Week in Review

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Week in Review

07/27/2024

For the week 7/22-7/26

[Posted 4:30 PM ET, Friday]

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Edition 1,319

Many of us have worried about the Paris Olympics for a long time...and now the Games are here. 

But hours before the opening ceremony, France’s national train service said it was targeted by several “malicious acts” that caused disruptions to its high-speed lines.

Three of four main lines were impacted, with fires being set starting on tracks outside Paris and in two other locations in a coordinated attack, damaging “installations,” like fiber optic cables, which had a knock-on impact on services at some of the capital city’s main train stations.  There were also disruptions to Eurostar trains departing to London.

The rail service said that up to 800,000 passengers were impacted and it asked them to postpone trips.  Rail company SCNF said the incident was aimed at “paralyzing the network.”  Disruption is expected to last all weekend and perhaps longer, though as I write some service has been restored.

France is a nation in upheaval after the controversial, and incredibly stupid call by President Emmanuel Macron to hold a snap election freakin’ weeks before his nation is hosting the world!  As I note below, the Left is most upset and you probably need to look no further than them for a possible culprit, though no one group has claimed credit for the attacks as yet.

As I go to post, the opening ceremonies appear to be going off without a hitch, despite the rain.

Fingers crossed for the next two weeks.

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Speaking of a nation in tumult....

Peggy Noonan / Wall Street Journal

“Here is some urgently meant advice. The American political story right now is one of instability. We claim to be the indispensable nation, the biggest power, the secure one that can be trusted with the nuclear arsenal. If you would be all-powerful you must be an obviously stable political entity.  We have been failing at this for some time and are failing now. It will have reverberations down the road.

“For now, to cool things:

“Stop showing pictures of Donald Trump with blood running down his face. Stop obsessing on the assassination attempt. It excites the unstable. I can do that too.  The sick and the evil don’t need more inspirations.

“Stop obsessing publicly over the inadequacy of the Secret Service.  (Washington obsess on it quietly, and fix it.)  It tells the sickest among us how easy it is to get around security and get your shot.  We have to stop telling them this.

“America’s enemies are excited by vulnerability, weakness, a sense things are scattered. On an average day key figures in our government – the secretaries of state and defense, heads of intelligence and domestic agencies – are on the road, in the conference in Prague and the meeting in Seoul. Right now, with the aged president and the volatile politics, they should stop, stay close to home, be in their offices in Washington.

“Be there, not on planes and in hotel rooms.  The look of solidity is almost as good as the real thing.”

[As I go to post, Defense Secretary Lloyd Austin is in Asia on an extensive trip, ditto Secretary of State Antony Blinken.]

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It was another momentous, historic week, and once again I feel obligated to cover it in depth for history (and the archives).  I’ll just say that regarding Vice President Kamala Harris’ elevation/coronation to be presumptive Democratic presidential nominee, I wouldn’t pay too much attention to the early head-to-head polls with Donald Trump.  The figures after Labor Day will, on the other hand, be quite telling.

What we do know today is that Harris has totally reenergized her party and she has done well in her early campaign stops. To keep comparing her to her 2020 efforts is a fools’ errand.

Now Harris has to pick a Veep and it’s a strong field.  I hope she tabs Arizona Sen. Mark Kelly.

So now...the week as it unfolded....

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After three weeks of defiance and angry refusals to step aside following the devastating June 27 debate performance, President Biden finally yielded to a combination of falling poll numbers, a rebellion in the donor class and urgent pleas from Democratic lawmakers to pack it in. By Sunday afternoon, 36 Democratic lawmakers and one independent who caucuses with the Democrats (West Virginia Sen. Joe Manchin) had called on Biden to step down, Manchin doing so on a Sunday talk show earlier in the day.

No sitting American president has dropped out of a race so late in the election cycle, with the Democratic National Convention scheduled to begin in Chicago Aug. 19.

The man who campaigned in 2020 as a “bridge” to the next generation of Democratic leaders finally saw the light.

Biden issued the statement early Sunday afternoon:

“My Fellow Americans, Over the past three and a half years, we have made great progress as a Nation. Today, America has the strongest economy in the world. We’ve made historic investments in rebuilding our Nation, in lowering prescription drug costs for seniors, and in expanding affordable health care to a record number of Americans....

“I know none of this could have been done without you, the American people. Together, we overcame a once in a century pandemic and the worst economic crisis since the Great Depression. We’ve protected and preserved our Democracy.  And we’ve revitalized and strengthened our alliances around the world.

“It has been the greatest honor of my life to serve as your President. And while it has been my intention to seek reelection, I believe it is in the best interest of my party and the country for me to stand down and to focus solely on fulfilling my duties as President for the remainder of my term.

“I will speak to the Nation later this week in more detail about my decision.  For now, let me express my deepest gratitude to all those who have worked so hard to see me reelected.

“I want to thank Vice President Kamala Harris for being an extraordinary partner in all this work. And let me express my heartfelt appreciation to the American people for the faith and trust you have placed in me.  I believe today what I always have: that there is nothing America can’t do – when we do it together.”

Biden then issued a separate statement endorsing Harris:

“My fellow Democrats, I have decided not to accept the nomination....

“My very first decision as the party nominee in 2020 was to pick Kamala Harris as my Vice President.  And it’s been the best decision I’ve made. Today I want to offer my full support and endorsement for Kamala to be the nominee of our party this year.  Democrats, it’s time to come together and beat Trump.  Let’s do this.”

Former president Donald Trump said following the announcement that he thinks Vice President Harris will be easier to defeat than Joe Biden.  Trump spoke to virtually every network in existence in the immediate hours after the president’s decision.  Trump and the campaign also attacked Biden and Harris on social media while saying Biden was unfit to continue serving as president.

On Truth Social, Sunday, Trump said Biden “was not fit to run for President and is certainly not fit to serve.”  Other top Republicans, including House Speaker Mike Johnson, also said Biden was not fit to serve as president and finish his term if he was stepping aside.  Johnson explicitly called on Biden to resign.

Trump, on Truth Social, said: “We will suffer greatly because of his (Biden’s) presidency, but we will remedy the damage he has done very quickly.”

Should the Democrats go with Harris, it is a historic gamble, betting that a Black woman can overcome racism, sexism and her own significant missteps as a politician.  We haven’t elected a woman, period.

But many Democrats are excited by the prospect and Harris has been a leader in the party on the issue of abortion rights, which resonates with young voters and the Democrats’ progressive base.  Proponents argue she is the best to prosecute the political case against Trump.

In a hypothetical matchup between Harris and Trump in a July 15-16 Reuters/Ipsos poll, the two were tied at 44% each. Trump led Biden by two points in the same poll.  But Harris’ approval rating is the same dismal percentage as Biden’s...in the 30s.

And Harris’ record of achievement is minimal.  She made little progress on her portfolio of protecting voting rights and stemming migration from Central America.

Liz Cheney on X: “The framers of our Constitution knew that our republic would endure only if our presidents have the character and honor to put duty ahead of self-interest.  President Biden deserves our gratitude for his decades of service to our nation and for his courageous decision today.”

Sen. Mitt Romney (R-UT) in a statement: “I’m a classic Republican and he’s a classic Democrat; obviously, President Biden and I usually didn’t see eye-to-eye. I opposed many of his initiatives. But we did find common ground on infrastructure, Ukraine, the Electoral Count Act, adding religious liberty protections to the marriage bill, gun safety measures, and chip manufacturing.

“Others will judge his presidency. However, having worked with him these past few years, I respect President Biden. His decision to withdraw from the race was right and is in the best interest of the country.

“Ann and I send warm personal best wishes to the President and First Lady.”

So how did Biden reach his decision? As recently as Saturday, the president’s aides were putting together a campaign schedule for him to pick up upon his return to the White House after his recovery from Covid.

But by Sunday morning, the president had changed his mind.  Saturday evening, Biden huddled with his small circle of advisers, including Steve Richetti and Mike Donilon, along with Annie Tomasini, his deputy chief of staff and Anthony Bernal, the chief of staff to First Lady Jill Biden.  As reported by the BBC and others, Biden and his aides pored over new poling data and discussed whether he could defeat Trump in the current political landscape.

Between the data and further defections from the party, Biden made the decision and worked with Donilon on drafting the historic statement. Richetti worked through the details of rolling out the announcement and informing other staff.

Biden made the final decision Sunday morning, calling chief of staff Jeff Zients, campaign chair Jen O’Mally Dillon, and Vice President Harris to inform them.

At 1:45 p.m. ET, the president held a video call with senior White House and campaign staff, and a minute later released the statement.

Harris shortly thereafter said she planned to “earn and win” the presidential nomination, and spent Sunday afternoon and evening calling lawmakers to line up support. By Sunday evening, the list of those backing the vice president included California Gov. Gavin Newcom, Colorado Gov. Jared Polis, North Carolina Gov. Roy Cooper, Pennsylvania Gov. Josh Shapiro, Senator Mark Kelly of Arizona, Sen. Patty Murray of Washington state, and Rep. Jim Clyburn of South Carolina.

Former president Bill Clinton and Hillary Clinton endorsed Harris in a statement.

An advisor to key Democratic donor Reid Hoffman called Harris “the American dream personified.”

All 50 Democratic Party state chairs quickly voiced their support for Harris as the party’s presidential nominee.

But by Monday morning, there were two notable party leaders who had yet to endorse Harris...former Speaker Nancy Pelosi and former president Barack Obama.

Two other potential challengers – Michigan Gov. Gretchen Whitmer and Kentucky Gov. Andy Beshear – made no mention of Harris in their statements.

By Monday afternoon, Pelosi had endorsed Harris, ditto Governors Whitmer and Beshear, but Obama, House Minority Leader Hakeem Jeffries and Senate Majority Leader Chuck Schumer, while praising Harris, had not officially endorsed her.

By late Monday night, Harris had secured the backing of more than the 1,976 delegates needed to capture the nomination in the first round of voting. The pledged support is not binding until the delegates cast their votes, which party officials said would take place by Aug. 7.

With 106 days until the election, Monday afternoon Harris visited her new campaign headquarters in Wilmington, Del., invoking her early career as a prosecutor who took on “predators” and “fraudsters.”

So now we get to see what Harris actually believes in.  She’s closely identified with the Biden record, which means, as the Wall Street Journal opined:

“(Mark) her down as endorsing the spending blowouts that caused inflation, the Green New Deal, entitlement expansions and student loan forgiveness.  Until she says otherwise, we should also assume she’s in favor of Mr. Biden’s $5 trillion tax increase in 2025....

