlanta Fed’s GDPNow barometer for first-quarter growth is at 1.3%.

So back to inflation, the minutes of the Jan. 25-26 Federal Reserve policy meeting were released on Wednesday, and officials agreed that, with inflation widening its grip on the economy and employment strong, it was time to tighten monetary policy, but also that decisions would depend on a meeting-by-meeting analysis of data.

Participants agreed that the U.S. central bank’s target interest rate would likely have to rise at a “faster pace” than it did when the Fed last lifted interest rates in 2015, said the minutes.  But “even so, participants emphasized that the appropriate path of policy would depend on economic and financial developments and their implications for the outlook and the risks around the outlook,” the minutes stated.

Participants “will be updating their assessments of the appropriate policy stance at each meeting” as officials consider both interest rate increases and plans to reduce the Fed’s asset holdings, the minutes said.

St. Louis Fed President James Bullard reiterated this week that a good target is for the Fed to hike the benchmark funds rate 100 basis points by July 1, the Fed having three meetings in the interim.

New York Fed Bank President John Williams said today it will be appropriate for the Fed to start raising rates in March in response to high inflation and strong jobs growth.

However, last weekend on CBS’ “Face the Nation,” San Francisco Fed Bank President Mary Daly said that being too “abrupt and aggressive” with interest rate increases could be counter-productive to the Fed’s goals.

“So I look at the data, and I see that it is obvious that we need to pull some of the accommodation out of the economy, but history tells us with Fed policy that abrupt and aggressive action can actually have a destabilizing effect on the very growth and price stability that we’re trying to achieve.”

The Fed’s Open Market Committee next meets March 15-16, and as I said before, they will be able to weigh further inflation data, for February, and any outside issues such as Ukraine and the potential impact on the U.S. and global economy.

--On a different topic….

Editorial / Washington Post

“ ‘It just doesn’t get any better than this,’ President Donald Trump proclaimed in January 2020 as he signed a partial trade deal with China.  Mr. Trump heralded the pact as ‘historic’ and ‘momentous.’  He touted his dealmaking abilities for getting China to commit to purchase an extra $200 billion of U.S. products in the next two years.

“The results are in: China didn’t buy anything extra from the United States.

“The purchases of U.S. exports that China did make in the past two years barely got back to the amount China was purchasing in 2017 – before Mr. Trump started his trade war, according to calculations by Chad P. Bown (sic) of the Peterson Institute for International Economics. U.S. exporters will never get back the sales they lost, and few have seen any meaningful growth in their sales to China under the ‘deal.’  ‘The only undisputed ‘historical’ aspect of that agreement is its failure,’ said Mr. Bown.

“The main result of Mr. Trump’s bluster on trade was higher costs to the American public.  Numerous studies have shown how tariffs were mostly passed along to American consumers, causing prices to rise on thousands of popular everyday items.  It was a debacle that was easy to predict.  Business leaders, economists and former trade officials from both parties warned the Trump White House repeatedly that the nation would have been better off without the trade war and the tenuous agreement that was ultimately reached with China (and not adhered to).

“The smarter move would have been to keep the United States in the Trans-Pacific Partnership, the big trade deal with other nations in the Pacific, including Vietnam, Singapore, Canada, Australia and Chile.  The whole purpose of the TPP was to boost trade among other nations and lessen reliance on China, which was excluded from the deal. But Mr. Trump pulled out of the TPP in his first week in office [Ed. as I railed against him for the move at the time], and other nations went ahead and completed the trade pact on their own.  In an ironic twist, China is now petitioning to join.

“It’s true that the pandemic didn’t help. The destruction of business travel, tourism and students studying abroad helped fuel a big decline in U.S. service exports to China. Some of the few U.S. industries to see exports to China rise significantly in the past two years were Covid-19-related products, semiconductors, liquefied natural gas, corn, wheat, pork and sorghum. In the meantime, U.S. purchases on Chinese goods jumped last year as Americans spent heavily on home remodeling and home entertainment.  Overall, 2021 was a record for the U.S. trade deficit, though that is largely a reflection of the strong economic rebound.

“The United States has just learned costly lessons about the futility of trade wars and how China can’t be trusted to honor its deals.  Now the Biden administration has to figure out how to hold Beijing to account for failing to fulfill its commitments.  One conclusion ought to be clear: More tariffs are not the answer.”

Lastly, Canada reopened the Ambassador Bridge, a vital border crossing between the U.S. and Canada, last Sunday night after Canadian police cleared the blockade by the self-styled “Freedom Convoy,” which continued to disrupt other cities and trade routes and illegally occupy the country’s capital for a third week.

Today, Friday, Canadian police began to clear out hundreds of truck drivers from Ottawa.  Prime Minister Justin Trudeau, who has handled the crisis miserably, assumed emergency powers for the first time in more than 50 years.

Police have set up 100 checkpoints around downtown to stop people without legitimate reason from entering and in this way cut off the truckers from supplies, including fuel.  At some point it is then hoped they will give up. As I go to post, some have been.

Europe and Asia

A flash reading on fourth-quarter GDP for the eurozone came in at 0.3% vs. the prior quarter, according to Eurostat.  Compared with the same quarter of the previous year, seasonally adjusted GDP increased by 4.6%.

Germany 1.4% vs. Q4 2020 (contracted in Q4 2021), France 5.4%, Italy 6.4%, Spain 5.2%, Netherlands 6.0%.

Industrial production in December was up 1.2% in the euro area, compared with November, up 1.6% vs. December 2020.

Brexit: UK exports to the EU dropped $27 billion in 2021 compared with 2018, the last year in which trade wasn’t knocked significantly by the pandemic or Brexit.  Seven in 10 exporters said the Brexit trade deal had held back growth, according to a survey of 1,000 companies by the British Chambers of Commerce.  Meanwhile, trade between Ireland and Northern Ireland surged after the UK left the bloc.

British Prime Minister Boris Johnson continues to survive, though he did receive a questionnaire from London’s Metropolitan Police last Saturday as part of the investigation into parties in Downing Street during Covid lockdowns.

If he is found to have broken his government’s own Covid rules, the embattled prime minister could be fined and will face even more pressure to resign from fellow lawmakers already furious at his proximity to the “Partygate” affair.

Turning to Asia…China reported that January inflation was up 0.9% year on year, while producer prices rose 9.1% Y/Y, though this was less than December’s 10.3% pace.

Japan issued a preliminary forecast of fourth-quarter GDP, up 1.3% quarter over quarter, 5.4% annualized, after contracting a revised 2.7% in the previous quarter, government data showed on Tuesday.  Some analysts expect the economy to slump again in the current quarter as rising Covid-19 cases keep households from shopping and supply chain disruptions hit factory output.

Economic growth in Q4 was driven by a 2.7% quarter-on-quarter rise in private consumption (consumer spending), which accounts for more than half of Japan’s GDP.

January exports were up a disappointing 9.6% year over year, imports up 39.6%.

Inflation in January was 0.5% annualized, -1.1% ex-food and energy.

Street Bytes

--Pretty easy analysis this week.  Stocks fell a second week, and fifth out of seven thus far in 2022, on escalating tensions between Russia and Ukraine, as well as the expected Fed tightening come March 16, and thereafter.  The Dow Jones fell 1.9% to 34079, the S&P 500 1.6% and Nasdaq 1.8%.  Earnings have taken a backseat to geopolitics.

--Charlie Munger, the 98-year-old vice chairman of Berkshire Hathaway Inc. and Warren Buffett’s longtime business partner, said the rise of index funds like those run by BlackRock Inc. has resulted in an “enormous transfer” of the power to sway corporate decision making.  That shift will “change the world,” Munger said, and not for the better.

“We have a new bunch of emperors, and they’re the people who vote the shares in the index funds,” Munger said at the annual meeting of Daily Journal Corp., a publishing company he has chaired since the 1970s.  “I think the world of Larry Fink (CEO of BlackRock), but I’m not sure I want him to be my emperor.”

Fink is an advocate of stakeholder capitalism, the idea that companies have societal obligations that extend beyond maximizing value for shareholders.

“Capitalism has the power to shape society and act as a powerful catalyst for change,” Fink said in his annual letter to shareholders last month.

