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07/18/2020

For the week 7/13-7/17

[Posted 10:00 PM ET, Friday]

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Edition 1,109

“We have to stop swapping air with each other.”

--Dr. Michael Osterholm, Director of the Center for Infectious Disease Research and Policy at the University of Minnesota.

---

I can’t help but take you back to just one month ago, when I noted an op-ed Vice President Mike Pence had penned in the Wall Street Journal on June 16 (as referenced in my 6/20 WIR).

“In recent days, the media has taken to sounding the alarm bells over a ‘second wave’ of coronavirus infections.  Such panic is overblown. Thanks to the leadership of President Trump and the courage and compassion of the American people, our public health system is far stronger than it was four months ago, and we are winning the fight against the invisible enemy….

“Cases have stabilized over the past two weeks, with the daily average case rate across the U.S. dropping to 20,000….

“(The president) rallied the American people to embrace social-distancing guidelines.  And the progress we’ve made is remarkable….

“The media has tried to scare the American people every step of the say, and these grim predictions of a second wave are no different.  The truth is, whatever the media says, our whole-of-America approach has been a success.  We’ve slowed the spread, we’ve cared for the most vulnerable, we’ve saved lives, and we’ve created a solid foundation for whatever challenges we may face in the future.  That’s a cause for celebration, not the media’s fear mongering.”

I wrote four weeks ago, “Your op-ed piece is a disgrace, Mike.”

And the death toll in the U.S. then was 121,407.  Tonight it is 142,064.  Cases over 70,000.

Yup, great job, Veep.  Great job, President Trump.  No wonder your poll numbers on the topic of your handling of the crisis are in the toilet.

Aside from the awful job the White House is doing in handling the pandemic and providing leadership, this week a leading topic was how to open the schools this fall safely.  President Trump and Vice President Pence are just saying, “Do it.”  Other White House officials such as economic adviser Larry Kudlow say, “It’s not that hard.”  Sunday, Education Secretary Betsy DeVos was on the talk shows, telling CNN’s “State of the Union,” “We know that children get the virus at a far lower rate than any other part of the population.  There is nothing in the data that would suggest that kids being back in school is dangerous to them.”

But the incredibly unimpressive DeVos didn’t offer any details whatsoever on how her department would advise or help school districts and states with their reopenings amid a resurgence in coronavirus cases across the country.  DeVos also downplayed the risk of children bringing the virus home to parents, grandparents or caregivers.

Asked if schools should follow the recommendations of the federal Centers for Disease Control and Prevention, which President Trump criticized last week as too stringent, DeVos said every school building is different.  No kidding.

So the states are once again fending for themselves and tonight, California Gov. Gavin Newsom said most public and private school campuses in his state will not reopen when the academic year begins under statewide rules just announced, shifting instead toward full-time distance learning in response to the summer surge in cases in his state.

“We all prefer in-classroom instructions for all the obvious reasons – social, and emotional foundationally.  But only, only if it can be done safely,” Newsom said.

No doubt most schools will at least attempt a hybrid approach, as it appears Chicago will start out with, but this is an issue that is going to infuriate President Trump more and more.

Yet much of it comes down to the administration’s ongoing attempt to undermine the CDC.  Four former directors of the CDC, including Tom Frieden and Richard Besser, penned an op-ed in the Washington Post this week on the undermining of public health.

“As of this date, the CDC guidelines, which were designed to protect children, teachers, school staffers and their families – no matter the state and no matter the politics – have not been altered.  It is not unusual for CDC guidelines to be changed or amended during a clearance process that moves through multiple agencies and the White House. But it is extraordinary for guidelines to be undermined after their release.  Through last week, and into Monday, the administration continued to cast public doubt on the agency’s recommendations and role in informing and guiding the nation’s pandemic response.  On Sunday, Education Secretary Betsy DeVos characterized the CDC guidelines as an impediment to reopening schools quickly rather than what they are: the path to doing so safely.  The only valid reason to change released guidelines is new information and new science – not politics.

“One of the many contributions the CDC provides our country is sound public health guidance that states and communities can adapt to their local context – expertise even more essential during a pandemic, when uncertainty is the norm.  The four of us led the CDC over a period of more than 15 years, spanning Republican and Democratic administrations alike. We cannot recall over our collective tenure a single time when political pressure led to a change in the interpretation of scientific evidence….

“(These) are the people best positioned to help our country emerge from this crisis as safely as possible.  Unfortunately, their sound science is being challenged with partisan potshots, sowing confusion and mistrust at a time when the American people need leadership, expertise and clarity.  These efforts have even fueled a backlash against public health officials across the country: Public servants have been harassed, threatened and forced to resign when we need them most.  This is unconscionable and dangerous.”

But this is Trump World.

Yes, children are at lower risk for serious illness and death from Covid-19, but the same is not true for everyone else involved in educating and caring for your kids.  It’s not just teachers, but it’s bus drivers, custodians, cafeteria workers, coaches, let alone the families all the preceding go home to at the end of the day.

It’s going to take the whole community, with state and federal help, to get the kids in schools at least two days a week.  But when we can’t even agree on wearing face coverings, such as in the battle today between Georgia’s governor and his mayors, how the heck are we going to work together on the schools when the health experts are blasted in public, such as in the following….

….The Discrediting of Dr. Fauci

Peter Navarro / USA TODAY

“Dr. Anthony Fauci has a good bedside manner with the public, but he has been wrong about everything I have interacted with him on.

“In late January, when I was making the case on behalf of the president to take down the flights from China, Fauci fought against the president’s courageous decision – which might well have saved hundreds of thousands of American lives.

“When I warned in late January in a memo of a possibly deadly pandemic, the director of the National Institute of Allergy and Infectious Diseases was telling the news media not to worry.

“When I was working feverishly on behalf of the president in February to help engineer the fastest industrial mobilization of the health care sector in our history, Fauci was still telling the public the China virus was low risk.

“When we were building new mask capacity in record time, Fauci was flip-flopping on the use of masks.

“And when Fauci was telling the White House Coronavirus Task Force that there was only anecdotal evidence in support of hydroxychloroquine to fight the virus, I confronted him with scientific studies providing evidence of safety and efficacy.  A recent Detroit hospital study showed a 50% reduction in the mortality rate when the medicine is used in early treatment.

“Now Fauci says a falling mortality rate doesn’t matter when it is the single most important statistic to help guide the pace of our economic reopening.  The lower the mortality rate, the faster and more we can open.

“So when you ask me whether I listen to Dr. Fauci’s advice, my answer is: only with skepticism and caution.”

This is from the same a-hole who in his many interviews, including on CNN, says when confronted with a medical question, “I need to stay in my lane…that’s production (of PPE) these days…”

Yes, Navarro wrote the January memo telling the president to take Covid-19 more seriously, but why didn’t he influence the president on all his myriad of godawful decisions after?  Why did he just play loyal tool?!

It’s a “novel” coronavirus.  ‘Novel’ as in ‘new.’  Dr. Fauci has changed as the science has changed.  He’s done his best. There would be no national confusion as there is today had President Trump just done his own job…which is to lead!  He’d also be romping all over Joe Biden in the polls if he had.  But this is no stable genius in the Oval Office, sports fans.

John M. Barry / New York Times…author of the definitive book on the 1918 pandemic, “The Great Influenza.”

“When you mix science and politics, you get politics.  With the coronavirus, the United States has proved politics hasn’t worked.  If we are to fully reopen both the economy and schools safely – which can be done – we have to return to science.

“To understand just how bad things are in the United States and, more important, what can be done about it requires comparison.  At this writing, Italy, once the poster child of coronavirus devastation and with a population twice that of Texas, has recently averaged about 200 new cases a day when Texas has had over 9,000.  Germany, with a population four times that of Florida, has had fewer than 400 new cases a day.  On Sunday, Florida reported over 15,300, the highest single-day total of any state.

“The White House says the country has to learn to live with the virus.  That’s one thing if new cases occurred at the rates in Italy or Germany, not to mention South Korea or Australia or Vietnam (which so far has zero deaths).  It’s another thing when the United States has the highest growth rate of new cases in the world, ahead even of Brazil.

“Italy, Germany and dozens of other countries have reopened almost entirely, and they had every reason to do so.  They all took the virus seriously and acted decisively, and they continue to: Australia just issued fines totaling $18,000 because too many people attended a birthday party in someone’s home.

“In the United States, public health experts were virtually unanimous that replicating European success required, first, maintaining the shutdown until we achieved a steep downward slope in cases; second, getting widespread compliance with public health advice; and third, creating a work force of at least 100,000 – some experts felt 300,000 were needed – to test, trace and isolate cases.  Nationally we came nowhere near any of those goals, although some states did and are now reopening carefully and safely.  Other states fell far short but reopened anyway. We now see the results.

“While New York City just recorded its first day in months without a Covid-19 death, the pandemic is growing across 39 states.  In Miami-Dade County in Florida, six hospitals have reached capacity.  In Houston, where one of the country’s worst outbreaks rages, officials have called on the governor to issue a stay-at-home order.

“As if explosive growth in too many states isn’t bad enough, we are also suffering the same shortages that haunted hospitals in March and April.  In New Orleans, testing supplies are so limited that one site started testing at 8 a.m. but had only enough to handle the people lined up by 7:33 a.m.

“And testing by itself does little without an infrastructure to not only trace and contact potentially infected people but also manage and support those who test positive and are isolated along with those urged to quarantine.  Too often this has not been done; in Miami, only 17 percent of those testing positive for the coronavirus had completed questionnaires to help with contact tracing, critical to slowing spread.  Many states now have so many cases that contact tracing has become impossible anyway.

“What’s the answer?

“Social distancing, masks, hand washing and self-quarantine remain crucial.  Too little emphasis has been placed on ventilation, which also matters.  Ultraviolet lights can be installed in public areas.  These things will reduce spread, and President Trump finally wore a mask publicly, which may somewhat depoliticize the issue.  But at this point all these things together, even with widespread compliance, can only blunt dangerous trends where they are occurring.  The virus is already too widely disseminated for these actions to quickly bend the curve downward….

“During the 1918 influenza pandemic, almost every city closed down much of its activity.  Fear and caring for sick family members did the rest; absenteeism even in war industries exceeded 50 percent and eviscerated the economy.  Many cities reopened too soon and had to close a second time – sometimes a third time – and faced intense resistance. But lives were saved.

“Had we done it right the first time, we’d be operating at near 100 percent now, schools would be preparing for a nearly normal school year, football teams would be preparing to practice – and tens of thousands of Americans would not have died.

“This is our second chance. We won’t get a third.  If we don’t get the growth of this pandemic under control now, in a few months, when the weather turns cold and forces people to spend more time indoors, we could face a disaster that dwarfs the situation today.”

Editorial / Wall Street Journal

“President Trump’s coronavirus management ratings have been plummeting (67% disapproval in an ABC/Ipsos poll last week) and if a better public-relations plan is in the works, it’s not apparent. Wednesday’s news on this front was an op-ed by Peter Navarro, a top economic adviser, attacking the judgment of Anthony Fauci of the National Institutes of Health.  The White House formally disavowed the op-ed, but it came after the White House social-media director posted an anti-Fauci cartoon on Sunday.

“The point is not that Dr. Fauci has been right about everything – the now-reversed early guidance against masks, in particular, hurt public confidence in health experts.  Nor should the doctor set virus policy, which is up to elected representatives.  The problem is that the White House sems to have given up on projecting any consistent virus message, and the descent into internal sniping amplifies a perception of dysfunction that is politically damaging.