“Mr. Biden famously put Ms. Harris in charge of border policy, and we know how that has turned out.”

On foreign policy, she has promoted Biden’s policies, but now she needs to be grilled on her national security views.  Can she handle the scrutiny?

As for campaign cash, Biden’s campaign had nearly $96 million left in the bank, and now Harris has access to that cash.  If another candidate emerged, somehow at this point, that person would likely have to start fundraising from $0.

The Biden-Harris campaign, the Democratic National Committee and state parties collectively had $240 million in the bank at the beginning of July, with $96 million of it directly under control of the campaign, according to recent filings. That committee was officially rebranded as “Harris for President,” according to a Federal Election Commission filing.

Harris’ campaign then said on Monday it had raised $81 million in the first 24 hours after announcing she would seek the presidential nomination, a figure then revised to over $100 million. [The figure was raised to more than $100 million from 1.1 million donors in the first 41 hours after Biden announced he was stepping down.]

Early Friday morning, former President Obama and Michelle Obama endorsed Harris, the final key leaders in the Democratic Party to unite behind her.  A video posted on social media shows the Obamas calling Harris to inform her of their endorsement.

“We called to say Michelle and I couldn’t be prouder to endorse you and to do everything we can to get you through this election and into the Oval Office,” the former president says to Harris.

Michelle adds, “I can’t have this phone call without saying to my girl Kamala: I am proud of you. This is going to be historic.”

Michelle in particular could be a huge asset for Harris.

A new Quinnipiac University national poll of registered voters released Monday had Harris trailing Trump 49% to 47%.  Independents supported Trump 55-41.

In a six-way hypothetical that includes Robert F. Kennedy Jr., Trump leads Harris 45-41, with RFK Jr. at 6%, Jill Stein 2%, and Libertarian Party candidate Chase Oliver and independent candidate Cornel West at 1% apiece.

A Reuters/Ipsos poll had Harris leading 44% to 42% over Trump.

A Morning Consult poll had Trump in the lead, 47% to 45%.

A CNN poll had Trump leading Harris 49% to 46%.

In this one, when you look at four categories of voters...18-34, Blacks, Hispanics and females...Harris picks up 4 to 8 points in each over Biden vs. Trump in a prior survey.

A New York Times/Siena College poll has Trump leading Harris 48% to 47% among likely voters.  In early July, the same poll had Biden behind by six points.

Tuesday, Senate Majority Leader Schumer and House Minority Leader Jeffries endorsed Harris during a news conference in Washington.

Later Tuesday, at her first campaign rally since replacing Biden, Harris assailed Donald Trump in Milwaukee.

“In this campaign, I promise you I will proudly put my record against his any day of the week,” Harris said.

“Do we want to live in a country of freedom, compassion and rule of law, or a country of chaos, fear and hate?” she asked.

Harris spoke before a very enthusiastic crowd as she drew quite a contrast with the president on the campaign trail.

Meanwhile, Monday night, Donald Trump wrote on Truth Social:

“Lyin’ Kamala Harris, the Biden appointed ‘Border Czar’ who never visited the Border, and whose incompetence gave us the WORST and MOST DANGEROUS Border anywhere in the World, has absolutely terrible poll numbers against a fine and brilliant young man named DONALD J. TRUMP!”

Trump also reposted a Civil War themed post attacking his political opponents.  The post contained an image of Civil War General Ulysses S. Grant along with the quote, “There are but two parties now: traitors and patriots.”

The Trump campaign is going to try to sway swing state voters that Harris has her fingerprints all over two issues he is counting on for victory: immigration and the cost of living.

Wednesday evening, President Biden then spoke for the first time since he dropped out of the race, addressing the nation for eleven minutes.

Biden said he believed he earned reelection because of his record during his first term, “But nothing, nothing can come in the way of saving our democracy. That includes personal ambition,” he said.  “So I decided the best way forward is to pass the torch to a new generation. That is the best way to unite our nation.”

Biden praised Harris as a strong leader who would make an effective president.  “She’s experienced, she’s tough, she’s capable.  She’s been an incredible partner to me and a leader for our country.  Now the choice is up to you the American people.”’

“Over the next six months I will be focused on doing my job as president,” Biden said.

Other than saying it was time to pass the torch to someone young, Biden offered no other reason for his decision to step down. He did not mention the three-week pressure campaign from his own party to get him out of the race after his incoherent debate performance on June 27.

He didn’t say why he has become the first incumbent president to abandon a re-election bid, just a few months before voting begins.

He hinted at it, but never tackled it head on.

“In recent weeks, it’s become clear to me that I need to unite my party.”

Incredibly, Biden and his advisers still believed he had a path to victory, but if he wanted to do what was best for the nation, how the hell could he, or his advisors, possibly feel he could do the job another four years?!

Earlier, at a campaign rally in Charlotte, N.C., Donald Trump called Harris “a radical Left lunatic who will destroy our country if she ever gets elected,” he said.  Trump made clear he plans to ignore advice that he take a softer line.  “I’m not gonna be nice!” he told his cheering supporters.  He attacked Harris as a driving force in the Biden administration.

“As border czar, Kamala threw open our borders that allowed 20 million illegal aliens to stampede every single open border policy of the Biden Harris administration and we will seal the border and we will stop Kamala Harris’ invasion without delay,” the former president said.

The Trump campaign said Thursday it would not agree to a debate with Harris “until Democrats formally decide on their nominee,” claiming in a statement that there “is a strong sense by many in the Democratic Party...that Kamala Harris is a Marxist fraud who cannot beat President Trump, and they are still holding out for someone ‘better.’”

Then the Obamas weighed in. 

Opinion...all sides....

Editorial / New York Times

“President Biden’s decision to exit the 2024 presidential election is a fitting coda for a man whose life has been devoted to public service.  Mr. Biden has served the nation well as its president.  By agreeing to step down when his term ends in January, he is greatly increasing the chance that his party is able to protect the nation from the dangers of returning Donald Trump to the presidency.

“Majorities of Americans have consistently said they did not believe Mr. Biden could lead the nation for another term, citing longstanding fears about his age and fitness that have only grown in recent months.  Had he remained at the top of the ticket, he would have greatly increased the likelihood of Mr. Trump retaking the presidency and potentially controlling both houses of Congress as well.  Mr. Biden himself has consistently warned that specter presents a profound threat to the nation and its democratic traditions.

“Mr. Biden has now done what Mr. Trump never will: He has placed the national interest above his own pride and ambition.

“Mr. Biden’s departure gives Democrats an opportunity to refocus public attention from questions about the president’s fitness to the manifest moral and temperamental unfitness of Mr. Trump – and to the dangers of rearming him with the considerable powers of the presidency....

“(Mr. Biden’s) departure offers a fresh chance to address voters’ concerns with better policies.

“The next Democratic nominee should acknowledge and offer solutions for the pain and disruptions caused by uncontrolled immigration.  America needs immigrants. The nation also needs better policies for controlling their flow into the country.

“Voters are angry about the cost of living. Democrats particularly need to offer better ideas for addressing the biggest line item in most household budgets: the high cost of housing.

“And Mr. Biden’s successor needs to engage with the American people.  Mr. Biden has had fewer unscripted interactions with the public and the news media than any other president in recent decades, often leaving voters with a sense that he was hiding from the public.  A new presidential candidate should demonstrate exactly the opposite tendency, showing both a willingness to be open about plans for the future and a real interest in what voters have to say in return....

“Choosing Ms. Harris would be a reasonable path for Democrats....

“Nonetheless, party delegates should have a voice in a decision of this consequence. There are other qualified Democrats who could take on Mr. Trump and win, and picking a candidate without a real contest is how the party got into a position of anointing a standard-bearer that large majorities of Democrats and independents had profound concerns about.  While the hour is late, there is still time to put leading candidates through a process of public scrutiny before the party’s nominating convention begins on Aug. 19, to inform the choice of a nominee and to build support.”

Editorial / Wall Street Journal

“President Biden bowed to the inevitable on Sunday by ending his re-election campaign, and, though belated and begrudging, his decision is in the best interests of the country.  He clearly isn’t capable of doing the job of President for four more years, and he was headed for a crushing defeat against Donald Trump.

“Republicans are saying the decision insults the voters who supported Mr. Biden in primaries, and there’s no doubt the Democratic establishment wanted him out.  Nancy Pelosi, Hakeem Jeffries, Chuck Schumer and Barack Obama orchestrated what in the end was an insider coup. But they had been all-in for Mr. Biden as long as they thought he could win.  Only when the election polls showed he was a likely loser, and the Democratic electorate revolted, did they plot to force his ouster.

“In that sense the voters prevailed and forced the establishment’s hand. By rights the Democrats should pay some electoral price for their complicity in covering for Mr. Biden’s growing infirmity. His decision to run again was a selfish act that someone other than Rep. Dean Phillips should have challenged.  Instead the liberal establishment savaged Mr. Phillips and tried to gull the public. The disastrous June 27 debate exposed the con.

“GOP vice-presidential nominee J.D. Vance is demanding that Mr. Biden resign immediately, claiming that if he can’t run for four more years he can’t serve for six more months. But those are different tenures, and we don’t think his resignation is in the country’s interest....

“Republicans would do better by the country, and more for their own political interests, if they sent a public message that adversaries shouldn’t seek to exploit this period – that they’ll support a lame-duck Mr. Biden if he is forced to use military force to defend U.S. interests. This is what leaders of past generations would have done....

“Relieved Democrats are hailing Mr. Biden for his decision and gilding his achievements in office as historic.  No doubt he has some accomplishments. There is the Aukus accord with Australia and the United Kingdom to increase military and especially nuclear submarine cooperation. Mr. Biden also worked to enhance the U.S. alliance with Japan and South Korea, and to reduce lingering enmity between them as an alliance against China.

“His support for Ukraine is laudable, but it’s severely compromised by his failure to deter Vladimir Putin and his refusal to give Ukraine the weapons to force Russia to the bargaining table.  Ditto for the Middle East. His main economic legacy is a spending blowout that ignited inflation and caused a decline in real wages.  His climate policies have already devolved into a special-interest bacchanal that won’t help the climate.

“Republicans can make a strong case against this record, but now they might not have the layup they anticipated.  Ms. Harris or some other nominee will be able to offer a competing vision and exploit Mr. Trump’s considerable weaknesses in a way Mr. Biden could not.  Mr. Trump will have to raise his game too.”

