Week in Review

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Week in Review

02/11/2023

For the week 2/6-2/10

[Posted 6:00 PM ET, Friday]

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Special thanks to longtime supporters Dan C. and George R.

Edition 1,243

For all the immense destruction and tragedy in Turkey and Syria, it is amazing to watch the love, compassion and humanity as rescuers pulled survivors out of the rubble.  The joy on men’s faces as a child was saved…but also the compassion of a father holding his dead daughter’s hand, as her lifeless body remained trapped in the debris.

These are good people who largely just didn’t get the breaks in life that the rest of us have gotten…and they suffer under poor leadership…corrupt, dictatorial, and in the case of Syria, brutal.

Watching the rescue efforts, I couldn’t help but think back to my first trip to Turkey in 2001, and one of my all-time favorite travel stories. 

I was a little skeptical, Turkey being a mess economically at the time (which led to the elevation of current President Erdogan), and I researched the route from Istanbul airport to my hotel, clear on the other side of this mammoth city, just so I’d have an idea if my cab driver was taking me for a ride of a different kind.

So I hop in and this man proceeds to take what seemed the right road.  For conversation, recognizing he didn’t seem to speak English, I asked “Efes?  Is that a good beer?” 

He looked at me quizzically in the rear-view mirror.  “Efes?  Good beer?” I asked again, giving a drinking motion with my hand.

He said nothing.  A few minutes later, we’re heading off an exit ramp.  ‘Uh oh,’ I thought.  He’s going to rob me.  Suddenly, he pulls in front of a store, hops out and goes in.  He’s clearly going to bring some other men out…this isn’t good.

And a minute later he emerges and hands me a 16-oz. can of Efes (which is indeed a very good beer).  He never said anything.  We eventually got to the hotel, I gave him a huge tip, said thank you and smiled.  He smiled back, and I thought, this is going to be alright.

To the father, Mesut Hancer, who lost his 15-year-old daughter Irmak, we pray for you, that you find peace.

For the families of the more than 23,000 Turks and Syrians who have died at last count, we pray for all of you.

I talk about President Erdogan down below.

China’s Balloon

After posting my column last week, early Friday evening, I was watching various news channels on the Chinese spy balloon, at least that’s what it seemed to be, and I was ticked at some of the commentary I was seeing, including from CNN’s Fareed Zakaria, who basically laughed it off and said it was nothing to be concerned about.

The thing is, we had no freakin’ idea what it was, what was on it, in it.  We did know it was up to no good, and it was clearly going over our most strategic assets.  Those, like Zakaria, who were saying, ‘well, China has dozens of spy satellites taking the same kinds of pictures,’ conveniently ignored that this was far closer than a low-earth satellite, and we had to assume that whatever pictures it was taking and data it was compiling, could be more accurate.

But what was confusing was why China would fly this balloon over our airspace at the same time it was supposed to be welcoming Secretary of State Antony Blinken for high-level meetings, including with President Xi, as China looked to reset relations after what has been a very tense period.

Blinken was supposed to be in China to build bridges, or at least, as the BBC put it, “try to stop those that still exist from being destroyed.”

As in the timing had to be a mistake.

But we will never know, unless in a face-to-face, Xi tells Joe Biden, or whoever the American president is at the time, that the balloon wasn’t to have been launched at that time.

Or…it was…and Xi and the People’s Liberation Army were just testing us.  And what they ended up seeing, that the U.S. let this balloon, in full view, traverse the country, showed weakness.

Republicans, and some Democrats, were rightfully upset the balloon wasn’t shot down much earlier. 

And it was beyond pathetic that once every Tom, Dick and Harriett started taking pictures on their phones in Montana, and Nebraska, clear across to the lovely Myrtle Beach area, that our president didn’t get on the airwaves and tell us, in just 3-5 minutes, what the Defense Department thought it was (by then they had the valuable info from the U-2 flights), and what the government was looking to do about it.

So back to the narrative of things as they happened….

China’s foreign ministry maintained it was a weather balloon that had blown off course and accused the United States of overreacting.  On Monday, the United States briefed 150 foreign diplomats in Washington and sent information to its missions around the world to share details about the incident.

We learned that China declined a U.S. request for a phone call between Defense Secretary Lloyd Austin and Chinese Defense Minister Wei Fenghe, the Pentagon said on Tuesday.

The Chinese balloon carried antennas and sensors for collecting intelligence and communications, Biden administration officials said, laying out the most detailed evidence to date about China’s surveillance program.

The new information was described Thursday by a range of officials from the Pentagon, State Department and FBI as the administration prepared to take unspecified action against companies and entities linked to the Chinese balloon program that the U.S. says has spied on more than 40 countries across five continents.

Officials at the State Department said much of the information came from tracking the balloon over eight days as it traversed the U.S.  Images captured by high-altitude U-2 surveillance planes showed that the balloon was equipped with multiple antennas, including an array likely capable of pinpointing the location of communications.

Those U-2 and other reconnaissance flights also found that the balloon carried large solar panels capable of powering an array of intelligence collection sensors.  The manufacturer of the balloon has a direct relationship with the Chinese military, the State Department said.

More information will be forthcoming as the FBI examines components of the surveillance equipment being retrieved from the waters near the South Carolina coast.

But with the acknowledgement that the balloon carried high tech equipment for collecting intelligence and communication, China risks losing even more access to Western technology, as the Biden administration looks to add a number of Chinese government-backed companies with links to the balloon program to the Commerce Department’s entities lists.

A Chinese foreign ministry spokesperson Mao Ning dismissed U.S. charges that the balloon was part of a worldwide spying fleet, saying that such allegations could be part of a “U.S. information war against China.”

Japan said on Thursday it was exchanging information with the United States after confirmation of suspected balloons flying over Japan, including in the open waters off the southwestern region of Kyushu in 2022.

A top U.S. military official admitted Monday that Chinese surveillance balloons flew over U.S. territory or airspace at least four times over the past few years, stretching back to the prior White House administration.

“The intel community, after the fact, as I believe has been briefed already, assessed those threats from additional means of collection and made us aware of those balloons that were previously approaching North America or transited North America,” the NORAD and NORTHCOM chief, Air Force Gen. Glen VanHerck, told reporters at the Pentagon on Monday.

“Every day as a NORAD commander it’s my responsibility to detect threats to North America,” he said, and then admitted bluntly, “I will tell you that we did not detect those threats. And that’s a domain awareness gap that we have to figure out.  But I don’t want to get into further detail.”

Beijing lashed out at President Biden for saying leader Xi Jinping faces “enormous problems.”  Biden said Xi has “great potential” but has “an economy that’s not functioning very well.”  He  also suggested that Beijing’s ties with Moscow weren’t helping matters.

But Biden said on Thursday he did not view the spy balloon as a major security breach.  In an interview with Noticias Telemundo, Biden said he did not regret shooting down the balloon sooner.  “It’s not a major breach,” Biden said, confusingly.  “I mean, look, it’s totally a violation of international law.  It’s our airspace. And once it comes into our space, we can do what we want with it.”

He said U.S. military officials were worried that by shooting it down over land, the balloon, and its parts could drop into a populated area.

Wednesday, in an interview with PBS NewsHour, Biden said the U.S. was “not looking for conflict” with China despite tensions over the balloon.  Asked if the incident had caused major damage to the relationship with Beijing, Biden said “No.”

Editorial / Wall Street Journal

“President Biden in his Tuesday State of the Union address made only a veiled reference to the Chinese spy balloon that appeared over Montana last week, and then only to boast about how he’s standing up to Beijing. If he means it, he can take a cue from the Cuban missile crisis and educate the world about China’s global spy campaign.

“Beijing is complaining about the U.S. decision to shoot down the balloon, though it isn’t cooperating with U.S. attempts to engage on the issue. Defense Secretary Lloyd Austin’s counterpart in China won’t take Mr. Austin’s call.  This isn’t the behavior of a great power that wants better relations.  All the more so given that China’s explanation that this was merely a weather balloon that took a wrong turn at the Aleutian Islands has imploded under scrutiny and more disclosures.

“The Pentagon said Wednesday that the balloon is part of a global fleet China has been operating for several years….

“The Defense Department says it’s confident this latest balloon was launched to get a closer-up peek at America’s ‘strategic sites,’ perhaps including intercontinental ballistic-missile bases in Montana.  U.S. officials say at least four other balloons have surfaced over U.S. soil in recent years – though, shockingly, we only detected them after the fact. Civilian officials were never informed….

“A U.S. general said earlier this week that the blimp had a payload the size of a regional jetliner.  Was it capable of carrying electromagnetic weapons, or blowing up on command?

“The Administration is also now leaking to the press that the balloon could loiter on sites longer than satellites on low-earth orbit, after insisting for days the balloon presented no advantage over China’s other intelligence methods.  Was it picking up signals that satellites can’t?  Was it sending real-time data back to its overlords in Beijing?

“An instructive if less threatening precedent here is the 1962 Cuban missile crisis, when American U-2 spy planes captured photos of an enormous Soviet nuclear missile buildup 90 miles from Florida.  The Kennedy Administration brain trust debated whether to inform the public or keep it quiet.  The White House decided to show the world the threat, and the U.S. presented photographic proof of the missiles at a confrontation with the Soviets at the U.N.  It helped to sway global opinion.

“Navy divers are now salvaging debris from the balloon, and the U.S. ought to put it on display for the world to see, complete with experts explaining what it reveals about what China was up to.  Put it all on stage, not merely in a Pentagon basement.

“The Administration may fear a public airing of the spy balloon fleet could inflame Beijing and preclude a calmer relationship.  But the opposite may be true.  The real worry should be that the incident blows over without consequences and China’s war hawks conclude that such provocations are manageable risks.

“The Biden crowd is no doubt eager to move on from the balloon affair, but the stakes are larger than their own embarrassment.  Let’s show the world the truth about how China thinks it can act with impunity.”

I have to add that the downing of the spy balloon marked the first time the F-22 Raptor fighter jet brought down an airborne target since it debuted in combat in Syria and Iraq almost a decade ago, defense analysts said.

Defense publication The War Zone said on its website that the incident “may be the highest altitude air-to-kill ever.”  The F-22 was flying at about 58,000 feet when it fired an Aim-9X Sidewinder missile at the balloon that was hovering at between 60,000 and 65,000 feet, Pentagon officials said Saturday.

***As I’m the ‘wait 24 hours’ guy, and this is being posted about four hours after we first learned the U.S. shot down a second object, the size of a small car, off the coast of Alaska, I’ll hold off on saying anything further, other than the Pentagon didn’t know the origin as yet and President Biden ordered it be shot down.  I hope it wasn’t Santa Claus just out for a post-holiday excursion.  That would suck.  [The Pentagon did say it wasn’t manned.]

