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For the week 9/13-9/17
[Posted 9:30 PM ET, Friday]
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Special thanks this week to Tim L. and Jeff B.
Just another awful week for the Biden presidency. First, last month he jumped the gun on vaccine booster shots in announcing a date certain for their availability, Sept. 20, only to be shot down today by an FDA panel.
The border crisis is beyond being out of control and will be a huge issue for Republicans come the midterm elections.
Biden’s withdrawal from Afghanistan was not only a debacle of epic proportions, but today defense officials had to apologize for a story everyone had already smelled out…that a drone strike on a purported terrorist with a car bomb was really a hit on a longtime aide worker that took out nine family members, including seven children, whose body parts were strewn all over the street.
And we suddenly have a diplomatic crisis with our oldest ally, France.
All of which I get into great detail below.
Meanwhile, tomorrow we have the “Justice for J6” rally at the Capitol in support of those currently detained for participating in the insurrection.
Donald Trump has been furiously trying to shape the narrative. In one interview, he said, “On Saturday, that’s a setup. If people don’t show up they’ll say, ‘Oh, it’s a lack of spirit.’ And if people do show up they’ll be harassed.”
But then he projected his false claim – the very one that drove the insurrectionists to the Capitol on Jan. 6 – that the election was stolen from him.
“Our hearts and minds are with the people being persecuted so unfairly relating to the January 6th protest concerning the Rigged Presidential Election,” Trump said in a statement on Thursday. “In addition to everything else, it has proven conclusively that we are a two-tiered system of justice. In the end, however, JUSTICE WILL PREVAIL!”
The chief organizer for the rally, a former Trump campaign staffer, has said it will be a peaceful protest.
But let’s start out with something that was actually a positive, as much as the French took umbrage to it….
--The United States, Britain and Australia announced a “historic” security alliance to strengthen military capabilities in the Pacific, which will share advanced defense technologies and give Australian forces nuclear submarine technology, further extending Washington’s drive for military cooperation that has angered China.
The three countries, in a security partnership called “AUKUS,” will cooperate on integrating artificial intelligence, quantum computing and underseas capabilities into their military operations.
There was bipartisan support in the Senate for this move. It’s a big deal. I agree with it.
But the deal scraps the $40 billion (other reports have $66 billion) French-designed submarine deal.
France accused Biden on Thursday of stabbing it in the back and acting like his predecessor after Paris was pushed aside from the historic defense export contract.
“This brutal, unilateral and unpredictable decision reminds me a lot of what Mr. Trump used to do,” Foreign Minister Jean-Yves Le Drian told franceinfo radio. “I am angry and bitter. This isn’t done between allies.”
Yes, a dramatic twist in a contest that has seen shipbuilding powers battle for years over what many observers called the world’s largest single arms export deal.
In 2016, Australia had selected French shipbuilder Naval Group to build a new submarine fleet to replace its more than two-decades-old Collins submarines.
Just two weeks ago, the Australian defense and foreign ministers had reconfirmed the deal to France, and French President Emmanuel Macron lauded decades of future cooperation when hosting Australian Prime Minister Morrison in June.
“It’s a stab in the back. We created a relationship of trust with Australia and that trust has been broken,” Le Drian said.
Diplomats say there have been concerns in recent months that Biden is not being forthright with his European allies. France’s ties with British Prime Minister Boris Johnson have also soured with Brexit. And now Washington’s actions in Australia are likely to further strain transatlantic ties.
Just months ago, France lost another big contract after Switzerland spurned Dassault’s Rafale to buy U.S.-made Lockheed Martin F-35 fighters.
But on the submarine deal, France had gone all-out to win it over Japan, with Germany also in the race.
Some, however, believe France’s harsh language against Australia will hurt its position there, and Australia wasn’t happy with the percentage of ‘local content’ in the original French project.
Nonetheless, tonight, French President Emmanuel Macron ordered the recall of France’s ambassadors to the United States and Australia in response to the secretly-negotiated deal.
As for China, needless to say they are furious, even as the People’s Liberation Army steps up aerial drills near Taiwan and in the South China Sea, where China’s territorial claims have been contested by Washington and other countries in the region.
Editorial / Global Times (a Communist Party mouthpiece)
“The U.S. is hysterically polarizing its alliance system. Using an external force to push “middle powers” like Australia to the defense level of owning nuclear-powered submarines is a strong showcase to middle powers around the world. Although Washington claims that Australia’s nuclear-powered submarines will not carry nuclear weapons, such restrictions are not reliable. From the very beginning, nuclear-powered submarines are designed to be strategic striking tools.
“If the U.S. and the UK help Australia acquire the cruising capability of nuclear-powered submarines, this will effectively legalize the acquisition of nuclear-powered submarines by all countries. This also means the legalization of international export of related technology. As Washington stirs up great power competition, more regions will be involved in rising tensions. Possessing nuclear-powered submarines will become a universal temptation. The world needs to prepare for the arrival of a ‘nuclear-powered submarine fever.’
“Washington is losing its mind by trying to rally its allies against China, creating antagonism and destruction beyond its control. It has been immersed in attacking China without seriously assessing the possibility of backfiring. The war in Afghanistan, which traverses one of the most stable periods in the world as a whole, has embarrassed the U.S. If the world really becomes chaotic, there will be many more setbacks ahead for the U.S. to fall down further.
“There used to be no grudges between China and Australia. Due to the geographical distance, there are no geopolitical conflicts between the two countries as well. However, by pursuing a one-sided policy tilting toward the U.S. in the China-U.S. strategic game, Australia has turned itself into an adversary of China. It is now escalating its confrontation with China by conducting nuclear-powered submarine patrols that are clearly targeted at China.
“However, no matter how Australia arms itself, it is still a running dog of the U.S. We advise Canberra not to think that it has the capability to intimidate China if it acquires nuclear-powered submarines and offensive missiles. If Australia dares to provoke China more blatantly because of that, or even find fault militarily, China will certainly punish it with no mercy.
“As Australia participates in the U.S.-led strategic siege of China, it should remain self-aware and take a position that matches its strength. If it acts with bravado to show its allegiance to the U.S. and takes the most prominent position in the U.S.’ anti-China strategy, especially by being militarily assertive, then Canberra will most likely become a target of Beijing’s countermeasures so as to send a warning to others. Thus, Australian troops are also most likely to be the first batch of Western soldiers to waste their lives in the South China Sea….
“The U.S. and its allies are messing up the world. They are even touching the bottom line of the non-proliferation of nuclear weapons. Here comes an interesting question: Who is more capable of withstanding the global chaos? China or them?”
The above is rather rich.
Meanwhile, the European Union set out its own formal strategy on Thursday to boost its presence in the Indo-Pacific and counter China’s rising power, pledging to seek a trade deal with Taiwan and to deploy more ships to keep open sea routes.
The EU’s foreign policy chief Josep Borrell insisted the strategy was also open to China, particularly in areas such as climate change, but diplomats told Reuters that deeper ties with India, Japan, Australia and Taiwan were aimed at limiting Beijing’s power.
Borrell also said Wednesday’s agreement between the United States, Australia and Britain, in which the EU was not consulted, showed the need for a more assertive foreign policy.
Editorial / Wall Street Journal
“Credit to (Australian Prime Minister Scott) Morrison for not yielding to China’s trade intimidation. One lesson for Beijing is that such tactics in the Asia-Pacific advertise to other countries the treatment in store for them as China’s economic and military reach extends across the globe. Beijing’s strategy is to divide and conquer, and the AUKUS initiative shows Western solidarity.
“Focusing on submarines as the first initiative also sends the right message. China’s recent naval buildup has been extraordinary, and Beijing’s stated ambition is to control Taiwan and dominate disputed waters in the Western Pacific.
“The eight or more nuclear-powered submarines the U.S. and UK will help Australia build are difficult for a hostile navy to detect as they travel long distances for reconnaissance or sea denial. They can remain submerged at high speeds for longer periods than diesel-powered boats, which need to surface periodically to burn fuel. The technology-sharing creates some risk, but the benefits of broadening the defense-industrial base across close allies are significant….