Speaking of Trump, in a separate Editorial from the Journal:

“The 2024 election is Donald Trump’s to lose, and he may yet manage it. That was our reaction to his splenetic outburst on Sunday after President Biden’s withdrawal from the presidential race.

“It should have been an opportunity to show some class and judgment by welcoming the decision, warning U.S. adversaries not to take advantage of Mr. Biden’s last few months in office, and saying Vice President Kamala Harris will have to defend Mr. Biden’s failed record.  Short and presidential, with a unifying tone.

“Not Donald Trump.  On Truth Social on Sunday after the announcement, the former President posted this: ‘Crooked Joe Biden was not fit to run for President, and is certainly not fit to serve – And never was!  He only attained the position of Presidency by lies, Fake News, and not leaving his Basement.  All those around him, including his Doctor and the Media, knew that he wasn’t capable of being President, and he wasn’t – And now, look what he’s done to our Country...’  And on down from there.

“We realize Mr. Trump is frustrated that he won’t be able to run against Mr. Biden. But he remains the favorite and has a strong case to make against the Biden-Harris record. The GOP convention was a political success, despite his self-indulgent Thursday speech.

“The biggest doubt voters have about Mr. Trump is that he’s a divisive, vindictive man who is unable to speak for all Americans. He had a chance on Sunday to show he is capable of more, but he didn’t rise to the occasion.”

Editorial / Washington Post

“Polls show Ms. Harris is the best known among the potential Democratic nominees, but, by the same token, she has a record in the Biden administration – including her validation of Mr. Biden’s fitness for a second term – the people have a right to examine. She did not succeed in addressing the root causes of illegal immigration, an assignment the president gave her, but she excelled as a messenger decrying the Supreme Court’s decision overturning Roe v. Wade.

“Perhaps more important, she is not the only option....

“At each decision point, Democrats should err on the side of transparency.  Even if Ms. Harris quickly locks down the nomination, her running mate should still be decided at the convention.  State delegations and superdelegates could play a vital role during nationally televised proceedings that would grip the country and shine the spotlight on Democrats.

“Even though he’s not seeking another term, Mr. Biden can still help his party campaign against GOP nominee Donald Trump this fall. By far his most important assignment now, though, is to work on getting the country in the best possible shape for his successor.  Unburdened from the rigors of the campaign trail, Mr. Biden can help bring a long-sought conclusion to the war in Gaza and the release of hostages as well as pilot the U.S. economy to a soft landing from inflation that will made likelier if the Federal Reserve cuts interest rates.

“The United States just celebrated the Fourth of July for the 248th time. Mr. Biden has been alive for nearly one-third of that history. His prudent, selfless decision to stand down improves his party’s prospects today, and, undoubtedly, retrospective assessments of his presidency tomorrow.”

Rich Lowry / New York Post

“They didn’t soulfully consider Joe Biden’s marked decline and decide, for the good of him, his party, and the country that he had to step down.

“They lied, and they got caught.

“The Democratic Party line on President Biden was that he had turned in an exceptionally effective State of the Union address. He might mess up a name here or there, but he had gotten better with age.

“He should be judged on his achievements, which rivaled those of LBJ. Anything suggesting he was in decline was a paranoid lie, or – in a truly ridiculous neologism – ‘a cheap fake.’

“Everything we saw with our own eyes was misleading. No, he hasn’t wandered off at the G-7 summit.  No, he hadn’t frozen up at his Hollywood fundraiser.

“No, everything was fine.

“No one formally enforced this party line, but everyone knew to follow it – Democratic leaders, journalists, and donors.

“The whispered conversations stayed whispered.

“Then, the debate happened, and before it had ended, the party line was inoperative.

“There were attempts to revive it, but it was a little like being a Communist in the 1930s when Stalin wrenched the party into a totally new position.

“It didn’t matter whether the new line had any connection to the prior line; it had to be followed.

“So, Joe Scarborough of MSNBC, who months earlier had issued forth with table-thumping assurances that Joe Biden was at the absolute top of his game, suddenly thought he might have to step aside.

“George Clooney, who co-hosted the aforementioned Hollywood fundraiser, wrote in the New York Times that Biden at that event was a shadow of his self, and suddenly former Obama speechwriter Jon Favreau could say that everyone he talked to at the event was appalled by Biden’s state.

“The president can be forgiven for being disappointed and angry that everyone who had been covering for him switched overnight.

“There’s no honor among thieves, but shouldn’t there be at least a little among political co-conspirators?

“Biden showed monumentally poor judgment in deciding to run again last year. He almost certainly was in the grips of legitimate self-delusion, though.

“His enablers were truly cynical and dishonest, hoping that their fake narrative about Biden’s continued vitality could see them through until November.

“Their credibility should be shot as they attempt their great switcheroo.

“The same Democratic establishment that gave you Joe Biden without offering Democratic voters a legitimate choice (serious primary challengers were warned off this year), now wants to give Kamala Harris without offering Democratic voters a legitimate choice....

“In sum, the perpetrators of a shameful cover-up want us to move on as if nothing happened, when the stink of their rank deception should dog their candidate and their party the rest of this campaign.”

David Ignatius / Washington Post...who controversially called for Biden not to run for reelection last fall, pissing off Jill Biden royally:

“Why was Biden so resistant?  Part of it surely was the pride and vanity everyone feels as they age. Older people don’t want to give up the keys to their cars even as they become a danger to others. They insist they can do everything as well as they could decades earlier, even when they can’t.  It’s human to resist the signs of age.  I’m 74 myself, and I am deep into denial.

“But it’s different when you’re commander in chief.  You can’t talk about getting to bed earlier when you’re the person who could receive the ominous phone call at 2 a.m. warning that an adversary has launched a missile strike.  ‘I just got to pace myself a little more, pace myself,’ Biden said in a July 11 news conference. That’s good advice for most people, but if you hold the fate of the world in your hands, it’s not enough.  Covering over your infirmities can be an act of recklessness.”

On Kamala Harris....Editorial / Wall Street Journal

“So much for a Democratic nominating contest. It has taken less than a day for Democrats to rally around Vice President Kamala Harris as their candidate to replace President Biden. Why the rush, folks? ....

“Our guess is Democrats are desperate to turn media attention from themselves and back on Mr. Trump. A nominating contest with raucous disagreement on the convention floor in Chicago is too much political drama for them to take.

“Some of the possible challengers to Ms. Harris also don’t want to take the heat for possibly blocking her from being the first black female President. They’d be blamed if she then loses to Mr. Trump. If she runs and loses without a challenge, California Gov. Gavin Newsom can run in 2028 without having alienated a chunk of the Democratic Party.

“This is all a shame since it means the country is losing the chance to see a genuine and instructive party debate unfold.  We’d learn more about each candidate and what he or she stands for.  Ms. Harris would probably win the nomination in any case, and she’d be stronger for it. As it stands now, she is winning by acclamation among all of the Democratic Party insiders and money men who’ve swung behind her.

“The good news in all of this is that Ms. Harris was going to become President anyway in a second Biden term.  At least Americans will be able to vote for her – or not – in her own right.”

Editorial / Wall Street Journal...on Biden’s first (of two) farewell addresses....

“President Biden explained his abrupt departure from the presidential campaign in a speech to the nation Wednesday evening...actually, no he didn’t.... (Why) was he all-in for re-election five days ago but all-out now? He didn’t say.

“Did he have some sudden health setback that forced the decision?  Or was it a gradual recognition of his growing inability to do the job that finally took hold and he was forced to admit?  Or, more likely, was he pushed from the race by fellow Democrats who had concluded that he was a sure loser to Donald Trump and had to go, or they would all say so in public? Mr. Biden explained nothing....

“He could have reassured Americans that he is still capable of doing the job for another six months, while warning adversaries not to take advantage of his remaining lame-duck period in office....

“We wanted to give Mr. Biden the benefit of the doubt for making the right decision to withdraw, and a gracious farewell would have enhanced that decision. He owed the country more than the self-serving, non-campaign speech he chose to deliver on Wednesday.”

Ingrid Jacques / USA TODAY

“(Biden) did not give an adequate rationale as to why he waited so long to make his decision.  By doing so now, so late in the game, he denied Democrats a true primary in which they could have picked from a robust crop of candidates.

“Instead, they appear stuck with Harris, whom no one voted for in the 2020 primaries. She has quickly become a media darling and star fundraiser now that the Democratic Party has rallied around her.

“At 59, she is decades younger than Biden, 81 – and Trump, 78 – but she doesn’t bring much else to the table.

“Biden also refused to level with the American people about his health, even as he struggled to read at times from the teleprompter.

“There are tumultuous times ahead in the coming months, and Biden did not offer any confidence that he’s the one to lead us through them.”

On the Harris candidacy, Editorial / Wall Street Journal....

“Democrats are newly energized as they rally behind Kamala Harris for President, which is no surprise after their weeks of despond over President Biden.  Yet Republicans seem suddenly and oddly on the back foot, as if they didn’t think this could happen. The U.S. now has a presidential race that Donald Trump and the GOP could lose....

“The puzzle is why all of this seems to have confounded Republicans. They’re grasping for attack lines that aren’t likely to work or are counterproductive. One bad argument is that Ms. Harris is ‘a DEI candidate.’  That may literally have been true in 2020 when Mr. Biden promised to appoint a woman as his running mate. But diminishing her in this way now, after she’s been VP for four years, will alienate women and the minority voters the GOP is trying to attract....

“Calling out Ms. Harris for being childless is another false note. The decision to have children is intensely personal and often a matter of chance as much as choice, and the attack underscores the culturally censorious side of the GOP that alienates many voters. She has two stepchildren.  It’s possible to stress the virtue of families, and children, without sounding like moral scolds.

“Some Republicans think they can win by portraying Ms. Harris as ‘weird,’ as if her laugh is disqualifying. But that only works if a candidate plays into the critique. So far on the stump she’s performing better than she did in 2019 or in her early days as Vice President.  Too many Republicans seem to have bought the triumphal claims in the conservative press that Ms. Harris can’t win. Of such media-bubble overconfidence are defeats made....

“None of which is to say that Ms. Harris is a juggernaut....

“The Veep’s biggest vulnerability is that she is a product of California’s progressive political hothouse.  She has never had to appeal to moderate voters nationwide. This shows in the many left-wing positions she took as a state Attorney General and Senator that are unpopular in middle America....