BlackRock reported assets under management of more than $10 trillion in the fourth quarter of 2021, a record high.  Passive funds manage more than two-thirds of those assets.

--U.S. Treasury Yields

6-mo. 0.62%  2-yr. 1.46%  10-yr. 1.92%  30-yr. 2.23%

For the second straight week, the yield on the 10-year hit 2.05% before a Friday flight to safety as stocks sold off.

--Spot power prices in Europe fell early in the week as wind generation was set to jump and rising temperatures in parts of the continent were leading to a drop in demand.   The lack of wind has been a big story for a long time here, but now stronger winds were being forecast vs. the norm for the season.

They’ll need it…and warmer temperatures…given the looming chaos.

Crude oil traded down just a little, with West Texas Intermediate still finishing the week at $91.66, a third straight week over $90, which translates to $4.00 a gallon gas (or $5) at the pump in many parts of the country.  The market is trying to weigh the adverse impact of a Russian invasion against a possible deal with Iran on the nuclear front that would open up their spigots and provide more supply.

Daniel Yergin / Wall Street Journal

“While the Ukraine crisis was raising anxiety about Europe’s dependence on Russian natural gas*, something remarkable happened.  Last month, for the first time ever, U.S. exports of liquefied natural gas to Europe exceeded Russia’s pipeline deliveries.  Russian exports, which normally account for about 30% of Europe’s gas use, dropped substantially because of Russian pricing.  And with European gas prices about four times as high as normal, U.S. exports surged to fill the gap.

*Reminder, Russia supplies more than 44% of the natural gas used for heating in the European Union.

“The extraordinary growth in U.S. oil and gas production is a geopolitical and economic asset for the U.S. that contributes to global energy security. As the domestic oil-and-gas industry continues to rebound from the spring 2020 price collapse caused by the onset of Covid, the U.S. is again the world’s top oil producer – almost 20% above the other two largest producers, Saudi Arabia and Russia – and the world’s top natural-gas producer.

“The global oil market, which was drowning in oversupply less than two years ago, has tightened dramatically as the world emerges from Covid shutdowns.  That makes the market vulnerable to crisis. Russia’s push on Ukraine, a rebounding global economy, major weather events, or a surprise event could send prices soaring.

“That is what oil prices above $90 a barrel are signaling. If there is a new nuclear agreement with Iran that brings its oil back to market, that could moderate prices some.  But unless a new virulent Covid wave causes more shutdowns (or the Omicron variant slows China’s economy), prices will remain high.

“The shock absorber for averting crisis is ‘spare capacity,’ the sum of the potential output from wells that is currently not produced but can be turned on during a disruption. Spare capacity has shrunk as the rebounding world economy has pushed demand up and some oil-exporting countries, because of underinvestment, haven’t been able to return to former production levels.  Almost all the spare capacity that now exists – about three million to 3.5 million barrels a day – is concentrated in two countries: Saudi Arabia and the United Arab Emirates.

“One critical offset to the tightening market is the current upswing in shale output from the U.S., which could add more than 900,000 barrels a day this year. Without the resurgence in U.S. supply, oil prices would likely be even higher….

“In the coming months, even if all Russian pipeline exports through Ukraine were cut off, U.S. exports could make up the deficit. But in the unlikely event that Russia cuts off all gas exports to Europe, U.S. exports wouldn’t be enough.  Europe would have to scramble, using gas from already-thin storage and restarting coal and nuclear facilities to generate electricity….

“Today there is no doubting the geopolitical importance of America’s new oil-and-gas position.  The Ukraine crisis and Europe’s energy crisis shine a light on the global impact of U.S. oil-and-gas production.

“Some saw this significance much sooner than others.  At the 2013 St. Petersburg International Economic Forum, Vladimir Putin was on stage with German Chancellor Angela Merkel in front of several thousand people.  I asked Mr. Putin how Russia planned to diversify its economy from its dependence on oil and gas export revenues.  In the course of asking my question, I mentioned the word ‘shale.’  Before I finished, Mr. Putin reacted sharply, denouncing shale gas as a grave threat that should be stopped.

“Reflecting afterward, I realized he had two strong reasons to oppose U.S. shale gas.  First, it would compete with Russian gas in Europe. Second, shale gas and oil would enhance America’s global strategic position.  Given how events are unfolding in Europe today, one would have to say he was prescient.”

--Walmart muscled through rising inflation and snarled global supply chains to put up strong fourth quarter results Thursday.

Net income reached $3.56 billion, or $1.28 per share in the quarter ended Jan. 31.  Adjusted earnings per share was $1.53, or 3 cents better than Wall Street expected.  Revenue rose 0.5% to $152.87 billion.

Last year during the same period the company lost $2.9 billion due partly to costs related to the pandemic.

Same-store sales rose 5.6% at U.S. Walmart stores, down from a 9.2% jump in the third quarter.  Online growth has slowed from the pandemic-infused sprees early last year and rose just 1%, down from 8% growth in the fiscal third quarter, and a nearly 70% surge a year earlier.

Walmart is the first major retailer to report fourth quarter results and is considered a barometer of consumer spending given its vast reach.  The company signaled steady demand despite the supply chain issues and rampant cost inflation pressuring margins.

While Walmart has increased prices on some products, it still undercuts rivals due to its scale and negotiating power with suppliers, helping it gain market share in key areas of business such as groceries.

The company estimates full-year U.S. comp sales growth of more than 3%.

Walmart said last weekend that fully vaccinated employees would no longer have to wear masks unless state or local rules required it.

--If you ordered a Porsche, Audi, Bentley or other luxury vehicle, it may be on a ship carrying around 4,000 such vehicles that caught fire near the coast of the Azores.  The ship needs to be towed to another European country or the Bahamas because it would be too big for the port in the Azores.

Lithium-ion batteries in the electric cars on board have caught fire and the blaze requires specialist equipment to extinguish.  It was not clear whether the batteries first sparked the fire.

“The ship is burning from one end to the other…everything is on fire about five meters above the water line,” said the captain of the port of Hortas.

Towing boats were on route from Gibraltar and the Netherlands, with three due to arrive by Wednesday.  A 16-person salvage team from Smit Salvage, owned by a Dutch company, was sent to the ship to help control the flames.

The ship was traveling from Germany to a port in Rhode Island.  The 22 crew members on board were evacuated on Wednesday, when the fire broke out, with no one hurt, Portugal’s navy said. 

Around 1,100 Porsches and 189 Bentleys were among the cars on board.

What a story.  Good luck to the salvage team.

--American Airlines Group said it is reducing its flight routes for this summer due to Boeing’s inability to deliver 787-8 aircraft.

The airline expected Boeing to deliver all 13 of its 787-8 planes in 2022, but delivery of only 10 is now expected this year.

The airline said the delay will postpone the launch of its Dallas to Israel flight and temporarily suspend services on Seattle to London Heathrow, Dallas to Chile, and Los Angeles to Sydney routes.  The company is also reducing its Miami to Sao Paulo flights to a single daily service.

--TSA checkpoint travel numbers vs. 2019….

2/17…91 percent of 2019 levels
2/16…67
2/15…69
2/14…90
2/13…81
2/12…79
2/11…118
2/10…87

--Marriott International reported fourth-quarter results that climbed year-on-year and came in ahead of Wall Street’s consensus as demand in leisure travel strengthened and short-term business travel improved.

The hotel operator posted adjusted earnings of $1.30 per share for the December quarter, up from $0.12 a year earlier.  Revenue rose to $4.45 billion from $2.17 billion, also above forecasts.

On a constant dollar basis, global comparable systemwide revenue per available room surged nearly 125% year over year in the fourth quarter, with a 144% jump in the U.S. and Canada and 83% in international markets.  The global average daily rate rose 35%, while occupancy grew about 23 percentage points to 58%.

Marriott added 120 properties or 20,440 rooms to its portfolio during the quarter and 23 properties left the system. For all of 2021, the company added more than 86,000 rooms “despite industry-wide preconstruction and construction delays, some labor shortages and supply chain issues,” said CEO Anthony Capuano.

Marriott saw some impact on its group and business transient demand and a disruption to leisure travel in January due to Omicron.

“We expect to see the recovery pace pick up nicely in February and March given weekly bookings across customer segments have now returned to pre-Omicron levels,” the company said on an investor call.