“The message to Europe from AUKUS is that the U.S. is serious about resisting Chinese hegemony in the Asia-Pacific. Europe can’t play China’s game of divide-and-conquer on economic and strategic issues without consequences for its U.S. relationship.”
--The Biden administration continues to ignore the severe crisis on the U.S.-Mexico border. A stark example of this came this week where, as of Thursday, some 10,500 migrants had converged under the Del Rio, Texas, International Bridge (reports have it over 12,000 tonight). Food and water are scarce, temperatures are in the 90s, and it’s a major humanitarian crisis, with the U.S. Customs and Border Patrol totally overwhelmed (though in Del Rio doing the best they can).
The migrants are mostly Haitians, with Cubans, Venezuelans and Nicaraguans also present. The squalid conditions are reflective of the challenges facing the administration as border arrests hover around 20-year highs.
Actually, the Del Rio situation is so bad, many of the migrants are marching back south just to get food and water. They are given numbered tickets for review by Border Patrol, and then transported to facilities, but the migrants will be stuck there for days, and weeks.
--As for the president’s economic agenda, for all the talk of progress in the House on a massive $3.5 trillion spending plan, including an initial $2.1 trillion in tax increases to help pay for the biggest expansion of social welfare programs in decades, we have a long ways to go.
Regardless of what the House comes up with, you still have the Senate to deal with and the package is going to be delayed for weeks, if not months in Congress. Just a fact.
“Some folks have issues on climate change, some people have issues on tax and some people have issues on health care,” said Senator Chris Murphy (D-Ct.).
Democratic Sen. Ben Cardin of Maryland said that the Senate would likely take whatever passes the House, change it and send it back to the House, and that’s not happening for a while.
I will just say, for the record, that the initial Democratic House proposal has a top tax rate of 39.6% on individuals earning more than $400,000 – or $450,000 for couples – in addition to a 3% surtax on wealthier Americans with adjusted income beyond $5 million a year. For big business, the proposal would lift the corporate tax rate from 21% to 26.5% on companies’ annual income over $5 million, less than the president’s initial 28% suggestion. The House plan would also increase the top capital gains rate to 25% from 20%, a far smaller increase than the near doubling Biden first called for.
Again, this is an opening bid. Yes, House Speaker Nancy Pelosi had agreed to hold a Sept. 27 vote on a separate bipartisan $1 trillion infrastructure bill, and we’ll get a better idea on that next week.
But I haven’t even brought up West Virginia Democratic Sen. Joe Manchin, who once again was all over the Sunday talk show circuit, saying he could support a smaller $1.5 trillion bill, while continuing to urge a pause on the $3.5 trillion.
--Hugh Hewitt / Washington Post
“I believe my eyes. The president is, in my opinion, infirm. He is old. Soon to be 79, Biden shows his years every time he appears in public.
“Biden is not incapacitated. He is not sidelined. He is simply lacking the ‘energy in the Executive’ that Alexander Hamilton identified in the Federalist Papers as the key ingredient in the president’s competence and the federal government’s success. This isn’t an issue of chronological age, but simply of energy. Biden lacks it. The press fails the people when it refuses, absolutely and repeatedly refuses, to discuss what this means for the country given the urgent issue of hostages, and the menace of emboldened enemies who must see in the president’s infirmity a vast field of opportunities.
“On Tuesday, Chris Wallace spoke to me with the sort of candor we need, but his target was (Secretary of State Antony) Blinken. It is worth quoting Wallace at length.
“ ‘I’m very unimpressed by the State operation,’ Wallace began. ‘I’m very unimpressed by Antony Blinken,’ he continued. ‘You know, Blinken had a news conference, I guess it was, well, it was last Friday. It was when he refused to say how many people, Americans and Afghans, had gotten out. And you know, he was speaking with all the passion of somebody reading the telephone book.’
“Wallace grew animated. ‘And you know, it’s not a matter of politics. It’s a matter of presence and gravitas. When Mike Pompeo or Hillary Clinton or, you know, you can go on and on, Colin Powell, spoke for the United States of America, there was, you know, there was a ‘Don’t mess with us, guys, we’re the United States of America.’ Blinken, I think, is a great staff man, but I’m not, I’m very doubtful as to whether he should be…the voice of America’s presence in the world.’
“That is a blunt and devastating assessment of American leadership, and if a broadcaster says it, imagine what the Taliban, Iran’s Ayatollah Ali Khamenei, Russia’s Vladimir Putin and China’s Xi Jinping must think. We are in deep, deep trouble.
“That trouble is compounded by legitimate questions, all unanswered, about the president’s energy and capacity. Merriam-Webster defines ‘infirm’ this way: ‘of poor or deteriorated vitality.’ The first step to repairing our crisis is a strong secretary of state, one whom the world pauses to watch when he or she speaks. There are many candidates. Time to make a change, Mr. President. American lives depend upon it. As does your credibility with the people.”
It was in 2014 that the late Sen. John McCain warned that Blinken, then up for deputy secretary of state in the Obama administration, was “dangerous to America.”
“I rise to discuss my opposition to the pending vote concerning Mr. Antony ‘Tony’ Blinken, who is not only unqualified but, in fact, in my view, one of the worst selections of a very bad lot that this president has chosen,” McCain excoriated Blinken, who was eventually confirmed to the post in 2015.
McCain warned that Blinken was a danger to the nation and its service members.
“In this case, this individual has actually been dangerous to America and to the young men and women who are fighting and serving it,” McCain said from the Senate floor.
Sadly, McCain was rather prescient.
--Pfizer says data from the U.S. and Israel suggests that the efficacy of the Covid-19 vaccine it manufactures with BioNTech wanes over time, and that a booster dose is safe and effective at warding off the virus and new variants.
The company detailed its case in a presentation to be given outside advisers to the U.S. Food and Drug Administration, which met today, with the panel expected to make recommendations for whether more Americans should receive those shots.
Moderna has reported similar news about its own vaccine, but is a bit behind Pfizer in terms of bringing it to the FDA panel. Moderna said its data shows that those who received a dose of its vaccine 13 months ago have higher rates of infections than those that got inoculated at the beginning of the year. Further evidence of a need for boosters.
So then this afternoon the FDA panel voted 16-2 against offering the booster broadly, to anyone 16 and up as the Biden administration wanted, and instead, voted unanimously to recommend that the agency authorize a booster shot of the Pfizer-BioNTech vaccine for people 65 years and older or who are at risk for serious disease.
The FDA will take the panel’s recommendations into consideration in making a formal decision on the boosters, but there is no reason to believe it will go against it.
That said, this is a big blow for the administration in gaining a broader approval and yet another unforced error. The panel’s decision and the variety of views will only sow further confusion as well (though not with me…it’s obvious we need booster shots at some point).
It was almost a month ago that President Biden jumped the gun and announced a plan to make coronavirus booster shots available to most adults in the U.S. eight months after they received their second dose. But days before the plan is to roll out, you have this mess.
The FDA, for example, said a look at broader evidence on third doses of the Pfizer vaccine raised concerns. Some of its top vaccine scientists, in an article for The Lancet, argued there was no credible evidence that the vaccines’ potency against severe disease declined substantially over time. But the two scientists responsible for the report already announced they were leaving the agency this fall.
Covid-19 death tolls, as of tonight….
Malaysia…22,743…new entrant…welcome aboard!
U.S. daily death tolls…Sun. 671; Mon. 843; Tues. 1,937; Wed. 2,282; Thurs. 1,871; Fri. 1,920.
--After 19 months, the pandemic reached a cruel milestone in the U.S.: Covid-19 has killed approximately 1 in 500 Americans. One in 35 Americans older than 85 died of Covid.
--British Prime Minister Boris Johnson is hoping to get through winter without any more coronavirus lockdowns, but doctors and scientists warn that relying largely on vaccines without other measures could put unsustainable pressure on hospitals.
The UK has one of the highest Covid death tolls in the world for its population size, but also one of the world’s highest vaccination rates. Leaning on that latter success, the plan Johnson announced on Tuesday involves booster vaccinations, shots for children and continuing a much criticized test, trace and isolate system to avoid lockdowns during the tough winter months.