“One wild card will be candidate performance, especially in debate.  Mr. Trump defeated the declining Joe Biden in a walkover, but Ms. Harris won’t be so easy. The former President will have to make a case on policy, rather than personal insults, and that isn’t his strength. The economic and security fundamentals still favor Mr Trump, but this is now a competitive race.”

And, as the Wall Street Journal’s Daniel Henninger opined, when it comes to Donald Trump, he “is the Dr. Jekyll and Mr. Hyde of American politics. Most of the time, he displays unusual talents to advance his own interests. But once in front of a big crowd – even the convention coronation – a switch flips and he becomes Mr. Hyde, uncontrollably going off-script about whatever enters his mind.”

Trump could lead Republicans to a sweep in November, but to do that he needs to just shut up!  He can’t.

It’s Game On.

---

Russia-Ukraine

--President Volodymyr Zelensky issued another call for long-range weapons after a massive overnight drone and missile attack Saturday on Kyiv, Russia’s fifth drone attack on the capital in two weeks, with Ukraine’s air defense systems destroying all the air weapons before they reached the capital.  Other regions were targeted.

--President Zelensky said Monday he respected President Biden’s “tough but strong” decision to end his reelection campaign.  “Ukraine is grateful to President Biden for his unwavering support for Ukraine’s fight for freedom, which, along with strong bipartisan support in the United States, has been and continues to be critical,” Zelensky wrote on X.  “Many strong decisions have been made in recent years and they will be remembered as bold steps taken by President Biden in response to challenging times. And we respect today’s tough but strong decision.”

Donald Trump had what he called a “very good” telephone call with Zelensky, and again vowed to bring about a deal to end the war – though without saying how he’d do it.

Trump said in a post on Truth Social the two men spoke Friday, adding that he appreciated Zelensky “for reaching out” and promised Russia and Ukraine would “come together and negotiate a deal that ends the violence and paves a path forward to prosperity.”

Zelensky confirmed the meeting in a post to X, saying that he had congratulated Trump for winning the Republican presidential nomination at his party’s convention in Milwaukee this week.  He also condemned what he called the “shocking assassination attempt” against Trump.

“Ukraine will always be grateful to the United States for its help in strengthening our ability to resist Russian terror,” Zelensky said.

Zelensky appeared to indicate that he and Trump made tentative plans to meet sometime.

--Russia attacked energy transmission facilities in the north and center of Ukraine with drones overnight Saturday, causing temporary power cuts for households and industrial producers.

UAVs from Ukraine targeted the large Millerovo airfield in the Rostov region, which borders the eastern areas of Ukraine occupied by Russia since 2022 and is a base for Russian fighter jets.  Russia claimed to have destroyed 26 drones with no casualties.  The Russian military said the attack caused little damage, but social media posts showed images of larges fires and cited reports of as many as 16 explosions in the area.

--Russian troops have been pressing toward the key logistics hub of Pokrovsk, which lies at an intersection of roads and a railway that makes it an important possession.  Ukraine’s top commander said Russian forces were staging relentless assaults to try to advance towards the town.

Colonel General Oleksandr Syrskyi said in a statement from the eastern front, “The enemy pays no attention to their fairly high level of losses and continues to push through towards Pokrovsk.”

Russian forces captured two villages in the east over the weekend.

--Ukraine’s military said it had “significantly damaged” a Russian ferry used for military purposes in an attack on Port Kavkaz in Russia’s Krasnodar region.  The ferry “Slavianin” was the last railway ferry Russia had in the region.  “The occupiers used this ferry to transport railway cars, vehicles, and containers for military purpose,” the General Staff said on Telegram.

--Nearly a third of Ukrainians would accept some territorial concessions to Russia for a quick end to the war, a more than three-fold increase over the past year, although most still oppose giving up any land, a poll from the Kyiv International Institute of Sociology revealed on Tuesday. 

The poll of 1,067 people on Ukrainian-held territory from May 16-22 found that 32% would agree to some form of territorial concessions, up from just 10% a year earlier and 19% at the end of last year.  It said 55% of Ukrainians remain opposed to making any territorial concessions. 

Russia occupies 18% of Ukrainian territory, including Crimea.

KIIS said those polled did not necessarily see concessions as equating to recognizing the territory as Russian.  “For example, some people are ready to postpone the liberation of certain territories until the future at a better time,” the institute said in a statement accompanying the results.

Ukrainian Foreign Minister Dmytro Kuleba, on a trip to China, said Ukraine is ready for talks with Russia if Moscow is prepared to negotiate in good faith, though it has seen no sign of that.

One of Zelensky’s top aides, Mykhailo Podolyak, told the Associated Press in an interview Thursday that signing an agreement with Russia to stop the war with Ukraine would amount to signing a deal with the devil.

A deal would only buy time for Vladimir Putin to strengthen his army and usher in another, potentially more violent chapter in the war, Podolyak said.

“If you want to sign a deal with the devil, who will then drag you to hell, well, go for it. This is what Russia is.

“If you sign anything today with Russia, that will not lose the war and will not be legally responsible for mass crimes, this will mean that you signed yourself a ticket to continue the war on a different scale, with other protagonists, with a different number of killed and tortured people,” Podolyak said.

--An overnight Russian drone barrage on Friday knocked out electricity for more than 68,000 Ukrainians, including near Kyiv, Ukraine’s military saying it shot down 20 of 22 drones Russia launched at four different regions.

--A former Ukrainian nationalist MP was shot and killed on the street in the western city of Lviv last Friday.

Iryna Farion, a 60-year-old linguistic professor, had said that true patriots of Ukraine should not speak Russian in any settings, including on the front lines, as it is the language of the aggressor country.

She described Russian as “the language of the enemy, who kills, discriminates, insults and rapes me,” and added: “How crazy should you be to fight in the Ukrainian army and speak Russian?”

Some in Ukraine accused her of inciting hatred based on linguistic preferences.  She was dismissed from a university in western Ukraine and was investigated by the Security Service of Ukraine.

Interior Minister Ihor Klymenko said “this was not a spontaneous killing.”

The hardline nationalist Svoboda (Freedom) political party Farion was a member of blamed Russia.

“Moscow shoots in the temple for the Ukrainian language,” it said in a statement.

---

Israel-Hamas

--The Israeli military has confirmed it struck Hezbollah weapons storage facilities last Saturday night.  Lebanon’s state-run National News Agency (NNA) said Saturday evening “the Israeli enemy launched a raid” on the town of Adloun, about 20 miles from the border with Israel, later saying the target was “an ammunition depot.”

Rockets were still exploding about an hour after the strike was first reported, the NNA said.  Three people were injured.

Earlier in the day, Hezbollah said it had launched “dozens of Katyusha rockets” on northern Israel “in response” to a strike blamed on Israel that injured civilians.

--Israeli forces killed at least 39 Palestinians in the Gaza Strip on Saturday, according to health officials, as tanks advanced deeper into Rafah.

At least 22 more were killed in strikes on Sunday, including areas in the center of the enclave where thousands of Palestinians displaced from their homes have been seeking shelter.

Hamas and Islamic Jihad claimed to have confronted Israeli forces with anti-tank rockets and mortar bombs.

--In a new first, Israel bombed an oil facility and power station in the Yemeni port city of Hodeidah on Saturday, killing six people and wounding more than 80, medical sources in Yemen told Reuters.

The Israeli strikes were a direct response to a Houthi missile attack in Tel Aviv last Friday (allegedly via Sudanese airspace) that killed one person and wounded four others.  Israel says it shot down another Houthi missile launched from Yemen Sunday.  The Houthis claimed to have launched “a number of ballistic missiles and drones” in the attack, which had no effect due to Israel’s missile defense system.

The IDF said the port had been used by the Houthis to receive weapons shipments from Iran.  The targets, more than 1,700 km (1,056 miles) from Israel, included dual-use sites such as energy infrastructure, an IDF spokesperson said.  Israel had informed allies before the strike, which the military said was carried out by Israeli F-15 fighters that all returned safely.  The Houthis vowed an appropriate response.

The strike on Yemen, which Israeli officials said came after more than 200 Houthi attacks on Israel, only happened after the first death in Tel Aviv.

“The fire that is currently burning in Hodeidah is seen across the Middle East and the significance is clear,” Israeli Defense Minister Yoav Gallant said in a statement.  The Houthis attacked us over 200 times. The first time they harmed an Israeli citizen, we struck them. And we will do this in any place where it may be required.”

Prime Minister Benjamin Netanyahu said: “Whoever wants to see a stable and safe Middle East needs to stand against Iran’s axis of evil, and support Israel’s struggle against Iran and its proxies.”

--Editorial / Wall Street Journal

“The bombing exchange between the Houthis of Yemen and Israel over the weekend isn’t merely another military escalation in the Middle East. It represents the failure of the Biden Administration’s policy of appeasement to contain the Iran-backed Houthis as they terrorize commercial shipping in the Red Sea, Israel and the U.S. Navy....

“The Biden Administration told Israel nine months ago that the U.S. would handle the Houthi threat and it should stick to playing defense. But the attack on Tel Aviv shows that the U.S. effort is a bust.

“The Houthis have all but shut down Western shipping in the Red Sea, at enormous cost to global businesses and consumers. They continue to attack U.S. naval vessels, which have been forced to play a high-stakes game of catch the drones and missiles.  That one or more haven’t killed sailors and damaged ships is a tribute to U.S. naval training and technology.  But sooner or later one might get through and result in American casualties....

“The White House is hoping a ceasefire in Gaza will cause the Houthis to cease and desist.  But the Houthis and Iran have learned they can terrorize and kill Israelis and Americans at little cost.  Even if they stop for a time, they can resume the shooting any time they wish.  The Houthis and their Iranian sponsors are winning their showdown with the West, and the result is likely to be more American and Israeli casualties in the future.”

--Israel renewed its assault in parts of Khan Younis in southern Gaza on Monday, in a ground and air operation that local health officials said killed and wounded scores of people.

The IDF said in a statement that it had launched the operation because intelligence indicated that Palestinian militants had used the eastern part of the city – part of an area previously designated as a humanitarian, or “safe” zone – to fire rockets toward Israel and that Hamas was regrouping there.

The Gazan health ministry said 70 bodies were brought to Nasser Hospital.

Further attacks on eastern neighborhoods of Khan Younis Tuesday killed at least ten more.  Palestinian residents were forced to flee their homes again.