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The State of Disunion

A February 6 Monmouth University poll had barely 4 in 10 Americans saying the state of the union is strong (7% strong, 32% ‘somewhat strong’), which is down from a majority who felt that way five years ago, when ‘somewhat strong’ was at 55%.  The poll also finds most of the public feels the federal government has a negative impact on people’s lives.

Of course there are partisan elements to the data, but Democrats’ optimism about the state of the union has ebbed from 68% in 2022 to 58% now.

Worrisomely for Democrats as well is the fact that independents’ opinion of the strength of the union has dropped steadily from 52% in 2018, to 33% today.  That blows if you’re a donkey and looking to 2024.

On the ‘right direction,’ ‘wrong direction’ question in terms of the nation, 24% of those surveyed by Monmouth said right direction, 73% wrong track, which ain’t good, sports fans.  In April 2021, three months into the Biden presidency, it was 46% right/50% wrong direction.

A recent NBC News poll had 71% believing the nation is headed in the wrong direction

Well, Joe Biden was vigorous and made it through an hour and fourteen-minute speech.  But not unscathed.  It was rather embarrassing he couldn’t remember what leadership post Sen. Chuck Schumer held, and he lied about all kinds of stuff, but all presidents stretch the truth in a State of the Union Address.

Biden highlighted the economic progress made in his first two years, including 12 million jobs created and 3.4% unemployment.  He attempted to convince a highly skeptical public that the trillions of dollars in initiatives since he came into office will boost the economy.

New laws to invest billions in U.S.-based manufacturing, infrastructure, and clean energy will bring more economic opportunity, “investing in places and people that have been forgotten,” Biden said.  “This is in my view a blue-collar blueprint to rebuild America and make a real difference in your lives at home.”

Biden called for bipartisanship but said he won’t negotiate on raising the nation’s $31.4 trillion debt limit.

But it took the president a full hour before he mentioned China, tossing it off in not even a minute.

Editorial / New York Post

“President Biden touched on a number of issues during his State of the Union Tuesday, blending brags and supposed achievements.

“State of the Union speeches are usually pretty scattershot, but President Joe Biden’s 2023 one set a new record.

“He ranged across a world of issues without substantively addressing the biggest ones – crime, the border crisis, China, the nation’s looming economic woes – because his record is so weak on all of them.

“Instead, he offered lie after lie in a shameless bid to fool the electorate ahead of his 2024 run for re-election.  His only ‘big idea’ is to make bogeymen out of the wealthy and offer the American people more freebies, more unsustainable spending.

“He blended brags about his supposed achievements (inflation-fueling blowout spending sprees), promos for various dead-on-arrival bits of legislation (even heavily Democratic Congresses have been unable to pass ‘comprehensive immigration reform’), blatantly insincere calls for bipartisanship, cynical and false attacks on his opponents (the chamber was in an uproar at his fake claim Republicans want to slash Social Security and Medicare), bogus stats (billionaires pay roughly 24% income tax, not 8%), some fine tough talk on the Ukraine war and utter laughers (‘as we made clear last week, if China threatens our sovereignty, we will act to protect our country.  And we did’ – by shooting down the balloon at the last possible moment?).

“It had the now-usual shout-outs to guests in the audience and the standard rah-rah patriotism (‘We are not powerless before the forces that confront us. It is within our power, of We the People.’).

“But he had literally no overall theme, as he has no overall vision beyond his self-serving distortions and promises of more giveaways.  In his best chance to reach the entire nation, our president basically showed America that there’s no there there except his trademark malarkey.

“His flagging polls show the American people aren’t fooled.  Just like Biden, they see that his act is getting stale.”

Ingrid Jacques / USA TODAY

“In his second State of the Union Address Tuesday, President Joe Biden highlighted how our country is ‘always moving forward…never giving up.’

“Presidents use this platform to sell their accomplishments – and make a case for future plans. And Biden is eager to shift the conversation from his political troubles, such as the classified document fiasco or the recent Chinese spy balloon uproar.

“This was Biden’s best chance to talk frankly with the country – and set the tone with a new and divided Congress. But the big-government solutions he offered failed to adequately address pressing concerns, including the ongoing financial difficulties faced by many citizens.

“And his words may have deepened political division, despite his calls for unity.

“The economy remains one of Biden’s biggest challenges, despite his sunny picture of the improving outlook.  Americans aren’t convinced that all is hunky-dory.

“Inflation is still at 40-year highs, and interest rates are up as the Fed seeks to combat rising prices.  While the inflation rate is gradually decreasing, many people are still struggling with buying their groceries and paying their bills.

“And just as before the midterm elections, voters are saying they’re worried.

“In December, a USA TODAY/Suffolk University poll found 45% of registered voters said the country was in a recession; 15% said it was in a depression; 20% identified stagnation.

“That’s hardly a rosy picture.

“Similarly, a recent ABC News/Washington Post poll found 40% of Americans say they’re worse off financially under Biden, the highest number in nearly 40 years of the poll.

“As Biden moves toward a formal reelection announcement, dissatisfaction with the economy – along with other factors, including the president’s age (now 80) – is leading many voters, including Democrats, to seek another option.

“Rather than offer ideas that could further ease inflation or earn the support of the GOP-controlled House, Biden instead made a hollow call for Republicans to ‘work together’ with him by aiding Big Labor, raising taxes on the wealthy and corporations, and extending social programs.

“These are ‘solutions’ more in line with far-left progressives and a nonstarter for conservatives.  Plus, additional taxing and spending would only put more pressures on an already fragile economy.

“Throughout his presidency, Biden has paid lip service to the ideals of bipartisanship and unity. And he has painted himself as someone who can work across the aisle and get deals done.

“ ‘The people sent us a clear message,’ Biden said Tuesday.  ‘Fighting for the sake of fighting, power for the sake of power, conflict for the sake of conflict, gets us nowhere.’

“Those words will be put to the test.  During the first two years of his presidency, Biden didn’t have to work with a divided Congress.  Now he does, and it’s already looking dicey….

“(Despite) his calls for unity and preserving the ‘soul of the nation,’ Biden has contributed to the country’s division.  In a speech last fall, he called most Republicans – anyone who buys into the ‘MAGA’ philosophy – semi-fascists.  He continued digs against the GOP in this speech, too.

“In advocating his ‘blue-collar blueprint to rebuild America,’ Biden in the State of the Union did not offer a bipartisan agenda.  Rather, he laid the groundwork for his 2024 campaign.”

Editorial / Wall Street Journal

“President Biden devoted most of his State of the Union address on Tuesday night to celebrating what he says is a long list of legislative and economic achievements – spending on social programs and public works, subsidies for computer chips, even more subsidies for green energy, and a strong labor market.  But if he’s done so much for America, why does most of America not seem to appreciate it?

“That’s the contradiction stalking his Presidency as he enters his third year and plots a likely re-election campaign.  The disconnect is clear enough in the polls.  His job approval rating average has climbed to 44.2% in the RealClearPolitics average, which should be better with all of that supposed good news.  Gallup has it at 41%.   Mr. Biden’s RCP average job approval on the economy is 38%.

“The latest Washington Post/ABC poll is even worse for the President.  Some 41% of Americans say they’re worse off financially than when Mr. Biden became President, while only 16% say they’re better off.  Most people – 62% - say Mr. Biden has accomplished either not very much or little or nothing. That includes 22% of Democrats.

“And here’s the really bad news for Mr. Biden.  Some 58% of Democrats say they’d prefer a different party nominee for President in 2024, and he even loses a head to head matchup with former President Trump 48%-44%.

“Polls are only snapshots in time, and few voters are focused on the 2024 choices.  Mr. Biden could rise if the economy ducks a recession, inflation subsides, and Ukraine pushes Russia out of most or all of its territory.

“But it’s worth asking why a Presidency as successful as Mr. Biden and the media claim hasn’t persuaded the public.  Part of the answer is polarization, with partisans automatically opposing a President of the other party.  But that would explain about 40 percentage points of his disapproval, not the other 16%.

“Mr. Biden has contributed to that polarization with the partisan agenda of his first two years after he campaigned as a unifier.  He jammed through Congress trillions of dollars in new spending with narrow majorities….

“The President’s governing rhetoric has also been as divisive as Mr. Trump’s.  He said a Georgia voting law was ‘Jim Crow 2.0’ and Republicans are the equivalent of Bull Connor.  Republicans believe in ‘semi-fascism,’ and those who want to use the debt ceiling as leverage to reduce spending represent ‘chaos and catastrophe.’

“This may rally Democrats but it turns off a majority. That may be why White House sources were leaking before Tuesday’s speech that Mr. Biden would avoid such rhetoric and personally edited the drafts to that effect.  We’ll see how long Biden the Unifier 2.0 lasts….

“As for foreign policy, Americans can see that the world is becoming more dangerous and its rogues more brazen.  Mr. Biden has done a good if often belated job of arming Ukraine, but he failed to deter Vladimir Putin. China has become less bellicose of late but no less aggressive in in its actions, as its spy balloon provocation shows.  Iran continues to advance its nuclear program despite U.S. and allied protests.

“All of which is to say that there’s ample reason for voters to be skeptical of Mr. Biden’s expansive claims of presidential success.  He’s lucky the opposition Republicans can’t get their act together or he’d be in far more trouble.”

Finally, remember how I mused weeks ago about the required Biden Super Bowl interview with Fox, who is doing the broadcast?  Guess what?  It is supposedly with Fox Soul, a streaming channel that describes itself as “unapologetically Black.”  Fox Corp. at first canceled the interview when it was clear the White House refused to do it with Fox News.  Seriously, this is outrageous.  I will not be easy on said president the next year, or however long he is alive.

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This Week in Ukraine….

--Russian forces launched several attacks in eastern Ukraine, pushing for a breakthrough on the battlefield ahead of the delivery of new Western weapons, although the UK’s Ministry of Defense cast doubt on the prospects for a major Russian offensive.

The General Staff of Ukraine’s armed forces said Russia was regrouping and attacking on five fronts in the eastern Donetsk and Luhansk regions, as part of a wider offensive anticipated by Kyiv and its Western allies.

The UK, however, said a lack of necessary munitions and mobile units would hamper any major Russian offensive.

“It remains unlikely that Russia can build up the forces needed to substantially affect the outcome of the war within the coming weeks,” the ministry said Tuesday.

Russian forces have only managed to take several hundred meters of territory a week since attempting to resume offensive operations last month with the aim of seizing remaining parts of the Donetsk region under Ukrainian control, the ministry said.

Desperate for western military aid to arrive, Ukraine anticipates a major offensive could be launched by Russia for “symbolic” reasons around the Feb. 24 anniversary of the invasion.