But many doctors feel overburdened as it is and want mandatory mask wearing and a requirement to be vaccinated to attend mass events to prevent the health system from being overwhelmed all over again.
It’s an issue facing most countries this winter.
--Russian President Vladimir Putin is self-isolating because of an outbreak among dozens of his staff. The Kremlin announced earlier this week that he would self-isolate after someone in his inner circle was infected although Putin had tested negative for the virus and he’s fully vaccinated with Russia’s Sputnik V. But Putin said Thursday the infections were extensive, “several tens of people.”
--China has been dealing with an outbreak of Delta variant cases in Fujian province, where I have traveled three times (and where the bulk of China’s missiles targeting Taiwan are). The top official there warned of a “big, tough and difficult battle ahead” with very young children among the sick.
--In Africa, just 3.5% have been vaccinated, but it is finally making headway in securing more vaccines.
David Nabarro, a special envoy to the World Health Organization, told Bloomberg this week, “Variants that can beat the protection offered by vaccines are bound to emerge all over the world in the coming months and years. This is an ongoing battle, and we need to work together.”
The envoy is calling for prioritizing global needs over national agendas. Rich countries could use up all the manufacturing capacity for their booster programs, leaving minimal supplies for the rest of the world, he said.
Well, that’s true. At some point a new, dangerous variant will emerge from Africa.
--Brazil, a major buyer of China’s CoronaVac shot and a poster child for Beijing’s efforts at vaccine diplomacy, is making a speedy retreat from the Covid-19 vaccine as concerns grow over its efficacy against the Delta variant and other vaccines become more readily available.
Brazil’s government has halted negotiations over additional doses of Sinovac’s vaccine, as reported by the Wall Street Journal. Several other Latin American nations and southeastern Asian countries are reducing their reliance on China’s vaccines as well.
Brazil’s health minister said during a television interview last week that the government no longer recommends using CoronaVac as a booster dose, recommending Pfizer instead.
Wall Street and the Economy
It’s all about the Federal Reserve’s Open Market Committee meeting next week, when it’s expected the Fed will announce, or telegraph, that it is going to start reducing, or tapering, its monthly bond-buying program in November. The Fed’s goal appears to be to reduce the current $120 billion monthly purchase of Treasurys (use ‘Treasuries’ if you like) and mortgage-backed securities so that it is wound down by mid-2022, at which point it would be prepared to begin raising interest rates if the economy is still doing well, which would mean the pandemic is under control.
This week the Fed received better news on the inflation front, even if but for a month, as August consumer prices rose a less than expected 0.3%, and just 0.1% ex-food and energy. For the last 21 months, the CPI rose 5.3% on headline, vs. 5.4% the prior month, and 4.0% on core, vs. July’s 4.3%. So for those of us in the ‘transitory’ crowd, a ray of hope, and good news for many of the Fed’s board members, including the chairman, Jerome Powell.
In other economic news, August industrial production was up 0.4%, while retail sales for the month rose a totally unexpected 0.7%, when -0.7% was the consensus. So a good example of the resiliency of the American consumer in the face of a surge in the Delta variant in many parts of the country.
But at the same time, July was revised down to -1.8% from -1.1%, so put the two together for a more accurate picture.
Weekly jobless claims rose a bit from a pandemic-low of a revised 312,000 to 332,000.
Add it all up and the Atlanta Fed’s GDPNow barometer for the third quarter is at 3.6%.
Separately, the federal budget deficit for August came in less than expected, $170.6 billion, down 14.7% from August 2020 when the deficit hit $200bn. The difference resulted from the winding down of a number of relief programs introduced since March 2020.
For the first 11 months of the fiscal year, government revenues totaled $3.39 trillion, up a healthy 17.7% from last year, fueled by the economic rebound from the Covid-induced recession.
Government spending was up a slower 4% to $6.21 trillion. Ergo, a deficit of $2.82 trillion, on the way to $3 trillion.
The August deficit report is not expected to materially alter the forecasts of when Treasury Secretary Janet Yellen will run out of maneuvering room to keep the government from defaulting on its obligations for the first time in history.
In a letter to congressional leaders last week, Yellen said she expects to exhaust next month the available “extraordinary measures” used to prevent the U.S. from hitting the government’s borrowing limit.
The need to deal with the debt limit is tied up in three other major pending decisions: the need to pass a stop-gap funding bill once the new budget year starts Oct. 1, and action on two massive infrastructure bills making their way through Congress.
Along with next week’s Fed meeting, this is the story the next couple of weeks.
On the subject of Fed Chair Powell’s renomination to a second four-year term, President Biden needs to decide soon on whether to do so, and he’s being pulled by progressive Democrats and activists not to.
Editorial / Washington Post
“Mr. Biden should ignore the opponents. Failing to renominate Mr. Powell would repeat one of the mistakes President Donald Trump committed when, in 2018, he refused to tap the Barack Obama-appointed Janel L. Yellen to a second term. Though he installed Mr. Powell, who has done an excellent job, Mr. Trump – who viewed the Fed as a partisan plaything - broke the stability and continuity of Fed leadership across presidential administrations, an important norm.
“Mr. Biden should instead emulate Mr. Obama, who in 2009 renominated George W. Bush-appointed Ben Bernanke for his second term atop the Fed. Only after Mr. Bernanke stepped aside did Mr. Obama tap Ms. Yellen. As other presidents before him, Mr. Obama sent the message that the central bank should remain insulated from politics and that competence in advancing the Fed’s core missions would be the primary qualification to lead the institution.
“Doing so again should not be a hard call….
“Some on the left complain that Mr. Powell has not used the Fed’s regulatory powers as aggressively as they would like, particularly on climate change. They argue that the central bank should incorporate climate considerations into the stress testing they apply to banks and make lending to fossil fuel companies more difficult. They favor replacing Mr. Powell with someone more likely to agree with them.
“This would be bad for the Fed and bad for the climate. As the Atlantic’s Robinson Meyer argues, fighting climate change would be much easier in a growing economy in which people feel as though the energy transition is not coming at the cost of their jobs. It will also require potentially vast amounts of government spending, which Mr. Powell’s interest-rate policies would help enable. The best thing the Fed can do to help the planet is focus on its actual job: create the conditions for national economic prosperity so Congress has the fiscal and political capacity to enact policies that tackle major issues such as global warming.”
Lastly, the holiday shopping season is already lining up to be incredibly chaotic, as retailers compete for goods in not just a strong sign of confidence in consumer demand, despite the Delta variant, but also as the supply-chain disruptions add major uncertainty to restocking efforts.
Thus the likes of Walmart, Target, Best Buy, you name it…are attempting to amass inventory, but they are dealing with the Covid-related bottlenecks in Asia and global shipping issues, including soaring costs.
Might be some good buys in January and February if some of these retail chains overorder.
Europe and Asia
Eurostat released reports on inflation and industrial production for the eurozone this week. On the latter, industrial production for July was up 1.5% over June, 7.7% year-over-year.
On inflation, the European Central Bank is no doubt concerned with today’s release that prices in August rose an annualized 3.0% vs. 1.9% just two months earlier in June, and -0.2% in August 2020.
But…ex-food and energy the rate was 1.6%.
Meanwhile, Goldman Sachs put out a research note that if Europe has a colder-than-average winter, it could send power prices spiking even higher than they are already rising, potentially prompting blackouts, which wouldn’t go over very well in Europe.
As European nations have turned away from thermal coal and nuclear power, they are victims to soaring natural gas prices and “still” weather conditions that have sapped wind power in the North Sea.
Brexit: Immigration is a big issue in Britain after its exit from the European Union. Brexit was meant to help the government ratchet back the flow of workers from abroad, especially low-skilled ones, but business groups are missing the workers. The Recruitment & Employment Confederation urged the UK to loosen immigration rules, noting headhunters are finding it difficult to find skilled staff. Hospitality and trucking companies (which are a reported 90,000 drivers short) are also calling for a change.
Government ministers, though, say business needs to invest in training the millions of workers who are unemployed or furloughed.
Meanwhile, post-Brexit border checks on food products are killing the food industry, with grocers struggling to keep shelves filled.