So good news for a good company.

--ViacomCBS said late Tuesday it will change its name to Paramount Global, but the shares fell sharply when the company reported adjusted Q4 earnings that at $0.26 per share were down from $1.04 a year earlier and well below expectations.

Revenue for the quarter ended Dec. 31 rose to $8 billion from $6.87 billion, above forecasts, and the company said it added 9.4 million global streaming subscribers in the quarter across all of its services.  Paramount+ ended the year with nearly 33 million subscribers; Peacock, the streamer launched by NBCUniversal nine months earlier, ended the year with 24.5 million monthly active accounts and 9 million paid subscribers.

Paramount now expects to hit 100 million paid subscribers by the end of 2024 across all platforms – it has about 56 million now. 

But investors seemed surprised at the target for content costs that was raised by 50% from the prior level.  Operating losses in direct-to-consumer content is expected to keep growing from the $1 billion reported in 2021 for the next two years. The company said those losses would start to moderate in 2024, but it gave no timeline for its streaming segment to reach profitability and the share price was taken to the woodshed Wednesday.

--Microsoft told employees that they will need to return to office next month, transitioning back to its corporate campus for the first time since the Omicron variant ripped through the nation.

The company has long said it would embrace a hybrid work environment, with most employees able to work from home up to 50 percent of the time.  Now they must finalize their routines and adopt the preferences they’ve agreed upon with their managers.

I told my nearly 1,000 employees (965) to do what they want, just don’t start drinking beer until the market closes, 4:00 p.m., 1:00 p.m. Pacific time.

Separately, nationally, an average of 33% of the workforce returned to the office during the first week of February in the 10 major cities monitored by Kastle Systems, which records building-access-card swipes.  The number has been slowly rising from 23% during the first week in January.  The office return rate for the second week of February fell slightly from the first week, Kastle said Monday.

The 33% is still well off the high of 41% in the first week of December, before the full force of Omicron hit.

The return rate to movie theaters in the first week of February was 58% of what it was before the pandemic, according to Kastle.  Attendance at NBA games was 93% of what it was in February 2020, Kastle said.

--Deere & Company reported fiscal Q1 diluted earnings early Friday of $2.92, down from $3.87 a year earlier, better than expected.

Net equipment sales rose to $8.53 billion for the quarter ended Jan. 31, up from $8.05 billion a year earlier.

The company said end-market demand remains favorable and, as a result, net income for fiscal 2022 is forecast to be in a range of $6.7 billion to $7.1 billion versus its previous guidance for $6.5bn to $7bn.

Demand for agricultural equipment is foreseen to be high this year as farmers are flush with cash from record grain prices and government support during the pandemic.  But they also face challenges from soaring costs for seeds and fertilizers.  The Department of Agriculture estimates net farm income rose 25% in 2021 but has warned it may fall 4.5% this year.

--Kraft Heinz reported fourth-quarter results that topped Street consensus but declined year over year as the food company lost share in parts of its U.S. portfolio, although it guided for organic revenue growth (ex-acquisitions) this year.

Sales slid to $6.71 billion from $6.94 billion, but surpassed the Street’s estimate of $6.63 billion.

Sales in the U.S. decreased 6.8% to $4.74 billion, while Canada grew 5.2% to $471 million.  International sales increased 6.5% to $1.5 billion.

Looking ahead, the company plans to recover the market share loss from supply challenges in the first quarter and the production constraints are set to be resolved in the first half.

Kraft estimates a low-single-digit percentage growth in organic sales for 2022, with consumption expected to be stronger compared with pre-pandemic levels, according to a statement.

--Cisco Systems posted better-than-expected results for its fiscal second quarter ended in January.  The networking hardware and software giant posted revenue of $12.7 billion, up 6% from a year ago, towards the high end of the company’s guidance range.

Heading into the quarter, analysts worried that guidance could disappoint given ongoing supply constraints, but a solid outlook for the April quarter and a higher forecast for full year profit fueled a 3% rise in the shares Thursday despite the overall market swoon.

CFO Scott Herren said order growth has been strong and the company has an order backlog of $14 billion, up more than 150% from a year earlier.

Cisco continues to see particularly strong demand for networking gear used by “webscale” cloud computing platforms – Herren says orders from that group were up 70% in the quarter.

For the April quarter, Cisco sees revenue up 3% to 5%, with profits inline with the Street’s expectations.

--The average home price in Dublin topped half a million euro last year, now 506,667 euro, or $576,308, according to Ireland’s Central Statistics Office, up 14% in a year.

--The United States decided last week to temporarily block all imports of avocados from Mexico after a verbal threat was made to U.S. safety inspectors working in the country.  [Yes, Mexico ran a commercial for its avocados during the Super Bowl.]

The suspension will “remain in place for as long as necessary to ensure the appropriate actions are taken, to secure the safety of APHIS personnel working in Mexico,” the U.S. Department of Agriculture said in a statement, referring to the Animal and Plant Health Inspection Service.

In the U.S., where 80 percent of the avocados consumed come from Mexico, analysts said even a two-week ban could sharply reduce availability and further increase prices, the cost having risen 11 percent in the past year.

Annual exports to the United States from Mexico’s western state of Michoacan total nearly $3 billion.

Details of the threat to agency employees were not made public, but the avocado industry has attracted interest in the past decade from the drug cartels in the region, looking to diversity their illicit income streams.

Well, this afternoon, the Department of Agriculture announced it will immediately resume its avocado inspection program in Michoacan

--CNN executive Allison Gollust resigned after an internal investigation found violations of policy by her and others, WarnerMedia CEO Jason Kilar told staff on Tuesday.

Her departure is the latest move after a network investigation into the conduct of Chris Cuomo, a primetime anchor fired by CNN in December for allegedly assisting his brother, former New York Governor Andrew Cuomo, who was accused of sexual misconduct.

CNN President Jeff Zucker resigned earlier this month, telling staff he had failed to disclose a consensual relationship with a colleague, later revealed to be Gollust.

Chris Cuomo then was accused of sexual harassment in various stories this week.

It’s a freakin’ blankshow at the network, Cuomo suing CNN.

--America’s commercial casinos won $53 billion in 2021, their best year ever, according to figures released by the American Gaming Association, the gambling industry’s trade group.

The $53 billion won by casinos is more than 21% higher than the previous best year, which came in 2019, before the coronavirus pandemic hit.

Almost $45 billion was won from in-person gamblers at casinos last year, up 6.6% from 2019.

Sports betting continued its rapid growth, with more than $57 billion wagered legally on games last year, an increase of 165% from 2020. Of that total, casinos and racetrack sportsbooks saw nearly $4.3 billion in revenue after winning bets and other expenses were paid. That’s up 177% from 2020.

Gaming’s total recovery is still reliant on the full return of travel and large events.

--While I haven’t seen a final tally of what was wagered on the Super Bowl, GeoComply, which monitors mobile sports-betting transactions, said it logged more than 80 million transactions over Super Bowl weekend, more than double that of last year, and 5.6 million unique accounts accessed legal online sportsbooks, a 95% increase from last year.

--Shares of DraftKings fell more than 20% today after the company issued bleak guidance in terms of ongoing losses.

Revenue surged 47% to $473.3 million, while the segment’s monthly unique payers increased 32% to 2 million, while average revenue per monthly unique payers rose 19% to $77 in the fourth quarter.

But DKNG, whose shares closed at $17.50, down from a 52-week high of $74 (Mar. 7, 2021), can’t provide any authentic guidance on future profitability as its acquisition costs, say to go into a new state like New York, are sizable.

The Pandemic

Yes, in the United States the masks are coming off, even if infectious-disease experts continue to urge caution.  There’s a fresh backlash from some who are intent on putting public health measures in the rearview mirror. Personally, I’ll continue to wear a mask in certain establishments, but as I’ve said since December, we have been going through the “final spasm” and it should be a good year, at least until the fall when we’ll see what variant emerges at that time and just how effective vaccines and/or therapeutics are against it.

I might say it was rather pathetic that I, like many of you, finally received our free Covid test kits in the mail, four weeks after the government program went into effect, which was months too late to have any real impact heading into the holiday season.