Ukraine itself is planning a spring offensive to recapture lost territory, but it is awaiting delivery of promised longer-range Western missiles and battle tanks, and some analysts say the country was months away from being ready.

“We are seeing more and more [Russian] reserves being deployed in our direction, we are seeing more equipment being brought in…,” said Serhiy Haidai, Ukraine’s governor of the mainly Russian-occupied Luhansk province.

“They bring ammunition that is used differently than before – it is not round-the-clock shelling anymore.  They are slowly starting to save, getting ready for a full-scale offensive,” Haidai told Ukrainian television.

“It will most likely take them 10 days to gather reserves.  After February 15th we can expect [this offensive] at any time.”

--One area where Russian forces have been gaining is around the city of Bakhmut, which Moscow is trying to cut off from other Ukrainian-held territory.  The British Defense Ministry wrote on Twitter, Sunday, that the two main roads in and out for Ukrainian forces are now within range of Russian fire, making efforts to resupply troops in Bakhmut difficult.

President Zelensky said the situation at the front is “getting tougher,” with Lyman, to the north of Bakhmut, and Vuhledar, to the southwest, also coming under fire.

“The occupier throws more and more of its forces to break our defenses,” Zelensky said in his Saturday video address.  “It is very difficult in Bakhmut,” as well as in other parts of the country’s eastern Donbas region.

Russia’s independent news outlet Meduza, now banned, had reported in late January that some 40,000 of the 50,000 recruits by the powerful Wagner private military group involved in the Bakhmut campaign were either dead or missing.

--In his Monday evening address, President Zelensky said personnel changes on the border and frontline will bolster Ukraine’s military efforts amid uncertainty over the future of his defense minister.

Zelensky said he wanted to combine military and managerial experience in local and central government but did not directly address confusion about whether his defense minister, Oleksii Reznikov, would be replaced.

On Sunday, David Arakhamia, head of Zelensky’s parliamentary bloc, said Reznikov would be transferred to another ministerial job, but on Monday he wrote that “there will be no personnel changes in the defense sector this week.”

Zelensky says he needs to show that Ukraine was a safe steward of billions of dollars of western military and other aid, and his government is engaged in the biggest political and administrative shake-up since Russia’s invasion nearly a year ago.

“In a number of regions, particularly those on the border or on the frontline, we will appoint leaders with military experience. Those who can show themselves to be the most effective in defending against existing threats,” said the president.

--Back to Reznikov, who indeed is still defense minister, he said over the weekend that he estimated Russia had 12,000 troops in Belarusian military bases, a number that would not be enough to launch a significant attack from Belarus into Ukraine’s north, reopening a new front.

Reznikov also said Ukraine will not use longer-range weapons pledged by the United States to hit Russian territory and will only target Russian units in occupied Ukrainian territory.

--On Tuesday, Ukraine’s military said that 1,030 Russian troops were killed over 24 hours, the highest daily toll of the war.  For its part, Russia said it had inflicted 6,500 Ukrainian casualties in the month of January.

Ukraine national security chief Oleksiy Danilov said in an interview the Kremlin was expected to target the northeastern Kharkiv or southern Zaporizhzhia regions in a new thrust.

The Ukrainian military said on Tuesday evening that more than 30 towns and villages in Kharkiv and 20 communities in Zaporizhzhia came under fire.

--The German government’s security council has approved delivery of 178 Leopard 1 tanks to Ukraine from industry stocks, considerably more than previously announced, which was first reported in Der Spiegel magazine.  Separately, Denmark, Germany and the Netherlands will pool funds to restore at least 100 old Leopard 1 tanks from industry stocks and supply them to Ukraine, according to a joint statement.

Russia said Western arms shipments to Ukraine are dragging NATO into the conflict with a potentially “unpredictable” level of escalation.

“The U.S. and its allies are trying to prolong the conflict as much as possible,” Defense Minister Sergei Shoigu said in a call with military officials.  “To do this, they have started supplying heavy offensive weapons, openly urging Ukraine to seize our territories.  In fact, such steps are dragging NATO countries into the conflict and could lead to an unpredictable level of escalation.”

His reference to “our territories” appeared to be a reference to four regions in eastern and southern Ukraine – Donetsk, Luhansk, Zaporizhzhia and Kherson – that Russia claims to have annexed following referendums last September condemned by Kyiv and its Western allies as illegitimate.

--President Zelensky traveled to London and Paris on Wednesday.  Zelensky spoke to the British parliament and met with Prime Minister Rishi Sunak. 

The Brits are second behind the U.S. in terms of total military aid pledged to Ukraine since the invasion, according to the Kiel Institute for the World Economy.  Zelensky repeated his request for fighter jets in his remarks to lawmakers.

The British military then announced it will expand its pilot training program to include Ukrainian troops, which could be a precursor to paving the way for other countries to send planes.

Zelensky then met with French President Macron and German Chancellor Scholz in Paris, before flying with Macron to Brussels, where he met with all 27 EU leaders.

In Brussels, Zelensky told the European Union parliament that his military is defending “the European way of life” by standing up to the Russian military’s invasion.

“This total war that has been unleashed by Russia is not just about territory in one part of Europe or another,” Zelensky said.

“We are defending ourselves against the most anti-European force in the modern world. We are defending ourselves. We, Ukrainians, are on the battlefield with you.

“We can never match your sacrifices,” said EU Commission President Ursula von der Leyen after Zelensky spoke.  “But we can stand up for you, and we have,” emphasizing the EU’s $70 billion+ in support thus far.

Zelensky said several European Union leaders told a summit he attended that they were ready to provide Kyiv with aircraft to help it fight against Russia’s invasion.  He did not specify which countries might be willing to send jets.

The sooner Ukraine received heavy, long-range weapons and modern planes, “the quicker this Russian aggression will end,” Zelensky said.

--According to reports, Russia’s Wagner Group is no longer recruiting convicts from prisons, its founder said, marking an end to one of the sources of troops that has helped tip the fighting in eastern Ukraine in Moscow’s favor.

Yevgeny Prigozhin, founder of Wagner, said Thursday on Telegram that the recruitment of prisoners “has completely stopped.”  “To those who work for us now, all obligations are being fulfilled,” he added.

The use of an estimated 40,000 convicts, scores now dead as noted above, helped give Russia a manpower edge that Ukrainian soldiers said was as much as 10-to-1 in some areas.

The Institute for the Study of War wrote in a daily assessment that the Russian offensive in occupied Luhansk has intensified.

--Friday, Russia unleashed strategic bombers, killer drones and rockets in a barrage of attacks on Ukrainian targets, as a military push by Moscow that Kyiv says has been brewing for days appeared to pick up pace ahead of the one-year anniversary of its invasion.

The Kremlin’s forces focused their bombardments on Ukraine’s industrial east, especially Luhansk and Donetsk provinces, the Ukrainian military said.

But the barrage went further, taking aim at Kyiv, while striking critical infrastructure in Kharkiv, Ukraine’s second-largest city in the northeast.  There were injuries.

The bombardments could be seen as an attempt by Russia to soften up Ukraine’s defenses ahead of a ground assault, which Kyiv believes Moscow is planning in the east.

It was the 14th round of massive strikes on Ukraine’s power supply. 

The Ukraine Air Force said Russia launched up to 35 S-300 anti-aircraft guided missiles on the Kharkiv and Zaporizhzhia provinces. Those missiles cannot be destroyed in mid-air by air defenses but they have a relatively short range so the Russians have used them for attacks on regions not far from Russian-controlled territory.

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--A serious accident at a high-voltage substation in Ukraine’s Odesa region on Saturday left hundreds of thousands without power and repair work could take weeks, though heat and water to most were restored.  The substation was overloaded, as it attempted to make up for power lost amidst all of Russia’s attacks on Ukraine’s energy grid.

The CEO of the state grid operator, Volodymyr Kudrytskyi, said critical equipment that had already been damaged several times by Russian missile strikes burst into flames when it could no longer “withstand the load.”

--Switzerland is close to breaking with centuries of tradition as a neutral state, as a pro-Ukraine shift in the public and political mood puts pressure on the government to end a ban on exports of Swiss weapons to war zones.

--The Paris mayor says there should be no Russian delegation at the Paris 2024 Olympics as long as the war is ongoing.

--Russia demanded that the U.S. embassy in Moscow stop spreading what Moscow regards as fake news regarding its military operation in Ukraine and has threatened to expel U.S. diplomats, the TASS news agency reported.

--Price caps on Russian oil likely hit Moscow’s revenues from oil and gas exports by nearly 40% in January, or about $8 billion, from a year ago period, International Energy Agency (IEA) chief Fatih Birol said on Sunday.

Opinion….

Sen. Tom Cotton (R-Ark.) / Wall Street Journal

“After years of observing Russian leaders up close during World War II, Winston Churchill remarked that ‘there is nothing they admire so much as strength, and there is nothing for which they have less respect than for weakness, especially military weakness.’  Churchill therefore warned against ‘offering temptations to a trial of strength.’

“Unfortunately, that’s exactly what President Biden did in his first year in office, tempting Vladimir Putin to pursue his long-standing ambition to reassemble the Russian Empire by conquering Ukraine.  Having failed to deter the war, Mr. Biden’s timid approach has now prolonged it.

“Thanks to his failures, some Americans wonder whether we should continue to support Ukraine.  But cutting off Ukraine wouldn’t end the war. It would only increase the chances of a Russian victory and harm our interests in deterring wider wars in Europe and Asia.

“Mr. Biden appeased Russia from the start, from a no-conditions extension of a one-sided nuclear-arms treaty, to the waiving of sanctions on Russia’s Nord Stream 2 pipeline, to freezing an arms shipment to Ukraine.  Then came the botched withdrawal from Afghanistan.  This humiliating failure telegraphed weakness and incompetence, and Russia soon massed an invasion force along Ukraine’s border.

“Mr. Biden responded by hinting at disunity in the North Atlantic Treaty Organization and suggesting he might tolerate a ‘minor incursion’ by Russia into Ukraine. Convinced of his strength and his enemies’ weakness, Mr. Putin went for the jugular.

“The Ukrainians stood their ground and fought.  Yet Mr. Biden has dragged his feet all along, hesitating fearfully to send the Ukrainians the weapons and intelligence they need to win.  Today, Mr. Biden stubbornly refuses to provide fighter jets, cluster munitions and long-range missiles to Ukraine.  As a result of Mr. Biden’s half-measures, Ukraine has only half-succeeded.

“We should back Ukraine to the hilt, because the likeliest alternative isn’t peace, but rather another ‘frozen conflict’ that favors Russia and harms our interests.  Russia would retain key strategic terrain and much of Ukraine’s industry and agriculture.  Food and energy prices would remain high, potentially starving many nations and exacerbating the migrant crisis in the West.