Back to the trucking industry, Britain had a chronic driver shortage for years, before Brexit, but now the problem is more acute, as European drivers go back home.
But the shortage is also across Europe as well, and the globe, say the experts.
Romania, a key source of truckers for Britain, it itself 20,000 drivers short – out of a population of 20 million. [By the way, you want to see traffic jams? Go to Romania. I was stuck there in the worst jam I’ve ever experienced in my life.]
Germany: A huge election is coming up Sept. 26, as longtime Chancellor Angela Merkel steps down. But in the race to replace her, Armin Laschet, Merkel’s handpicked successor and the conservative Christian Democratic Union Party’s candidate, has been sinking in the polls, pulling the party down with him. This summer’s extraordinary flooding exposed flaws in Laschet’s environmental policies and disaster management; Laschet running Germany’s most populous state, North Rhine-Westphalia, which was hit hard.
Turning to Asia…we had important data out of China for the month of August and it was highly disappointing. Retail sales rose just 2% year-over-year, vs. 8.5% the prior month and a consensus estimate of 7%. That’s a bad miss. Industrial production for the month was up 5.3% Y/Y vs. 6.4% in July. Fixed asset investment was up 8.9% for the first eight months of the year. The unemployment rate for August was 5.1%.
It’s all about the stringent Covid-related curbs, which have limited travel, for starters.
Japan reported July figures on industrial production, -1.5% over June, up 11.6% year-over-year.
Exports in July rose 26.2%, Y/Y, but this was less than expected. Exports to China increased 12.6% Y/Y, and were up 22.8% to the U.S.
Imports rose 44.7%. Reminder, these figures are off a very low 2020 base.
--Stocks finished down a second week, though only marginally, as the September malaise continues, the S&P off about 2% for the month. The weak numbers out of China didn’t help, and as the third quarter nears its end, you have concerns over the next earnings season. And the Delta variant is still surging in some parts of the country.
The Dow Jones lost 0.1% to close at 34584, while the S&P 500 was down 0.6% and Nasdaq 0.5%.
But the S&P is still up 18% for the year.
--U.S. Treasury Yields
6-mo. 0.04% 2-yr. 0.22% 10-yr. 1.36% 30-yr. 1.90%
All eyes on the Fed next week, as well as a slew of housing data.
--The impact of Hurricane Ida and other supply outages could take a sizable chunk out of global oil production this year, the International Energy Agency said Tuesday.
In its monthly market report, the IEA cut its supply rebound forecast for 2021 by 150,000 barrels a day and cut its demand forecast by 100,000 barrels a day, citing the impact of the Delta variant.
While refineries in the Gulf Coast region have been quick to restart production after the outages triggered by Hurricane Ida, offshore installations have been slow to restart, forcing sharp stock draws of both crude oil and refined products, the IEA said. Both the U.S. and China have recently tapped their strategic oil reserves to keep refiners operating.
“It is only by early 2022 that supply will be high enough to allow oil stocks to be replenished,” the Paris-based organization said. “In the meantime, strategic oil stocks from the U.S. and China may go some way to help plug the gap.”
The IEA echoed OPEC’s monthly report in cutting its demand forecast for the third quarter, but whereas OPEC significantly boosted its 2022 global demand outlook, the IEA didn’t increase its prior forecast. The IEA expects global demand of 99.4 million barrels next year, while OPEC expects 100.8mbd – a figure it said Monday would outstrip pre-pandemic levels.
As for the price of West Texas Intermediate this week, it rose over $2 a barrel on Wednesday after government data showed a larger-than-expected drawdown in U.S. inventories, and on expectations demand will rise as vaccination roll-outs widen, finishing the week at $71.96.
U.S. crude oil stockpiles fell last week to the lowest since September 2019, the U.S. Energy Information Administration said, extending their drawdown since Ida’s hit shut some of the refineries and offshore drilling production.
--Amazon said Tuesday it plans to hire 125,000 “local” jobs nationwide on top of 40,000 corporate and technology jobs.
Jobs in fulfillment and transportation offer an average starting wage of more than $18 per hour – and up to $22.50 per hour in some locations. The company also provides full-time employees with comprehensive benefits from day one, worth an additional $3.50 per hour.
There are also sign-on bonuses of up to $3,000 available in select locations.
In 2021, Amazon opened over 250 new fulfillment centers, sorting centers, regional air hubs, and delivery stations in the U.S. There are plans to open more than 100 buildings in September.
Competition for hourly workers is fierce. The other day, Kroger CEO Rodney McMullen told CNBC that the national grocery chain has 20,000 positions it is struggling to fill.
--FedEx plans to hire 90,000 new workers across the U.S. for the holiday season. The company’s target is higher than the 70,000 sought last year. The open positions include package handler, operations manager, forklift driver and couriers.
United Parcel Service previously announced it would hire more than 100,000 seasonal workers this year, unchanged from its target in 2020.
--Apple Inc. unveiled a new iPhone 13 at a product event Tuesday, looking to entice consumers with improvements to the camera and processor in lieu of major design changes.
The new models – four in the iPhone 13 line – look similar to the iPhone 12 but include a smaller display cutout at the top of the screen, faster chips and upgraded camera systems.
Apple is counting on the new phone and a slew of other upgraded devices – including bigger watches and speedier iPads – to fuel growth this holiday season. This year Apple also has the benefit of a 5G upgrade cycle helping spur consumers to get new phones. The iPhone, the company’s flagship product, accounts for about half of Apple’s revenue.
Apple says the A15 Bionic processor is 50% faster than chips in competing smartphones, and the iPhone 13 has new features to enhance artificial intelligence tasks. The cameras capture improved images in low light and at night and can better handle wide-angle shots, Apple said.
The iPhone 13 is priced at $799, with the iPhone 13 Pro at $999, while the 13 Pro Max costs $1,099 and up.
Meanwhile, on Monday, Apple issued emergency software updates for a critical vulnerability in its products after security researchers uncovered a flaw that allows highly invasive spyware from Israel’s NSO Group to infect anyone’s iPhone, iPad, Apple Watch or Mac computer without so much as a click.
Apple’s security team had worked around the clock to develop a fix since Tuesday, after researchers at Citizen Lab, a cybersecurity watchdog organization at the University of Toronto, discovered that a Saudi activist’s iPhone had been infected with an advanced form of spyware from NSO.
The spyware, called Pegasus, used a novel method to invisibly infect Apple devices without victims’ knowledge. Known as a “zero click remote exploit,” it is considered the holy grail of surveillance because it allows governments, mercenaries and criminals to secretly break into someone’s device without tipping the victim off.
Using the zero-click infection method, Pegasus can turn on a user’s camera and microphone, record messages, texts, emails, calls, even those sent via encrypted messaging and phone apps like Signal, and send them back to NSO’s clients at governments around the world.
Well, this is kind of scary.
--The Wall Street Journal reported on damning documents related to Facebook and how its algorithms, against the supposed wishes of CEO Mark Zuckerberg, weren’t encouraging people to interact more with friends and family, but instead was turning Facebook’s platform into an angrier place.
Company researchers discovered that publishers and political parties were reorienting their posts toward outrage and sensationalism. That tactic produced high levels of comments and reactions that translated into success on Facebook.
“Our approach has had unhealthy side effects on important slices of public content, such as politics and news,” wrote a team of data scientists, with one of them writing in a memo, “This is an increasing liability.”
They concluded that the new algorithm’s heavy weighting of reshared material in its News Feed made the angry voices louder. “Misinformation, toxicity, and violent content are inordinately prevalent among reshares,” researchers noted in internal memos.
“Many (political) parties, including those that have shifted to the negative, worry about the long term effects on democracy,” read one internal Facebook report, which didn’t name specific parties.
--Yes, it was a bad summer for many air travelers. Spirit Airlines canceled nearly 6% of its flights between Memorial Day and Labor Day.
Southwest had one-third of all flights arrive late this summer, compared with only 21% in the summer of 2019. American had more flights than any other carrier, and more canceled flights, too.
The average flight delay on JetBlue was 83 minutes.
But now with bookings dropping this fall, airlines have been able to rebuild staff and get ready for what is expected to be a busy holiday season.