The pandemic is also far from over, globally, as just a look at the graphs for Japan and Indonesia show you. And in terms of the global supply chain, Vietnam is back, in a bad way…a record number of infections this week.

But for the U.S. and much of Europe, enjoy the break while you can.

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

World…5,891,958
USA…958,300
Brazil…643,111
India…511,262
Russia…343,957
Mexico…314,598
Peru…208,964
UK…160,379
Italy…152,596
Indonesia…146,044
Colombia…137,869
France…136,446
Iran…134,607
Argentina…125,062
Germany…121,693
Poland…109,509
Ukraine…104,106
South Africa…98,298
Spain…97,998
Turkey…91,910
Romania…62,323
Philippines…55,409
Hungary…43,066
Chile…41,067
Vietnam…39,358
Czechia…38,106
Canada…35,995
Ecuador…35,105
Bulgaria…34,973
Malaysia…32,276
Pakistan…29,950
Belgium…29,886
Bangladesh…28,931
Tunisia…27,375
Greece…25,183
Iraq…24,840
Egypt…23,632
Thailand…22,568
Netherlands…21,465
Bolivia…21,358
Japan…21,198
Portugal…20,759

[Source: worldometers.info]

U.S. daily death tolls…Mon. 1,123; Tues. 2,223; Wed. 2,854; Thurs. 2,280; Fri. 2,070.

Covid Bytes

--The World Health Organization cautions that the reported global case numbers might not reflect the true spread of the virus because of a decline in testing. South Korea, a virus success story, now finds its model unsustainable.

The Omicron surge is slowing in much of the world, but a subvariant that scientists believe is even more contagious is on the rise, and a decline in testing has muddled the global picture, the WHO said.

New cases worldwide dropped 19 percent from Feb. 7 to Feb. 13, compared with the week before, according to the agency.

The WHO also said that the subvariant of Omicron, BA.2, appeared to be “steadily increasing” in prevalence and that BA.2 had now become dominant in several Asian countries, including China, India, Pakistan, Bangladesh and the Philippines.

Scientists have said there is no evidence that BA.2 is more lethal than BA.1, the version of Omicron that first swept through the world.

The Omicron wave has yet to crest in what the agency calls the Western Pacific region, which includes Oceania, the Pacific islands, and East Asian countries like China and South Korea.

While cases are falling in the other regions, including Europe, in Russia, new cases have increased by 79 percent over the past two weeks, according to Johns Hopkins University.

“This will not be the last variant, and the future of the pandemic is still extremely uncertain,” said Dr. Carissa F. Etienne, the director of the WHO’s Pan American Health Organization, adding that “a new variant could emerge at any time.”

--Hong Kong leader Carrie Lam said on Friday that it would take up to three months to stabilize a worsening Covid-19 pandemic that has overwhelmed health facilities and forced the postponement of an upcoming leadership election.

“Our government needs to focus on the epidemic,” Lam said at a press conference after a week that saw daily infections jump by 60% so far this month.  It “cannot be diverted…we cannot afford to lose,” she said.

Quarantine facilities in Hong Kong have reached capacity and hospital beds are more than 95% full as cases spiral, with some patients, including elderly, left on beds outside in chilly, sometimes rainy weather.

Hong Kong reported 3,629 new daily Covid-19 infections on Friday (after a record 6,116 on Thursday), with 10 deaths in the past 24 hours.

Schools, gyms, cinemas and most public venues are shut.  Most office employees are working from home.

I get Hong Kong’s concerns, having been there multiple times.  It’s one of the 3 or 4 most crowded cities in the world, and you should see the apartment blocks that are potential ( and have been) Covid centers of infection.  So it will be interesting to see what develops here, but of course the people are more than tired of the restrictions.

--Canada will ease entry for fully vaccinated international travelers starting on Feb. 28 as Covid-19 cases decline, allowing a rapid antigen test for travelers instead of a molecular one, officials said on Tuesday.

The new measures include dropping compulsory testing on entry and will drop testing requirements for fully vaccinated Canadians who make short trips – less than 72 hours – abroad.

About 80% of Canadians are fully vaccinated and over 40% have also taken a booster dose, according to the health ministry.

Ontario said it will speed up its plan to remove proof-of-vaccination requirements and lift pandemic-related capacity limits for many businesses, while the western province of Alberta ended its mask requirements for school children on Monday. 

Protesters have blocked border crossings and paralyzed the center of Ottawa for weeks asking for governments to roll back pandemic restrictions.  Provincial premiers have denied loosening restrictions to appease them, saying instead that the limits are no longer needed to contain Covid.

--The Dutch government announced Tuesday that it will scrap virtually all its remaining coronavirus restrictions by the end of the month as infection rates begin to decline and pressure on health care services eases.

“The country is opening up again,” Health Minister Ernst Kuipers said.

The Netherlands is following Belgium and other European nations in easing restrictions as the continent increasingly looks for ways of co-existing with the virus without the economic and social damage wreaked by lockdown measures.

--Subway ridership in New York City topped 3 million for three days in a row last week, the first time since mid-December, according to the Metropolitan Transportation Authority.

Ridership plummeted as much as 95% during the depths of the pandemic and had been coming back before the Omicron wave hit.

It’s critical to bring the crowds back in order to help reduce crime in the subways, for one.

--U.S. Surgeon General Vivek Murthy and his family have tested positive for Covid-19, he said today.

“My 5-year-old son, my wife Alice, and I have all tested positive… Our son has a runny nose and low-grade fever but is otherwise eating, drinking, playing with his sister, and watching his favorite cartoons,” Murthy said on Twitter.  He added that he and his wife had mild symptoms.  He was experiencing muscle aches, chills and a sore throat.  His 4-year-old daughter, who tested positive first over the past weekend, was “doing OK” and her fever was starting to improve.

Foreign Affairs

Russia/Ukraine: Monday, Ukrainian President Volodymyr Zelensky said his country would continue to pursue its goal of NATO membership despite Russia’s anger and some Western countries’ skepticism.

“Today, many journalists and many leaders are hinting a little to Ukraine that it is possible not to take risks, not to constantly raise the issue of future membership in the alliance, because these risks are associated with the reaction of the Russian Federation,” Zelensky said at a news conference with Germany’s Chancellor Olaf Scholz.  “I believe that we should move along the path we have chosen.”

Tuesday, Moscow claimed some of its troops were returning to their bases after completing drills, and the stock market stupidly rose on the news, the Dow finishing up 400 points that day, Tuesday.  The claims were quickly debunked by the United States and NATO and a day later, the U.S. was saying Russia had added 7,000 troops close to the border with Ukraine, including in Belarus, the quickest point to Kyiv.

Also on Tuesday, Russia’s lower house of parliament voted to ask President Vladimir Putin to recognize the two Russian-backed breakaway regions in eastern Ukraine as independent and the European Union warned Moscow not to follow through.

The move by the State Duma, if approved, would further inflame tensions.  For starters, it would kill the Minsk peace process in eastern Ukraine, not that Russia is abiding by its provisions.

Tensions between Russia and the West then escalated further on Thursday as the U.S. said the Kremlin may manufacture a “violent event” such as a fake terrorist bombing, a drone strike or even a chemical attack to justify an invasion of Ukraine.

President Biden said his sense was that Moscow would launch such an invasion within the next several days, and could engage in a “false flag” operation as an excuse to “go in.”  The Kremlin, in turn, accused Biden of stoking tension.

Russia said the West was ignoring its key security demands and reaffirmed that it could take unspecified “military-technical measures” if the U.S. and its allies continued to stonewall on its concerns.

At the same time, Russia said it was ready to discuss measures to enhance security in Europe, including limits on missile deployments, restrictions on patrol flights by strategic bombers.

But in a further indication of worsening relations, Russia on Thursday expelled the U.S. deputy chief of mission in Moscow, Bart Gorman, the No. 2 diplomat at the embassy. Washington described the move as “unprovoked” and said it would respond.

Amid the diplomatic sparring, Ukraine and Moscow-backed separatists blamed each other for a surge in shelling in the divided east of the country.  Russia accused Ukraine of repeatedly violating a 2015 ceasefire aimed at bringing peace to the breakaway Donbas region.