“The media are propagating the view that the U.S. is a coronavirus basket case.  In fact, the per-capita death rate remains lower than that of some major countries in Western Europe.  A more significant reason voters are souring on Mr. Trump’s virus management is his unwillingness to be candid or consistent about the disease’s likely toll.

“Americans will accept bad news if it’s in the context of realism about the problem and a strategy to address it.  Mr. Trump’s messaging has caromed from saying the virus isn’t a problem, to the economy must shut down to crush it, to the economy must open and everything will soon go back to normal, to barely talking about it at all as cases rise.  Now his aides are filling the vacuum by attacking the government health expert who sees it as his role to warn of worst-case scenarios.

“This is a mess, and if it continues Republicans will be routed in November.  Leaning into a culture war against experts won’t win undecided voters.  Americans want a realistic assessment, which is that infections are not going to be eliminated in the U.S. in the immediate future but that does not justify the public-health and economic harm of indefinite lockdowns.  If the Administration had said that there would likely be virus flareups in parts of the country amid reopenings and civil unrest, fewer Americans would have been caught by surprise.

“Today President Trump’s opponents can depict the White House as resigned, lacking direction, and more eager to disparage medical authorities than rally them to implement the Administration’s strategy.  Time is running out to change that perception.”

Lastly, this was a big week in U.S.-China relations.  A massive step into a full-blown Cold War.  I detail the rhetoric below but the two sides are headed towards a nasty collision, perhaps precipitated by an “accident” in the South China Sea.  President Trump and his aides no doubt see it as a deflection from the heat the administration is facing in its handling of the pandemic, but China won’t respond well.

You know where I stand on the place.  I’m not a fan.  But we’ve seen how they’ve taken over Hong Kong with the snap of a finger.  And they are working on Taiwan.  And they know that for all our bluster, we won’t do anything.

We should be easing tensions for at least the next four months and a bit after.  This is a time for heavy diplomacy…but behind the scenes.  Not in the open. 

But we also need to reinvigorate our alliances and Donald Trump is not the man for that job.

Covid-19 Death Tolls (as of tonight)

World…599,273
USA…142,064
Brazil…77,932
UK…45,233
Mexico…38,310
Italy…35,028
France…30,152
Spain…28,420
India…26,285

Further proof of “Catch-up Tuesday.”

U.S. death tolls…Sun. 380; Mon. 465; Tues 937; Wed. 999; Thurs. 963; Fri. 946.

[Source: Worldometers.info]

Covid Bytes

--Johnson & Johnson is in talks with the government of Japan and the Bill and Melinda Gates Foundation about locking up allocations of its potential Covid-19 vaccine as it prepares to kick off human trials, the company’s CFO Joseph Wolk told Reuters in an interview.  More than a hundred vaccines are under development and drugmakers including J&J are working to ramp up supply for their vaccines in the face of unprecedented demand.

J&J has already agreed to prioritize an allocation to the United States as part of its funding agreement with the government’s Biomedical Advanced Research and Development Authority.

The Bill and Melinda Gates Foundation would focus on allocating any vaccine it acquired to developing countries, Wolk added.

--Moderna Inc.’s experimental vaccine for Covid-19 showed it was safe and provoked immune responses in all 45 healthy volunteers in an ongoing early-stage study, U.S. researchers reported on Tuesday.  No study volunteers experienced a serious side effect, but more than half reported moderate reactions such as fatigue, headache, chills, muscle aches or pain at the injection site.  These were more likely after the second dose and in people who got the highest dose, the team reported in the New England Journal of Medicine.

Moderna was the first to start human testing of a vaccine for the novel coronavirus on March 16, some 66 days after the genetic sequence of the virus was released.  The federal government is supporting the Cambridge, Mass.-based company’s effort with nearly half a billion dollars and has chosen it as one of the first to enter large-scale human trials.

Moderna is now due to start a Phase 3 study on July 27 with 30,000 adults.  The company has been criticized for seemingly hyping its vaccine without sharing backup data, which is what the journal published Tuesday.  We’ll see.

[The shares surged anew late today on potential distribution deals for any vaccines with the European Union.]

--Dr. Anthony Fauci told Facebook Inc.’s Mark Zuckerberg that he expects results for a clinical trial on monoclonal antibodies (i.e., perhaps Moderna’s) by late summer or early fall, underscoring the speed at which the government has been working to quickly approve and roll out treatment for the novel coronavirus.

Fauci described a monoclonal antibody treatment as “precise bullets” that can be developed from antibodies from other people who’ve been infected and used as a treatment to fight the virus at multiple stages.

“What we really need are drugs that, when given early, can prevent a symptomatic person from requiring hospitalization or very dramatically diminish the time that they’re symptomatic,” Fauci said during the Facebook Live interview on Thursday.

--The European Union on Thursday placed further restrictions at its borders on foreign travelers and extended its ban on Americans. The EU shuttered its borders in March due to the pandemic, but began easing those restrictions to 15 countries on July 1, including Montenegro and Serbia, which with its twice-monthly review process, the EU has now removed from the ‘permitted’ list due to rising coronavirus cases in the two countries.

Most Americans won’t be able to visit much of Europe.  In order for the EU to lift its travel restriction on a country, the country must have an average new case rate at or below the EU average on June 15, have a stable or decreasing trend of new cases over the previous 14 days, and meet certain standards on testing, surveillance, contact tracing and containment.

Approved countries must also lift their restrictions on EU travelers.

--Brazilian President Jair Bolsonaro has again tested positive for coronavirus, he told reporters on Wednesday, suggesting he has yet to recover from an infection first diagnosed last week.    Since catching the virus, the president has said he remains in good health as he takes hydroxychloroquine, and a lot of other stuff, while alienating two health ministers who resigned in the middle of the pandemic.  The ministry is being led on an interim basis by an active duty army general.

Speaking of hydroxychloroquine, researchers reported Thursday that it didn’t reduce the severity of Covid-19 symptoms in people newly diagnosed and reporting mild symptoms any better than those who received a placebo.

The results of a 491-person study were published in the Annals of Internal Medicine and led by researchers at the University of Minnesota.

Researchers didn’t find any serious safety problems associated with the drug’s use, such as irregular heart rhythms or deaths.

The trial was conducted from March 22 through May 20.

--Monsoon floods have swamped large parts of India’s densely populated eastern states, forcing more than a million people into makeshift shelters despite the risk of coronavirus.

India needs the annual torrential rains for agriculture, but with thousands of villages submerged, authorities are trying to ensure social distancing in relief camps.

John Fleming of the International Federation of Red Cross and Red Crescent Societies said: “Covid-19 is spreading at an alarming rate in South Asia, home to a quarter of humanity.  India alone is nearing 1 million infections in the coming days.”  [Indian crossed the 1 million mark on Thursday.]

--Tokyo saw a second straight day of record coronavirus cases Friday, with 293 reported amid growing concern about the ability of authorities to suppress the outbreak.  The city had 286 cases Thursday.  But the minister in charge of the virus stressed that serious cases – those in an ICU or needing a ventilator – weren’t’ rising, and that while hospitalizations in Tokyo had increased to 760, the city’s health care system wasn’t under pressure.

But any story like this concerning Tokyo brings us one day closer to the day when officials cancel the 2021 Tokyo Olympics.

--Travelers were left stranded and residents scrambled to buy groceries as Urumqi – capital of China’s Xinjiang region – went into sudden lockdown on Thursday after confirming one new local Covid-19 patient and three asymptomatic cases.

Think about that.  Sudden lockdown over four cases…a city of 3.5 million.  There were scenes of panic buying in supermarkets when residential compounds learned movement would be restricted.

Xinjiang’s Communist Party committee said on Friday, “[We] will resolutely cut off the channel of transmission…”

Of course Xinjiang is also where China is suppressing the Uighur Muslim minority.

--More than 3,000 healthcare workers are known to have died from Covid-19 around the world, with Russia having the highest known total, 545, though this figure is almost certain to be higher.  A study by Amnesty International also concludes the global total is likely to be a “significant underestimate” due to under-reporting.

There is currently no systematic global tracking of health and essential workers mortality rates, according to Amnesty, which has estimated the numbers in its report.

Disgustingly, in many countries, the healthcare workers are met with reprisals from their governments, such as in Egypt, where nine were “arbitrarily detained” between March and June on “vague and overly broad charges of ‘spreading false news’ and ‘terrorism,’” Amnesty’s report said.  “All those detained had expressed safety concerns or criticized the government’s handling of the pandemic.”

--Britain faces a potentially more deadly second wave of Covid-19 in the coming winter that could kill up to 120,000 people over nine months in a worst-case scenario, health experts said on Tuesday.

“This is not a prediction, but it is a possibility,” said Stephen Holgate, a professor and co-lead author of a report by Britain’s Academy of Medical Sciences.

--Almost 100,000 mink at a farm in northeastern Spain are to be culled after many of them tested positive for coronavirus, health authorities say.

The outbreak in Aragon province was discovered after a farm employee’s wife contracted the virus in May.  Her husband and six other farm workers have since tested positive for the disease.

The mink were bred for their prized fur and had been isolated but when tests on July 13 showed that 87% of them were infected, health authorities ordered all 92,700 to be culled.

Trump World

--In reply to President Trump’s commutation of Roger Stone’s prison sentence, Robert S. Mueller III opined in the Washington Post….

“The work of the special counsel’s office – its report, indictments, guilty pleas and convictions – should speak for itself.  But I feel compelled to respond to broad claims that Roger Stone was a victim of our office. The Russia investigation was of paramount importance. Stone was prosecuted and convicted because he committed federal crimes. He remains a convicted felon, and rightly so.

“Russia’s actions were a threat to America’s democracy.  It was critical that they be investigated and understood.  By late 2016, the FBI had evidence that the Russians had signaled to a Trump campaign adviser that they could assist the campaign through the anonymous release of information damaging to the Democratic candidate. And the FBI knew that the Russians had done just that: Beginning in July 2016, WikiLeaks released emails stolen by Russian military intelligence officers from the Clinton campaign. Other online personas using false names – fronts for Russia military intelligence – also released Clinton campaign emails.

“Following FBI Director James B. Comey’s termination in May 2017, the acting attorney general named me as special counsel and directed the special counsel’s office to investigate Russian interference in the 2016 presidential election…One of our cases involved Stone, an official on the campaign until mid-2015 and a supporter of the campaign throughout 2016.  Stone became a central figure in our investigation for two key reasons: He communicated in 2016 with individuals known to us to be Russian intelligence officers, and he claimed advance knowledge of WikiLeaks’ release of emails stolen by those Russian intelligence officers.

“We now have a detailed picture of Russia’s interference in the 2016 presidential election.  The special counsel’s office identified two principal operations directed at our election: hacking and dumping Clinton campaign emails, and an online social media campaign to disparage the Democratic candidate.  We also identified numerous links between the Russian government and Trump campaign personnel – Stone among them. We did not establish that members of the Trump campaign conspired with the Russian government in its activities.  The investigation did, however, establish that the Russian government perceived it would benefit from a Trump presidency and worked to secure that outcome….

“Uncovering and tracing Russian outreach and interference activities was a complex task.  The investigation to understand these activities took two years and substantial effort.  Based on our work, eight individuals pleaded guilty or were convicted at trial, and more than two dozen Russian individuals and entities, including senior Russian intelligence officers, were charged with federal crimes….