--Last Sunday, the IDF issued call-up notices to 1,000 members of the ultra-Orthodox community in a move meant to bolster the army’s ranks but which could further inflame tensions between religious and secular Israelis.  The Supreme Court ruled last month that the defense ministry could no longer grant blanket exemptions to Jewish seminary students from the conscript military.  That arrangement had been in place since around the time of Israel’s establishment in 1948 when the number of ultra-Orthodox, or Haredi, was tiny.

The new policy shift has been opposed by the two religious parties in Netanyahu’s government.

Not all Haredim refuse to serve and the IDF has created a number of units for the ultra-Orthodox, whose population is growing rapidly.

--Prime Minister Netanyahu visited the U.S. this week, addressing a joint session of Congress on Wednesday and meeting with President Biden Thursday.

The trip offered the prime minister a platform for a reset with Washington after months of tension over his approach to the war in Gaza.

A drumbeat of protests in Israel demanded that he stay home and focus on a ceasefire deal with Hamas to free Israeli hostages.  Israel believes around a third of the announced 120 hostages still being held by Hamas and other militants are dead.

In the address, Netanyahu defended his country’s military campaign in Gaza, and did not discuss the status of a ceasefire deal that Hamas and Israel had been negotiating for weeks.  He said that the war against Hamas was part of a larger conflict between Iran and the U.S., insisting: “We’re not only protecting ourselves; we’re protecting you.”

“Our enemies are your enemies; our fight is your fight; and our victory will be your victory,” Netanyahu said.

But in the House chamber, the erosion of bipartisan support for Israel was evident.  Republicans applauded loudly, but dozens of Democratic members either boycotted the speech or sat silent.  One House member, Rep. Rashida Tlaib, the first Palestinian American to be a member of Congress, held up a sign that read “war criminal” as Netanyahu spoke.

Netanyahu described the protesters outside as “Iran’s useful idiots.”  He also praised both President Biden and Donald Trump.  And he met with both of them, and Vice President Harris Thursday and Friday.

But he blamed Hamas for denying Palestinians food aid when Israel is also responsible, and sketched out a post-war vision that didn’t include a Palestinian state.

I am not a fan of the man, albeit he’s a fascinating figure.  It’s always been about staying in power, first and foremost, but he’s also a conniver and immensely corrupt.

Harris said after her meeting with the prime minister that she sharply pressed him about the humanitarian situation in Gaza. “Israel has a right to defend itself.  And how it does so matters.”

--Lastly, Israeli athletes will receive 24-hour protection during the Paris Olympics, France’s interior minister said, after a far-left lawmaker said Israel’s delegation was not welcome and called for protests against their participation, which is rather disgusting and despicable.  But such are the times with the war in Gaza inflaming tensions.

---

Wall Street and the Economy

The Federal Reserve holds its next policy meeting July 30-31, Tuesday and Wednesday, so it’s been going through its ‘quiet period,’ awaiting the personal consumption expenditures data for June that came out Friday.

The Fed was looking for good numbers out of its preferred inflation barometer in order to allow it to telegraph a rate cut in September when the Open Market Committee gathers next week, and the numbers fit the narrative.  The PCE was up 0.1% and 2.5% year-over-year, as expected, while the core rate rose 0.2%, 2.6% Y/Y, a tick higher than forecast but matching May’s figure.

I expect to see an optimistic Chairman Powell next Wednesday at his press conference.

Personal income rose 0.2%, less than forecast, and consumption was in line, up 0.3%.

In other economic news....

June existing home sales fell more than expected in the month to an annualized rate of 3.89 million, or down 5.4% from a month earlier and also down 5.4% year-over-year. The median sales price rose 4.1% Y/Y to a record $426,900.

June new home sales declined to a 617,000 annual rate in June from an upwardly revised 621,000 in May, and compared with a consensus figure of 640,000.  Year-over-year, sales were down 7.4% from June 2023.

Thursday, we had our first estimate of second-quarter GDP, 2.8%, well above consensus of 2.0%.  But the Atlanta Fed’s last look, Wednesday, was for 2.6%, so good for them.

June durable goods were awful, -6.6% when a gain of 0.5% was expected, the worst number since April 2020. Ex-transportation the figure was +0.5%, beating consensus.

Friday, we had the Atlanta Fed’s GDPNow first estimate for third-quarter growth, also 2.8%.

Freddie Mac’s 30-year fixed-rate mortgage is at 6.78%.

Europe and Asia

We had flash July PMIs for the eurozone this week and they were not good.  The flash composite reading for the eurozone was 50.1 (50 the dividing line between growth and contraction), the worst reading since February and down from June’s 50.9.  Germany dropped below the 50-line for the first time since March, and France failed to grow. [S&P Global / Hamburg Commercial Bank]

The eurozone’s flash manufacturing PMI was 45.3, a 7-mo. low, with services at 51.9 (4-mo. low).

Germany: manufacturing: 42.2 (9-mo. low), services 52.0.
France: mfg. 44.1 (6-mo. low), services 50.7 (3-mo. high)

The picture in the UK was far better.

UK: mfg. 54.4 (29-mo. high), services 52.4.

Dr. Cyrus de la Rubia / HCB:

“While Germany is seemingly struggling to grow, the French economy is being fueled by the Olympic Games.  According to anecdotal evidence, French service providers increased their business activity in July due to the preparation for the Olympic Games. In contrast, demand in the German manufacturing sector seems to have dragged down overall private sector output.”

France: President Emmanuel Macron has said he won’t name a new government until after the end of the Paris Olympics, after the New Popular Front (NFP), the left-wing coalition that makes up the largest group in France’s fractured parliament, put forward a little-known civil servant, Lucie Castets, as a candidate for prime minister.

The NFP is accusing Macron of trying to “cancel the result of the legislative elections.”

Turning to Asia...no big economic data out of China this week.  But the People’s Bank of China unexpectedly lowered the cost of its one-year policy loans by the most since April 2020, acting days after cutting a key short-term rate in a sign of greater support for the slowing economy.

Japan reported out its flash PMIs for July...manufacturing 49.7, services 53.9 (up from 49.4 in June).

Street Bytes

--It was a volatile week. Wednesday, Nasdaq suffered its worst single-day decline since Oct. 2022, after some disappointing earnings reports, but the market staged a broad rally Friday after the tame PCE numbers and better earnings from the likes of 3M.

In the end the major averages were mixed, the Dow Jones up 0.7% to 40589, with the S&P 500 down 0.8% and Nasdaq 2.1%.

Next week, earnings from Microsoft, Meta, Apple and Amazon.  I apologize. The earnings site I use incorrectly had Microsoft and Exxon as scheduled for this past week when I wrote last Friday’s WIR.  I questioned it in my head at the time and should have gone with my gut.  I know the earnings calendar better than this.

--U.S. Treasury Yields

6-mo. 5.14%  2-yr. 4.38%  10-yr. 4.19%  30-yr. 4.45%

On the increasing belief a rate cut is coming, Treasury yields continue to fall, the 2-year down 13 basis points this week, the 10-year five.

--Crude oil has fallen from $83.14 on West Texas Intermediate to $76.75 mostly on concerns about China growth, reduced oil imports and refinery activity in the land of Xi Jinping.  My local gas pump, a block away, finally dropped its price six cents for regular.  [These guys are assholes...they used to have a market price, and then stuck to $3.75 a gallon forever when everyone else reduced their price to $3.42 to $3.59.  Ergo, they no longer get my business.]

--So much for the big rally in Tesla’s share price.  The stock, which hit $271 on July 11, fell to $216 Wednesday, after the company reported second-quarter net income fell 45% compared with a year ago as the EV-maker’s sales tumbled despite price cuts and low-interest financing.

Tesla said after the close on Tuesday that it made $1.48 billion from April through June, less than the $2.7 billion it made in the same period of 2023.  It was the company’s second-straight quarterly net income decline.

Q2 revenue rose 2% to $25.5 billion, beating Wall Street estimates of $24.54 billion.  Ex- one-time items, Tesla made 52 cents per share, below consensus for 61 cents.

Earlier this month, the company said it sold 443,956 vehicles in the quarter, down 4.8% from 466,140 sold the same period a year ago.

For the first half of the year, Tesla has sold about 831,000 vehicles worldwide, far short of the more than 1.8 million for the full year that CEO Elon Musk had predicted.

The company’s widely watched gross profit margin fell once again to 18%. It peaked at 29.1% in the first quarter of 2022.

The company said it posted record quarterly revenue “despite a difficult operating environment.”  The energy-storage business took in just over $3 billion in revenue, double the amount in the same period last year.

It hasn’t helped that the robotaxi unveiling is now scheduled for Oct. 10, after being delayed earlier.  Musk believes autonomous driving technology is Tesla’s key differentiator.

--Alphabet reported stronger-than-expected second-quarter results, driven by strength in the Google parent’s search and cloud businesses.

Per-share earnings rose to $1.89 for the June quarter from $1.44 a year earlier, compared with consensus of $1.85.  Revenue advanced 14% to $84.74 billion, slightly ahead of the Street’s view of $84.29bn.

Google services revenue increased to $73.93 billion from $66.29bn.  Search advertising revenue grew to $48.51 billion from $42.63 billion while YouTube ads brought in $8.66 billion, up from $7.67 billion last year, though this last metric was less than expected.

“Our strong performance this quarter highlights ongoing strength in search and momentum in cloud,” CEO Sundar Pichai said in a statement.

Revenue in the Google cloud segment rose to $10.35 billion from $8.03 billion, exceeding $10bn in quarterly revenues for the first time.

Google had been pursuing its largest acquisition ever, a roughly $23 billion buyout of cybersecurity firm Wiz.  But Wiz told employees on Monday it was walking away from the deal and would instead pursue going public.

--Ryanair expects air fares to be “materially lower” across its crucial summer season than last  year, continuing a trend that almost slashed profits at the carrier in half over the period between April and June.

On Monday, the discount airline giant reported a 46% fall in after-tax profit to $390 million – well below the $583 million profit forecast by analysts for the first quarter of the fiscal year.

Average fares per passenger fell 15% in the quarter from a year earlier as the airline was forced to engage in “more price stimulation than we had previously expected,” CEO Michael O’Leary said in a statement.

“While second quarter demand is strong, pricing remains softer than we expected, and we now expect (fiscal) second quarter fares to be materially lower than last summer.”  Ryanair typically makes most of its profit in the July to September quarter.

--Boeing is seeing a significant improvement in production flow at its 737 MAX factory, its new commercial planes chief said on Sunday, as Boeing battles to overcome a safety crisis.