In a speech before the UN Security Council, Thursday, U.S. Secretary of State Antony Blinken proposed new talks with his Russian counterpart, Sergei Lavrov in Europe next week, which he said could “pave the way for a summit of key leaders, in the context of de-escalation, to reach understandings on our mutual security concerns.”

Blinken told the Security Council how Washington believed any Russian attack would unfold.

“First, Russia plans to manufacture a pretext for its attack. This could be a violent event that Russia will blame on Ukraine, or an outrageous accusation that Russia will level against the Ukrainian government. We don’t know exactly the form it will take. It could be a fabricated so-called terrorist bombing inside Russia, the invented discovery of a mass grave, a staged drone strike against civilians, or a fake – even a real – attack using chemical weapons.”

Russian Foreign Minister Lavrov said the West was fanning “hysteria” by accusing Moscow of not withdrawing its troops from near the Ukraine border.  “This is where the escalation is,” he said.

In a letter delivered to the U.S. ambassador in Moscow on Thursday, Russia said: “In the absence of readiness on the American side to agree on firm, legally binding guarantees on our security from the United States and its allies, Russia will be forced to respond, including through the implementation of military-technical measures.”

Vladimir Putin first spoke of “military-technical” measures back in December, and it’s thought they could include a range of options, including missile and troop deployments, electronic warfare and even the use of space-based weapons systems.

Secretary Blinken said on Friday that everything Washington has seen happening on Russia’s border with Ukraine in the past 24 to 48 hours is part of a scenario of creating false provocations designed to elicit a response.

Speaking at the Munich Security Conference alongside German Foreign Minister Annalena Baerbock, Blinken said of Russia’s claims it was pulling forces back from the border, “on the contrary, we see additional forces going to the border including leading edge forces that would be part of any aggression.”

Vladimir Putin told Ukraine on Friday to sit down for negotiations with Moscow-backed separatists in the Donbas, citing rising tensions in the region and calling for the implementation of the Minsk peace process, which Moscow and the separatists have been breaking.

At a news conference in Moscow, Putin also said Russia was ready to follow a negotiation track with NATO on its security demands, but that the U.S.-led military alliance and Washington were not yet in a mood to engage on Moscow’s key concerns.

A Russian-backed separatist leader in eastern Ukraine (Donbas) announced the evacuation of the breakaway region’s residents to southeast Russia today amid a rise in shelling.  Announcing the move on social media, Denis Pushilin, head of the self-proclaimed Donetsk People’s Republic (DPR), said Russia had agreed to provide accommodation for people leaving and that women, children and the elderly should be evacuated first.

The Kremlin said it had no information about the situation in the Donbas after Pushilin’s pronouncement.  Kremlin spokesperson Dmitry Peskov said he did not know if the move had been coordinated with Russia.

Late Friday, the separatists said they planned to evacuate around 700,000 people to Russia.  Ukraine says the people who run the DPR are not separatists but Russian proxies, something the Kremlin denies.

President Putin’s spokesman then said Vlad the Impaler had ordered the emergencies minister to travel to southeast Russia to organize accommodations for residents leaving the Donbas.

Meanwhile, U.S. Defense Secretary Lloyd Austin announced on Friday the planned sale of 250 Abrams tanks to Poland, as Washington moves to strengthen the defenses of a key ally.

“Some of (Russia’s) forces are within 200 miles of the Polish border,” Austin said during a trip to Warsaw. “If Russia further invades Ukraine, Poland could see tens of thousands of displaced Ukrainians and others flowing across its border, trying to save themselves and their families from the scourge of war.”

The sale of the tanks to Poland, which is also home to a future U.S. missile defense site, is another sign of a deep and growing defense relationship with the United States.  It follows the deployment of nearly 5,000 additional troops to Poland as well as additional fighter aircraft, as part of Washington’s response to the Ukraine crisis.

Iran: France on Wednesday said a decision on salvaging Iran’s 2015 nuclear deal with world powers was just days away and that it was now up to Tehran to make the political choice.  Indirect talks between Iran and the United States on reviving the tattered agreement resumed last week after a 10-day hiatus and officials from the other parties to the accord – Britain, China, France, Germany and Russia – have shuttled between the two sides as they seek to close gaps.

Western diplomats previously indicated they hoped to have a breakthrough by now, but tough issues remain unresolved. Iran has rejected any deadline imposed by Western powers.

“We have reached the tipping point now.  It’s not a matter of weeks, it’s a matter of days,” French Foreign Minister Jean-Yves Le Drian told parliament, adding that the Western powers, Russia and China were in accord on the outlines of the accord.  “Political decisions are needed from the Iranians.  Either they trigger a serious crisis in the coming days, or they accept the agreement which respects the interests of all parties.”

The agreement began to unravel in 2018 when then-President Trump withdrew the U.S. and reimposed broad economic sanctions on Iran, which then began breaching the deal’s limits on its uranium enrichment activity a year later.  Diplomats and analysts say the longer Iran remains outside the deal, the more nuclear expertise it will gain, shortening the time it might need to race to build a bomb if it chose to, thereby invalidating the accord’s original purpose.

“We are coming to the moment of truth,” Le Drian said. “If we want Iran to respect its (nuclear) non-proliferation commitments and in exchange for the United States to lift sanctions, there has to be something left to do it.”

Iran’s foreign ministry said on Monday it was “in a hurry” to strike a new deal as long as its national interests were protected and that restoring the pact required “political decisions by the West.”

Ali Shamkhani, hardline secretary of Iran’s Supreme National Security Council, underlined Iranian wariness by saying on Wednesday that the 2015 accord had become economically worthless for Iran and he blamed the United States and European powers.

“The United States and Europe failed to meet their obligations under the (deal).  The deal has now become an empty shell for Iran in the economic sphere and the lifting of sanctions. There will be no negotiations beyond the nuclear deal with a non-compliant America and a passive Europe,” he tweeted.

Wednesday, State Department spokesman Ned Price said the United States is in “the midst of the very final stages” of indirect talks with Iran.  The administration has said it will remove curbs inconsistent with the 2015 pact if Iran resumes compliance with it, implying Washington would leave in place sanctions imposed under terrorism or human rights measures.

China: Nils van der Poel of Sweden won two speedskating gold medals in Beijing, but before returning to his home country, he offered some scathing parting words about the decision to hold the Winter Olympics in China, calling it “terrible” and “extremely irresponsible.”

“I really think it’s terrible, but I think I shouldn’t say too much about it, because we still have a squad in China,” van der Poel told SportBladet in an interview translated from Swedish to English.

“The Olympics is a lot, it’s a fantastic sporting event where you unite the world and nations meet.  But so did Hitler before invading Poland (Berlin hosted the 1936 Summer Games), and so did Russia before invading Ukraine (Sochi hosted the 2014 Winter Games).

“I think it is extremely irresponsible to give it to a country that violates human rights as blatantly as the Chinese regime is doing.”  Van der Poel is alluding the mistreatment of the Uyghur people by the Chinese government that the U.S. State Department has called genocide and cited as ongoing “crimes against humanity.”

Van der Poel was kinder to the Chinese people he came into contact with while staying at the Olympic Village.

“The Olympic Village was very nice,” he said.  “The Chinese people I met were absolutely amazing. I had a very nice experience behind the scenes.”

Meanwhile…

Elbridge Colby and Oriana Skylar Mastro / Wall Street Journal

“The U.S. can no longer afford to spread its military across the world. The reason is simple: an increasingly aggressive China, the most powerful state to rise in the international system since the U.S. itself.  By some measures, China’s economy is now the world’s largest. And it has built a military to match its economic heft.  Twenty-five years ago, the Chinese military was backward and obsolete. But extraordinary increases in Beijing’s defense budget over more than two decades, and top political leaders’ razor-sharp focus, have transformed the People’s Liberation Army into one of the strongest militaries the world has ever seen.

“China’s new military is capable not only of territorial defense but of projecting power.  Besides boasting the largest navy in the world by ship count, China enjoys some capabilities, like certain types of hypersonic weapons, that even the U.S. hasn’t developed.