“When a subject lies to investigators, it strikes at the core of the government’s efforts to find the truth and hold wrongdoers accountable. It may ultimately impede those efforts.

“We made every decision in Stone’s case, as in all our cases, based solely on the facts and the law and in accordance with the rule of law.  The women and men who conducted these investigations and prosecutions acted with the highest integrity. Claims to the contrary are false.”

--In his ongoing effort to bend the curve, the percentage of black people who will vote for him in November, the president claimed Tuesday in an interview with CBS News’ Catherine Herridge that “more white people” die at the hands of police, despite studies that show Black people are more likely to be killed by law enforcement.  It was the tone that was so disturbing.

Herridge brought up the case of George Floyd.

“Why are African Americans still dying at the hands of law enforcement in this country?” she asked.

“So are white people. So are white people,” Trump replied.  “What a terrible question to ask. So are white people.  More white people, by the way.  More white people.”

Multiple studies have shown that Black men are 2.5 times more likely to be killed by police than white men, according to a University of Michigan, Rutgers University and Washington University study released last year.  The study found that about 100 Black men and boys per 100,000, and 39 white men and boys per 100,000, are killed by police during their lifetimes.

A Harvard analysis of deaths by police from 2013-2017 and published last month found Black men are more than three times more likely than white men to be killed by police.

During the interview that had to have floored former Fox News reporter Herridge, Trump  also defended displays of the Confederate flag as “freedom of speech.”  Trump said that people who love the Confederate flag are “not thinking about slavery,” citing NASCAR fans who displayed the flag before its ban at events as an example.

“All I say is freedom of speech.  It’s very simple.  My attitude is, freedom of speech.  Very strong views on the Confederate flag.  With me, it’s freedom of speech.  Very simple.  Like it, don’t like it, it’s freedom of speech,” Trump told Herridge.

Asked if he would be comfortable with his supporters displaying the flag at political events, Trump said “It depends on what your definition is.  But I am comfortable with freedom of speech.”

“I just think it’s freedom of speech, whether it’s freedom of speech, whether it’s Confederate flags or Black Lives Matter or anything else you want to talk about. It’s freedom of speech,” Trump said.

[The Pentagon today announced its ‘approved’ list of flags allowed on military bases and the Confederate flag was not among them.]

--President Trump demoted Campaign Manager Brad Parscale, a move of desperation with just 100+ days left before the election.

Trump tweeted: “I am pleased to announce that Bill Stepien has been promoted to the role of Trump Campaign Manager.  Brad Parscale, who has been with me for a very long time and has led our tremendous digital and data strategies, will remain in that role, while being a Senior Advisor to the…

“…campaign. Both were heavily involved in our historic 2016 win, and I look forward to having a big and very important second win together.  This one should be a lot easier as our poll numbers are rising fast*, the economy is getting better, vaccines and therapeutics will soon…

“…be on the way, and Americans want safe street and communities!”

*Ed. No they aren’t.

Bill Stepien was a field director in 2016 who previously worked for former New Jersey Gov. Chris Christie.

Ivanka Trump and Jared Kushner are both reported to have blamed Parscale for the disastrous Tulsa rally.

--The administration on Tuesday abandoned its attempt to force foreign students to leave the United States if all of their classes will be taught online this fall, in a dramatic reversal from a cruel policy announced just days earlier.  The government and Harvard University and MIT who sued over the measure reached a settlement that would make the rule moot.

--A New York prosecutor on Thursday warned against allowing President Trump to run out the clock on the Manhattan district attorney’s criminal probe into the president.  Carey Dunne, general counsel for District Attorney Cyrus Vance, spoke at a hearing in federal court in Manhattan to discuss Trump’s renewed legal challenge to block or narrow Vance’s ability to see his tax returns.  The case concerns an August 2019 subpoena to Trump’s accounting firm Mazars USA for eight years of personal and corporate tax returns, related to Vance’s criminal probe into Trump and his Trump Organization.

Dunne told U.S. District Judge Victor Marrero there are looming deadlines to prosecute cases because of statutes of limitations, and more delays could give Trump the “absolute temporary immunity” the Supreme Court has rejected.  “Let not let delay kill this case,” Dunne said.  “Justice delayed becomes justice denied.”

Trump now has until July 27 to file papers formally opposing the subpoena and its scope.

In a Reuters/Ipsos poll this week, 66% of adults agreed that Trump should release his tax returns from earlier years, and 68% said Americans have a right to see presidential candidates’ returns before the Nov. 3 election.

--Mary Trump’s book had sales of 950,000 through Tuesday, the book’s first day of sales, and a first-day record for publisher Simon & Schuster.

--President Trump retweeted the accusations of former game show host Chuck Woolery that “everyone is lying” when it comes to the coronavirus.

“The most outrageous lies are the ones about Covid 19.  Everyone is lying. The CDC, Media, Democrats, our Doctors, not all but most, that we are told to trust.”

Woolery cited no evidence.  The next day he then tweeted: “To further clarify and add perspective, COVID-19 is real and it is here.  My son tested positive for the virus, and I feel for those suffering and especially for those who have lost loved ones.”

Soon thereafter, Woolery deactivated his Twitter account.

There was no further comment from the president.

--Former acting chief of staff and OMB head Mick Mulvaney, as part of an op-ed for CNBC.com, went off on the pandemic effort as he talked about another stimulus program.

“Any stimulus should be directed at the root cause of our recession: dealing with Covid.  I know it isn’t popular to talk about in some Republican circles, but we still have a testing problem in this country.  My son was tested recently; we had to wait 5 to 7 days for results.  My daughter wanted to get tested before visiting her grandparents, but was told she didn’t qualify.  That is simply inexcusable at this point in the pandemic.”

Funny comments from a guy who back in February was dismissing Covid-19.

--Republican Oklahoma Gov. Kevin Stitt announced on Wednesday he has tested positive for the coronavirus and will self-isolate; significant because aside from the fact he is the first governor to test positive, he attended President Trump’s Tulsa rally last month.

--Trump tweets:

“Corrupt Joe Biden wants to defund our police.  He may use different words, but when you look at his pact with Crazy Bernie, and other things, that’s what he wants to do. It would destroy America!”

[Ed. This tweet was issued about an hour before I posted tonight.  It’s all about an interview with Fox News’ Chris Wallace for his Sunday show wherein Wallace points out that in the Biden-Sanders platform, the words ‘defund the police’ don’t exist, despite Trump’s protestations they do.  Trump has his staff get him a copy and the words indeed are not in there. So this is Trump’s attempt to work around what America will see for itself Sunday.]

“I am the ultimate member of The Book of the Month Club. First, I have lowlife dummy John Bolton, a war mongering fool, violating the law (he released massive amounts of Classified Information) and an NDA in order to build badly needed credibility and make a few dollars which….

“….will all end up going to the government anyway.  Next up is Mary Trump, a seldom seen niece who knows little about me, says untruthful things about my wonderful parents (who couldn’t stand her!) and me, and violated her NDA. She also broke the Law by giving out my….

“….Tax Returns.  She’s a mess! Many books have been written about me, some good, some bad.  Both happily and sadly, there will be more to come!”

“Roger Stone was targeted by an illegal Witch Hunt that never should have taken place.  It is the other side that are criminals, including Biden and Obama, who spied on my campaign – AND GOT CAUGHT!”

[Mitt Romney tweeted: “Unprecedented, historic corruption: an American president commutes the sentence of a person convicted by a jury of lying to shield that very president.”]

“Would be so great if the Media would get the word out to the people in a “fair and balanced” way. We will win anyway, but they are a far more difficult adversary than their Radical Left Do Nothing Democrat Partner!”

“Joe Biden claims to be prioritizing ‘safety of kids’ by keeping schools closed this Fall.  Yet he remains silent about children being slaughtered by violence on the streets of Democrat run cities.  You & your children won’t be SAFE in Biden’s America, and neither will anyone else!”

“The Lamestream Media is not talking about what is happening with the Stock Market and JOBS. Both are doing GREAT!  The Radical Left will destroy the USA.  Be careful what you wish for!”

“The Silent Majority will reign!”

“So hard to watch @Foxnews anymore. They are working so hard against the people (viewers) that got them there. Their contributors are a disaster, and all over the place. The Radical Left has scared Fox into submission, just like they have so many others. Sad, but we will WIN!”

“There is so much evidence, yes scientific evidence, that schools should open this fall.  It’s worldwide and it’s overwhelming. BUT NO.”

“We have now built 240 Miles of new Border Wall on our Southern Border.  We will have over 450 Miles built by the end of the year.  Have established some of the best Border Numbers ever. The Radical Left Democrats want Open Borders for anyone, including many criminals, to come in!”

On being slammed for playing a lot of golf…Trump felt compelled to tweet on the topic.

“I know many in business and politics that work out endlessly, in some cases to a point of exhaustion. It is their number one passion in life, but nobody complains.  My ‘exercise’ is playing, almost never during the week, a quick round of golf.  Obama played more and much longer….

“….rounds, no problem.  When I play, Fake News CNN, and others, park themselves anywhere they can get a picture, then scream ‘President Trump is playing golf.’  Actually, I play VERY fast, get a lot of work done on the golf course, and also get a ‘tiny’ bit of exercise.  Not bad!”

Wall Street and the Economy    

We had some important data releases for June this week and retail sales were up a stronger than expected 7.5% after May’s 18.2% record rise.  Industrial production for June was also better than expected, up 5.4%.

June housing starts came in at a 1,186,000 annualized level, a little shy of forecasts but up 17% over the prior month.  And this week, the average rate on a 30-year mortgage was below 3.00% for the first time ever, 2.98%, per Freddie Mac.

June consumer prices rose 0.6%, which ordinarily would be highly worrisome, but the core figure, ex-food and energy, was up just 0.2% and, year-over-year, the headline CPI is the same 0.6%, 1.2% on core.

The Atlanta Fed’s GDPNow barometer for second-quarter activity still reflects a 34.7% historic rate of decline.

But all the above was before the big surge in coronavirus cases in July, which clearly has an impact on the economy of some big states, i.e, California, Arizona, Texas, Georgia and Florida, as well as a few others, such as the Carolinas.  It certainly makes a V-shaped recovery harder to come by.  And the stimulus programs continue to come to an end in July, at least until a new package from Congress, including, critically, moratoriums on evictions and payments of rent and mortgages.

Philadelphia Federal Reserve Bank President said on Tuesday that the economy remains “mired” in crisis and policymakers need to create solutions that offer better support to struggling small businesses.

“Indeed, even as the economy is reopening in fits and starts, the pandemic’s effects are proving not to be just a brief setback” Harker said in remarks to small businesses organized by the Fed.  “We are in a downturn that is both exceptionally painful and stubbornly long-lasting.”

Harker said the Paycheck Protection Program, which offered loans to small businesses that could be converted to grants, was an “immense help” to millions of businesses. But Harker called the program a “blunt instrument,” saying it fell short when it came to aiding businesses in areas hit hard by the virus.  For example, the state of Nebraska, which was less affected by the virus, received a higher rate of PPP loans than states such as New York, New Jersey or Pennsylvania, which were harder hit, he said.

Part of the problem is that many of the smallest businesses in affected areas faced a harder time applying for the program because they did not have existing banking relationships, Harker said.

“And so, when PPP loans became available, these business owners had no ability to access them,” Harker said.  “This is a problem that has disproportionately affected racial minorities and communities of color.”