--TSA checkpoint travel numbers vs. 2019…
9/16…75 percent of 2019 level
*No days with 2 million travelers since 9/6.
**8/1 remains top day post-pandemic with 2,238,462 travelers.
--Ford said Thursday it will invest an additional $250 million and add a total of 450 jobs at three Michigan plants to expand manufacturing capacity for its upcoming all-electric truck to 80,000 vehicles per year.
“Ford’s pre-production F-150 Lightning trucks are leaving the factory for real-world testing, with the truck available to customers next spring,” Ford said.
The company has actually taken over 150,000 reservations to date. “The interest from the public has surpassed our highest expectations,” Executive Chairman Bill Ford said in a statement.
--China’s top cyberspace watchdog has ordered internet platforms to weed out and censor “unhealthy” content in its latest squeeze on Big Tech.
Guidelines issued by the Cyberspace Administration of China (CAC) on Wednesday emphasized that online platforms are responsible for managing their content, and told them to enhance both their self-censorship and the censorship of content generated by their legions of users.
It is part of Beijing’s drive to create a “clean and healthy” cyberspace, free from information it deems harmful to society, which has recently come to include apolitical content such as stock market analysis and celebrity gossip.
Tencent Holdings, one of the country’s tech behemoths, was quick to show it was complying with the new directive, purging thousands of independent financial news accounts from its popular WeChat platform.
The so-called Great Firewall already prevents Chinese internet users from accessing global giants such as Google, Facebook and Twitter, as well as the websites of foreign media organizations. China’s internet regulators have now turned their attention to cleansing domestic online content.
The CAC said the new guidelines are “aimed at further ensuring that internet platforms are the primary entities responsible for content management” and that they are “the first ones responsible for content management.”
Last month, Chinese regulators ordered platforms including Weibo, China’s top microblogging site, to remove some of their celebrity content in a bid to reduce what they see as frenzied idol worship among young fans.
--Meanwhile, Macau’s authorities will solicit public opinion to overhaul the city’s gambling laws, sending the shares of casino operators plunging in a $17 billion wipeout, as the proposed revisions portend heightened scrutiny of capital flows and daily operations.
The 45-day consultation will ask the public to give their feedback on a raft of rules including additional government oversight, permission for the remittances of dividends, and a proposal to slash the number of gaming tables.
JPMorgan Chase then slashed its rating on six casino operators to either “neutral” or “sell,” reversing its “overweight” call made as recently as July 20, citing investors’ doubt about the industry’s outlook amid the regulatory curbs.
Gambling, which is banned in mainland China because it’s anathema to Communist Party doctrine, has been legal in Macau since 1850 under Portuguese colonial administration. When Macau reverted to Chinese sovereignty in 1999, the gambling operations and the concessions were maintained.
Over two decades, gambling revenue in Macau grew to surpass Las Vegas seven times over, becoming the world’s casino hub. Still, Chinese President Xi made Macau’s casinos a target of his anti-corruption campaign in 2012, banning party and government officials from gambling.
--The U.S. exported $107 million worth of frozen beef to China in July, compared to just $35 million from traditional export destination Australia, adding to Canberra-Beijing trade tensions (pre-nuclear submarine deal, as well).
In April, the U.S. shipped $68 million worth of frozen beef to China, compared with $80 million from Australia, according to Chinese customs.
Australia still dominates exports of chilled beef, as U.S. remains more expensive in this category than imports from Australia and New Zealand.
--Shares in Microsoft on Tuesday rose 2% after the company announced a $60 billion share buyback program, its biggest ever. The announcement came just two days after Senate Democrats unveiled a proposal to tax corporate stock buybacks to help fund President Biden’s $3.5 trillion investment plan.
The senators said the “Stock Buyback Accountability Act” would encourage large corporations to invest in their workers rather than enriching investors and executives by boosting stock prices.
But Microsoft’s buyback plan can be terminated at any time, and follows similar announcements this year by the likes of Apple and Alphabet.
--Social Security checks are likely to be 6% higher next year with a hefty cost-of-living adjustment, after years of puny increases.
Such a rise would far outpace 1.4% average bumps in SS payments since 2010 and amount to the largest increase since 1982, according to the Senior Citizen League.
For the average retiree who got a monthly check of $1,559 this year, a 6% rise would increase that payment by $93.54 to $1,652.54 in 2022.
The Social Security Administration will announce its cost-of-living adjustment for 2022 next month. It’s based on average annual increases in the consumer price index for urban wage earners and clerical workers, or CPI-W, from July through September.
--Separately, Americans last year saw their first significant decline in household income in nearly a decade, according to a report from the Census Bureau, with economic pain from the Covid-19 pandemic prompting government aid that helped keep millions from falling into poverty.
Median household income was about $67,500 in 2020, down 2.9% from the prior year, when it hit an inflation-adjusted historical high.
The bureau said the traditional poverty rate in 2020 was 11.4%, an increase of 1 percentage point from 2019 and the first increase after five consecutive years of declines.
For a four-person household, the threshold for meeting the definition of poverty was about $26,000 in 2020.
--Subway ridership in New York City broke post-pandemic records this week with nearly 3 million daily riders as nearly a million children returned to school and Broadway shows reopened.
Despite the increase, the numbers are still well below pre-pandemic levels, when more than 5.5 million New Yorkers commuted by subway on a weekday basis.
Afghanistan: Friction between pragmatists and ideologues in the Taliban leadership has intensified since the group formed a hardline Cabinet last week that is more in line with their harsh rule in the 1990s than their promises of inclusiveness.
Rumors began circulating about a recent violent confrontation between the two camps at the presidential palace, including claims that the leader of the pragmatic faction, Abdul Ghani Baradar, was killed. He then issued a statement saying he was uninjured and appeared on the country’s national TV.
Baradar served as the chief negotiator during talks between the Taliban and the United States that paved the way for the U.S. troop withdrawal from Afghanistan, which was completed in late August, two weeks after the Taliban overran the capital of Kabul.
Shortly after the takeover, Baradar had been the first senior Taliban official to hold out the possibility of an inclusive government, but then an all-male, all-Taliban lineup was announced.
In a further sign that the hardliners had prevailed, the white Taliban flag was raised over the presidential palace, replacing the Afghan national flag.
Experts say that Baradar’s absence from key functions early on was jarring because Qatar had hosted him for years as head of the Taliban political office in Doha.
The argument/brawl between the two factions at the presidential palace was reportedly over who did the most to secure victory over the U.S., and how power was divided up in the new cabinet.
Meanwhile, Secretary of State Antony Blinken faced withering bipartisan criticism Tuesday over the botched U.S. withdrawal. And he had to admit that officials were still investigating whether a drone strike at a suspected ISIS-K terrorist accidentally killed an Afghan aid worker and nine family members, including seven kids.
Blinken’s claim that no one expected Kabul to fall before the U.S. military left was countered by months of intelligence warnings that the situation in Afghanistan was “going to hit the fan.”
Republican Sen. James Risch of Idaho, the ranking member on the Senate Foreign Relations Committee, blasted the withdrawal as a “dismal failure.”
“There’s not enough lipstick in the world to put on this pig to make it look any different than what it actually is,” he said.
In his appearance before the House Foreign Affairs Committee Monday, Blinken defended President Biden’s decision to pull out, repeatedly noting that former president Trump had negotiated the withdrawal agreement with the Taliban, and said the Biden administration could not renegotiate because of threats from the group to resume killing Americans.
“There’s no evidence that staying longer would have made the Afghan security forces or the Afghan government any more resilient or self-sustaining,” Blinken said. “We inherited a deadline. We did not inherit a plan,”
Representative Michael McCaul (Texas), the top Republican on the panel, countered: “The American people don’t like to lose, especially not to the terrorists. But this is exactly what has happened.”
Rep. McCaul asked why assets like the Bagram Air Base were not maintained and why the administration had not reached counterterrorism agreements with neighboring countries.
“This is a national security threat as China moves in. For all I know they make take over Bagram,” McCaul said.
So then this afternoon, defense officials acknowledged that the drone strike was a “tragic” and “horrible mistake.”