Speaking to reporters in London ahead of this week’s Farnborough Airshow, Stephanie Pope said the changes Boeing was making to the Seattle-area factory were significant.  “This isn’t a minor change. This is transformational change,” she said.

--To go back to the massive global computer outage last Friday, when I went to post last time, 4:30 p.m. ET, there had been about 2,500 flight cancellations within, into or out of the U.S., and that total grew to 3,400 by day’s end.  We then had 2,145 on Saturday and another 2,070 Sunday, and 1,772 on Monday.  That’s a lot of pain and suffering.

Atlanta’s Hartsfield-Jackson International Airport saw 824 flights canceled Friday, the highest of any U.S. airport, and another 724 on Saturday.  Sunday the total was 750.

And the airline with easily the most problems in the country over the weekend was Delta, with its big hub in Atlanta.

Delta cancellations nationwide....

Friday...1,207
Saturday...1,208
Sunday...1,386
Monday...1,157
Tuesday...511

Staggering.

Delta CEO Ed Bastian, in an email, said on Sunday that more than 3,500 Delta and Delta Connection flights were canceled during the busiest travel weekend for the summer, “limiting our re-accommodation capabilities.”

He apologized to affected passengers, saying: “Cancelling a flight is always a last resort, and something we didn’t take lightly.”

Bastian said that a significant number of Delta’s applications use the Microsoft Windows operating system that was affected by Friday’s outage, including one of its crew-tracking tools, making it unable to effectively process the “unprecedented number of changes triggered by the system shutdown.”

Delta has been the gold standard among airlines the past few years, especially after Southwest fell off.  But this is outrageous.

The Department of Transportation is launching an investigation into the airline, Secretary Pete Buttigieg announced Tuesday on X.

Delta didn’t get back to normal until Wednesday, and you’ve seen the pictures of lost baggage...all representing a disruption of some kind, and in some cases, if the individual or family was on vacation, a major headache.

As for CrowdStrike, the cybersecurity company responsible for Friday’s disaster, its shares fell another 13% on Monday.  The company said in a statement around 8.5 million devices were affected by the outage.

Warning customers that bad actors were trying to exploit the event, the company said it had identified a malicious file being sent around by hackers posing as a ‘quick fix’ to the problem. A file named “crowdstrike-hotfix.zip” was being distributed that included malware enabling hackers to remotely control or monitor a user’s device, CrowdStrike said in a blog post.

--Southwest Airlines reported Q2 adjusted earnings Thursday of $0.58, down from $1.19 a year earlier, with consensus at $0.51. Revenue for the quarter ended June 30 was $7.35 billion compared with $7.04bn a year earlier, the Street at $7.34 billion.

But the airline announced sweeping changes, including plans to end open seating and offer seats with extra legroom as it faces pressure from an activist investor to improve financial results. The move marks a significant shift away from its traditional business model.  The company will share more plans at its investor day in September.

Southwest said its research shows that 80% of its customers, and 86% of potential customers prefer an assigned seat. It also has plans to offer premium, extended legroom seats, which will account for roughly one-third of seats across its fleet.

“We are taking urgent and deliberate steps to mitigate near-term revenue challenges,” Southwest CEO Bob Jordan said.

The airline said third-quarter unit revenue is expected to be flat to down 2%, as it deals with Boeing’s jet delivery delays and elevated operating expenses, including high aircraft maintenance costs as it keeps older planes in the air.

--American Airlines Group reported Q2 earnings of $1.09 per share, down from $1.92 a year earlier. The Street was at $1.05. Revenue for the quarter was $14.33 billion, up from $14.06bn a year earlier.  Analysts were at $14.37bn.

AAL now expects full-year 2024 adjusted EPS to be between $0.70 and $1.30, with the Street at $1.82.  Not what Wall Street wanted to hear.  The airline said it would break even in the third quarter, when investors were expecting EPS of $0.45!

The company said in a statement: “American has a fleet, network and product built to deliver results, but during the second quarter, we did not perform to our initial expectations due to our prior sales and distribution strategy and an imbalance of domestic supply and demand.”

AAL fired chief commercial officer Vasu Raja who had spearheaded a plan to rework contracts with corporate travel agencies and customers, cutting perks and discounts.  It also slashed its sales team, and the strategy backfired.  CEO Robert Isom promised a reset, but the fallout will continue to impact its revenue and earnings through the remainder of the year.

Despite their problems, shares in both AAL and LUV rose a bit Thursday, though the stocks had already been beaten down from their 52-week highs.

--TSA checkpoint numbers vs. 2023

7/25...107 percent of 2023 levels
7/24...108
7/23...110
7/22...106
7/21...104
7/20...105
7/19...98
7/18...107

--UPS boosted its volume in the U.S. for the first time since 2022 during its second quarter, but profit and revenue fell short of Wall Street expectations, partly due to a hefty charge, and the shares dropped 10% at the open on Tuesday, and finished down 12%.

CEO Carol Tome said the package delivery company returned to volume growth in the quarter for the first time in nine quarters, calling it a “significant turning point” in a statement.

For the three months ended June 30, UPS earned $1.41 billion, or $1.65 per share.  Stripping out one-time costs, earnings were $1.79 per share, well below the Street’s consensus of $1.98.

Quarterly revenue was $21.82 billion, short of analysts’ estimate of $22.31 billion.

The Atlanta company now anticipates full-year revenue of about $93 billion, with its previous outlook in a range of $92 billion to $94.5 billion.

UPS has been slashing costs to lift margins. In January, it said it would cut 12,000 jobs to save $1 billion.  But it’s paying the price for the big contract it gave the Teamsters.  The company did announce it will replace FedEx as the primary expedited air service provider for the USPS.

--General Motors shares fell 6% after the automaker reported Q2 adjusted earnings of $3.06 per share, up from $1.91 a year earlier.  The Street was at $2.70.

Revenue for the quarter ending June 30 was $47.97 billion, up from $44.75 billion a year earlier, consensus at $45.32bn.

The company now expects 2024 adjusted earnings of $9.50 to $10.50, versus its prior forecast of $9.00 to $10.00, with analysts expecting $9.64.

But GM also announced its Cruise self-driving unit will focus its development efforts on a next-generation Chevrolet Bolt rather than its planned futuristic Origin vehicle that would not have a steering wheel or other human controls.  Oh yeah, I want that!  [Not]

So why a 6% drop?  Aside from the shift in the Cruise vehicle strategy, GM lost $104 million in China after making $78 million a year ago, and there’s a broader concern the auto industry will become less disciplined on inventory levels and buyer incentives.  A report from the Federal Reserve last week showed motor-vehicle production surged to a four-year high in June.

--Shares in Ford Motor Company cratered 18% Thursday (the worst day for it since 2008) after the automaker posted Q2 adjusted earnings of $0.47 per share, down from $0.72 a year earlier with analysts expecting $0.68, a huge miss. Revenue in the quarter rose to $47.8 billion from $45 billion a year earlier.  Consensus was at $44.9bn.

Ford said it made $1.83 billion from April through June, compared with $1.92 billion a year ago.

The company’s Q2 sales in the U.S., its most lucrative market, rose just under 1% to more than 532,000 vehicles.

Ford has had quality issues that have led to higher warranty costs and its EV business is weighing on the bottom line.  Ford has been topping the industry in the number of recalls, with CFO John Lawler saying most of the expenses were related to older vehicles launched before 2021.

Ford has been shifting production from EVs to its flagship F-150 in an effort to meet soaring demand for the gas guzzlers.  And Ford is ramping up hybrid production as well as developing a platform for a lineup of affordable, smaller electric vehicles. Ford recorded a $1.1 billion operating loss for the EV and software division in the second quarter, adding to its $1.3 billion loss from the first quarter.

--IBM shares rose 5% after second-quarter earnings unexpectedly increased year-over-year as momentum in its software division propelled consolidated revenue above Wall Street’s estimates.

Adjusted earnings rose to $2.43 per share from $2.18 a year ago, with consensus at $2.17. Revenue increased 2% to $15.77 billion, higher than the Street’s view of $15.62 billion.

Revenue in the software segment increased 7.1% to $6.74 billion.

--I’m always interested to see how Bristol Myers Squibb does with its earnings reports, living across the street from a major headquarters, and the company reported better-than-expected adjusted earnings of $2.07 for Q2 on Friday, beating estimates of $1.64. Revenue of $12.2 billion also beat Street forecasts for $11.52bn.

Growth is driven by new products like anemia treatment Reblozyl and heart drug Camzyos, as well as from top-seller, blood thinner Eliquis, and cancer immunotherapy Opdivo.

The shares rallied 9% in response, though prior to today’s move, the stock had dropped 29% in the last 12 months amid talk of restructuring and layoffs, which could hurt the Dunkin’ Donuts in my building.

--3M shares soared over 20%, its best day ever, after the industrial conglomerate’s results underscored its focus on cutting costs and high-growth businesses.  Adjusted earnings for Q2 of $1.93 beat analysts’ average estimate of $1.68, while second-quarter revenue of $6 billion beat consensus of $5.88bn.  3M also guided higher for the full year.

New CEO Bill Brown (formerly top boss at L3Harris Technologies) has said his top priority is to sell more and “reinvigorate the 3M innovation machine.”

“The simple fact is our products are aging,” Brown said on his first earnings call and that the company would shift its focus to high-growth businesses such as automotive electrification and growth areas such as climate technology, while exiting less-profitable consumer product lines to drive growth amid slow demand.

--I have never purchased plant-based meat products, such as from Beyond Meat, first and foremost because one thing stands out when I’m going through the grocery store...the price!  I’m not paying $8.99 when I get real meat for $4.99, for example.

Beyond Meat in particular continues to bleed cash.  The company’s initial public offering in 2019 was a wild success and it had a peak market capitalization of $14 billion, which on Tuesday when I checked was down to $400 million.  The cash balance of more than $1 billion had dwindled to $158 million by the first quarter.

But the struggles in this industry go beyond BYND.  Dollar sales of plant-based meat and seafood declined by 12% from 2022 to 2023, according to a report from the Good Food Institute.

Apparently sales are better in Europe, with McDonald’s Germany having launched two meals built around plant-based burgers and plant nuggets.  But I for one will continue to pass.

--Shares in Chipotle Mexican Grill fell a bit after the company reported earnings and revenue that beat consensus; adjusted EPS of $0.34, up from $0.25, and revenue of $2.97 billion, up from $2.51bn a year earlier.  The Street was at $0.32 and $2.94bn respectively.