“Meanwhile, Russia could rebuild its strength and seize the rest of Ukraine when the opportunity arises.  Such an outcome would create millions more Ukrainian refugees, drive inflation higher and worsen supply-chain disruptions.  Russia would extend its border deep into Europe.  Next on the chopping block could be Moldova, site of another frozen conflict.  And after that, a NATO nation.

“Stopping Russia also will allow the U.S. to focus on the greater threat from China.  A Russian victory would force us to divert more resources for a longer time to Europe to deter Russian expansionism, creating persistent threats on both fronts.  But a Ukrainian victory and a durable peace will secure our European flank as we confront China.

“The Chinese dictator, Xi Jinping, is closely watching the war in Ukraine. If the West falters, he will conclude that we will never fight to protect Taiwan.  In the 1930s, the West tempted the Axis powers by appeasing naked aggression against small countries like Ethiopia and Czechoslovakia.  Some Western politicians may have forgotten the lessons of history, but Mr. Xi hasn’t….

“The Ukrainian people are fighting with spirit and resolve, exercising what Churchill called ‘the primary right of men to die and kill for the land they live in.’  Their cause is sympathetic, but the world is a dangerous place and America shouldn’t act out of sympathy alone.  We act to protect our vital national interests.  That’s the case in Ukraine, and we deserve a strategy of victory to match.”

Sen. Cotton’s important op-ed comes as far-right Republican Rep. Matt Gaetz and 10 likeminded co-sponsors submitted legislation Thursday instructing the U.S. to “end its military and financial aid to Ukraine” and reach some sort of peace agreement.  Co-sponsors include Reps. Andy Biggs and Paul Gosar of Arizona; Colorado’s Lauren Boebert, Georgia’s Marjorie Taylor Greene, Anna Paulina Luna of Florida, Kentucky’s Thomas Massie, Mary Miller from Illinois, Alabama’s Barry Moore, Ralph Norman of South Carolina, and Montana’s Matt Rosendale.

Nine out of the 11 in Gaetz’s entourage voted to overturn the 2020 election results.

---

Wall Street and the Economy

In a week bereft of important economic data, at least that which I report on in this space, all eyes were on Federal Reserve Chair Jerome Powell and an appearance Tuesday at the Economic Club of Washington.  Would he use the opportunity to fine tune his remarks of the prior week after the Fed’s latest rate hike?

Powell, in a Q&A with David Rubenstein, said the process of lowering inflation to the Fed’s goal of 2% “is likely to take quite a bit of time. It’s not going to be, we don’t think, smooth,” Powell said.  “It’s probably going to be bumpy.”

The expectation that inflation “will go away quickly and painlessly…is not the base case,” he added.  “The base case for me is that…we’ll have to do more rate increases, and then we’ll have to look around and see whether we’ve done enough.”

Powell repeated his view that the Fed is prepared to raise rates higher if data suggested that economic activity was accelerating in ways that officials hadn’t anticipated.

“We’re going to react to the data,” he said. “So if we continue to get, for example, strong labor market reports or higher inflation reports, it may well be the case that we have to do more and raise rates more than has been priced in.”

As I’ve been writing for months, just follow Powell’s words and once again he emphasized still-tight labor markets, elevated wage pressures and high inflation for labor-intensive services…i.e., service sector inflation that makes up 55-60% of the personal consumption expenditures index, the Fed’s key inflation barometer.  That’s the sticky part, or as he put it, “We’re not seeing disinflation there yet, and that’s going to take some time.  We’re going to need to be patient.”

JPMorgan Chase & Co. CEO Jamie Dimon cautioned against declaring victory against inflation too early, warning the Federal Reserve could raise interest rates above the 5% mark if higher prices ended up “sticky.”

Dimon’s warning came after Fed officials said more rate rises are in the cards.

Dimon said “people should take a deep breath on this one before they declare victory because a month’s number looked good.”

“It’s perfectly reasonable for the Fed to go to 5% and wait a while,” Dimon added.  But if inflation comes down to 3.5% or 4% and stays there, “you may have to go higher than 5% and that could affect short rates, longer rates,” he said.

In an interview with Reuters, Dimon also said a default on the nation’s debt – a prospect unless the debt ceiling is raised by a projected early June, according to the Treasury – would potentially be “catastrophic.”

Appearing in an interview with CNN’s Fareed Zakaria, ex-Treasury Secretary Larry Summers warned: “My continued fear is…that we had a set of inflation indicators during 2022 that were very strong that have now come back to Earth, but they’re still too high.”

“They’re still unimaginably high from the perspective of two or three years and that getting the rest of the way back to target inflation may still prove to be quite difficult,” Summers added.  “I’m encouraged, but it would be a big mistake to think we’re out of the woods.”

Well, next week is a biggie for the Fed and the markets, as we have January data on consumer and producer prices.  In fact, before the next Federal Open Market Committee gathering on March 21-22, the Fed will have seen inflation numbers for two months.

***And in a lightly covered news item today from the Labor Department, it’s annual revisions to CPI data showed that consumer prices were higher than first reported for October through December, which could raise the risk of higher inflation readings in the months ahead.

For the record, the latest Atlanta Fed GDPNow barometer for first-quarter growth is up to 2.2%.

Freddie Mac’s 30-year fixed-rate mortgage rate rose to 6.12% from last week’s 6.09%.

Gasoline prices ticked down six cents to $3.43 for regular, nationwide.

Europe and Asia

It was a quiet week for eurozone data, with a report on December retail trade down 2.7% compared with November.  Versus a year ago, the figure fell by 2.8% in the EA19.

Britain: Strikes here continue, some of the most disruptive so far.  Some unions have, however, briefly called off strike action when they get a contract offer.  But the strikes in the healthcare sector, in particular, certainly put lives at risk, even if union heads say they don’t.

Meanwhile, the UK narrowly avoided recession, classically defined, when the national statistics agency revealed today that GDP growth was unchanged in the fourth quarter, after dropping by 0.2% in the third quarter.  Analysts still expect a recession in 2023.

France: Public transport, schools and refinery supplies were disrupted on Tuesday as trade unions led a third wave of nationwide strikes against President Emmanuel Macron’s plans to make the French work longer before retirement.

To repeat, the government says people must work two years longer – meaning for most until the age of 64 – in order to keep the budget of one of the industrial world’s most generous pension systems in the black.  The French spend the largest number of years in retirement among OECD countries – a deeply cherished benefit that a substantial majority are reluctant to give up, polls show.

The government is being forced to offer concessions and carve-outs.

This is a typical Frenchman these days, pensioner Bernard Chevalier (“thank heavens…for little girls…”):

“We’re worn out by work.  Retirement should be a second life, not a waiting room for death.”  [Reuters]

Well, personally, I will work until I’m dead, which could be soon if it’s Trump vs. Biden redux.

Turning to Asia…China reported its inflation data for January, with consumer prices up 2.1% year-over-year vs. 1.8% prior, while producer prices fell 0.8% Y/Y, continuing a recent trend.

Auto sales plunged 35% from a year earlier in January to 1.65 million units, the lowest figure for the month since 2012 and compared to an 8.4% drop a month earlier, data from the China Association of Automobile Manufacturers showed.  Demand dropped sharply due to the expiration of tax credits for vehicles with combustion engines and subsidies on electric vehicles.  The CAAM recently predicted that in 2023, China’s total auto sales would rise 3% year-on-year to reach 27.6 million.

Separately, trade between the U.S. and China hit a record last year even as their diplomatic relations deteriorated.

Imports and exports between the two totaled $690.6 billion in 2022, official figures show.

U.S. imports from China increased to $536.8bn last year as American shoppers spent more on Chinese-made goods, including toys and mobile phones.  In the same period, U.S. exports to China increased to $153.8bn.

While some of the increase is due to rising prices, the figures point to how reliant the U.S. and China still are on each other even after years of trade conflict.

As in…it’s not that easy to decouple.

Deborah Elms, the founder of Asian Trade Centre, summed it up for the BBC: “Even if governments, firms and consumers wanted to separate, the economics make it difficult to deliver products in a decoupled world at a price that firms and consumers are willing to pay.”

Japan said household spending in December fell 1.3% Y/Y.  January producer prices rose 9.5% Y/Y vs. 10.5% prior.

Street Bytes

--Stocks fell on the week, Nasdaq ending a 5-week winning streak. The Dow Jones was off 0.2% to 33869, the S&P 500 fell 1.1%, and Nasdaq 2.4%.

Next week, all about the inflation data and some further earnings reports.

--U.S. Treasury Yields

6-mo. 4.89%  2-yr. 4.52%  10-yr. 3.74%  30-yr. 3.82%

Bond yields surged on the realization the Fed could be higher for longer.  The inversion between the 2- and 10-year hit a 40+ year high, normally a major warning sign for the economy.  [At one point 86 basis points.]

--Russia said it will cut oil output by 500,000 barrels a day next month, following through on a threat to retaliate against Western sanctions and sending oil prices sharply higher, closing today at $79.80, up nearly $2 Friday…and over $6 on the week.

The output reduction, which is the equivalent of about 5% of January output, has been hinted at repeatedly by the Kremlin since the European Union and G-7 began discussing capping the price of Russian exports.

--The aforementioned Fatih Birol of the International Energy Agency said the growth in global oil demand this year will come from China and that may need the OPEC+ countries to look at their (output) policies. “And now this year the Chinese economy is rebounding. …this is putting upward pressure on the demand,” he said, referring to ‘exploding’ demand for jet fuel in China.

--Energy giant BP reported record annual profits as it scaled back plans to reduce the amount of oil and gas it produces by 2030.

The company’s profits more than doubled to $27.7 billion in 2022, as energy prices soared after Russia invaded Ukraine.  Other energy firms have reported similar rises.

BP boss Bernard Looney said the British company was “helping provide the energy the world needs” while investing in the transition to green energy.

But it came as the firm scaled back plans to cut carbon emissions by reducing its oil and gas output.

The company – which was one of the first oil and gas giants to announce an ambition to cut emissions to net zero by 2050 – had previously promised that emissions would be 35-40% lower by the end of this decade.

However, on Tuesday it said it was now targeting a 20-30% cut, saying it needed to keep investing in oil and gas to meet current demands.

--Walt Disney Co. shares surged 7% on Wednesday after the entertainment giant topped earnings expectations, while also announcing it was planning to cut 7,000 jobs and reinstate its dividend.

Disney reported EPS of 99 cents a share, ahead of estimates of 78 cents.  Sales of $23.51 billion was slightly ahead of the Street’s consensus of $23.45 billion.

Sales in the Disney Media and Entertainment Distribution segment ticked up 1% year over year to $14.78 billion.  Disney Parks, Experiences and Products revenue rose 21% to $8.74 billion.