Or as JPMorgan Chase CEO Jamie Dimon said in releasing his bank’s earnings this week, “The recessionary part of this (economy) you’re going to see down the road.”  You don’t see it now because of all the stimulus that is running off.

Lastly, last week I reported on the Congressional Budget Office’s projections for the deficit in fiscal 2020 and then on Monday, the Treasury Department confirmed the figures I noted from the CBO…the federal budget deficit in June surged to $864 billion from single digits a year earlier amid continued strong spending on coronavirus relief programs and a drop in individual and corporate tax receipts.  The June deficit brought the year-to-date fiscal deficit to $2.7 trillion, far eclipsing the previous full-year record of $1.4 trillion in 2009…and with three months to go in the fiscal year ending Sept. 30.        

Robert J. Samuelson / Washington Post

“It is impossible not to marvel at the apparently indestructible gap between the buoyant stock market and the less-than-buoyant real economy of workers, companies and jobs.  One must say ‘apparently indestructible,’ because maybe there is some simple and obvious explanation that eludes your correspondent.  Otherwise, either the stock market is too high, or the economic outlook is too low.  One or both must be wrong.

“Just last week, the Organization for Economic Cooperation and Development (OECD) – a group of 36 countries – issued its forecast for the United States through 2021.  It is unlikely to inspire much cheering. Acknowledging that much depends on the severity of the coronavirus, the OECD report constructs two scenarios: one that might be termed ‘pessimistic’ and a second that is ‘more pessimistic.’

“Under the ‘pessimistic’ assumptions, the unemployment rate is projected at 11.3 percent at the end of 2020 and the economy (gross domestic product) falls 7.3 percent for the year.  Both the unemployment rate and the GDP decline are larger than in any previous post-World War II recession.  By way of comparison, the peak monthly jobless rate in the Great Recession of 2007-2009 was 10 percent.

“The ‘more pessimistic’ forecast assumes that there is a second wave of coronavirus cases. This delays the economy’s recovery and results in more deaths.  In the ‘double-hit’ scenario, the year-end unemployment rate is 12.9 percent, and the GDP drops by 8.5 percent.  ‘The recession risks leaving behind a long-lasting negative economic impact,’ the OECD warns.  ‘Policies are needed…to help workers and businesses avoid scarring effects and fully recover from the crisis.’

“Of course, the OECD could be too glum.  A new report from the Congressional Budget Office foresees a slightly brighter future.  It reckons the GDP decline for 2020 at 5.9 percent and year-end unemployment at 10.5 percent.  Hardly a boom.  The presidential campaign magnifies the uncertainty….

“The most popular view (for today’s lofty stock market valuations) involves the Federal Reserve’s policy of holding short-term interest rates near zero and flooding financial markets with money.  The idea is that the low interest rates push investors into riskier financial assets, including stocks.  Implied (but not yet said openly) is that the Fed might actually buy stocks to prevent a horrific crash….

“Writing for Project Syndicate, an opinion website, Nobel Prize-winning economist Robert Shiller of Yale University argues that crowd psychology has driven prices up.  He divides the current market move into three separate periods: a 3 percent increase from Jan. 30 to Feb. 19; a 34 percent decline from there to March 23; and about a 40 percent rise from the end of March until now.

“Once the Fed made clear its determination to foster recovery, ‘FOMO’ – fear of missing out – took over, says Shiller. What happens now is anyone’s guess.

“ ‘The stock market and the economy have parted ways,’ says Mark Zandi, chief economist for Moody’s Analytics.  ‘I’m not sure what will trigger a sustained sell-off in stocks, but surging [virus] infections and another round of more business closures will be difficult for investors to ignore much longer.’”

Editorial / Wall Street Journal

It barely gets a headline these days, but we thought readers might like to know that federal spending for the first nine months of fiscal 2020 hit a record $5.005 trillion. Congratulations to everyone, and especially young Americans.  You’ll be paying for it the rest of your lives.

“The Congressional Budget Office fiscal report for June says outlays rose 49% in the first nine months, or $1.649 trillion more than a year earlier.  Most of this was due to the four coronavirus relief bills that Congress passed in recent months.  Unemployment payments were $277 billion compared to $24 billion a year ago, while the new Paycheck Protection Program (PPP) doled out $537 billion.

“Receipts were down only 13% in the first nine months, and much of that reduction came from deferred tax payments. Some of that tax revenue may be collected later in the year, starting with this week’s delayed IRS tax filing deadline for individuals.  But the overall budget deficit from October through June rolled in at $2.744 trillion…and it will get much higher.

“Some of this spending was necessary, especially for health care, and PPP loans have kept many small businesses alive and workers on the job. But tens of billions haven’t even been spent so far, and Congress still wants more.  House Democrats have passed a fifth virus bill spending $3 trillion more, and President Trumps says he wants a fifth bill too.  This means there is likely to be one, as the U.S. tests whether there are limits to what the Treasury can borrow on the cheap. The Federal Reserve is financing deficits for now, but taxpayers will start paying – and paying – next year.”

Europe and Asia

Just a few data points on the eurozone (EA19) economy.  May industrial production rose 12.4% over April (which was down 18.2%) due to an easing of lockdown restrictions.  But year-over-year, industrial production is down 20.9%.

June inflation was up just 0.3% annualized in the euro area.  A year earlier, the rate was 1.3%.

Annualized rates – Germany 0.8%, France 0.2%, Italy -0.4%, Spain -0.3%.

Meanwhile, the European Central Bank announced it will use its stimulus firepower fully even as the eurozone economy shows some signs of rebounding from its pandemic-induced recession, ECB President Christine Lagarde said on Thursday.

Tackling the biggest economic collapse in living memory, the ECB is buying massive amounts of debt and paying banks to lend out its cash in an effort to salvage the bloc’s economy until Europe is ready to reopen after coronavirus lockdowns

Lagarde said economic activity in the EA19 had shown signs of a “significant, though uneven and partial recovery” but the outlook remained uncertain amid risks of a second wave of infections.

“Uncertainty over the scale of the rebound remains high,” Lagarde said.  “The balance of risks remain on the downside.”

Accordingly, the central bank sees no reason to hold back when deploying a $1.49 trillion envelope it has earmarked for buying financial assets under its Pandemic Emergency Purchase Program, Lagarde said. 

“Unless, and we don’t see for the moment frankly, but unless there are significant upside surprises, our base line is that we will need the entire envelope of PEPP,” she added.

Well, today the 27 leaders of the European Union gathered in Brussels and they ended their first day of discussions over an economic recovery fund plan with no agreement after 13 hours of discussions. Talks resume tomorrow.

Brexit: Zero new to report.

Turning to Asia…China released some important data for June.  First and foremost, China’s economy grew 3.2% in the second quarter from a year earlier, better than expected, after a 6.8% decline in the first quarter as the country was in the midst of its Covid-19 crisis.

In Q2 the lockdown measures ended and policymakers stepped up stimulus to combat the shock of February and March, in particular.

President Xi Jinping said China’s long-term sound economic growth fundamentals will not change, the official Xinhua news agency reported on Thursday.  Xi made the remarks in a letter to global CEOs.

But for the first time since 1990 when records began, China still has no GDP target for all of 2020.  For the first six months, the economy fell 1.6%, according to the National Bureau of Statistics.

Separately, industrial production in June was up 4.8% vs. a year earlier, solid, but retail sales unexpectedly fell 1.8% last month from a year ago, as consumer demand continues to be weak despite a lifting of restrictions following the nationwide lockdown.

Fixed asset investment (roads, railroads, airports) was up 3.1% in the first half.

We also had reports on trade for June.  Exports rose just 0.5% year-over-year, with imports up 2.7% yoy when a drop was expected.

Exports to the U.S. were up 1.4% in June vs. a year ago after a 1.3% drop in May.  Imports from the U.S. were up 11.3% after a decline of 13.5% vs. a year ago in May. [Data from the General Administration of Customs]

In Japan, industrial production in May was down 8.9% over April, which was down 9.8% over March.  Industrial production is down 26.3% vs. a year ago.  We get important data on trade this weekend.

Street Bytes

--Earnings for the second quarter started rolling in this week and the next two will see all the tech heavyweights and their hoped for comments on the future.  This was ‘bank week’ and I give a tale of the tape down below.  Otherwise, the market was mixed, with the Dow Jones and S&P 500 rising for a third week in a row by 2.3% and 1.2%, respectively.  The S&P is just six points shy of its Dec. 31 close of 3230.

Nasdaq took a breather after two powerful weeks, down 1.1%.

--U.S. Treasury Yields

6-mo. 0.13%  2-yr. 0.14%  10-yr. 0.62%  30-yr. 1.33%

Virtually unchanged on the week.  Ditto Euro bond yields.

--Oil rallied to over $41 on Wednesday, before falling back a bit to finish the week at $40.57, virtually unchanged on the week, on the heels of the vaccine news and then a bullish inventory report from the Energy Information Administration revealing a sizable drop in domestic crude stockpiles.

The number of oil rigs operating in the U.S. fell by one to 180 in the week through Friday, the lowest since the week ended June 5, 2009, according to data compiled by energy-services firm Baker Hughes.  A year earlier, the U.S. had 779 rigs in operation.

--American Airlines told employees on Wednesday that it could furlough as many as 20,000 people starting Oct. 1, after federal stimulus funds expire.

“We know American will be smaller going forward and we must right-size all aspects of our airline to adjust to that new reality,” CEO Doug Parker and President Robert Isom said in a letter to employees.  “Although this is a day none of us wanted to see, we have created new, generous programs intended to help offset as many frontline furloughs as possible.”

American is actually sending out legally required warnings to 25,000 employees, but the airline said it expects to be overstaffed by 20,000 workers this fall.  10,000 flight attendants, 3,200 maintenance workers, 2,900 passenger service employees and 2,500 pilots, among others, received the notice.

Last week, I detailed United Airlines’ plan to furlough as many as 36,000 workers come October.

Separately, American and JetBlue Airways Corp. announced an alliance that the carriers said would speed their recovery from the pandemic-driven downturn by boosting their position in large Northeast markets.

The two airlines want to market each other’s flights and link loyalty programs to improve their competitiveness at the three New York area airports and in Boston.

--Delta Air Lines said it expects to take a charge of $2.7 billion to $3.3 billion to cover the costs of early retirements and buyouts for employees as it shrinks in response to a sharp decline in air travel.

The airline said this week that 17,000 employees have agreed to depart.  Employees who agree to leave get cash payments, health insurance, and, in some cases, retiree health care benefits.

Delta CEO Ed Bastian said the airline hopes to carry out the “vast majority of the head count changes we need” through voluntary departures, “minimizing, if not eliminating, the need for involuntary furloughs.”

Delta, American and United all received between $5 billion and $5.8 billion in CARES Act funding back in March to help the companies pay workers through Sept. 30.

Meanwhile, Delta announced it was trimming plans for more summer flights after a $5.7 billion loss for the latest quarter underscored the depth of the crisis facing the aviation industry.

CEO Bastian said the recovery from April’s near-collapse in domestic flying had stalled, and the TSA checkpoint numbers bear that out; 22% to 28% of last year’s numbers the last seven days.

The airlines have been adding back flights at a faster clip than demand to protect market share and to be well-positioned for a return to pre-pandemic levels, though that is expected to take three years or more.

“We expect this to be a very choppy recovery,” Bastian said in an interview.  He added that the pause in the demand recovery would leave the airline burning through $27 million in cash a day this month, in line with last month.