The California-based chain has been able to buck a larger slowdown in customer traffic within the U.S. restaurant industry, partly because Chipotle’s loyal customers kept returning to its outlets despite inflation straining household budgets.

--Royal Caribbean Group stock dropped 7% even after the cruise line posted better-than-expected second-quarter results, raised its forecast for its 2024 earnings, and reinstated its dividend.

Q2 adjusted earnings of $3.21 a share from revenue of $4.1 billion, beat consensus of $2.76 on revenue of $4 billion.

“Exceptional demand for our vacation experiences has accelerated our performance by generating significant yield growth over the past several years,” CEO Jason Liberty said in an earnings release.

The company now expects 2024 adjusted EPS will be in a range of $11.35 to $11.45, compared with an earlier call for $10.70 to $10.90.  And it’s resuming paying a dividend of 40 cents per share. It suspended the dividend during the pandemic.

The stock fell because, aside from having had a spectacular run in the past year, there are concerns over increasing costs, expected to be up 6%, ex-fuel, over the coming year.

--There are many towns in Europe that are tired of being tourist destinations, and anti-tourism activists and their protests have been spreading.  Thousands of activists protested in Spain’s Palma de Mallorca (the island in the Mediterranean) last Sunday in the latest demonstration against a key industry for the Iberian nation.  Anti-tourism demonstrations have been frequent in Barcelona, Malaga, and the Canary Islands, the message being visitors drive up housing costs and lead to residents being unable to afford to live in city centers.

--This past Memorial Day weekend was the slowest at the box office, in terms of attendance, in 43 years, but Hollywood has been bouncing back and this past weekend, “Twisters,” a loose follow-up to “Twister,” a 1996 action-adventure about storm chasers in Oklahoma, did about $80 million in the United States and Canada, much better than expected.  [There was a good review in the Wall Street Journal this week as well.]

“Inside Out 2” is up to $1.4 billion worldwide, while “Despicable Me 4” has taken in more than $500 million in three weekends.  “Quiet Place” and “Bad Boys” also did well.

This weekend, Marvel’s “Deadpool” is forecast to generate at least $200 million in global ticket sales.

But one film has bombed (aside from Kevin Costner’s latest Western effort), that being “Fly Me to the Moon,” just $16 million in two weekends domestically.  I actually liked the story line on this one.

Foreign Affairs, Part II

China: In a highly worrisome development, Chinese and Russian bombers were detected and intercepted off the coast of Alaska for the first time on Wednesday, according to joint Canadian and U.S. defense agency Norad.

North American Aerospace Defense Command said it “detected, tracked, and intercepted” two Russia Tu-95 and two Chinese H-6 warplanes operating in the Alaska Air Defense Identification Zone (ADIZ).

The incident marked the first time the two countries’ militaries had entered the area at the same time, a U.S. defense official told Air & Space Forces Magazine.

It was also the first time a Chinese H-6 had flown into the ADIZ – an international airspace that acts as a buffer zone with sovereign territory, where the ready identification of all aircraft is required in the interest of national security.

According to the Norad statement, U.S. F-16 and F-35 fighter jets and Canadian CF-18s intercepted the Chinese and Russian bombers which “remained in international airspace and did not enter American or Canadian sovereign airspace.”

Norad said they didn’t see the activity as a threat but that it “will continue to monitor competitor activity near North America and meet presence with presence.”

On a different topic, Beijing released a policy document on Sunday, following the closed-door meeting of the Communist Party’s Central Committee, known as the third plenum, which was held July 15-18.  The 60-point document’s publication outlines the government’s known ambitions, as the country faces a prolonged property crisis, surging debt and weak consumer and business sentiment.  Trade tensions are also flaring.

The focus is on boosting consumer demand and away from a debt-fueled, investment-led model that funnels resources into manufacturing and infrastructure at the expense of households.

“The overall industrial system is large but not strong, comprehensive but not refined, key and core technologies are controlled by others,” state media quoted President Xi Jinping as telling the plenum.

Other policy targets included boosting affordable housing, improving job opportunities for young people and the standard of living for the elderly.

But no details on how Chinese leaders intend to reach these goals. For example, Beijing never explains how to get consumers to spend when most of the resources flow to producers and infrastructure, or how it plans to stimulate growth, while curbing debt.

But the third plenum also shows China is “not in the mood” to restrain its nuclear weapons capability as it learns from Russia’s deterrence strategy in Ukraine, observers of the meeting said.

As reported by the South China Morning Post, there were concerns about the risks of a nuclear arms race with the United States as Beijing sought “respect” for its core interests, especially Taiwan.

The plenum document from the Central Committee pledged to “speed up the development of strategic deterrence forces,” an expression generally taken to refer to nuclear prowess.

Speaking of Taiwan, the Taipei government ran several days of civilian and military drills mimicking a reaction to a Chinese invasion this week. Air-raid sirens signaled exercises lasting half an hour each across the main island and on its outlying archipelagoes.  Civilians received text messages telling them to seek shelter. 

The exercises were interrupted for a spell by Typhoon Gaemi.

Gaemi killed three on the island and rescue officials in Taiwan were searching for a cargo ship with nine crew members that sunk of its southern coast.

At least 22 were killed in the Philippines by Gaemi, where a tanker carrying close to 1.5 million liters (about 400,000 gallons) of industrial fuel has capsized*.  Sixteen crew members were rescued, one was missing.

*In an update Friday, the Philippine Coast Guard is starting to clean up an oil spill to prevent it from reaching the capital, Manila.  There are fears this could be the worst spill in the country’s history if it is not contained.  It is also in an area popular with fishermen and a significant spill could be devastating to both the fishing industry and marine life.

The spill could reach Manila Bay and the Port of Manila, the biggest port in the Philippines and the center of trade and economic activity.  One expert at Mindanao State University told the BBC, “This could possibly paralyze the capital and the neighboring areas.”

Gaemi then headed to China and Fujian province, where over 300,000 were evacuated, according to Xinhua news agency.

North Korea: Hackers are attempting to steal nuclear and military secrets from governments and private companies around the world, the UK, U.S. and South Korea have warned in a joint statement Thursday.

They say the group – known by the names Andariel and Onyx Sleet – is targeting defense, aerospace, nuclear and engineering entities to obtain classified information, with the aim of advancing Pyongyang’s military and nuclear programs and ambitions.

The group has been seeking information in a wide range of areas – from uranium processing to tanks, submarines and torpedoes – and has targeted the UK, U.S., South Korea, Japan, India and elsewhere.

U.S. air force bases, NASA and defense companies are said to have been targeted.

The U.S. says the group funds its espionage activity through ransomware operations against U.S. healthcare entities.

Paul Chichester, director of operations for the UK’s National Cyber Security Centre (NCSC), an arm of GCHQ, said: “The global cyber espionage operation that we have exposed today shows the lengths that DPRK state-sponsored actors are willing to go to pursue their military and nuclear programs.

“It should remind critical infrastructure operators of the importance of protecting the sensitive information and intellectual property they hold on their systems to prevent theft and misuse.” [The Economist]

Bangladesh: The Supreme Court on Sunday scrapped most quotas on government jobs after nationwide action led by students spiraled into clashes that killed at least 150 people, though some organizers said the protests would continue.

Dismissing a lower court order, the Supreme Court directed that 93% of government jobs should be open to candidates on merit, the nation’s attorney general said.  Prime Minister Sheikh Hasina’s government had scrapped the quota system in 2018, under which 56% of jobs were reserved for groups such as freedom fighters’ families (leftover from the War of Independence from Pakistan), women and people from underdeveloped districts.

But the lower court reinstated it last month, sparking the protests and an ensuing clampdown that included an internet shutdown and a curfew with the army on the streets.

Experts attribute the unrest to stagnant job growth in the private sector and high youth unemployment, making public sector jobs with regular wage hikes very attractive among the group who make up nearly a fifth of the population.

The U.S. State Department issued a travel warning to avoid the country, in case you were planning on finishing the summer with a dream vacation here.

Random Musings

--Presidential approval ratings....

Gallup: New numbers....36% approve of President Biden’s job performance*, 58% disapprove; 31% of independents approve (July 1-21).

*Lowest of his presidency.

Rasmussen: 46% approve, 53% disapprove (July 26)...continually surprised by this outlier, though this is after Biden’s announcement, whereas the Gallup survey is from before.

The aforementioned Quinnipiac University national poll had Biden with an approval rating of 39%, 57% disapproving, little changed from a June 26 survey that gave Biden a negative 38-58 approval rating.

Sixty-two percent of voters think Biden dropping out was the right thing to do, while 27% think it is the wrong thing to do. Democrats by 54-33 percent think Biden dropping out is the right thing to do.

Trump has a 46% favorable rating, 49% unfavorable, the highest favorability rating for Trump since the Quinnipiac poll first asked this question of registered voters in May 2015.

Harris only has a 37% favorable rating.  J.D. Vance 29%, though 34% haven’t heard enough about him.

[I saw a piece on NJ.com / Star-Ledger, that voter registrations surged across the country in the 48-hour period after Biden’s announcement and endorsement of Harris...38,500, a daily increase of 700%, according to Vote.org.  Americans between the ages of 18 and 34 made up 83% of all new registrations.]

--Late Saturday night, the Biden campaign said it raised $127 million in June, while the Trump campaign said it had raised $111.8 million. The Trump campaign’s reports showed that it has about $285 million in the bank, while the Biden campaign had about $240 million in cash on hand across its allied committees, including the Democratic National Committee, ditto for the Trump campaign and the RNC.

But as noted above, of the overall $240 million on the Democrat side, Kamala Harris can access $96 million.

Separately, it was previously stated that Elon Musk had pledged to give $45 million a month to a Trump super PAC.  But Tuesday, while confirming that he was “making some donations” to a committee supporting Trump, it was at a “much lower level” that has been reported.

--Following his speech a week ago Thursday accepting the Republican nomination for president, five days after the assassination attempt on his life, Donald Trump initially called for national unity, but by last Saturday, the former president was up to his old tricks.  In a rally in Grand Rapids, Mich., with his new running mate J.D. Vance, Trump spoke for an hour and 50 minutes (5:22 p.m. ET to 7:11 p.m. ET) and he returned to his use of insults and sometimes offensive language to attack his opponents, while repeating a string of false claims on various topics,  though I got a kick out of him citing my inflation example from last WIR in my criticism of President Biden.