Within the direct-to-consumer unit, revenue was a bit light, though.  The unit, which includes Disney streaming services like Disney+ and Hulu, generated sales of $5.31 billion, below estimates for $5.44 billion.

“After a solid first quarter, we are embarking on a significant transformation, one that will maximize the potential of our world-class creative teams and our unparalleled brands and franchises,” CEO Bob Iger said in a statement. “We believe the work we are doing to reshape our company around creativity, while reducing expenses, will lead to sustained growth and profitability for our streaming business, better position us to weather future disruption and global economic challenges, and deliver value for our shareholders.”

Total Disney+ paid subscribers declined 1% sequentially to 161.8 million but beat estimates for 161.1 million. Total Hulu subscribers grew 2% to 48 million.  ESPN+ subscribers grew 2% to 24.9 million. [234.7 million subscriptions across all platforms, down from 235.7 million in early October.  Netflix has roughly 231 million subscribers worldwide.]

I just have to add, as a longtime ESPN+ subscriber, it is the single best deal on the planet.

On a conference call with analysts, Iger outlined organizational changes and cost saving plans, including making ESPN a standalone unit under current ESPN president James Pitaro.  Content production and distribution, including streaming, will be housed in a separate division.

Iger also stated Disney+ will hit profitability by the end of fiscal 2024.

As part of the restructuring, Disney expects to cut costs by $5.5 billion and eliminate roughly 7,000 jobs, or about 4 percent of its global total.

“We must return creativity to the center of the company, increase accountability, improve results and ensure the quality of our content and experiences,” Iger said on a call with analysts.

Separately, activist investor Nelson Peltz on Thursday ended his quest for a board seat at Disney, satisfied with Iger’s plan to fix the Mouse House.

“The proxy fight is over.  This is a win for all shareholders,” Peltz told CNBC in a rather dramatic business television moment.

--Boeing plans to make staff cuts in the aerospace company’s finance and human resources departments in 2023, with a loss of around 2,000 jobs, the company said.

But Boeing, which recently relocated its headquarters to Arlington, Virginia, said it expects to “significantly grow” the overall workforce during the year.  “We grew Boeing’s workforce by 15,000 last year and plan to hire another 10,000 employees this year with a focus on engineering and manufacturing,” the statement said.

Boeing’s total workforce was 156,000 employees as of Dec. 31, 2022, the company said.

The Seattle Times reported that Boeing plans to outsource a third of the eliminated positions to Tata Consulting Services in Bengaluru, India.

--Air safety officials and members of Congress are raising fresh concerns about recent near-collisions on runways in New York and Texas, close calls that threatened a relatively long stretch without domestic aviation accidents involving major planes.

The FAA and National Transportation Safety Board have opened investigations into why two planes nearly collided last month at JFK Airport in New York, and what led to the incredibly close call in Austin, Texas, over last weekend, where a FedEx cargo plane may have come within 100 feet of a Southwest Airlines Co. passenger jet as the latter began to roll down a runway.

At a House Transportation Committee hearing Tuesday, David Boulter, acting associate administrator for aviation safety at the FAA, said, “No one takes it for granted that these are serious mistakes.”

--So, with the above in mind, I don’t know how much travelers should find comfort in Southwest Airlines’ announcement that it would reduce by half the amount of experience prospective pilots must have flying jet or turboprop aircraft as it accelerates hiring this year.

Applicants will need to have 500 hours of “turbine time” starting Feb. 7, down from the 1,000 hours previously required, the airline confirmed last Saturday.  The change, outlined in a memo to pilots, “will allow more highly-skilled aviators the opportunity to pursue a career at Southwest Airlines.”

The airline industry has been hobbled by a pilot shortage that has intensified during and coming out of the pandemic. Southwest is adding a net 1,700 pilots this year, after hiring about 1,000 in 2022.

--TSA checkpoint numbers vs. 2019

2/9…105 percent of 2019 levels
2/8…85
2/7…98
2/6…95
2/5…106
2/4…95
2/3…127
2/2…102

--Microsoft Corp. shares surged as the company announced it was revamping its Bing search engine and Edge web browser with artificial intelligence, the company said on Tuesday, in one of its biggest efforts yet to lead a new wave of technology and reshape how people gather information.  

Microsoft is staking its future on AI through billions of dollars of investment as it directly challenges Alphabet Inc.’s Google. That could mean new competition for business customers using cloud and collaboration products as well as a vigorous return to consumer markets where Google now leads.

Working with the new startup OpenAI, Microsoft is aiming to leapfrog its rival and potentially claim vast returns from tools that speed up all manner of content creation, automated tasks, if not jobs themselves.

“This technology is going to reshape pretty much every software category,” Microsoft CEO Satya Nadella told reporters in a briefing.

Bing will be powered by AI and run on a new “large language model” that is more powerful than ChatGPT, according to Microsoft.  A chatbot will help users refine queries more easily, give more relevant, up-to-date results, and even make shopping easier.

Bing is far behind Google in search market share, but just taking a few points of market share from them is worth $billions.

Alphabet reported $42.6 billion in Google Search and other revenue, while Microsoft posted $3.2 billion from search and news advertising.

--Speaking of Alphabet, the shares lost $100 billion in market value on Wednesday after its new chatbot shared inaccurate information in a promotional video and a company event failed to dazzle.

The shares slid as much as 9%, and then further in succeeding days, after Reuters was the first to point out an error in Google’s advertisement for chatbot Bard, which debuted on Monday, about which satellite first took pictures of a planet outside the Earth’s solar system. As in, what else will Bard get wrong?

--Dell Technologies Inc., facing plummeting demand for personal computers, will eliminate about 6,650 jobs, becoming the latest technology company to announce it will let thousands of employees go.

The company is experiencing market conditions that “continue to erode with an uncertain future,” Co-Chief Operating Officer Jeff Clarke wrote in a memo.  The reductions amount to about 5% of Dell’s global workforce.

Industry analyst IDC said preliminary data show personal computer shipments dropped sharply in the fourth quarter of 2022.  Among major companies, Dell saw the largest decline – 37% compared with the same period in 2021, according to IDC.  Dell generates about 55% of its revenue from PCs.

Dell rival HP Inc. announced a reduction of 6,000 workers in November.  Cisco Systems and IBM each said they would eliminate about 4,000 workers.

The tech sector announced 97,171 job cuts in 2022, up 649% compared with the previous year, according to consulting firm Challenger, Gray & Christmas Inc.

--Shares in Chipotle Mexican Grill fell 5% on Wednesday after the company’s fourth-quarter results fell short of expectations, but the restaurant operator insisted it is poised for growth in the coming years, given its strong outlook and improving traffic trends.

The company reported adjusted earnings of $8.29 per share for the December quarter, up from $5.58 a year earlier, while revenue increased 11% to $2.18 billion.  But the results missed the Street’s expectations of $8.89 and $2.23bn, respectively.

Chipotle plans to open 255 to 285 new restaurants in 2023, higher than the 236 in 2022.  First-quarter comp sales are expected to grow by a high single digit, versus expectations for 7% growth, as traffic continues to improve.

--Tyson Foods Inc. took a “hit in the mouth” as larger-than-expected U.S. beef and pork supplies reduced demand for its chicken, company executives said on Monday, as the meatpacker missed Street estimates for quarterly profits.  Shares fell nearly 5% as Tyson also cut its outlooks for operating margins this year.

Tyson was caught wrong footed by expectations for chicken demand to increase at supermarkets in the face of tightening supplies of beef and pork. Instead, meat supplies were ample and Tyson was forced to sell chicken at lower prices when demand fell short, executives said. The results show Tyson’s struggle to forecast meat supplies as a drought in the western United States continues to drive ranchers to reduce their herds, temporarily increasing beef production.  Tyson also grappled with excess domestic supplies of chicken as the worst-ever U.S. outbreak of bird flu triggered export restrictions, the company said. 

“We got hit in the mouth in Q1 because of all the protein on the market,” said CEO Donnie King on an analysts call.

Tyson sales rose 2.5% to $13.26 billion in the three months ending Dec. 31, missing analysts’ estimates of $13.52 billion.  Adjusted earnings of 85 cents per share were much lower than expectations of $1.34.  The second quarter will likely be weaker, CFO John R. Tyson said.  “This is the first time I’ve seen all markets work against us, all at the same time,” CEO King said.

The U.S. beef cow herd, by the way, dropped to its lowest level since 1962, Department of Agriculture data showed last month, as the drought raised costs for livestock feed.

--PepsiCo on Thursday posted higher fourth-quarter results that topped market expectations despite inflation challenges, while the beverages and snacks company guided for higher earnings this fiscal year and raised its annual dividend.

Adjusted earnings came in at $1.67 a share, up from $1.53 the year before, just above consensus of $1.65.  Revenue grew 11% to almost $28 billion, beating the Street’s view for $26.82 billion.

“In a year filled with elevated geopolitical tensions, high inflation, and significant macroeconomic volatility, PepsiCo delivered more than 14% organic revenue growth and 11% core constant currency earnings per-share growth in 2022,” the company said in a statement.

In North America, PepsiCo’s Frito-Lay snack business saw an organic revenue rise of 18%, with Frito-Lay posting “strong net revenue growth” across all channels.

Quaker Foods and beverages logged organic revenue gains of 10% each.  The beverages segment benefited from “double-digit net revenue growth” in Gatorade, Pepsi, Mountain Dew and Aquafina.

For fiscal 2023, PepsiCo expects adjusted EPS of $7.20 vs. the Street’s forecast of $7.28.

--Kellogg Co. surpassed market expectations for quarterly sales and profit on Thursday as demand for the Corn Flakes maker’s cereals and snacks held strong even as inflation pinched household budgets.

The Pringles maker, which is in the process of a three-way break-up of its business, also said it has decided to keep its plant-based business, which represents 2% of net sales, in-house.  Kellogg had last June talked of exploring options for its profitable MorningStar Farms business.

Americans have taken price hikes for snacks and breakfast cereals in stride even as decades-high inflation forces consumes to dial back spending.  The company forecast organic sales growth of 5% to 7% for full year 2023.

Kellogg’s net sales rose 12% to $3.83 billion in the fourth quarter, better than expected, with adjusted earnings of 94 cents, also ahead of the Street’s 84 cents.

--Hilton Worldwide Holdings posted Q4 adjusted earnings Thursday of $1.59, up from $0.72 per share a year ago, and versus expectations for $1.22.

Revenue for the quarter ended Dec. 31 was $2.44 billion, up from $1.84 billion a year earlier, also above consensus of $2.35 billion.

For full-year 2023, Hilton said it expects adjusted EPS of $5.42 to $5.68, with the Street at $5.62.