The Pentagon had previously defended the Aug. 29 operation as a “righteous strike,” saying it tracked a white sedan for hours after the vehicle left a suspected Islamic State-Khoran safe house. But the driver was an aid worker for a U.S.-based group and was indeed hauling water cans for his family.
Defense Secretary Lloyd Austin said in a statement announcing the military’s conclusions: “We apologize, and we will endeavor to learn from this horrible mistake.”
The Defense Department said compensation would be paid, but with no one on the ground to effort that, and with the banks closed and the Taliban in charge, how do you do that?
Separately, the International Monetary Fund on Thursday said it was deeply concerned with the economic situation facing Afghanistan and warned of a looming humanitarian crisis. The global lender’s engagement with the country remains suspended, which means IMF funding is on hold.
UN Secretary General Antonio Guterres said that since the Taliban takeover, the nation’s poverty rate has soared and basic public services have neared collapse and, in the past year, hundreds of thousands of people have been made homeless after being forced to flee fighting.
With winter approaching, one million children are at risk of starvation if their immediate needs are not met, Guterres warned.
Lastly, women in Afghanistan can continue to study in universities, including at post-graduate levels, but classrooms will be gender-segregated and Islamic dress is compulsory, the higher education minister in the new Taliban government said Sunday.
We’ll see how long this lasts. The education minister said subjects being taught would be reviewed, without elaboration.
Editorial / Washington Post…on the drone attack…
“The fog of war is proverbial. Combat against unconventional enemies, who mix with the civilian population, makes it challenging to tell friend from foe. For U.S. forces trying to extricate themselves and allies from Kabul last month, these difficulties were compounded by the environment and the context: a city of 4.4 million in which Islamic State-Khorasan terrorists took cover and, on Aug. 26, struck, killing 13 U.S. service members and scores of Afghans.
“Even with those caveats, the Aug. 29 drone-launched missile attack against a suspected terrorist target in Kabul ranks as a horrible potential error for the United States. Initially portrayed by Gen. Mark A. Milley…as a ‘righteous strike’ on an Islamic State vehicle being prepared as a car bomb for another attack against U.S. troops, the incident now appears far more likely to have been a deadly case of mistaken identity….
“Investigations by The Post and the New York Times raise serious questions about the U.S. military’s claim that the weapon used, a single Hellfire missile, triggered a ‘secondary explosion’ indicative of a car loaded with explosives. Rather than explosives, (aid worker Zamarai) Ahmadi seems to have been loading the car with water canisters for his family….
“The Pentagon says it is continuing to investigate. Definitive judgment must await the results. If, as seems all too probable, the eyewitness testimony and expert analysis gathered by journalists stands up, the United States must offer both sincere apologies and generous compensation to surviving family members of the victims.
“There must also be a clear-eyed assessment about what this episode implies for the ‘over the horizon’ approach to terrorist threats in Afghanistan that President Biden has adopted now that U.S. troops – and a friendly Afghan government – are gone. Mr. Biden has long portrayed remotely based forces as a smart, low-cost means of coping with hostile forces that have grown more diffuse and no longer must be countered with American boots on the ground. Common sense, however, dictates that his alternative creates risks of its own….
“As William J. Burns, the director of the Central Intelligence Agency, acknowledged in congressional testimony April 14: ‘When the time comes for the U.S. military to withdraw, the U.S. government’s ability to collect and act on threats will diminish. That is simply a fact.’ The apparent tragedy in Kabul underscores that reality – and the need for the Biden administration to act on it.”
Lastly, is Al Qaeda leader Ayman al-Zawahiri, who appeared in a video released Saturday – the 20th anniversary of the Sept. 11 attacks – alive, after his rumored death last November-December due to illness?
The U.S.-based SITE Intelligence Group, which tracks jihadist groups online, tweeted about the existence of the video, saying Zawahiri made comments about events that occurred after speculation first emerged that he’d died, including the situation in Afghanistan.
Iran: Tehran said Monday it planned to resume nuclear talks in the near future, and the Biden administration confirmed it would drop a resolution censuring Iran for failing to cooperate with nuclear inspectors.
The comments came after Iran agreed over the weekend to allow International Atomic Energy Agency staff access to reset cameras and other equipment that monitor Iranian activities at various nuclear-related sites in Iran.
Iran’s new president, Ebrahim Raisi, had warned that if the U.S. and European powers sought to rebuke Iran at the meeting of IAEA member states, it could derail Tehran’s plans to resume the talks.
But Raisi and his new government have repeatedly refused to fix a date for returning to the negotiations in Vienna, which is sparking concern Iran is playing for time as it moves forward on its nuke program. It’s already now producing near-weapons-grade enriched uranium. And it’s made other advancements, such as in making advanced centrifuges.
Editorial / Wall Street Journal
“We’re not sure Iran could do anything to make President Biden give up his pursuit of reviving the 2015 nuclear deal, and Iran is acting as if it agrees. This could explain Tehran’s escalations in response to U.S. concessions.
“The International Atomic Energy Agency (IAEA) announced Sunday that Iran would allow its inspectors to service surveillance cameras monitoring Iranian nuclear sites. This is no great breakthrough. In February the regime began blocking the agency from inspecting several nuclear facilities in person, though it cut a deal to keep some monitoring equipment. The latest agreement won’t guarantee access to this data, which could be deleted at any time, but a joint Iran-IAEA statement still noted their ‘spirit of cooperation and mutual trust.’….
“Iran offered the token concessions over the weekend to avoid an IAEA board censure, which theoretically could lead to United Nations sanctions. The U.S., Germany, France and the UK had been considering a rebuke over the inspection intransigence, but don’t hold your breath….
“(The Iranian) regime also has stonewalled a separate IEA investigation into undeclared nuclear sites in the country. This points to a fundamental flaw in the nuclear agreement: No one knows the true extent of the Iranian nuclear program, let alone what’s happening at the declared sites. The sense of security the deal provided the West was illusory, but the sanctions relief was real….
“Arms-control agreements work best among friendly nations. When dealing with adversaries, the agreement is only as good as the verification and monitoring measures that come with it. An IAEA censure would send a message that Mr. Biden understands this basic principle.”
North Korea: The North fired two ballistic missiles toward the sea in defiance of UN resolutions, the second weapons test in several days that experts say shows it’s pressing ahead with its arms build-up plans while nuclear diplomacy with the United States remains stalled.
South Korea’s Joint Chiefs of Staff said that the missiles, launched from central North Korea, flew about 500 miles before landing in the waters between the Korean Peninsula and Japan. The military said South Korean and U.S. intelligence authorities are analyzing more details about the launches.
“The firings threaten the peace and safety of Japan and the region and are absolutely outrageous,” Japanese Prime Minister Yoshihide Suga said. “The government of Japan is determined to further step up our vigilance and surveillance to be prepared for any contingencies.”
North Korea is barred from engaging in any ballistic missile activities. But the UN Security Council typically doesn’t slap fresh sanctions on Pyongyang when it launches short-range missiles, like the ones fired Wednesday.
The latest launches came two days after North Korea said it tested a newly developed cruise missile twice over the weekend. State media described the missile as a “strategic weapon of great significance,” implying it was developed with the intent to carry nuclear warheads. That missile, according to North Korean accounts, demonstrated an ability to hit targets 930 miles away, a distance putting all of Japan and U.S. military installations there within reach.
South Korea then said it had carried out its first underwater-launched missile test, hours after North Korea fired its ballistic missiles.
President Moon Jae-in’s office said he observed the test of a domestically built submarine-launched ballistic missile.
Canada: Prime Minister Justin Trudeau called for a controversial snap election back on Aug. 15 and here we are…the vote being Monday. Trudeau acknowledged this week on the campaign trail the unpopularity of his pandemic election and intensified his calls on progressive voters to back his campaign, with his bid for re-election at risk of being doomed by low turnout.
Low turnout has historically favored the opposition Conservatives who are led by Erin O’Toole.
Trudeau’s Liberals lead the Conservatives 31.9% to 30.4%, according to the latest poll from Nanos Research, with the New Democrats in third at 20.3%.
I’ll say Trudeau goes down to O’Toole, who is no relation to former Reds pitcher Jim O’Toole, at least that I know of.