--Southwest Airlines CEO Gary Kelly told employees on Monday it needs a dramatic jump in passenger demand or it will be forced to take new steps to reduce staffing.  Employees faced a Wednesday deadline whether to participate in a voluntary incentive program to leave the airline.

“Although furloughs and layoffs remain our very last resort, we can’t rule them out as a possibility obviously in this very bad environment,” Kelly said in his message to employees.  “We need a significant recovery by the end of this year, and that’s roughly triple the number of passengers from where we are today.”

Kelly added that the “recent rise in Covid cases and increasing regional restrictions on businesses and states requiring quarantine aren’t positive developments for our business, and we are concerned about the impact on already weak travel demand.”

--Ryanair will cut 1,000 flights between Ireland and the UK in August and September due to the 14-day quarantine rule on visitors to Ireland, which will suppress demand.  [Ireland announced this week it wasn’t reopening its pubs until at least Aug. 10 due to a rising transmission rate.]

--Emirates is cutting as many as 9,000 jobs because of the pandemic.  Prior to the crisis the Middle East airline that is the world’s biggest long-haul carrier had 60,000 employees.

--El Al Israel Airlines extended its suspension of flights to the end of August and said it reached cost-cutting agreements with the country’s main labor union that will facilitate a government bailout.

The Israel flag carrier, which sent nearly all 6,500 employees on unpaid leave since the coronavirus outbreak, has said it will go bankrupt without state assistance. The government is demanding an overhaul, including some $400 million in cutbacks.

--Boeing delivered just 20 planes in the second quarter, which is not unexpected but this is the lowest quarterly number since 1963.  Boeing delivered 149 planes in the second quarter of 2019 and 184 planes in the second quarter of 2018. 

The aerospace giant on Tuesday reported another 60 cancellations for its grounded 737 MAX jet and removed 123 more aircraft, including 119 MAX jets, from its order backlog because of doubts those deals will be concluded.

Separately, British Airways said it will retire all of its Boeing 747s as it suffers from the travel downturn.  The UK airline is the world’s largest operator of the jumbo jets, with 31 in the fleet.

BA had planned on retiring the planes in 2024 but has brought forward the date due to the crisis in the industry.

--In a serious attack by hackers on Twitter, billionaires Elon Musk, Jeff Bezos and Bill Gates were among the many prominent U.S. figures targeted in an apparent Bitcoin scam.  Others attacked were the official accounts of Joe Biden, Barack Obama and Kanye West.

The message posted requested donations in the cryptocurrency.

“Everyone is asking me to give back,” a tweet from Mr. Gates’ account said.  “You send $1,000, I send you back $2,000.”

Twitter said it was a “coordinated” attack targeting its employees “with access to internal systems and tools.”

“We know they [the hackers] used this access to take control of many highly-visible (including verified) accounts and Tweet on their behalf,” the company said in a series of tweets.

It added that “significant steps” were taken to limit access to such internal systems and tools while the company’s investigation was ongoing.

But this is obviously a huge danger as we approach Nov. 3rd.  Much more to follow and Twitter owes us answers.

--It was Big Bank earnings week….

JPMorgan Chase set aside $10.47 billion to cover potential losses on loans to borrowers hurt by the pandemic.  The nation’s biggest bank by assets is stockpiling reserves with so much uncertainty.  JPM set aside $8 billion in the first quarter.

JPMorgan posted a profit of $4.60 billion, down from $9.65 billion a year earlier, with revenue rising 15% to $33 billion.

JPM’s trading revenue surged 77% in a quarter that saw record-breaking volumes in financial markets.  Bond trading alone generated $7.3 billion in revenue as central banks bought billions more in government paper under the huge stimulus programs to deal with the pandemic.

In a release, CEO Jamie Dimon said that despite some recent positive data and decisive government action, “we still face much uncertainty regarding the future path of the economy.”

“The consumer’s incomes are up, savings are up and home prices are up.  The recessionary part will come later,” Dimon said, when I was wrote earlier all the stimulus washes out.

The bank is expecting double-digit unemployment in the U.S. through the first half of 2021, but warned that it may not have much visibility into the damage it is dealing with.

--Wells Fargo & Co. posted its first quarterly loss since the 2008 financial crisis as the coronavirus forced it to set aside $9.57 billion to cover potential loan losses while slashing its dividend, thus derailing efforts to recover from a sales scandal.

Wells has suffered because it does not have a strong capital markets business to lean on like its peers.

The bank reported a net loss of $2.4 billion for the quarter ending June 30, compared with a profit of $6.2 billion in the year-earlier period.  Most analysts called Wells’ results “awful.”

The Federal Reserve placed an asset cap on the bank as a penalty for its misdeeds.

CEO Charlie Scharf promised changes to improve the bank’s performance and said while the hit from the pandemic was unprecedented, its franchise should perform better.

“We are extremely disappointed in both our second quarter results and our intent to reduce our dividend.  Our view of the length and severity of the economic downturn has deteriorated considerably from the assumptions used last quarter,” Scharf said.

--Citigroup Inc. saw its profit fall 73%, weighed down by the $7.9 billion the bank set aside for an expected increase in soured loans.

“The pandemic has a grip on the economy, and it doesn’t seem likely to loosen until vaccines are widely available,” Citigroup CEO Michael Corbat said.

--Goldman Sachs blew away market expectations with earnings of $6.26 per share, $2.35 better than the Street’s estimate of $3.91, while revenues rose 40.5% year-over-year to $13.29bn vs. estimates of $9.76bn, as its trading desks rocked; benefiting from heightened market volatility that impacted markets in April, May and June as anxious investors tried to determine the economic impact of the pandemic.

Net revenues in Global Markets were $7.18bn for Q2, 93% higher than the second quarter of 2019 and 39% higher than the first quarter of 2020.  Investment Banking generated record quarterly net revenues of $2.66bn, including record quarterly net revenues in both Equity and Debt underwriting.

Goldman had to set aside $1.59bn to cover potentially bad loans in the quarter, but this is significantly less than the amounts JPMorgan Chase, Citigroup and Wells Fargo had to set aside, due to the small size of Goldman’s consumer banking business compared to its competition.

--Morgan Stanley posted a record quarterly profit on Thursday that blew past analysts’ expectations, gaining from its trading operations.  But CEO James Gorman cautioned that the record-setting numbers would be hard to repeat in the coming quarters.

“Clearly, it will be challenging for the back half of 2020 to meet the record first half results… That said, many parts of our business should continue to perform well,” said Gorman.  He attributed the success of the quarter to the bank’s decade-long plan that balances the stability of the wealth management business and a minimal exposure to consumer loans against the unpredictability of its trading business.

MS set aside just $239 million to brace for potential credit losses, lower than the previous quarter, as the bank doesn’t have a credit-card business nor does it lend to small businesses – sectors badly hit by the pandemic.

Equities trading revenue rose 23%, with overall revenue jumping 31% to a record $13.41 billion in the quarter.  The bank’s earnings rose 45% to $3.2 billion.

--Bank of America’s second quarter profits were sawed in half and the consumer banking giant set aside $4 billion to cover potentially bad loans, but less than most competitors.

Profit of $3.53 billion was down from $7.34 billion in the same period a year ago.  Wall Street had expected worse but the shares still fell.

Because it is so consumer-focused, BofA is feeling the effects of the coronavirus pandemic more acutely than other major banks.  During the quarter, the bank processed 1.8 million requests for payment deferrals on credit cards, mortgages and auto loans, of which 1.7 billion are still in place as of last week.

--Bank of New York reported earnings and revenue that exceeded expectations but the shares fell after CEO Todd Gibbons said in a statement that “downside risks remain from the economic uncertainty and the significant pressure from low interest rates” for the remainder of 2020.

The company did post earnings of $1.01 vs. Wall Street’s expectation for $0.87 on revenue of $4 billion vs. estimates of $3.89bn.

--Netflix reported second quarter earnings on Thursday that missed analyst expectations for earnings, but beat on new subscribers and total revenue.

The company added 10.1 million paid subscribers, a record number for the quarter, in a boost likely provided by the hundreds of millions of people spending more time at home due to the pandemic.

But the shares fell heavily in the aftermarket as Netflix announced it expected 2.5 million new paid subscribers in the third quarter, in a sign that easing lockdown measures may have negatively impacted the company.

“Growth is slowing as consumers get through the initial shock of Covid and social restrictions,” Netflix said in a statement.

The company also announced Chief Content Officer Ted Sarandos was being promoted to co-CEO, while retaining his chief content officer title.  He has long been expected to succeed Reed Hastings as CEO, having overseen content operations since 2000, while being pivotal in the company’s transition from a DVD rental business to a massively popular streaming hub with a raft of original productions such as “House of Cards” and “Orange is the New Black.”

--Walmart announced on Wednesday that as of this coming Monday, it will require shoppers to wear face coverings.

“While we’re certainly not the first business to require face coverings, we know this is a simple step everyone can take for their safety and the safety of others in our facilities,” Walmart officials said in an online post.

Walmart said it has created the new position of health ambassador who will be posted at a store’s entrance to remind shoppers about the mask requirement and to find a solution if a customer arrives without one.

Kohl’s then announced it would require shoppers to wear face coverings at its more than 1,100 stores nationwide starting Monday.  Kroger announced the same.

On Tuesday, Best Buy said it would require customers to wear face masks and would provide one if needed.  Ditto Starbucks.  Costco and Apple have required them since May.

Then Thursday, CVS and Target announced they too will require masks in their stores.

--UnitedHealth Group Inc. saw profits rise sharply because of savings from surgeries, hospital stays and doctor visits canceled amid the pandemic, though UNH said health care returned to near-normal levels in recent weeks.

UnitedHealth, parent of the largest U.S. health insurer, UnitedHealthcare, posted net income of $6.64 billion, compared with $3.29bn in the same period last year.

Elective surgeries paused for months this spring as hospitals braced for a surge of coronavirus patients and the insurers’ payouts for coronavirus care so far fall well short of the savings they have accrued from all of the foregone procedures and routine care.

The earnings report is really totally unprecedented and UnitedHealth says it expects higher health-care costs in the second half of the year, as people seek deferred care.

UNH’s enrollment in commercial plans dropped, a sign of the impact of the economic downturn, while insurers saw growing membership in its Medicaid and Medicare products.

--At its peak on Monday, Tesla was valued at more than $330 billion, more than Toyota, Ford Motor, General Motors and Fiat Chrysler combined, as the share price hit $1,795 before a wicked pullback, finishing the week at $1,500.

--Auto sales in China increased 10.4% in the second quarter year over year as dealers and automakers begin to recover from the coronavirus.

The government-backed China Association of Automobile Manufacturers said Friday that the industry had bounced back more strongly than expected, posting its first quarterly gain in two years.  June sales of 2.3 million were up 11.6% year over year, a record for the month.

But sales were down 16.9% year over year in the first six months of 2020, basically assuring a third straight year of declines.

Ford Motor said its second-quarter sales in China increased 3% to 158,589, the first such increase in three years.  General Motors’ China sales declined 5.3% vs. a year ago to 713,600.

Toyota Motor Corp.’s China sales increased 23% in June, while the second-quarter surge meant for the first half, Toyota’s sales were down only 2%.  Ford and GM were down 10% and 25% in the first half, respectively.

Electric-vehicle sales in China continued to fall; down 37% year over year in the first half of 2020, though Tesla had the bestselling EV in China in the first six months.