“Most urgently, China poses an increasingly imminent threat to Taiwan.  Xi Jinping has made clear that his platform of ‘national rejuvenation’ can’t be successful until Taiwan unifies with the mainland – whether it wants to or not.  The PLA is growing more confident in its ability to conquer Taiwan even if the U.S. intervenes.  Given China’s military and economic strength, China’s leaders reasonably doubt that the U.S. or anyone else would mount a meaningful response to an invasion of Taiwan.  To give a sense of his resolve, Mr. Xi warned that any ‘foreign forces’ standing in China’s way would have ‘their heads…bashed bloody against a Great Wall of steel forged by over 1.4 billion Chinese people.’

“The U.S. must defend Taiwan to retain its credibility as the leader of a coalition for a free and open Indo-Pacific.  From a military perspective, Taiwan is a vital link in the first island chain of the Western Pacific.  If Taiwan falls into Chinese hands, the U.S. will find it harder to defend critical allies like Japan and the Philippines, while China will be able to project its naval, air and other forces close to the U.S. and its territories.  Taiwan is also an economic dynamo, the ninth-largest U.S. trading partner of goods with a near-monopoly on the most advanced semiconductor technology – to which the U.S. would most certainly lose access after a war.

“The Biden administration this month ordered more than 6,000 additional U.S. troops deployed to Eastern Europe, with many more potentially on the way. These deployments would involve major additional uncounted commitments of air, space, naval and logistics forces needed to enable and protect them. These are precisely the kinds of forces needed to defend Taiwan. The critical assets – munitions, top-end aviation, submarines, and intelligence, surveillance and reconnaissance capabilities – that are needed to fight Russia or China are in short supply.  For example, stealthy heavy bombers are the crown jewel of U.S. military power, but there are only 20 in the entire Air Force.

“The U.S. has no hope of competing with China and ensuring Taiwan’s defense if it is distracted elsewhere. It is a delusion that the U.S. can, as Pentagon press secretary John Kirby said recently, ‘walk and chew gum at the same time’ with respect to Russia and China.  Sending more resources to Europe is the definition of getting distracted. Rather than increasing forces in Europe, the U.S. should be moving toward reductions….

“To be blunt: Taiwan is more important than Ukraine. America’s European allies are in a better position to take on Russia than America’s Asian allies are to deal with China. The Chinese can’t be allowed to think that America’s distraction in Ukraine provides them with a window of opportunity to invade Taiwan.  The U.S. needs to act accordingly, crisis or not.”

Random Musings

--Presidential approval ratings….

Gallup: 40% approve of President Biden’s job performance, 56% disapprove, 33% of independents approve (Jan. 3-16).  Still no update.

Rasmussen: 43% approve, 56% disapprove (Feb. 18).

--California Gov. Gavin Newsom’s approval ratings are sliding, according to a new UC Berkeley Institute of Governmental Studies / Los Angeles Times poll, though Newsom’s prospects for reelection in 2022 still appear strong, with less than four months to go before the June primary.

According to the poll, 48% of registered voters surveyed approved of Newsom’s job as governor, while 47% disapproved.  That’s down from the 64% approval rating California voters gave Newsom in September 2020 amid the first wave of the pandemic.

More than half of registered voters polled, 54%, believe California is on the wrong track compared to 36% who believe the state is on the right path, with the remainder expressing no opinion.  Voters were evenly split just last May.

Concerns about rising crime and California’s seemingly intractable homelessness crisis emerged as the top political undercurrents driving voter dissatisfaction.

But Newsom, having survived last September’s recall vote, just doesn’t have a serious challenger as yet.

--Trump World….

President Biden is ordering the release of Trump White House visitor logs to the House committee investigating the riot of Jan. 6, 2021, once more rejecting the former president’s claims of executive privilege.

The committee has sought a trove of data from the National Archives, including presidential records that Trump had sought to keep private.  The records being released to Congress are visitor logs showing appointment information for individuals who were allowed to enter the White House on the day of the insurrection.

Investigators also are seeking communications between the National Archives and Trump’s aides about 15 boxes of records that the agency recovered from Trump at his Florida resort and are trying to learn what they contained.

That is until late today, Friday, when the National Archives and Records Administration said that some of the items in the 15 boxes were marked classified national security information.

It is up to the Justice Department and the FBI to determine what they will do about the discovery, if anything.

A letter from the archivists to the House Committee on Oversight and Reform also stated that certain social media records were not captured and preserved by the Trump administration and that the agency learned that White House staff frequently conducted official business using unofficial messaging accounts and personal phones.  They were to be copied or forwarded as required by the Presidential Records Act and were not. 

Meanwhile, White House call logs obtained so far by the House committee do not list calls made by Trump as he watched the violence unfold on television on Jan. 6, nor do they list calls made directly to the president.

That lack of information about Trump’s personal calls is a particular challenge as the investigators attempt to ascertain what Trump was doing in the White House as the attack unfolded and the congressional certification of Joe Biden’s election victory was interrupted.

---

Donald Trump’s accounting firm cut ties with the former president and said a decade of financial reports should “no longer be relied upon.”

The firm, Mazars, announced it would stop working with the Trump Organization in a Feb. 9 letter made public Monday.

In the letter to a Trump Organization lawyer, the firm said the decision was made because they determined the former president’s “Statements of Financial Condition” from 2011 to 2020 were unreliable.

A lawyer for Mazars said in the letter that the statements “as a whole,” don’t “contain material discrepancies.”  Still, “we believe our advice to you to no longer rely upon those financial statements is appropriate,” the letter continued.

Trump’s lawyers argued the statements were truthful and a Trump Org. spokesperson reiterated that the Mazars letter said it didn’t find “material discrepancies.”

On Tuesday night, Trump insisted the Mazar’s accounting firm cut ties with his company over “vicious intimidation tactics” from the New York authorities investigating him.

The former president alleged Mazars was forced to stop working with his company because of “prosecutorial misconduct” by New York Attorney General Letitia James, who is investigating the Trump Organization’s financial dealings.

“Mazars has been threatened, harassed, and insulted like virtually no other firm has ever been,” Trump said in a lengthy statement.

The firm’s “decision to withdraw was clearly a result of the AG’s and DA’s vicious intimidation tactics used – also on other members of the Trump Organization,” he said.

In his statement, Trump praised his company and estimated his net worth to be around $8 to $9 billion.

“We have a great company with fantastic assets that are unique, extremely valuable and, in many cases, far more valuable than what was listed in our Financial Statements,” he wrote.

AG James has said her office has uncovered evidence that shows Trump’s company used “fraudulent or misleading” valuations of golf clubs, skyscrapers and other properties to get loans and tax benefits.

James is seeking testimony from Trump and his kids Ivanka and Don Jr. as part of her investigation.

Thursday, Judge Arthur Engoron then ordered Trump and the kids to answer questions under oath.  Trump, Ivanka and Don Jr. must sit for a deposition within 21 days, Engoron said.

Engoron issued the ruling after a two-hour hearing with lawyers for the Trumps and James’ office.

“In the final analysis, a State Attorney General commences investigating a business entity, uncovers copious evidence of possible financial fraud, and wants to question, under oath, several of the entities’ principals, including its namesake.  She has the clear right to do so.” Engoron wrote in his decision.

The ruling is almost certain to be appealed, but if upheld it could force Trump into a tough decision about whether to answer questions, or stay silent, citing his Fifth Amendment right against self-incrimination.

If Trump were to testify in the civil probe, anything he says could be used against him in the criminal investigation being overseen by AG James.

If he invokes the Fifth, it could still hurt a potential criminal defense.

In a statement, Trump exclaimed “THERE IS NO CASE.”

“On the other hand, failed Gubernatorial candidate, Letitia James, can run for the office of AG on saying absolutely horrendous and false things about Donald Trump, a man she doesn’t know and has never met, go on to get elected, and then selectively prosecute him and his family,” Trump said, accusing James of trying “to interfere with my business relationships, and with the political process.”

The former president said prosecutors “after viewing millions of pages of documents over many years” came up with a fringe benefits case on a car, an apartment and on grandchildren’s education.

“With the rest of the case, even Cy Vance, who just left the DA’s office without prosecuting anything additional, because there isn’t anything additional to prosecute – THERE IS NO CASE!” he railed.

“The targeting of a President of the United States, who got more votes while in office than any President in History, by far, and is a person that the Radical Left Democrats don’t want to run again, represents an unconstitutional attack on our Country – and the people will not allow this travesty of justice to happen,” Trump went on.  “It is a continuation of the greatest Witch Hunt in history – and remember, I can’t get a fair hearing in New York because of the hatred of me by Judges and the judiciary.  It is not possible!”