There was a heavy police presence at the rally, with police on every street corner for several blocks, while Secret Service officers were positioned on the top balconies in the Van Andel Arena, giving them a view of the crowd inside.

Trump said, “I hope I never have to go through that again.”  He said his opponents call him “a threat to democracy,” but countered that he “took a bullet for democracy.”

Speaking less than 24 hours before President Biden withdrew from the race, Trump referenced the leadership “chaos” he saw within the Democratic Party.  “They have no idea who their candidate is, and neither do we,” Trump jibed, calling Biden a “feeble old guy.”

Trump hit his usual themes, attacking electric vehicles, China and trade and promising a massive effort on deportation.  He talked in his usual extreme rhetoric, especially when it came to immigration, where he spoke in dire terms of crimes committed by immigrants.

The former president pushed back on accusations that a second Trump presidency would be influenced by the extremist manifesto Project 2025 from the conservative Heritage Foundation and including scores of people close to Trump and his campaign.

The document, he said, had been produced by the “severe right – very, very conservative and the opposite of the radical left. I don’t know anything about it, and I don’t want to know anything about it.”

Trump said Chinese President Xi wrote him a note after the assassination attempt.

“”(Xi) wrote me a beautiful note the other day when he heard about what happened,” Trump told the Grand Rapids crowd, adding, “I got along very well with President Xi.”

Trump also said he would change the name of U.S. forts back to their original name.  “We won two world wars out of Ft. Bragg.”

Oh brother. “Person. Woman. Man. Camera. TV.”

--Secret Service Director Kimberly Cheatle appeared before the House Oversight Committee on Monday to explain how a would-be assassin was able to get so close to Donald Trump ten days earlier.

Editorial / Wall Street Journal

“Everyone with a video screen knows about the failure to protect Donald Trump from a would-be assassin in Butler, Pa.  But don’t look to Secret Service director Kimberly Cheatle for answers because she doesn’t have any.

“That was the bottom line from (the hearing) Monday.  Ms. Cheatle said the agency failed in protecting the former President – no kidding – but did little to explain the staggering operational mistakes. She couldn’t illuminate even basic facts about how a young shooter, apparently acting alone, was able to get an AR-15 style rifle within a few hundred feet of the former president.

“We know law enforcement noticed the alleged gunman, Thomas Matthew Crooks, before the rally began and designated him as suspicious.  Local police alerted the Secret Service because of the man’s behavior near the magnetometers.  Around 5:30 p.m. the shooter was spotted again looking through a rangefinder, a device shooters use to calculate distance to a target.

“Those moments should have been enough to transform Crooks from a ‘person of interest’ to an active threat. But that didn’t happen, and Ms. Cheatle deflected lawmakers’ questions with a bureaucratic defense.  ‘I think we’re conflating the difference between the term ‘threat’ and ‘suspicious,’’ she said.  ‘An individual with a backpack is not a threat....An individual with a range finder is not a threat.’

“She was wrong about that....

“In the minutes before he tried to kill Mr. Trump, the shooter was spotted by rally attendees who pointed and shouted to alert law enforcement. Why wasn’t the gunman taken out by snipers before he fired into the crowd.  Why was Mr. Trump even allowed on stage?

“Ms. Cheatle failed to answer those questions, telling lawmakers she needed to wait until the internal investigation is done in some 60 days.  Her non-answers managed the rare feat of uniting Democrats and Republicans in calls for her resignation....

“At the hearing, progressive Rep. Ro Khanna (D., Calif.) asked Ms. Cheatle if she knew what Secret Service director Stuart Knight did after the attempted assassination of Ronald Reagan.  ‘He remained on duty,’ Ms. Cheatle said.  Mr. Khanna replied, ‘He resigned.’”

Tuesday, the handwriting on the wall, Cheatle tendered her resignation.

House Speaker Mike Johnson told reporters that the resignation is “overdue.”

“Now we have to pick up the pieces,” Johnson said.  “We have to rebuild the American people’s faith and trust in the Secret Service as an agency.”

Ronald Rowe Jr., the Secret Service deputy director, was tapped to be acting director while the administration searches for a new leader. Rowe is a 24-year veteran of the agency.

--The Senate Ethics Committee told Senator Bob Menendez (D-N.J.), who was convicted of corruption last week, that it has taken the first step of a review that could end in his expulsion.

Menendez had remained defiant, but then Tuesday, he said he would resign Aug. 20, with Gov. Phil Murphy appointing a replacement to fill the remainder of Menendez’s term, which ends on January 3, 2025.

--A longtime senior leader of the Sinaloa cartel, Ismale Zambada Garcia, or “El Mayo,” and a son of famed drug lord Joaquin “El Chapo” Guzman were taken into custody Thursday by U.S. authorities in El Paso, Texas, according to senior Mexican and U.S. officials.  It’s a major blow to the Sinaloa federation, a global drug-trafficking syndicate considered the No. 1 supplier of fentanyl to the United States.

Whie details are sparse, Zambada was fooled into boarding a private plane to inspect property in Mexico near the U.S. border with the former drug lord’s son, also named Joaquin Guzman, only to have the plane land near El Paso, where FBI agents arrested both men. 

The two are among the U.S. government’s most wanted drug traffickers, and the State Department had offered $15 million for information leading to Zambada’s capture.

It’s a huge victory for U.S. law enforcement against the cartels.

--We note the passing of longtime Texas Democratic congresswoman Sheila Jackson Lee.  In three decades in Congress, she became one of the most prominent Black members and a champion of African American and women’s rights.  She was 74, having announced in June she had pancreatic cancer. She had been treated years earlier for breast cancer.

Rep. Jackson Lee actually grew up in the borough of Queens, New York. She received a bachelor’s degree from Yale University and a law degree from the University of Virginia, before moving to Texas with her husband, where he was from.

She was first elected to Congress in 1994, and to the same Houston-based congressional seat once held by the charismatic congresswoman Barbara Jordan.

I can’t say I ever agreed with Rep. Jackson Lee, but she did have passion, though her critics said she was more about drawing attention to herself.  And her “reputation was complicated by accounts of mistreatment of staff members, whom she reportedly required to chauffeur her around Washington, dispatched on personal errands, phoned after midnight and scolded harshly for what she regarded as their shortcomings.” [Washington Post]

--At least 12 people died and more than 30 were missing after a highway bridge partially collapsed during torrential rains in northwest China, Shaanxi province’s Shangluo city. It was the second major bridge to collapse in the country in recent weeks.  President Xi called for an “all out” effort to find those missing.

The dead were found in cars pulled from the river below.  The missing were in an estimated 20 other cars thought to have plunged into the river.

Earlier, at least five more people drowned in flooding in another part of the province. Tens of thousands have been evacuated from massive floods in China.

At least 30 people were missing following a downpour in Ya’an city in the southwestern province of Sichuan.

Meanwhile, in Fujian, the province on the coast, across from Taiwan, that I am most familiar with, temperatures topped 40 C last weekend (104 F), CCTV said. And then came Typhoon Gaemi.

--At least 229 people were killed in mudslides in a remote part of Ethiopia that has been hit with heavy rain, according to local authorities.

Talk about heartbreaking, a local administrator, Dagmawi Ayele, said, “There are children who are hugging corpses, having lost their entire family, including mother, father, brother and sister, due to the accident.”

Think about this...next time you’re bemoaning not being able to get a table at the popular dining establishment in town.

--Health authorities in India’s Kerala state (I’ve been there...Cochin, “Kochi”...), have issued an alert after a 14-year-old boy died from the Nipah virus.  According to the state’s health minister, an additional 60 people have been identified as being in the high-risk category of having the disease.

People in the area of the boy’s town of Pandikkad were told to take precautions such as wearing masks and refrain from visiting people in hospital.

The Nipah virus infection is a “zoonotic illness” transmitted from animals like pigs and fruit bats to humans, according to the World Health Organization.

It can also be transmitted through contaminated food and through contact with an infected person.

You don’t want to see the word ‘zoonotic’ at any time.

--Monday was recorded as the hottest day ever, beating a record set the day before, as countries across the globe from Japan to Bolivia to the United States continue to feel the heat, according to the European climate change service, Copernicus. 

Provisional satellite data published by Copernicus early on Wednesday showed that Monday broke the previous day’s record by 0.06 degrees Celsius (0.1 F).

Copernicus’ preliminary data shows the global average temperature Monday was 17.15 degrees Celsius, or 62.87 degrees Fahrenheit.

While 2024 has been extremely warm, what kicked this week into new territory was a warmer-than-usual Antarctic winter.

--Singapore was the safest city to visit in the world in the latest Forbes Advisor ranking.   Having been there, well deserved. Tokyo was second safest, followed by Toronto.

The riskiest city for travelers to visit is Caracas, Venezuela.  The city offers the highest health security risk due to the low quality of healthcare available, the highest crime risk, the second-highest infrastructure security risk and the second highest digital security risk.  The U.S. State Department says: “Do Not Travel due to crime, civil unrest, kidnapping, and the arbitrary enforcement of local laws.”

Karachi, Pakistan is second riskiest, with Yangon, Myanmar third.

--Finally, our hearts goe out to the residents of Jasper, Alberta, a beautiful Canadian town inside one of the country’s most-visited national parks. As of yesterday, half of it had been destroyed by a pair of wildfires that roared in from two sides.  The mayor called the disasters “almost beyond comprehension.”

I went here as a kid, part of a long family trip...just a gorgeous area. 

And then there’s California’s largest fire in years, the “Park Fire” in the northern part of the state (north of Sacramento), that we learned Thursday was started by a 42-year-old man who authorities believe rolled a burning car into a ravine.  He’s being held without bail.  I’m biting my tongue on what to do with people like this (assuming he’s found guilty).

---

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 $2383
Oil $76.75

Bitcoin: $67,974 [4:00 PM ET, Friday]

Regular Gas: $3.51; Diesel: $3.82 [$3.68 - $3.92 yr. ago]

Returns for the week 7/22-7/26

Dow Jones  +0.7%  [40589]
S&P 500  -0.8%  [5459]
S&P MidCap  +2.0%
Russell 2000  +3.5%
Nasdaq  -2.1%  [17357]

Returns for the period 1/1/24-7/26/24

Dow Jones  +7.7%
S&P 500  +14.4%
S&P MidCap  +10.5%
Russell 2000  +11.5%
Nasdaq   +15.6%

Bulls 64.2
Bears 14.9...certainly these numbers for weeks have called for a correction.  [For new readers, it’s a contrarian indicator.]

Hang in there.

Brian Trumbore

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