--Last WIR I noted that British Prime Minister Boris Johnson was preparing to issue an order purging Huawei telecom equipment from Britain’s 5G network by the end of 2025.  When the order went through Tuesday, the deadline was extended to end of 2027.

Britain’s “discriminatory” ban on Huawei has severely damaged China’s investment confidence in the country, China’s commerce ministry said on Thursday, adding it will take necessary measures to defend Chinese firms’ legal rights.

“China is evaluating the UK actions that have betrayed free trade principles and will take necessary measures to resolutely defend Chinese firms’ legal rights,” ministry spokesman Gao Feng said during a weekly briefing, without giving any details.

Chinese ambassador Liu Xiaoming questioned whether the UK can provide a “fair” business environment for foreign firms.  “Disappointing and wrong decision by the UK on Huawei,” he tweeted.  China said the Huawei decision would cost Britain dearly in investment.

President Trump welcomed the UK decision, calling Huawei “unsafe.”

“We convinced many countries, many countries – and I did this myself for the most part – not to use Huawei because we think it’s an unsafe security risk, it’s a big security risk,” he said.

Britain denied Trump was responsible for its own decision.

--As I was going to post last Friday night, this story hit that Amazon had asked its employees to delete the Chinese-owned video app TikTok from their cellphones.  Five hours later, Amazon reversed course, saying the email to workers was sent in error.

Another classic case of ‘wait 24 hours.’ 

But the sentiment is now out there, part of a growing storm surrounding TikTok, which has Chinese ownership and has come under increased scrutiny in Washington over its security.

Wells Fargo told some workers who had installed TikTok on company-owned phone to delete the app.  “Due to concerns about TikTok’s privacy and security controls and practices, and because corporate-owned devices should be used for company business only, we have directed those employees to remove the app from their devices,” a Wells spokeswoman said in a statement.

--Walt Disney was forced to shut down Hong Kong Disneyland again after it reopened less than a month ago, as additional daily coronavirus cases confirmed by the local government rose to 52 on Monday.

But Disney World in Orlando resumed operations last Saturday amid the surge in cases in Florida.  Disneyland in Anaheim has not reopened.

Shanghai Disney Resort in China reopened on May 11, Tokyo Disney Resort in Japan reopened on July 1, and Disneyland Paris had a partial reopening Wednesday.

--Carnival’s Holland America Line unit said it will sell four of its ships to two unnamed buyers and cancel cruises for the ships’ deployments amid the Covid-19 crisis.

--Chipotle Mexican Grill said it is adding as many as 10,000 employees as it opens more stores with drive-through lanes for digital orders.

Chipotle expects more than 60% of new stores that it opens will include drive-through lanes, which are strictly for picking up orders placed in advance online.

--Domino’s Pizza reported fiscal Q2 net income of $2.99 per share, up from $2.19 per share in the prior-year period, as revenue for the quarter ended June 14 was $920 million, compared with $811.6 million a year earlier.

U.S. same-store sales growth was 16.1% vs. 3% a year ago with the most recent period “positively impacted by customer ordering behavior during the Covid-19 pandemic,” Domino’s said in a statement.

--JCPenney said it would cut 1,000 jobs and shutter 152 stores as the department store chain looks to emerge from Chapter 11 protection and the coronavirus crisis.  The layoffs affect corporate, field management and international roles.

--Carnegie Hall dipped into its endowment after a generous loan from the Paycheck Protection Program ran dry, the famed music hall furloughing 51 full-time staff, effective Monday.  The $5.5 million loan, secured from Citibank, kept 274 employees paid through the end of June. Carnegie Hall had 350 employees at the start of March.

--New York City’s unemployment rate climbed to 20.4% in June, with a loss of roughly 760,000 private-sector jobs compared to this time last year, the state Department of Labor said Thursday.  It was 3.4% in February.

--New York City’s mass transit system is run by the Metropolitan Transportation Authority, or MTA, which finds itself in a dire financial crisis, with the MTA currently projecting a shortfall of more than $10 billion through the end of 2021.

The MTA spends about $17 billion annually running buses and trains.  It relies for more than two-thirds of its revenues on fares, tolls and dedicated payroll and other taxes that have been decimated by the pandemic.

So picture that by April, mass transit ridership had fallen more than 90%; at its low point, 400,000 subway riders on a weekday from a pre-pandemic average of 5.5 million.

But today, with New York reopening, bus ridership is still down 50% and subway ridership down 80% from usual levels.  Yet the MTA runs an almost full schedule on trains and buses to reduce crowding.  And now it’s spending an additional $500 million to disinfect trains, buses and stations.

It’s just a freakin’ disaster.

--I asked a good friend and expert for an update on the inground pool business and I need to keep his name anonymous but he passed along a note from a company in Pennsylvania. 

“When you have a good company and product you sell 64 inground pools in the last 3.5 weeks!?  Average is 11.  Unfreakingbelievable… 2021 is now nearing a sellout.”

Yes, 2021.  If you order a pool today, you sure as heck aren’t able to put it in until next year.

You all know the reason. Staycations.  From my office perch, I look down on a slew of single-family homes and two of them have purchased very nice above-ground pools just for their kids this long summer.

--Fox News host Tucker Carlson distanced himself and his program from the incendiary hate speech posted online by a former writer, Blake Neff.

But critics who expected an apology from Carlson did not get one.  Instead Carlson delivered a parting shot as he suddenly headed off for a brief vacation.

“What Blake wrote anonymously was wrong,” Carlson said Monday on his program, reading from a statement.  “We don’t endorse those words, they have no connection to the show. It is wrong to attack people for qualities they cannot control.  In this country we judge people for what they do, not for how they were born.  We often say that because we mean it.  We’ll continue to defend that principle often alone among national news program because it is essential…Blake fell short of that standard and he has paid a very heavy price for it.”

Neff shared racist and bigoted opinions on Black and Asian people, the Mormon church and immigrants.

But Carlson had harsh words for his detractors whom he accused of reveling in Neff’s departure.  “We are all human,” he said.  “When we pretend we are holy, we are lying. When we pose as blameless in order to hurt other people we are committing the gravest sin of all and we will be punished for it. There is no question.”

“Tucker Carlson Tonight” is the most watched program in all of television, but he was struggling with advertisers lately prior to this episode.

Foreign Affairs

China, Hong Kong and Taiwan: In a blistering speech with long-range ramifications, Attorney General William Barr warned on Thursday that the Chinese Communist Party has launched an “economic blitzkrieg” to topple the U.S. from its perch as the world’s superpower, laying out the threat as the most important issue of this century and calling for the free world to join together in a “whole of society approach” against it.

“How the United States responds to this challenge will have historic implications and will determine whether the United States and its liberal democratic allies will continue to shape their own destiny or whether the CCP and its autocratic tributaries will control the future,” Barr said during a speech at the Gerald R. Ford Presidential Museum in Grand Rapids, Mich.

“The People’s Republic of China is now engaged in an economic blitzkrieg – an aggressive, orchestrated, whole-of-government (indeed, whole-of-society) campaign to seize the commanding heights of the global economy and to surpass the United States as the world’s preeminent superpower,” he continued.

By exceeding World Trade Organization quotas on domestic output, “it is clear that the PRC seeks not merely to join the ranks of other advanced industrial economies, but to replace them altogether.

“The General Secretary of the Chinese Communist Party, Xi Jinping, who has centralized power to a degree not seen since the dictatorship of Mao Zedong, now speaks openly of China moving ‘closer to center stage,’ ‘building a socialism that is superior to capitalism,’ and replacing the American Dream with the ‘Chinese solution.’

Barr said China’s “Made in China 2025” initiative seeks to dominate high-tech industries like robotics and information technology and electric vehicles, which “poses a real threat to U.S. technological leadership.”

“ ‘Made in China 2025’ is the latest iteration of the PRC’s state-led, mercantilist economic model. For American companies in the global marketplace, free and fair competition with China has long been a fantasy.”

Barr noted that America aided China’s rise by granting the country favored-trading status in 1980 and supporting its joining the World Trade Organization a decade later.

China “used tariffs and quotas to pressure American companies to give up their technology and form joint ventures with Chinese companies. Regulators then discriminated against American firms, using tactics like holding up permits. Yet few companies, even Fortune 500 giants, have been willing to bring a formal trade complaint for fear of angering Beijing,” he said.

Even more, Barr said American companies have become dependent on the China markets to provide “vital goods and services” – a situation that has been emphasized during the pandemic.

Barr said the Chinese Communist Party has launched an “orchestrated” campaign enlisting the government and society to “exploit the openness of our institutions in order to destroy them.”

To counter Beijing’s efforts and “to secure a world of freedom and prosperity for our children and grandchildren,” Barr said the free world will have to mount its own “whole-of-society approach.”

“America has done that before.  If we rekindle our love and devotion for our country and each other, I am confident that we – the American people, the American government, and American business together – can do it again.  Our freedom depends on it,” he said.

Barr called on America’s corporate executives and the tech giants of Silicon Valley to defy China’s encroachment.

“The ultimate ambition of China’s rulers isn’t to trade with the United States.  It is to raid the United States,” he said.

Barr also warned those who believe trade and investment would appease and liberalize China that it has no desire to be an open and democratic society.

“As its ruthless crackdown of Hong Kong demonstrates once again, China is no closer to democracy today than it was in 1989 when tanks confronted pro-democracy protesters in Tiananmen Square.  It remains an authoritarian, one-party state in which the Communist Party wields absolute power, unchecked by popular elections, the rule of law, or an independent judiciary,” he said.

Barr said American companies, hungry for short-term profits, have come under Beijing’s influence – “even at the expense of freedom and openness in the United States.”

“Globalization does not always point in the direction of greater freedom. A world marching to the beat of Communist China’s drums will not be a hospitable one for institutions that depend on free markets, free trade, or the free exchange of ideas,” he said.

So in retaliation for Beijing imposing its new strict national security law on Hong Kong to crackdown on pro-democracy protests, President Trump signed an executive order this week slapping sanctions on Chinese officials.

It also removes Hong Kong from special trade status it had enjoyed with the U.S. when it was semi-autonomous.

The president also said he’s “not interested” in meeting with his counterpart Xi to hammer out a phase two trade deal.

China’s foreign ministry said it will impose retaliatory sanctions against U.S. individuals and entities in response to the law targeting banks, saying in part, “Hong Kong affairs are purely China’s internal affairs and no foreign country has the right to interfere.”

Separately, Secretary of State Mike Pompeo said China’s pursuit of offshore resources in parts of the South China Sea is “completely unlawful.”  Pompeo said he wanted to make clear that Beijing’s “campaign of bullying to control” the disputed waters was wrong.

As I’ve detailed over many years, China has been building military bases on artificial islands in the region also claimed by Brunei, Malaysia, the Philippines, Taiwan and Vietnam.

Beijing claims it essentially owns the entire area under its “nine-dash line.”  The sea is also a shipping route and has major fishing grounds.

In a statement on Monday, Pompeo denounced China’s claims on the disputed Spratly Islands in the South China Sea, saying Beijing had “no legal grounds to unilaterally impose its will on the region.”

He said the U.S., which has previously said it does not take sides in territorial disputes, rejected Beijing’s claims to waters off Vietnam, Malaysia and Indonesia.

“Any [People’s Republic of China] action to harass other states’ fishing or hydrocarbon development in these waters – or to carry out such activities unilaterally – is unlawful,” he said. 

“The world will not allow Beijing to treat the South China Sea as its maritime empire.”