---

As released:

Statement by Donald J. Trump, 45th President of the United States of America

Could somebody please inform the low-rated political shows that plague our Sunday morning programming that my Endorsement of candidates is much stronger today than it was even prior to the 2020 Election Scam. I am almost unblemished in the victory count, and it is considered by the real pollsters to be the strongest endorsement in U.S. political history.  There are plenty of existing politicians who wouldn’t be in power now were it not for my Endorsement (like the Old Crow!). The Fake News does everything within their power to diminish and belittle but the people know, and the politicians seeking the Endorsement really know!

I’m reminded of a recent passage from a piece by Peter Wehner of The Atlantic:

“Trump seems unable to incorporate anything critical about himself, hence his need to create an imaginary world in which he really won the 2020 election but was the victim of a conspiracy that borders on intergalactic.  He’s performed a moral inversion in which the supporters who stormed the Capitol are the true patriots; they, like he, are being unfairly persecuted.  They are the defenders of democracy; the people who are holding them accountable are the enemies of America.”

--Editorial / Wall Street Journal…on the Durham investigation…

“Special Counsel John Durham continues to unravel the Trump-Russia ‘collusion’ story, and his latest court disclosure contains startling information.  According to a Friday court filing, the 2016 Hillary Clinton campaign effort to compile dirt on Donald Trump reached into protected White House communications.

“The filing relates to Mr. Durham’s September indictment of Michael Sussmann, a lawyer who represented the Clinton campaign while he worked for the Perkins Coie law firm.  Mr. Sussmann is accused of lying to the FBI at a September 2016 when he presented documents claiming to show secret internet communications between the Trump Organization and Russia-based Alfa Bank.  The indictment says Mr. Sussmann falsely told the FBI he was presenting this information solely as a good citizen – failing to disclose his ties to the Clinton campaign.  (He has pleaded not guilty.)

“The indictment revealed that Mr. Sussmann worked with ‘Tech-Executive-1,’ who has been identified as Rodney Joffe, formerly of Neustar Inc.  The indictment says Mr. Joffe used his companies, as well as researchers at a U.S. university, to access internet data, which he used to gather information about Mr. Trump’s communications.

“Mr. Durham says Mr. Joffe’s ‘goal’ was to create an ‘inference’ and ‘narrative’ about Mr. Trump that would ‘please certain VIPs,’ referring to individuals at [Perkins Coie] and the Clinton Campaign.’

“The new shocker relates to the data Mr. Joffe and friends were mining.  According to Friday’s filing, as early as July 2016 Mr. Joffe was ‘exploit[ing]’ his ‘access to non-public and/or proprietary Internet data,’ including ‘Internet traffic pertaining to…the Executive Office of the President of the United States (‘EOP’).’

“The filing explains that Mr. Joffe’s employer ‘had come to access and maintain dedicated servers for the EOP as part of a sensitive arrangement whereby it provided [internet services]’ to the White House.  Mr. Joffe’s team also was monitoring internet traffic related to Trump Tower, and Mr. Trump’s apartment on Central Park West.

“White House communications are supposed to be secure, and the notion that any contractor – much less one with ties to a presidential campaign – could access them is alarming enough. The implication that the data was exploited for a political purpose is a scandal that requires investigation under oath….

“The filing says the new allegations Mr. Sussman provided – claiming suspicious ties between a Russian mobile phone operator and the White House – were also bogus, and that Mr. Sussmann again made the false claim that he wasn’t working on behalf of a client….

“Mr. Durham’s revelations show the 2016 collusion scam went well beyond the Steele dossier, which was based on the unvetted claims of a Russian émigré working in Washington.  Those claims and the Sussmann assertions were channeled to the highest levels of the government via contacts at the FBI, CIA and State Department.  They became fodder for secret and unjustified warrants against a former Trump campaign official, and later for Robert Mueller’s two-year mole hunt that turned up no evidence of collusion.

“Along the way the Clinton campaign fed these bogus claims to a willing and gullible media.  And now we know its operatives used private tech researchers to monitor White House communications.  If you made this up, you’d be laughed out of a Netflix story pitch.

“Mr. Durham’s legal filing is related to certain conflicts of interest in Mr. Sussmann’s legal team, and it remains unclear where else his probe is going. But the unfolding information underscores that the Russia collusion story was one of the dirtiest tricks in U.S. political history.  Mr. Durham should tell the whole sordid story.”

Well, there are major issues with the above, as Durham himself knows in the way his ‘filing’ has been spun this week.  More next time, if warranted.

For her part, Clinton, speaking at a New York Democratic Party state convention on Thursday said, “They’ve been coming after me again.  It’s fine, the more trouble Trump gets into, the wilder the charges and conspiracy theories about me seem to get, so now his accountants have fired him and investigations draw closer to him.”

--After writing of Peter Thiel last week, Monday, the New York Times had a piece on him.  After sitting out the 2020 presidential race, Thiel, who hosted a fundraiser at his Miami Beach compound lats month for a conservative candidate challenging Rep. Liz Cheney* of Wyoming, is backing 16 Senate and House candidates, many of whom have embraced the Big Lie, that Trump won the election.

*House Minority Leader Kevin McCarthy endorsed Cheney’s opponent Harriet Hageman on Thursday.  Pathetic.

Thiel has given more than $20 million of his own money to these candidates, through various avenues as he seeks to become a new power broker on the right.

Steve Bannon told the Times of Thiel’s involvement in the midterms, “I don’t think it’s just about flipping the Senate.  I think Peter wants to change the direction of the country.”

I think Peter Thiel is a dangerous man.

--Peggy Noonan / Wall Street Journal

“America is in a crucial, high-stakes moment.  Since 2020 we have been roiled over the pandemic, wokeness, crime, inflation, the schools, illegal immigration.  The Democratic Party has stood for, or failed to oppose, many unpopular policies.  The Republican Party seems poised to rise.

“So what is the job of the Republican Party at this time?

“It is to be sane.  It is to stand against excess.  It is to put itself forward as worthy of leadership.  It has to be centrist in its mood and attitudes, and in its internal understanding of itself….

“The party should retain its ancestral beliefs – for power being held closest to the individual and the family, and radiating out from there to county, state and nation.  In the century-old formulation the party was meant to be Main Street, not Wall Street or any other center of concentrated power – big business, big tech.  Really anything that begins with ‘big.’….

“Be prudent stewards, keep your eye on the long run, cultivate economic growth, defend free markets, but make peace with the welfare state.  Your own voters did long ago.

“Make peace with programs that support the poor and middle class.  Appreciate and respect that members of your party, and potential supporters, rely on Medicare, Medicaid, Social Security – the whole edifice created in the past century by both parties to help people feel more secure and with a steadier foothold in the world.  These programs have been a positive good.  Make them stronger; undergird them.

“Republican congressmen enjoy receiving credit for damning such spending while not cutting it.  They think this is the best of both worlds.  It isn’t.  It leaves voters afraid that once in power you’ll revert to type and pull the rug out from under them, when the past few years they’ve had too many rugs pulled from under them – the end of U.S. manufacturing, a tottering culture….

“You saw the funeral last month of Jason Rivera at St. Patrick’s Cathedral in New York City. He was 22, a New York City policeman from a Dominican immigrant family, gunned down and killed with another cop, Wilbert Mora, 27, who was also from a big immigrant family.  Cardinal Timothy Dolan of New York buried those men the way you bury a president – in the presence of dozens of priests and officiants, a choir, a certain liturgical solemnity and grace. The cathedral was packed, filled with family, friends and colleagues of the fallen – the immigrant community, members of minority groups, all of them Americans, normal people there in affiliation with one of their own. It was beautiful.  And when the service was over and the mourners walked out of the cathedral, what they saw for blocks, downtown and uptown, was a sea of police in full regalia, come to honor their own.  A street full of flags.

“It was a statement, it was a show of cultural force, and it was a question: Who will stand with us?

“The Republican Party should come to understand it is the answer to that question.