Hilton did note that demand for stays in China will be volatile in the near term due to rising Covid infections, following the reopening.

“I mean the environment created a drag…before it was lockdown, now they reopen and everybody gets sick, but the net result is a drag on business activity,” said Hilton’s finance chief Kevin Jacobs on an investor call.

--The New York Times Co. beat Wall Street estimates for quarterly earnings on Wednesday as more people signed up for its digital subscription bundles, offsetting a slowdown in ad sales and helping the newspaper unveil a $250 million share buyback. The company’s shares rose 9% in response.

The Times added 240,000 digital-only subscribers in the fourth quarter, compared with 180,000 in the third quarter.  For the year, the newspaper added more than a million subscribers, the second most since 2020 when the pandemic dominated headlines.  It has a goal of 15 million subscribers in 2027.

“With each passing quarter, we saw more proof that there is strong demand for a bundle of our news and lifestyle products,” CEO Meredith Kopit Levien said.

In the December quarter, the New York Times’ revenue was $667.5 million, beating the $646.4 million estimated by analysts.  Adjusted profit of 59 cents per share was also above expectations of 43 cents.

--News Corp. said on Thursday it would cut 5% of its workforce, or 1,250 jobs, after the media conglomerate fell short of quarterly Wall Street estimates for profit and revenue, hurt by declines across its businesses including news.

A slump in advertising spending by businesses hit by rising inflation and higher interest rates has dented one of the major sources of revenue for companies such as News Corp.

Advertising revenue in the fiscal second quarter fell 10.6%, though Fox’s ad revenue rose 4% thanks to a boost from the World Cup and the midterm election.

--Yahoo Inc. will lay off 20% of its workforce by the end of the year, with nearly 1,000 positions being eliminated this week, the company said Thursday.

Yahoo is currently owned by Apollo Global Management Inc., the private-equity firm that purchased Yahoo and AOL from Verizon Communications Inc. for about $5 billion in 2021.

--Zoom, the video conference company that became a household name during the pandemic, is laying off 1,300 staff, a move affecting about 15% of its workforce, as the company has seen user growth slow and profits fall recently.

--Literally like an hour after I posted last Friday evening, a U.S. jury found Tesla CEO Elon Musk and his company were not liable for misleading investors when Musk tweeted in 2018 that he had lined up funding to take the electric car company private.

Plaintiffs had claimed billions in damages and the decision also had been seen as important for Musk himself, who has aggressively defended his ability to tweet broadly.  The jury came back with a verdict just two hours after beginning deliberations.

--But speaking of Musk, the U.S. Department of Transportation said on Thursday it is investigating Musk’s brain-implant company Neuralink over the potentially illegal movement of hazardous pathogens.

The Physicians Committee of Responsible Medicine (PCRM), an animal-welfare advocacy group, wrote to Transportation Secretary Pete Buttigieg earlier Thursday to alert it of records it obtained on the matter.

PCRM said it obtained emails and other documents that suggest unsafe packaging and movement of implants removed from the brains of monkeys. These implants may have carried infectious diseases in violation of federal law, PCRM said.

Neuralink, which is developing a brain implant it hopes will help paralyzed people walk again and cure other neurological ailments, has been under a federal investigation over potential animal welfare violations and that some of its staff made internal complaints about experiments being rushed, causing needless suffering and deaths.  But this latest letter said records that the PCRM obtained showed instances of pathogens, such as antibiotic-resistant staphylococcus and herpes B virus, that may have been transported without proper containment measures.

Well this is a bit disconcerting, and rather serious if true.

--Bed Bath Beyond Inc. shares have been on a meme-inspired rollercoaster, hitting a beyond irrational $7 earlier in the week before finishing Friday at a still highly irrational $2.35.

The shares will eventually be worthless, even as the company said it raised about $225 million in an equity offering and that it was expecting to receive $800 million more in future installments, in a move that could help stave off bankruptcy.

Hudson Bay Capital Management is the lead investor in the share sale (not to be confused with Canada’s Hudson’s Bay Co., a department store chain), and the additional cash may offer the retailer a short window of a few quarters to revive the business, but a weakening economy is zero help.

Because the company isn’t officially dead, yet, yes, the shares could from time to time surge on meme-related activity, but a turnaround is highly unlikely.  That said, I’ll be at the flagship store from time to time, looking for deals.

But wait…there’s more!  BBBY announced Wednesday it would close 150 more stores, including a huge one in nearby Watchung, N.J., I’ve frequented.  This is on top of the 87 it announced last week.

One year ago, the chain had 950 stores worldwide.  The company said it hopes to scale down to 360 Bed Bath & Beyond locations and 120 buybuy Baby stores.

--Royal Caribbean Group said on Tuesday it was set for record bookings during the January-March period after the company posted a smaller-than-expected quarterly loss on pent-up travel demand.  Shares of the company rose about 5% in early trade as investors were encouraged by the latest sign of the industry sailing out of the pandemic-induced pause.

Cruise liners have reported strong booking volumes from well-to-do Americans for the so-called “wave season,” a period between January and March where operators offer special cruise deals and discounts for the year.

Royal Caribbean said North America sailings were booked in line with record 2019 levels for the full year, while bookings for European itineraries accelerated during the wave season and were higher than 2019.

The cruise operator’s booking volumes in the fourth quarter were also significantly higher than the corresponding period in 2019, before the pandemic outbreak shut down the industry.

But the company also cautioned that inflationary pressures and supply chain disruptions could put pressure on costs across many categories, including food and beverage.

--Gambling on the Super Bowl Sunday is expected to reach record-breaking levels, with more than 50 million Americans projected to bet $16 billion on the game, according to the American Gaming Association.

Super Bowl LVII is also the first NFL Championship to be played in a state with legalized sports betting.  Fans inside State Farm Stadium in Glendale, Ariz., will be able to place mobile-phone bets during the game.

About 30 million Americans plan to make Super Bowl sports wagers online – on both legal and illegal sites – as well as in legal sportsbooks and with illegal bookies, according to a survey released by the AGA.

The estimate of $16 billion in legal and illegal bets is more than double last year’s estimate of $7.6 billion.

Sports betting is now legal in 36 states and the District of Columbia.  Personally, I only bet (through DraftKings) on golf and NASCAR.

Foreign Affairs, Part II

China: Among the comments from Chinese state media on the balloon crisis was this from Shen Yi / Global Times:

“A ‘wandering balloon’ – an utterly harmless civilian airship used for meteorological research, blown by wind and accidentally entered into U.S. airspace via Westerlies – has made the U.S., a superpower which shows off its military muscles around the world, react as if it were confronted by a formidable enemy.

“Members of Congress shrieked about the so-called threats to U.S. national security, as if Doomsday was approaching.  Amid the screams, the balloon turned into a target of a U.S. F-22 fighter jet’s ‘first kill.’  The act of rudely damaging Chinese civilian property quickly drew criticism from Chinese Foreign Ministry and Chinese Ministry of National Defense.

“However, in the U.S., the political farce surrounding the wandering balloon is continuing, which helps us comprehensively understand the main challenge confronting U.S.-China ties, as well as the ill nature of U.S. domestic politics.

“Compared with the frank, open and calm manner of the Chinese authorities, the performances of some U.S. politicians in the current Biden administration can be said as hysterical….

“From the perspective of modern military technology, balloons have long been logged off from mainstream military toolkits.  The use of balloons, especially the type involved in the latest incident, which can be sent to the Earth’s stratosphere, is for collecting meteorological information….

“The wandering balloon episode echoes an old Chinese saying – life can be really simple, but some insist on making it complicated.  The reaction from the U.S. is bringing troubles on oneself.”

In another editorial in the Global Times, a Chinese Communist Party mouthpiece, we had the official government line after the balloon was shot down.

“China will reserve the right to take necessary measures in dealing with similar situations.”

Senior Colonel Tan Kefei, a spokesperson at China’s Ministry of National Defense, said in a statement that “if a foreign airship accidentally enters the Chinese airspace, the Chinese forces could also shoot it down in a similar manner.”

Separately, the U.S. military has notified Congress that China now has more land-based intercontinental-range missile launchers than the U.S., fueling the debate about how Washington should respond to Beijing’s nuclear buildup.

“The number of land-based fixed and mobile ICBM launchers in China exceeds the number of ICBM launchers in the United States,” the commander of the U.S. Strategic Command, which oversees nuclear forces, wrote the Senate’s and House’s Armed Services Committees on Jan. 26, as reported by the Wall Street Journal.

The notification comes as the U.S. is facing the challenge of deterring Russia’s substantial nuclear forces as well as China’s growing nuclear arsenal.

The U.S., which is modernizing all three legs of its land, sea and air based nuclear arsenal, has a much larger nuclear force than China.

I noted long ago that China’s land-base launchers are still mostly empty silos, and the Strategic Command’s notifications also don’t include submarine-launched missiles and long-range bombers, where the U.S. has a decided advantage, U.S. officials say.

But there is little doubt that China is rapidly going to be filling the silos and it is catching up.

“China is rapidly approaching parity with the United States,” said Rep. Mike Rogers, the Alabama Republican who chairs the House Armed Services Committee.  “We cannot allow that to happen.  The time for us to adjust our force posture and increase capabilities to meet this threat is now.”

Last year, in the Pentagon’s policy document known as the Nuclear Posture Review, it offered: “By the 2030s the United States will, for the first time in its history, face two major nuclear powers as strategic competitors and potential adversaries.”

Try 2027.

An immediate challenge for the administration is preserving the New START treaty with Russia.  The Biden administration said last week that Moscow is violating the accord by refusing to allow on-site inspections.

North Korea:  Kim Jong-un presided over a military meeting early in the week and pledged to expand drills and beef up the country’s war readiness posture, state media reported.  Last week, North Korea condemned drills by the United States and its allies, saying they have reached an “extreme red-line” and threaten to turn the peninsula into a “huge war arsenal and a more critical war zone.”

So then Kim brought out his daughter to visit troops to mark the 75th founding anniversary of the country’s army as he lauded the “irresistible might” of his nuclear-armed military, state media said Wednesday.

It was the fourth known appearance of Kim’s daughter, Kim Ju-ae, believed to be 9 or 10 years old, who stood closely with her father as he shook the hands of senior officials and sat next to him at a table.  Clearly, Dad is grooming the daughter to replace him.

And then Lil’ Kim made her fifth appearance Wednesday night as she took center stage, with her father, and mother, Ri Sol-ju, at a huge military parade that showed off Kim Jong-un’s largest nuclear weapons, including what experts said was possibly a new solid-fuel intercontinental ballistic missile he could test in the coming months.