In a statement posted on Twitter, the Chinese embassy in Washington, D.C. said the U.S. State Department “deliberately distorts the facts and international law including the United Nations Convention on the Law of the Sea.”

As if all the above isn’t disturbing enough, Friday, Taiwan officials in Hong Kong were told their visas will not be renewed if they don’t sign a document supporting Beijing’s claim to Taiwan under its “one China” policy, as first reported by Reuters.

The move comes after Taipei strongly criticized the new security law imposed on Hong Kong by Beijing, and opened an office in Taipei this month to help people who may want to leave the Asian financial hub.

Several Taiwanese officials at its de facto Hong Kong consulate who were due to renew their visas have been asked by the city’s government to sign the document, a senior official said, calling it an unprecedented move and an “unnecessary political obstacle” for Taipei-Hong Kong ties.

The Taiwanese official told Reuters, “We will try our best to defend our stance.  Our representatives in Hong Kong will hold fast to their position.”

Meanwhile, last weekend some 600,000 Hong Kongers cast votes in democratic primaries, which aren’t part of Hong Kong’s formal political process but determine who will run against pro-Beijing candidates in September’s Legislative Council elections.  Hong Kong’s elections are rigged to favor Beijing’s choices, but as the Wall Street Journal editorialized, “this year the pro-democracy camp hoped to gain enough seats to prevent the worst proposals from becoming law.  In last fall’s district-council elections, Hong Kongers elected pro-democracy candidates in a landslide.”

Editorial / Washington Post

“So far, Hong Kongers have received only limited support from Western democracies.  The United States and European Union have condemned the new security law; Britain and Australia have offered asylum to Hong Kong refugees, and the United States is imposing sanctions on some officials. The Xi regime brushes off such gestures; people in Hong Kong know that the repression will likely escalate.  Nevertheless, they persist.  It’s a historic display of civic will and courage.”

Lastly, the U.S. State Department warned American citizens to “exercise increased caution” in China due to heightened risk of arbitrary law enforcement including detention and a ban from exiting the country.

“U.S. citizens may be detained without access to U.S. consular services or information about their alleged crime,” the State Department said in a security alert.

Russia: Russian spies are targeting organizations trying to develop a coronavirus vaccine in the UK, U.S. and Canada, security services from all three have warned.

The UK’s National Cyber Security Centre (NCSC) said the hackers “almost certainly” operated as “part of Russian intelligence services.”

It did not specify which organizations had been targeted, or whether any information had been stolen.  But it said vaccine research had not been hindered by the hackers.

Russia has denied responsibility.

“We do not have information about how many have hacked into pharmaceutical companies and research centers in Great Britain. We can say one thing – Russia has nothing at all to do with these attempts,” said Dmitry Peskov, a spokesman for President Putin, according to the Tass news agency.

The warning was published by an international group of security services: the NCSC, the U.S. Department for Homeland Security Cyber-security Infrastructure Security Agency, the U.S. National Security Agency, and the Canadian Communication Security Establishment.

The latest accusations are unusual in that officials are directly pointing the finger at Russian spies rather than talking generally about “state-backed hackers” or using other more cautious references.

And they are also challenging them over targeting something that the general public recognizes as being highly sensitive – coronavirus vaccine research – rather than simply some company or government department’s information.

The UK, U.S. and Canadian agencies said the hackers had exploited software flaws to get access to vulnerable computer systems, and had used malware called WellMess andWellMail to upload and download files from infected machines.

They are also said to have tricked individuals into handing over login credentials with spear-phishing attacks.

Specifically, Western officials identified the hacking group as Russia-supported APT29, which is also known as Cozy Bear.

Iran: Authorities are investigating a blaze that damaged seven ships at the southern port of Bushehr, the latest in a string of fires and explosions that have raised suspicions of coordinated sabotage targeting the nation’s infrastructure and a nuclear facility.

It’s bizarre seven ships would catch fire like this, but the blaze follows a series of incidents, at least eight in less than three weeks, that the government has characterized as accidents.  Tehran has still not given a cause for the most serious incident, a massive explosion July 2 at Natanz, one of the country’s key nuclear facilities.  The blast dealt extensive damage to an assembly center for advanced centrifuges. 

Meanwhile, Iran and China are seeking to cement a wide-ranging partnership that would deflect U.S. economic pressure and ease Tehran’s global isolation. 

A draft of the deal, which requires Iranian parliamentary approval, would pave the way for Chinese investments in Iranian free-trade zones and for joint projects in countries such as Syria and Iraq.  Under a 25-year partnership, China would also import “sustainable” levels of Iranian oil, but offered no further details.

China has been resisting U.S. attempts to cut its consumption of Iran’s crude-oil supply to zero.  Sales to China still account for the majority of oil that Iran exports.

Israel: Prime Minister Benjamin Netanyahu’s popularity is plummeting amidst his government’s response to the coronavirus.  Israel essentially opened everything up in May, having seemingly defeated Covid-19, but now it is seeing record case numbers and is beginning to lockdown anew.

Netanyahu admitted Wednesday night that the government made a mistake in the way it opened: “The opening of the banquet halls and large gatherings…these things lead to a disaster and raise the level of morbidity,” he said.  “So, our guidelines will be very strict about gatherings.”

Unemployment in Israel has soared to 21%, while 387 have died from the coronavirus as of Friday.

Afghanistan: A Taliban attack on a government intelligence headquarters in the northern part of the country killed 11 security forces and injured dozens of civilians, further straining a peace process meant to pave the way for a withdrawal of American troops.

The assault Monday capped a bloody 24-hour wave of violence across Afghanistan, where Taliban insurgents killed at least 25 government forces in separate attacks on three security posts around the country and this comes amid a stalled peace process between the Afghan government and the Taliban, which was intended to follow a preliminary agreement in February between the U.S. and the insurgents.  At the same time, the government is struggling to respond to the coronavirus crisis.  Deaths have been spiking and now total nearly 1,150.

Poland: President Andrzej Duda won five more years in power on a socially conservative, religious platform in a closely fought election that makes renewed confrontation with the European Union’s executive likely.  Duda, 48, won 51.03% of the vote, the National Election Commission said, while Liberal Warsaw Mayor Rafal Trzaskowski received 48.97%.

Duda is allied with the ruling nationalist Law and Justice (PiS) party, and his victory reinforces the government’s mandate to pursue reforms of the judiciary and media which the European Commission says subvert democratic standards.

Duda has painted himself as a guardian of traditional values and the generous PiS welfare programs that have transformed life for many poorer Poles.

But he ran an acrimonious campaign laced with homophobic language, attacks on private media and accusations that Trzaskowski serves foreign interests.

Since the polls closed, Duda has been more conciliatory.

Canada: Prime Minster Justin Trudeau is embroiled in his third ethics commission inquiry, the latest involving a government contract to a charity that paid his family.

We Charity was tapped by his government to oversee a $664 million youth volunteer program in June and it later emerged that We previously paid Trudeau’s relatives about $200,000 to speak at events.

“I made a mistake for not recusing myself from the discussions immediately, given my family’s history,” Trudeau said Monday.

The prime minister has not been paid by the organization himself, although he has spoken at We events for free.  He said he should have known his family had been paid, since they are frequently hired for professional speaking engagements.

Random Musings

--Presidential tracking polls….

Gallup: 38% approval for President Trump’s job performance, 57% disapproval; 91% of Republicans approve, 33% of independents (June 8-30).
Rasmussen: 45% approve, 53% disapprove (June 17…same as last week).

--A new Wall Street Journal/NBC News national survey found that 51 percent of voters said they would vote for Joe Biden, with 40 percent backing Trump.  Last month in this poll, Biden’s lead was seven.

42 percent of voters approve of Trump’s job performance, with 56 percent disapproving – his lowest job-approval rating since April 2018.

--In a new Quinnipiac University national poll released Wednesday, registered voters back Joe Biden over Trump 52-37 percent, which compares to a June 18th national poll when Biden led 49-41.

Independents are a key factor behind Biden’s widening lead as they now back him 51-34 percent, while in June, independents were split with 43 percent for Biden and 40 percent for Trump.  Republicans back Trump 84-9 percent, compared to 92-7 percent in June.  Democrats back Biden 91-5, little changed from 93-4 in June.

On the coronavirus response, Biden leads 59-35 percent, with voters giving Trump a negative 35-62 percent approval rating for his handling of the crisis.  By a 67-30 margin they do not trust the information the president is providing about the pandemic.  *By 65-26 percent, on the other hand, voters trust the information Dr. Anthony Fauci is providing.

On the issue of “Honesty,” 31 percent say President Trump is honest; 66 percent say “no.”  46 percent say Biden is honest; 42 percent say no.

On the issue of reopening schools, voters say by more than 2 to 1, 61-29 percent, that they disapprove of the way Trump is handling things.

Slightly more than 7 in 10 Americans, 71-26 percent, think everyone should be required to wear face masks in public.

Voters say 54-40 percent they support removing Confederate statues from public spaces, while by a 51-42 margin, they support renaming military bases named after Confederate generals.

A majority, 56 percent, see the Confederate flag more as a symbol of racism.  35 percent see it more as a symbol of Southern pride.

Trump’s overall job approval rating is an abysmal 36 percent in the Q poll, with 60 percent disapproving, down from a June 18 split of 42-55.

--A new ABC News/Washington Post national poll shows six in 10 disapprove of how President Trump is handling the pandemic, up steeply from the early days of the outbreak.

Just 38% now approve of Trump’s response, down from 46% in late May and a narrow majority, 51%, in late March.  Disapproval gained 15% in the same period to 60%.

Only 34% of Americans place a great deal or good amount of trust in what Trump says on the coronavirus, while 64% trust him not so much or – in the case of nearly half the public – not at all.

By 63% to 33%, Americans say it’s more important to control the spread of the virus than to restart the economy.

And 79% say they wear a mask all or most of the time when they’re around other people outside their home.

--A CNBC-Change Research poll of likely voters in six battleground states (Arizona, Florida, Michigan, North Carolina, Pennsylvania and Wisconsin) found 45 percent approval of Trump’s overall job performance versus 55 percent disapproval.

On the topic of the coronavirus, 54 percent said Biden and the Democrats would do a better job compared to 46 percent for Trump and the Republicans.

--A CBS News Battleground Tracker YouGov poll of three key Sun Belt states has Biden leading Trump by six points in Florida, while the two are tied in Arizona and virtually tied in Texas (46-45 Trump).

In Arizona, 31% believe the state’s coronavirus efforts are going well, while 69% say they are going badly; in Florida the ratio is 34-65; and in Texas it’s 37% going well, 62% going badly.

In all three states, most voters say their state reopened too soon, and those who say this feel their state went too fast under pressure from the Trump administration.

Trump won Florida 49.0%-47.8%, Texas 52.2%-43.2%, and Arizona 48.7%-45.1% in 2016.

[A new Dallas Morning News/University of Texas at Tyler poll found Biden had 46% support to Trump’s 41%.]

--A Monmouth University Poll of registered voters in Pennsylvania has Biden leading Trump 53% to 40%, with 3% saying they will vote for another candidate and 4% who are undecided.  Biden is in a relatively stronger position among his fellow Democrats (93% to 1%) than Trump is among Republican voters (84% to 12%).  Biden enjoys a 54% to 33% advantage among independents.

White voters without a college degree prefer Trump (55% to 39%), while Biden leads among white college graduates (61% to 34%) and voters who are Black, Hispanic, Asian or from other racial groups (76% to 16%).