“Many of those men and women are new here, work hard, fled something bad, and want America to work.  They are invested in it.  And they are the big center.  As America tries to cohere and regain its cultural and societal balance, it is the job of the Republican Party to be the party of the big center, to stand for normal, regular people in all their human variety – all races, ethnicities, faiths – against the forces of ideology currently assailing them.

“It is your job to see this moment for what it is and be serious. It is not your job to be extreme – to pose for Christmas photos with your family including little children fully armed with guns in order to troll the libs, as two members of Congress did.  It is not your job to call the events of Jan. 6, the riot in the Capitol, ‘legitimate political discourse.’  That is a lie the cops and their families in the cathedral can see right through, that everyone can see through….

“A great party can’t be a cult.  Cults are by definition marginal, not of the majority.  Donald Trump brought new voters in, it’s true, and the party would do well to hold them by taking good stands.  But don’t forget the votes he lost. He never came close in two tries to winning the popular vote, he lost once-Republican suburbs, in 2020 he lost Arizona and Georgia, dooming Senate candidates and giving control of the chamber to the Democrats. As long as he dominates the scene the party will not succeed nationally.

“How sad that would be when the problems we face are piled so high.

“To his friends and followers I would say, put America first. Don’t be a cultist, be a patriot.  Help your country, let go of old obsessions.  Go forward with a spirit of repair and lead this wounded country.”

--A jury on Tuesday ruled against Sarah Palin in her libel lawsuit accusing the New York Times of defaming her in a 2017 editorial that incorrectly linked her to a mass shooting, after the presiding judge already had said he would dismiss the case regardless of the verdict.

The nine-person jury in Manhattan federal court needed about two days to unanimously conclude that the Times was not liable to Palin.  She is expected to appeal.

Her case was considered a major test of libel protections for American media under the Constitution’s First Amendment free press guarantee and under a landmark 1964 U.S. Supreme Court decision, New York Times v. Sullivan.  That decision established an “actual malice” standard for public figures like Palin to prove defamation, meaning that media knowingly published false information or had a reckless disregard for the truth.

On Monday, U.S. District Judge Jed Rakoff in Manhattan said Palin had not met that “very high” standard, even as he faulted the Times for “very unfortunate editorializing” in “America’s Lethal Politics,” the editorial Palin challenged.  He said letting the jurors reach a verdict could avoid complications should Palin appeal.

The Times corrected the editorial (that incorrectly linked Palin to a January 2011 mass shooting in Arizona that killed six people and wounded Democratic Congresswoman Gabby Giffords) the next morning and former editorial page editor James Bennet testified that he did not intend to harm Palin and felt terrible about the mistake.

There is no guarantee the Supreme Court would take the case, though two conservative justices, Clarence Thomas and Neil Gorsuch, have called for the 1964 Sullivan decision to be reconsidered.

Palin said the Times editorial left her feeling “powerless” and “mortified,” but during her testimony did not offer specific examples about how it hurt her reputation or caused her harm.

--Prince Andrew and Jeffrey Epstein accuser Virginia Giuffre have settled a lawsuit alleging the British royal sexually abused her in the early 2000s, a court filing revealed Tuesday.

Giuffre alleges that she was intimate with Prince Andrew at the London home of Ghislaine Maxwell. 

Now 38, Giuffre had long maintained Andrew raped and sexually assaulted her when she was 17 and being trafficked worldwide for sex by Epstein.

Andrew denied the claims and had previously requested a jury trial, which a U.S. district judge had said could begin between September and December of 2022.

The sum of Andrew’s payment to Giuffre was not disclosed, but the prince would make a “substantial donation” to Giuffre’s charity in support of victims’ rights.  If the case had gone to trial and Giuffre won, Andrew could have been ordered to pay Giuffre damages.

Andrew, per the settlement, did not confirm or deny Giuffre’s claims.  He said he regretted his association with Epstein and would “demonstrate his regret” by supporting victims of sex trafficking.  He also praised Giuffre’s “bravery,” an about-face from his earlier argument that her lawsuit was baseless and that she was simply seeking a payday.

Andrew does not face any other pending civil lawsuits in U.S. federal courts.  At the same time, there is zero chance he will be returning to public duties inside the royal family.  Buckingham Palace in January said Andrew would no longer be known as “His Royal Highness” after losing his royalty and military links.

--The families of nine victims of the Sandy Hook Elementary School shooting have agreed to a settlement of a lawsuit against the maker of the rifle used to kill 20 first graders and six educators in 2012.  The amount was a reported $73 million.

The families and a survivor of the shooting sued Remington in 2015, saying the company should have never sold such a dangerous weapon to the public.  They said their focus was on preventing future mass shootings.

The civil court case in Connecticut focused on how the firearm used by the Newtown shooter – a Bushmaster XM15-E2S rifle – was marketed, alleging it targeted younger, at-risk males in marketing and product placement in violent video games.  In one of Remington’s ads, it features the rifle against a plain backdrop and the phrase: “Consider Your Man Card Reissued.”

Remington had argued there was no evidence to establish that its marketing had anything to do with the shooting.

The company also had said the lawsuit should have been dismissed because of a federal law that gives broad immunity to the gun industry.  But the Connecticut Supreme Court ruled Remington could be sued under state law over how it marketed the rife.  The gun maker appealed to the U.S. Supreme Court, which declined to hear the case.

The case was watched by gun control advocates, gun rights supporters and gun manufacturers across the country because it had the potential to provide a roadmap for victims of other mass shootings to circumvent the federal law and sue the makers of firearms.

Remington, one of the nation’s oldest gun makers founded in 1816, filed for bankruptcy for a second time in 2020 and its assets were later sold off to several companies.  The manufacturer was weighed down by lawsuits and retail sales restrictions following the school shooting.

--Sea levels on U.S. coastlines are forecast to rise on average by about a foot by 2050, surging with meltwater from ice sheets and glaciers as a result of climate change, federal scientists said Tuesday.

The estimates were released in a report from the National Oceanic and Atmospheric Administration, NASA, and other federal and academic institutions.

Across the U.S. coast on average, in the last 100 years, sea levels rose about 0.9 foot.

Well, I’ll be long dead.  The rest of you deal with this.

--But in the here and now, the extreme drought ravaging the U.S. West for more than two decades ranks as the driest 22-year period in at least 1,200 years, and scientists have found that this megadrought is being intensified by humanity’s heating of the planet.

In their research, the scientists examined major droughts in southwestern North America back to the year 800 and determined that the region’s desiccation so far this century has surpassed the severity of a megadrought in the late 1500s, making it the driest 22-year stretch on record.  The authors of the study also concluded that dry conditions will likely continue through this year and, judging from the past, may persist for years.

The researchers found the current drought wouldn’t be nearly as severe without global warming. They estimated that 42% of the drought’s severity is attributable to higher temperatures caused by greenhouse gases accumulating in the atmosphere.

“The results are really concerning, because it’s showing that the drought conditions we are facing now are substantially worse because of climate change,” said Park Williams, a climate scientist at UCLA and the study’s lead author.  “But that also there is quite a bit of room for drought conditions to get worse.”

You all have seen the pictures of California’s reservoirs, and Utah’s Great Salt Lake, dropping to record-low levels.

This past December, there was some hope for at least a better 2022, water wise, after the second wettest December on record for the Los Angeles area (which translated to record snowfalls in the mountains), but then that was followed by the 8th driest January on record for the region and you saw the record temperatures around the time of the Super Bowl.

I was watching the golf from Phoenix, AZ, last weekend, knowing how people keep pouring into the area (one of my favorites in the country…love the desert…), but thinking…where the hell are people going to get their water?  The water supply is drying up, and you’re stressing the system even more each year.

Oh well.

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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 $1900…first weekly close at this level since May 2021
Oil $91.66

Returns for the week 2/14-2/18

Dow Jones  -1.9%  [34079]
S&P 500  -1.6%  [4348]
S&P MidCap  -0.6%
Russell 2000  -1.0%
Nasdaq  -1.8%  [13548]

Returns for the period 1/1/22-2/18/22

Dow Jones  -6.2%
S&P 500  -8.8%
S&P MidCap  -7.4%
Russell 2000  -10.5%
Nasdaq  -13.4%

Bulls 33.7
Bears 27.9

Hang in there.

Brian Trumbore

 

 

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