But the parade showed off a column of ICBMs, “more ICBM launchers than we’ve seen before at a North Korean parade,” Ankit Panda of the U.S.-based Carnegie Endowment for International Peace said on Twitter.

South Korean President Yoon Suk-yeol urged a posture of readiness to respond to any possible dangers in the face of a “rapidly changing military situation,” saying the possibility of North Korea’s provocations continued.

Iran: Tehran on Tuesday revealed an underground air force base, called “Eagle 44” and the first of its kind large enough to house fighter jets, the official IRNA news agency said. The “Eagle 44” base is capable of storing and operating fighter jets and drones, IRNA said.  The report did not elaborate on the location.  The fighters can be equipped with long-range cruise missiles.

This is the second underground base Iran’s army has announced, as the country seeks to protect military assets from potential air strikes by arch foe Israel.

Meanwhile, Iran’s supreme leader, Ayatollah Ali Khamenei, has pardoned “tens of thousands” of prisoners including some arrested in recent anti-government protests, IRNA reported on Sunday, after a deadly state crackdown helped quell the nationwide unrest.

However, the pardon approval came with conditions, according to details announced in state media reports, which said the measure would not apply to any of the numerous dual nationals held in Iran.  IRNA said those accused of “corruption on earth” – a capital charge brought against some protesters, four of whom have been executed – would also not be pardoned.  Neither would it apply to those charged with “spying for foreign agencies” or those “affiliated with groups hostile to the Islamic Republic,” state media reported.

The Norway-based Iran Human Rights group said this week that at least 100 detained protesters faced possible death sentences.

Turkey/Syria: Turkish President Recep Tayyip Erdogan declared a three-month state of emergency in the earthquake affected areas and he has been visiting the quake-hit provinces.  So far, with a May election coming up, the political implications of the quake have been minimal, but Erdogan has admitted “shortcomings” in the crisis response and anger is beginning to rise over lack of emergency shelter and the basics like food and water.

After an extraordinary two decades in power, Erdogan called on his rivals to transcend differences for the sake of the country, but they have not let up in their criticism.  In turn, Erdogan has condemned his opponents.  The political aftershocks are just beginning to kick in.

Istanbul’s stock exchange operator suspended trading for five days in an unprecedented step. 

As for Syrian President Bashar al-Assad, he is pressing for foreign aid as he aims to chip away at his international isolation.

Editorial / The Economist

“Even as the relief effort goes on, attention will turn to politics. President Erdogan, who has ruled Turkey for two decades, faces an election in May that was already going to be tough for him, thanks to a floundering economy and an inflation rate driven to over 50% by his foolish monetary policies.  Voters will note his response to the earthquake, and ask why his government did not do more to prepare for such a disaster after the tremor of 1999 [Ed. which killed 18,000.]  He knows it: government prosecutors have already launched investigations into two journalists for criticizing the state’s response.

“There is a grim irony at work.  Mr. Erdogan came to power after an election in 2002.  His new party, Justice and Development (AK), upended an establishment that had ineffectually governed Turkey since the restoration of democracy in 1983.  The then government’s weak response to the earthquake of 1999, followed by its mishandling of a financial crash in 2001, contributed to a sense that a clear-out was needed, and AK ended up with two-thirds of the seats in parliament.  Now Mr. Erdogan faces a similar set of circumstances; an economic crisis and a humanitarian one.  Voters will judge him on his record in handling both.

“The collapse of so many buildings in Turkey – over 6,000, according to the government – will invite scrutiny. Evidence will emerge that the advice of earthquake experts was ignored and building codes were flouted, while corrupt or incompetent supervisors looked the other way.  One hallmark of the economic boom that made Mr. Erdogan so popular for his first decade in power was a surge in construction, though most of the buildings that collapsed were built before he came to office.  He has had two decades to prepare for a big earthquake; it is hardly a secret that Turkey sits on one of the world’s most active fault lines….

“After the quake, the president declared a state of emergency in ten southern provinces, to last for three months, until almost the eve of the poll.  No doubt there are commendable practical reasons for this.  But it might also make it easier for Mr. Erdogan to shut down criticism or opposition activity; and indeed access to Twitter has been restricted after people used it to lambast the government’s response to the quakes.  He might now postpone the elections. Turkey was already entering a difficult period.  Plate tectonics has just made it more dangerous.”

Pakistan: Pervez Musharraf, the army general who seized power in Pakistan in 1999 and ruled the Muslim nation for nine tumultuous years before being sentenced to death in absentia for high treason stemming from his iron-fisted invocation of emergency powers, died last weekend in Dubai, where he had been receiving medical treatment.  He was 79.

The terrorist attacks of Sept. 11, 2001, and the U.S.-led invasion of Afghanistan forced Gen. Musharraf to choose between Pakistan’s alliance with the Afghan Taliban and Washington’s demand for cooperation in the war on terror.  His decision to side with the West was unpopular at home and helped fuel violent Islamist groups that have terrorized Pakistan.

Musharraf took control on Oct. 12, 1999, in a bloodless coup.  The coup was condemned internationally, but welcomed in Pakistan, where ousted Prime Minister Nawaz Sharif was seen as corrupt and the public had long been accustomed to army interventions.  But then Sharif would return as prime minister, from 2013 to 2017, before he was ousted again.  He was sentenced to a decade in prison.

Gen. Musharraf was an interesting man.  A career army officer who rose through the ranks, serving in the highly trained Special Services Group.  He was well-educated, the son of a diplomat, a moderate Muslim and an admirer of Mustafa Kemal Ataturk*, the secular-leaning army officer who founded modern Turkey.

Musharraf made significant progress in turning around Pakistan’s debt-ridden economy, but he faced strong social, religious or bureaucratic resistance at each step of the way.

*I’m the only kid on my block who has been to Ataturk’s tomb, as well as the national war museums of Turkey, Australia and New Zealand…think Battle of Gallipoli. 

Random Musings

--Presidential approval ratings….

Gallup: 41% approve of Biden’s job performance, 54% disapprove; 36% of independents approve (Jan. 2-Jan. 22).

Rasmussen: 45% approve, 53% disapprove (Feb. 10).

A new Reuters/Ipsos poll had Biden’s approval rating at 41% on the eve of his State of the Union Address.  And the poll, which closed Sunday, had 65% of Americans thinking the country is on the wrong track – up from 58% a year earlier.

--According to a new Washington Post/ABC News poll, Americans show little enthusiasm for a rematch between Joe Biden and Donald Trump.

Among Democrats and Democratic-leaning independents, the Post-ABC poll finds 58 percent say they would prefer someone other than Biden as their nominee in 2024 – almost double the 31 percent who support Biden.

Among Republicans and Republican-leaning independents, 49 percent say they prefer someone other than Trump as their nominee, compared with 44 percent who favor the former president.

In a hypothetical matchup between Biden and Trump, 48 percent of registered voters today say they would favor Trump to 45 percent who say Biden.  Among independents, 50 percent favor Trump to 41 percent for Biden.

Biden’s job approval rating in this survey is 42%, 53% disapproving of his handling of the presidency.

--A new Yahoo News/YouGov poll shows that in a head-to-head matchup, more Republican voters would cast their ballots for Florida Gov. Ron DeSantis (45%) than for Donald Trump (41%) if the party’s 2024 presidential primary were held today.

In contrast to the Washington Post/ABC poll, in a hypothetical matchup between Biden and Trump, Biden leads by 47% to 41%, among registered voters.

Back to DeSantis, his problem is that the more candidates who enter the race, the worse it is for him.  For example, in the Yahoo survey, Trump would trounce Nikki Haley 54% to 27% in a head-to-head.

--Republican New Hampshire Gov. Chris Sununu said on Sunday he is considering running for president in 2024, adding that he believes Donald Trump would lose to Joe Biden if the former president secured his party’s nomination.

Sununu, appearing on ABC’s “This Week” program, said he believes Nikki Haley, Mike Pompeo and Ron DeSantis will compete for the Republican nomination, along with Trump, the only announced candidate thus far.  Haley is expected to kick off her campaign shortly.

I’d vote for Sununu or Haley.

--Sen. John Fetterman (D-Penn.) was hospitalized Wednesday night after feeling lightheaded at the end of a Senate Democratic retreat, his office said.  The symptoms do not appear to be the result of a new stroke, his communications director said.

But this is a guy who never should have been on the ballot last November, having suffered a stroke early in 2022 and clearly nowhere near back to full strength.  Senate personnel have even installed a closed caption display in the chamber to assist Fetterman with his auditory processing issues.

Fetterman remained in the hospital Thursday night.

--Sen. Mitt Romney (R-Utah) told disgraced Rep. George Santos (R-NY) he didn’t “belong” in the House chamber in a tense exchange ahead of the State of the Union Address.

Romney scolded Santos for taking a prime and highly-visible, center-aisle seat in the chamber as members of Congress piled in for President Biden’s speech.

“You don’t belong here,” Romney told Santos.  The two apparently exchanged words, though Romney later said he didn’t hear it all.

“He shouldn’t be in Congress, and they are going to go through the process and hopefully get him out,” Romney told reporters after the address.  “But he shouldn’t be there, and if he had any shame at all he wouldn’t be there.”

“I didn’t expect that he’d be standing there, trying to shake hands with every senator and the president of the United States,” Romney added.

Santos fired back via Twitter.

“Hey @MittRomney just a reminder that you will NEVER be PRESIDENT!”

--Former vice president Mike Pence received a subpoena from the special counsel investigating key aspects of the sprawling probe into the Jan. 6, 2021, attack on the Capitol and former president Trump’s efforts to overturn the election.

It is unclear if Pence will comply. 

Today, the FBI conducted a consensual search of his Indiana home for documents.

--Editorial / New York Post

“We still don’t know what’s in the classified documents that’ve popped up in President Joe Biden’s home and old office, but he’s sure sounding like he has something to hide.

“After weeks of insisting that he doesn’t know what’s in the cache after cache of classified documents squirreled away at his think-tank office and private home, and his lawyers have told him not to ask, he suddenly said to PBS they’re just ‘stray papers’ from 1974.

“He’s also insisting it must have been staffers that did any wrong.  That might explain him recalling nothing – except some of the docs were apparently in a folder with other material for a book he wrote about his time as veep.

“Actually, his remark was so hedged that it really said nothing: ‘The best of my knowledge, the kinds of things they picked up are things that are from 1974 and stray papers – there may be something else, I don’t know.’….

“All this follows his earlier ‘no regrets’ line, which amounts to ‘these laws are for the little people.’  And ignores the fact that influence-peddling First Son Hunter Biden had access to the Wilmington garage where many docs were tossed.

“At the very least, Mr. President, stop playing the victim.”