--Presidential approval ratings….
Gallup: We’ll receive an important update next week. Last split, for Aug. 2-17, was 49% approve of Biden’s job performance, 48% disapprove, with 43% of independents approving.
Rasmussen: 43% approve, 55% disapprove (Sept. 17).
A new Quinnipiac University national poll of adults released Thursday had Joe Biden’s job approval dropping into negative territory, with 42% approving and 50% disapproving. In early August the split was 46-43.
Democrats approve 88-7 percent, while Republicans disapprove 91-7 and independents disapprove 52-34 percent.
As for Biden’s handling of the pandemic, 48% approve, 49% disapprove, vs. an August positive split of 53-40.
While more than half of Americans, 54-41 percent, say they approve of Biden’s decision to withdraw all U.S. troops from Afghanistan, Americans give Biden a negative 31-65 percent score for the way he handled the withdrawal.
--California Gov. Gavin Newsom handily beat back a recall effort, with about 64% of voters answering “no” to the question whether Newsom will be removed; a major win for Newsom, 53, and Democratic leaders who had characterized the recall attempt as a power grab by supporters of former president Trump.
The governor cast the vote as a win for science, women’s rights and other liberal issues, and it ensures the nation’s most populous state will remain in Democratic control as a laboratory for progressive policies.
“‘No’ is not the only thing that was expressed tonight,” Newsom said. “I want to focus on what we said ‘yes’ to as a state: We said yes to science, we said yes to vaccines, we said yes to ending this pandemic.”
Newsom was elected in 2018 with about 62% of the vote.
Newsom’s prime opponent, conservative radio host Larry Elder, conceded the race early Wednesday morning, telling his audience to be “gracious in defeat.” But his campaign’s tactics in the lead-up to the vote – including open threats to raise doubts about the results in case of defeat – echoed a new normal, where Republicans challenge elections losses even in heavily Democratic states and without proof of serious fraud or rule-breaking.
On Monday, former president Trump, issued a statement on the recall saying, “Does anybody really believe the California Recall Election isn’t rigged?”
--So…. According to a new CNN/SSRS poll, most Americans feel democracy is under attack in this country (56%), as 51% say it is likely that elected officials in the U.S. will successfully overturn the results of a future election because their party did not win.
Nearly all Americans feel that democracy in the U.S. is at least being tested: 93% say that democracy is either under attack (56%) or being tested but not under attack (37%). Just 6% say that American democracy is in no danger.
Republicans are far more likely than Democrats to say that democracy is under attack, and that view is most prevalent among those who support former President Trump. All told, 75% of Republicans say democracy is under attack, compared with 46% of Democrats. Among Republicans and Republican-leaning independents, those who say Trump ought to be the leader of the party are much likelier to see democracy as under threat: 79% in that group vs. 51% among those who say Trump should not be the party’s leader.
Although there is no evidence of widespread voter fraud in the 2020 election, 36% of Americans say that President Biden did not legitimately get enough votes to win the presidency. That 36% includes 23% who falsely say there is solid evidence that Biden did not win.
Among Republicans, 78% say that Biden did not win and 54% believe there is solid evidence of that, despite the face that no such evidence exists.
Among Republicans who say Trump should be the leader of the party, 88% believe Biden lost – including 64% who say there is solid evidence that he did not win – while among those Republicans who do not want Trump to lead the Party, 57% say Biden won legitimately.
A separate CNN/SSRS survey revealed that most Republicans and Republican-leaning independents want Donald Trump to remain their party’s leader, 63% to 37%. But they are about evenly split over whether having him back on the ticket in 2024 would be an advantage: 51% say that Republicans have a better chance of retaking the presidency if Trump is the nominee, with 49% saying the party would be better off with a different nominee.
This is very different from 2019, when more than three-quarters of Republicans said their party had a better shot in 2020 with Trump as their nominee.
But Trump’s support isn’t equally distributed throughout the party: 69% of Republicans without a college degree think Trump should head the party, compared with 49% of those who hold a college degree.
Separately, in looking at a generic ballot of next year’s congressional elections, the CNN/SSRS poll finds that 45% of registered voters said they’d vote for the Democratic Party’s candidate, and 44% that they’d vote for the Republican candidate.
--Rich Lowry / New York Post
“It’s one thing to complain about last-minute emergency changes in voting procedures in 2020 and to advocate for a system that is secure and tilts toward in-person voting; it’s another to retail unproven allegations that, for most people, will always be associated with Trump’s worst excesses and the rioting at the U.S. Capitol.
“The choice that was forced on (Larry) Elder – admit that Biden won the election and alienate MAGA voters or say it was stolen and alienate voters in the middle – will be faced by Republican candidates around the country for the duration.
“That won’t change as long as Trump has an outsize influence on the party. He’s not letting 2020 go but rather is bent on vengeance against those Republicans he believes betrayed him by not embracing his various conspiracy theories.
“Since he never admits the fairness of any loss, the number of allegedly rigged and stolen elections will only increase – the recall, Trump said in a statement, is ‘just another giant Election Scam, no different, but less blatant, than the 2020 Presidential Election Scam!’
“This is a cynical and corrosive view of American democracy that, to the extent it becomes GOP orthodoxy, can contribute only to further Republican frustration.”
--Rep. Anthony Gonzalez (R-Ohio), one of 10 Republicans who voted to impeach former president Trump, on Thursday said he will not seek reelection in 2022, citing a desire to “build a fuller family life” as well as “the toxic dynamics inside our own party.”
Gonzalez was once seen as a rising star within the GOP, before his vote to impeach Trump incurred the wrath of the former president and his supporters. He was facing a tumultuous primary against Max Miller, an aide to the former president, whom Trump endorsed in February.
Gonzalez, in an interview with the New York Times, talked of an “eye-opening” moment with his family this year at the Cleveland airport, where they needed additional security after the impeachment brought a new wave of threats.
The congressman also told the Times that he saw Trump as “a cancer for the country” and that he would devote most of his political energy to ensuring Trump would never be president again.
Trump issued an idiotic statement blasting Gonzalez.
--Joint Chiefs of Staff Chairman Gen. Mark Milley’s office said Wednesday that he did not go outside the chain of command when he reached out to Chinese leaders to reassure them the U.S. would not attack China in the unsteady weeks before and after the 2020 election.
Milley, who is guaranteed another two years in his job, has faced pressure from Congressional Republicans to resign following revelations in Bob Woodward and Robert Costa’s upcoming book “Peril” that the chairman took unusual steps to prevent war. Those steps included reminding flag officers of their specific roles and responsibilities if a nuclear launch were ordered ruing Donald Trump’s erratic final days in office.
Sworn in as the 20th Joint Chief chairman in September 2019, Milley is the first to serve a guaranteed four-year term. Past chairmen served two-year terms, renewable once by the White House. But under legislation that went into effect two years ago, the Army general could serve a second four-year term, and even beyond that “in time of war.”
On Tuesday, Trump responded to the allegations in Woodward’s book by saying that he had never considered launching an attack on China.
“I’ve had so many calls today saying, ‘That’s treason,’” Trump said on Newsmax. “For him to say that I would even think about attacking China, I think he’s trying to just get out of his incompetent withdrawal from Afghanistan.”
Some Republicans have called for Milley to be removed from his post. Sen. Marco Rubio (R-Fla.) sent President Biden a letter on Tuesday demanding that he fire Milley for “working to actively undermine” the president. [Biden, for now, supports him.]
Other Republicans, such as Sen. Tom Cotton (Ark.) were more cautious, saying they wanted more information.
Today, Gen. Milley, in his first public comments on the conversations, said they were “perfectly within the duties and responsibilities” of his job. Milley said such calls are “routine” and were done “to reassure both allies and adversaries in this case in order to ensure strategic stability.”
The chairman of the Joint Chiefs spoke to reporters traveling with him to Europe.
Milley said he plans for a deeper discussion about the matter with Congress when he testifies at a hearing later in the month, saying, “I’ll go into any level of detail Congress wants to go into in a couple of weeks.”
Max Boot / Washington Post
“In July, Post reporters Carol D. Leonnig and Philip Rucker released a book that revealed Gen. Mark A. Milley had been worried about the possibility that President Donald Trump, during his final days in office, would issue dangerous or illegal orders.
“The chairman of the Joint Chiefs of Staff compared the then-president to ‘the classic authoritarian leader with nothing to lose,’ and warned, ‘This is a Reichstag moment.’ ‘They may try, but they’re not going to f—king succeed,’ Milley reportedly told his deputies. ‘You can’t do this without the military. You can’t do this without the CIA and the FBI. We’re the guys with the guns.’
“Now comes another book, this one written by The Post’s Bob Woodward and Robert Costa, who reveal that Milley wasn’t just worried about Trump staging a coup. He was also worried about the president initiating a war with China. So worried, in fact, that Milley twice called China’s senior general and assured him that the U.S. military wasn’t planning to attack….
“The two books paint a consistent picture of a president who was judged a clear and present danger to U.S. national security by his own top general. Milley should be commended for acting to limit an unhinged commander in chief’s ability to overthrow the government or start a war.
“But while Trump critics will see Milley as the hero of this story, Woodward and Costa’s reporting will be viewed very differently on the right. Trump and his followers have already been fulminating against ‘woke generals.’ After Milley defended the teaching of critical race theory at the U.S. Military Academy, Fox ‘News’ host Tucker Carlson called him a ‘pig’ and Trump demanded he resign. Following the release of the Leonnig/Rucker book, Trump claimed that ‘Milley choked like a dog’ when he apologized for accompanying Trump on his infamous walk through Lafayette Square after police had cleared it of peaceful demonstrators. After Tuesday’s news about the Woodward/Costa book, right-wingers have already suggested that Milley was guilty of plotting a coup, engaged in treason and should be fired, court-martialed or even executed. If only they showed half as much outrage about the conduct that twice got Trump impeached.”
--According to “Peril,” former vice president Dan Quayle, out of nowhere, may have been a key player in the leadup to the Jan. 6 insurrection.
Quayle served as a sounding board for Vice President Mike Pence in the final days of the administration as Trump leaned hard on him to overturn the 2020 presidential.
Pence and Quayle, who knew each other through Indiana politics, went back-and-forth on what Pence could and could not do in support of the president.
According to the book:
“Over and over, Pence asked if there was anything he could do.
“ ‘Mike, you have no flexibility on this. None. Zero. Forget it. Put it away,’ Quayle told him.
“Pence pressed again.
“ ‘You don’t know the position I’m in,’ he said, according to the authors.
“ ‘I do know the position you’re in,’ Quayle responded. ‘I also know what the law is. You listen to the parliamentarian. That’s all you do. You have no power.’”
What if Quayle had taken a different tact with Pence?
The bottom line is, you have yet another example of how fragile our democracy is.
--Former President George W. Bush on Saturday, speaking at ceremonies at Shanksville, Pa., warned there is growing evidence that domestic terrorism could pose as much of a threat to the United States as terrorism originating from abroad, and he urged Americans to confront “violence that gathers within.”
Without naming it, Bush was clearly condemning the Jan. 6 insurrection, comparing those “violent extremists at home” to the terrorists who had hijacked planes on Sept. 11, 2001, and crashed them in New York City, the Pentagon and Shanksville.
“There is little cultural overlap between violent extremists abroad and violent extremists at home,” Bush said. “But in their disdain for pluralism, in their disregard for human life, in their determination to defile national symbols – they are children of the same foul spirit, and it is our continuing duty to confront them.”
Bush continually invoked “the nation I know” in his remarks, and spoke of the difficulties of describing “the mix of feelings” everyone experienced on that September day 20 years ago.
“For those too young to recall that clear September day, it is hard to describe the mix of feelings we experienced. There was horror at the scale of destruction and awe at the bravery and kindness that rose to meet it. There was shock at the audacity of evil and gratitude for the heroism and decency that opposed it.
“In the sacrifice of first responders and the mutual aid of strangers, in the solidarity of grief and grace, the actions of an enemy revealed the spirit of the people. And we were proud of our wounded nation….
“On America’s day of trial and grief I saw millions of people instinctively grab for a neighbor’s hand and rally to the cause of one another. That is the America I know. At a time when religious bigotry might have flowed freely, I saw Americans reject prejudice and embrace people of Muslim faith. That is the nation I know. At a time when nativism could have stirred hatred and violence against people perceived as outsiders, I saw Americans reaffirm their welcome to immigrants and refugees. That is the nation I know. At a time when some viewed the rising generation as individualistic and decadent, I saw young people embrace an ethic of service and rise to selfless action. That is the nation I know.
“This is not mere nostalgia, it is the truest version of ourselves. It is what we have been, and what we can be again. Twenty years ago, terrorists chose a random group of Americans on a routine flight to be collateral damage in a spectacular act of terror. The 33 passengers and seven crew of Flight 93 could have been any group of citizens selected by fate. In a sense, they stood in for us all….
“These Americans were brave, strong and united in ways that shocked the terrorists but should not surprise any of us. This is the nation we know. And whenever we need hope and inspiration, we can look to the skies and remember.”
Donald Trump of course had to respond, lashing out at Bush’s comments.
“So interesting to watch former President Bush, who is responsible for getting us into the quicksand of the Middle East (and then not winning!), as he lectures us that terrorists on the ‘right’ are a bigger problem than those from foreign countries that hate America, and that are pouring into our Country right now,” Trump said in an emailed statement.
“If that is so, why was he willing to spend trillions of dollars and be responsible for the death of perhaps millions of people? He shouldn’t be lecturing us about anything. The World Trade Center came down during his watch. Bush led a failed and uninspiring presidency. He shouldn’t be lecturing anybody!” he said.
--Simone Biles and three fellow gymnasts offered gut-wrenching testimony to the Senate Judiciary Committee on Wednesday, describing the abuse they suffered at the hands of doctor Larry Nassar and charging the FBI “turned a blind eye” as he molested young female patients.
Biles blamed USA Gymnastics, the U.S. Olympic committee and the FBI for the long-running abuse by the doctor, who molested girl and women athletes under the guise of medical treatments.
Biles, fighting back tears, said, “To be clear, I blame Larry Nassar, and I also blame an entire system that enabled and perpetrated his abuse.”
More than a year after the allegations against Nassar were first brought to the FBI in 2015, he was arrested and charged by state officials. In the interim, Nassar is estimated to have abused at least 70 more athletes, according to a devastating report issued in July by Department of Justice Inspector General Michael Horowitz.
Nassar, who treated athletes for both USA Gymnastics and Michigan State University, is now serving the equivalent of a life term in federal prison.
Former gymnast Aly Raisman condemned the FBI and the sport’s overseers for letting Nassar quietly continue to see patients even after authorities had been told what he was doing.
“It was like serving innocent children up to a pedophile on a silver platter,” she said.
Chairman Richard Durbin (D-Ill.) called the botched investigation “a stain on the bureau” that paints “a shocking picture of FBI dereliction of duty and gross incompetence.”
FBI Director Christopher Wray, who testified after the gymnasts, offered them a robust public apology, but Raisman said, “We all deserve more than just words.”
--A SpaceX rocket lifted off on Wednesday from a launchpad at the Kennedy Space Center, Fla., carrying four Americans, none of whom are astronauts, on an adventure to orbit the Earth for three days.
The mission, known as Inspiration4, is the first orbital trip where not one of the people aboard is a professional astronaut and where government is basically a bystander.
Jared Isaacman, a 38-year-old billionaire and founder of Shift4, a payments’ processing service, financed the trip.
The crew is due to splash down in the waters off Florida Saturday.
Pray for the men and women of our armed forces…and all the fallen.
We thank our first responders and healthcare workers.
God bless America.
Returns for the week 9/13-9/17
Dow Jones -0.1% 
S&P 500 -0.6% 
S&P MidCap -0.3%
Russell 2000 +0.4%
Nasdaq -0.5% 
Returns for the period 1/1/21-9/17/21
Dow Jones +13.0%
S&P 500 +18.0%
S&P MidCap +16.1%
Russell 2000 +13.3%
Hang in there.