--The Democratic National Committee last Saturday approved Biden’s proposed shakeup of his party’s 2024 primary calendar, ending New Hampshire’s run as the party’s first state-level nominating primary and giving that role to South Carolina.  The move faced opposition from leaders in New Hampshire and Iowa, which traditionally kicked off the state-by-state contest for the party presidential nominations with its caucus.

Of course, giving South Carolina the lead spot assures President Biden would get a win, whereas who knows what would happen in Iowa or New Hampshire should one or two candidates opt to run against him, which I sure hope is the case.

New Hampshire and Nevada will now follow South Carolina one week later, and then by primaries in Georgia and Michigan.

--The network established by conservative billionaires Charles Koch and his late brother David Koch (Americans for Prosperity) is signaling it won’t support Donald Trump in the 2024 GOP presidential primaries, saying it plans to back a candidate “who can lead our country forward, and who can win.”

Trump has been critical of the Koch network in the past.  “I have never sought their support because I don’t need their money or bad ideas,” he said in 2018.

Trump also had a falling out with the conservative Club For Growth, a former ally that supported candidates in high-profile GOP primaries last year against Trump-endorsed candidates and has suggested it could back Ron DeSantis over the former president in 2024.

“The Club For No Growth is a GLOBALIST group that I have been taking to the cleaners for years,” Trump said in a Jan. 30 post on his social-media site.

What a jerk.

--Editorial / New York Post

“Florida Man has hit a truly pathetic new low.

“President Donald Trump is effectively disavowing his own vaccine fast-tracking effort Operation Warp Speed – a miraculous success, by any reasonable standard – in order to play to the more deranged segment of his voter base and attack likely 2024 rival Gov. Ron DeSantis.

“ ‘The real Ron is RINO GLOBALIST,’ he blared on Truth Social Wednesday, one who ‘Loved the Vaccines.’

“The same vaccines, in other words, that Team Trump fought to have developed and produced in record time, against jeers from his opponents and general incredulity. The same vaccines that, when Trump delivered on his promise, saved countless lives.

“That’s what Trump is willing to discard in his pursuit of power.  And no method is too tone-deaf or stupid, as usual: His allies are reportedly creating an ‘oppo file’ on DeSantis that includes footage of him praising the vaccines and even – gasp! – helping old people get vaccinated.

“Yeah, that will sink DeSantis for sure.

“It’s crucial to remember here that Warp Speed was, quite literally, the only good element of the Covid response Trump presided over.  Everything else, from the CDC’s pointless, endless, anti-science rules to the elevation of Dr. Anthony Fauci, ended in complete disaster – largely because the president utterly caved to the deranged authoritarian impulses of his top ‘science advisers.’

“The cost of these failures inflicted on America is vast and still not fully measured.  We and our children will be paying for it for a long time, through a disrupted economy, massive learning loss and huge social damage.

“But Warp Speed, of which Trump himself once said ‘They say it’s somewhat of a miracle, and I think that’s true,’ is what he wants to throw overboard.

“It would be funny if it weren’t so sad.”

I don’t necessarily agree with some of the Post’s conclusions, but, again, Donald Trump reveals himself.

--But speaking of the pandemic, half of the nation’s students began this school year a full year behind grade level in at least one subject because of Covid-19 pandemic disruptions, according to the Education Department.

“We’re seeing that they’re starting the school year off about the same as they were last year,” Rachel Hansen, a statistician for the National Center for Education Statistics, told reporters Tuesday.  “And I think overall, it means that we’ve got a long road ahead of us in trying to get kids to get back to grade level.”

Before the pandemic, about 36% of students started a typical school year that far behind, Hansen said.

--With the massive earthquake in Turkey and Syria, for good reason, folks are thinking about California. In 2008, the U.S. Geological Survey and a host of other state government agencies and academics published a study called the ShakeOut Scenario that told the story of what could happen if a magnitude 7.8-earthquake returned to Southern California.

A magnitude 7.8 earthquake would be “so powerful that it causes widespread damage and consequentially affects lives and livelihoods of all southern Californians.  A catastrophe is a disaster that runs amok when a society is not prepared for the amount of disruption that occurs,” the report said.

The death toll could be among the worst for a natural disaster in U.S. history: nearly 1,800.

Los Angeles County could suffer the highest death toll, more than 1,000.

Nearly 50,000 could be injured.

Main freeways to Las Vegas and Phoenix that cross the San Andreas fault would be destroyed.

Some 500,000 to 1 million people could be displaced from their homes.

Southern California could be isolated for some time, with the region surrounded by mountains and earthquake faults.

Major utilities such as gas, power and cell service would likely be severely compromised.

The last California seismic event that reached magnitude 7.8 was the great San Francisco earthquake of 1906.  In Southern California, a magnitude 7.8 quake struck in 1857.  [The magnitude 6.7 Northridge earthquake in 1994, which occurred on a much smaller fault in the San Fernando Valley, was 45 times weaker than the co-called Ft. Tejon quake, and did not halt daily life across all of Southern California.]

--Leo Sands / Washington Post

“Birds flew erratically above snow-capped buildings. Dogs howled loudly. Then, a devastating earthquake in Turkey and Syria leveled buildings and killed more than 5,000 people….

“While the Washington Post could not immediately verify the footage, the idea that animals can detect powerful earthquakes before humans has been a theory around since at least ancient times.

“There is scientific research that supports it.  Much in the same way that seismological machines can pick up tremors undetectable to the human body, animals are better equipped to sense tiny foreshocks traveling through the Earth seconds before more powerful earthquake waves barrel through, scientists say.  They might even be able to sense them before the foreshocks, some researchers say.

“According to the U.S. Geological Survey, abnormal animal behavior in the seconds preceding an earthquake is explained by the difference between two forms of seismic waves.  Primary, or P, waves are the first to be emitted from an earthquake, traveling at several miles per second from the epicenter.  These are more noticeable to animals, USGS says.  P waves are followed by stronger secondary, or S waves, which shake the ground in a rolling motion….

“Initial tremors, detected and analyzed by seismology machines, are also used by early-warning systems to forecast earthquakes – usually with less than a minute of warning.  But can animals sense earthquakes even earlier, and better than modern machines?  While humans for millennia have anecdotally observed animals seeming to detect earthquakes minutes or hours before they struck, the science is murkier.”

Martin Wikelski, a director at the Max Planck Institute of Animal Behavior, led a peer-reviewed study on this topic published in 2020, with researchers attaching electronic tags to cows, dogs and sheep on an Italian farm to observe their movements over several months when earthquakes were detected nearby.

Leo Sands:

“They found that the animals were unusually ‘superactive,’ defined as continuously moving for more than 45 minutes, before seven of the eight major earthquakes detected nearby.”

Wikelski believes that their ability to detect earthquakes potentially more than 12 hours before humans may be related to their ability to communicate with each other.

“The cows initially just froze – they didn’t move at all.  And then that got the dogs really nervous, and they started to go crazy, barking. And the sheep went crazy.  And that started, altogether, to make the cows really crazy.”

--The snowpack in the Sierra Nevada, the deepest in decades, won’t make much of a dent in the long-term water shortage for the Colorado River Basin – an essential source of supplies for Southern California.

Don’t expect Lakes Mead and Powell, the nation’s largest reservoirs, to fill up again anytime soon.

“To think that these things would ever refill requires some kind of leap of faith that I, for one, don’t have,” said Brad Udall, a water and climate scientist at Colorado State University.

Lake Mead, located on the Arizona-Nevada border and held back by Hoover Dam, filled in the 1980s and 1990s.  In 2000, it was nearly full and lapping at the spillway gates.  But the megadrought over the last 23 years – the most severe in centuries – has worsened the water deficit and left Lake Mead about 70% empty.

Upstream, Lake Powell has declined to just 23% of full capacity and is approaching a point where Glen Canyon Dam would no longer generate power.

Even with this winter’s above-average snowpack in the Rocky Mountains, water officials and scientists say everyone in the Colorado River Basin will need to plan for low reservoir levels for years to come.  And some say they think the river’s major reservoirs probably won’t refill in our lifetimes.

“They’re not going to refill.  The only reason they filled the first time is because there wasn’t demand for the water. In the 1950s, ‘60s, ‘70s and ‘80s, there was no Central Arizona Project, there was no Southern Nevada Water Authority, there was not nearly as much use in the Upper [Colorado River] Basin,” said Bill Hasencamp, manager of Colorado River resources for the Metropolitan Water District of Southern California.  “So the water use was low. So that filled up storage.”  [Rong-Gong Lin II, Ian James / Los Angeles Times]

--For the record, when I went to post last Friday, I was musing about what the wind chill would be on Mount Washington in New Hampshire later that night, the record -102.6.

Well, it hit -108, the coldest wind chill ever recorded in the United States.  The Washington Post put it at -109.  [The New York Post put it at -110.] The air temp on Mount Washington hit minus-46.2 at minimum – a new February record for the state of New Hampshire.  Wind gusts topped at 110 mph.

Boston’s air temperature Saturday morning hit minus-10, the coldest reading observed in the city since Jan. 15, 1957.  It also recorded its lowest wind chill ever at minus-39 degrees; records there dating back to 1944 for this category.

But within 24 hours, normality had returned.

--Finally, it was overshadowed by the tragedy in Turkey and Syria, but what a gutsy, heroic trip Pope Francis, accompanied by the Archbishop of Canterbury Justin Welby and Church of Scotland Moderator Iain Greenshields, made to South Sudan – an unprecedented joint “pilgrimage of peace.”

South Sudan broke away from Sudan in 2011 but plunged almost immediately into civil war with ethnic groups turning on each other.

Despite a 2018 peace deal between the two main protagonists, bouts of inter-ethnic fighting have continued to kill and displace large numbers of civilians.

The pope told displaced South Sudanese children to build a better future for the world’s newest country by replacing ethnic hatred with forgiveness.

“Although conflict, violence and hatred have replaced good memories on the first pages of the life of this republic, you must be the ones to rewrite its history as a history of peace!” Francis said. “You bear the burden of a painful past, yet you never stop dreaming of a better future.  In our meeting today, we would like to give wings to your hope.”

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

Pray for Ukraine.

God bless America.

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Gold $1876
Oil $79.80

Regular Gas: $3.43; Diesel: $4.58 [$3.47 / $3.86 yr. ago]

Returns for the week 2/6-2/10

Dow Jones  -0.2%  [33869]
S&P 500  -1.1%  [4090]
S&P MidCap  -2.5%
Russell 2000  -3.4%
Nasdaq  -2.4%  [11718]

Returns for the period 1/1/23-2/10/23

Dow Jones  +2.2%
S&P 500  +6.5%
S&P MidCap  +8.6%
Russell 2000  +9.0%
Nasdaq  +12.0%

Bulls 48.6
Bears 25.7

Hang in there.

Brian Trumbore

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