But it’s going to be largely about turnout.  If there is a ‘lower’ turnout, Monmouth’s model has Biden with just a 51-44 margin.

Just 42% of registered voters in the state say Trump has done a good job on the coronavirus while 56% say he has done a bad job.  By contrast, Pennsylvania Gov. Tom Wolf, a Democrat, earns praise on the issue – 67% say he has done a good job and just 29% say he has done a bad job.

Trump defeated Hillary, 48.2% to 47.5%, in 2016.

--Jeff Sessions’ long political career in all probability came to a screeching halt on Tuesday.  The first senator to back Donald Trump’s candidacy in 2016, Trump tapped Sessions to be his first attorney general, after serving in the Senate from 1997 to 2017, but their relationship soured when Sessions recused himself from the investigation into Russian meddling in the election.  Sessions then resigned in late 2018 under withering criticism from Trump.

But Tuesday, Sessions lost a primary bout against former Auburn football coach Tommy Tuberville, whom Trump endorsed, 61% to 39%.  Tuberville now goes up against Democratic incumbent Sen. Doug Jones in November.

Sessions defended his actions as he backed Tuberville.

“On recusal, I followed the law, I did the right thing, and I saved the president’s bacon in the process,” he told supporters.  “I would do it again.  I leave elective office with my integrity intact and my head held high.”

Tuesday night Trump tweeted:

“Wow, just called! @TTuberville – Tommy Tuberville WON big against Jeff Sessions. Will be a GREAT Senator for the incredible people of Alabama. @DougJones is a terrible Senator who is just a Super Liberal puppet for Schumer & Pelosi.  Represents Alabama poorly. On to November 3rd.”

--There are at least five GOP groups aimed at denying President Trump a second term by encouraging just enough disaffected Republican voters that it is in the best interest of the nation to support Joe Biden.

Republican Voters Against Trump has conservative writer Bill Kristol among its leaders; the Lincoln Project, whose co-founders include George Conway, which has been producing some devastating ads; former Trump aide Anthony Scaramucci is supporting the Right Side PAC; former George W. Bush administration staffers launched the 43 Alumni for Biden super PAC; while a fifth group features Republican national security experts.

“We’re all in this together. We are allies, and we all see our efforts as complementary.  We all have our own ways of prosecuting our case against the president,” said Reed Galen, a top adviser to the Lincoln Project who previously worked for George W. Bush, the late Sen. John McCain and former Gov. Arnold Schwarzenegger.  “The Lincoln Project does its best to…take him on in a very direct manner that keeps him and his campaign off balance politically.”  [Seema Mehtastaff / Los Angeles Times]

--George F. Will / Washington Post

“Because of his incontinent use of it, the rhetorical mustard that the president slathers on every subject has lost its tang.  The entertainer has become a bore, and foretelling his defeat no longer involves peering into a distant future. Early voting begins in two states (South Dakota and Minnesota) 61 days from Sunday, which is 107 days before Election Day.

“Never has a U.S. election come at such a moment of national mortification.  In April 1970, President Richard M. Nixon told a national television audience that futility in Vietnam would make the United States appear to the world as “a pitiful, helpless giant.’  Half a century later, America, for the first time in its history, is pitied.

“Not even during the Civil War, when the country was blood-soaked by a conflict involving enormous issues, was it viewed with disdainful condescension as it now is, and not without reason: Last Sunday, Germany (population 80.2 million) had 159 new cases of Covid-19; Florida (population 21.5 million) had 15,300.

“Under the most frivolous person ever to hold any great nation’s highest office, this nation is in a downward spiral.  This spiral has not reached its nadir, but at least it has reached a point where worse is helpful, and worse can be confidently expected.

“The nation’s floundering government is now administered by a gangster regime.  It is helpful to have this made obvious as voters contemplate renewing the regime’s lease on the executive branch.  Roger Stone adopted the argot of B-grade mobster movies when he said he would not ‘roll on’ Donald Trump.  By commuting Stone’s sentence, Stone’s beneficiary played his part in this down-market drama, showing gratitude for Stone’s version of omerta (the Mafia code of silence), which involved lots of speaking but much lying.  Because the pandemic prevents both presidential candidates from bouncing around the continent like popcorn in a skillet, the electorate can concentrate on other things, including Trump’s selection of friends such as Stone and Paul Manafort, dregs from the bottom of the Republican barrel….

“This year, the pandemic will be an accelerant of preexisting trends: There will be a surge of early and mail voting.  So, an unambiguous decision by midnight Eastern time Nov. 3 will require (in addition to state requirements that mailed ballots be postmarked, say, no later than Oct. 31) a popular-vote tsunami so large against the president that there will be a continentwide guffaw when he makes charges, as surely he will, akin to those he made in 2016.  Then, he said he lost the popular vote by 2.9 million because ‘millions’ of undocumented immigrants voted against him.  Making a preemptive strike against civic confidence, Trump has announced that the 2020 election will be the ‘most corrupt’ in U.S. history….

“Larry Diamond of the conservative-leaning Hoover Institution at Stanford discerns another scandal:

“ ‘The hard truth is that there has been a rising tide of voter suppression in recent U.S. elections. These actions – such as overeager purging of electoral registers and reducing early voting – have the appearance of enforcing abstract principles of electoral integrity but the clear effect (and apparent intent) of disproportionately disenfranchising racial minorities.  One example was the decision of Georgia’s Republican Secretary of State (now Governor) Brian Kemp to suspend 53,000 predominantly African-American voter registration applications in 2018 because the names did not produce an ‘exact match’ with other records.’

“This nation built the Empire State Building, groundbreaking to official opening, in 410 days during the Depression, and the Pentagon in 16 months during wartime.  Today’s less serious nation is unable to competently combat a pandemic, or even reliably conduct elections.  This is what national decline looks like.”

--Supreme Court Justice Ruth Bader Ginsburg revealed Friday that she’s undergoing chemotherapy to treat a recurrence of cancer.  In a statement, Ginsburg said she began treatment in May after a scan in February discovered lesions on her liver.

At 87, Ginsburg is the court’s oldest member and leader of its liberal bloc.  She is a four-time cancer survivor.

Earlier this week, Ginsburg was hospitalized overnight for treatment of a possible infection she said Friday was “unrelated” to the cancer recurrence.

--After 31 years in office, New York Rep. Eliot Engel was sent packing as he officially lost a Democratic primary battle to newcomer and former Bronx middle school principal Jamaal Bowman.  Bowman, 44, was up double-digits after Election Day but they had to wait until more than half of the absentee mail-in ballots confirmed his lead.

As Bowman’s district is reliably Democratic, he’ll be an interesting new face in Congress.

--Democratic lawmakers in New Jersey gave final approval to a highly controversial bill authorizing $10 billion in state borrowing to fill a swelling budget gap amid Republican opposition and an expected court challenge.

Lawmakers largely passed the bill Thursday along party lines and Democratic Gov. Phil Murphy signed it into law last night.

The economic crisis forced the hands of lawmakers to take drastic measures, said Senate President Steve Sweeney, a Democrat.  “We are in a place we’ve never been before,” he said.

But the legislation creates a panel of two state senators (Sweeney one of them) and two members of the state Assembly that are authorized to approve or deny each borrowing request.

GOP officials argue the plan doesn’t require the typical voter approval and is unconstitutional and they are challenging it in court.

My state is known for massive borrowing to the detriment of the future.

--A 15-year-old boy died in western Mongolia of bubonic plague, the country’s national news agency reported.

The health ministry said lab tests confirmed the teenager died of plague that he contracted from an infected marmot, according to the Montsame News Agency.

The case prompted the government to impose a quarantine on a portion of the province of Gobi-Altai.

In an unrelated case in neighboring China, a patient who was infected with plague in the northern region of Inner Mongolia is improving, according to China’s official Xinhua News Agency.

Meanwhile, a squirrel is the first case of plague in the town of Morrison, Colorado, which is west of Denver.

Officials attempted to isolate the squirrel but it seems he broke free, attempted to cross a road, and, well, it did not end well.  Then again, I really don’t know what happened to the squirrel, just a good guess.

[I had to look up Morrison.  Looks like an idyllic area, lots of golf courses, Red Rocks Amphitheater…Red Rocks Beer Garden!]

--As if yearend isn’t already likely to be depressing enough, even if we have a vaccine by then, you’d at least like to turn on the television New Year’s Day and see the Rose Parade. Alas, it was canceled for the first time in 75 years.

Parade officials initially hoped they’d be able to hold the parade safely, but after weeks of assessment, it became clear this was impossible.

---

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

God bless America.

---

Gold: $1812
Oil: $40.57

Returns for the week 7/13-7/17

Dow Jones  +2.3%  [26671]
S&P 500  +1.2%  [3224]
S&P MidCap  +3.6%
Russell 2000  +3.6%
Nasdaq  -1.1%  [10503]

Returns for the period 1/1/20-7/17/20

Dow Jones  -6.5%
S&P 500  -0.2% [just six points shy of 12/31/19 close]
S&P MidCap  -11.0%
Russell 2000  -11.7%
Nasdaq  +17.1%

Bulls 58.1
Bears 18.1

Hang in there…Mask up. Wash your hands.

Brian Trumbore



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Week in Review

07/18/2020

For the week 7/13-7/17

[Posted 10:00 PM ET, Friday]

Note: StocksandNews has significant ongoing costs and your support is greatly appreciated.  Please click on the gofundme link or send a check to PO Box 990, New Providence, NJ 07974.

Edition 1,109

“We have to stop swapping air with each other.”

--Dr. Michael Osterholm, Director of the Center for Infectious Disease Research and Policy at the University of Minnesota.

---

I can’t help but take you back to just one month ago, when I noted an op-ed Vice President Mike Pence had penned in the Wall Street Journal on June 16 (as referenced in my 6/20 WIR).

“In recent days, the media has taken to sounding the alarm bells over a ‘second wave’ of coronavirus infections.  Such panic is overblown. Thanks to the leadership of President Trump and the courage and compassion of the American people, our public health system is far stronger than it was four months ago, and we are winning the fight against the invisible enemy….

“Cases have stabilized over the past two weeks, with the daily average case rate across the U.S. dropping to 20,000….

“(The president) rallied the American people to embrace social-distancing guidelines.  And the progress we’ve made is remarkable….

“The media has tried to scare the American people every step of the say, and these grim predictions of a second wave are no different.  The truth is, whatever the media says, our whole-of-America approach has been a success.  We’ve slowed the spread, we’ve cared for the most vulnerable, we’ve saved lives, and we’ve created a solid foundation for whatever challenges we may face in the future.  That’s a cause for celebration, not the media’s fear mongering.”

I wrote four weeks ago, “Your op-ed piece is a disgrace, Mike.”

And the death toll in the U.S. then was 121,407.  Tonight it is 142,064.  Cases over 70,000.

Yup, great job, Veep.  Great job, President Trump.  No wonder your poll numbers on the topic of your handling of the crisis are in the toilet.

Aside from the awful job the White House is doing in handling the pandemic and providing leadership, this week a leading topic was how to open the schools this fall safely.  President Trump and Vice President Pence are just saying, “Do it.”  Other White House officials such as economic adviser Larry Kudlow say, “It’s not that hard.”  Sunday, Education Secretary Betsy DeVos was on the talk shows, telling CNN’s “State of the Union,” “We know that children get the virus at a far lower rate than any other part of the population.  There is nothing in the data that would suggest that kids being back in school is dangerous to them.”

But the incredibly unimpressive DeVos didn’t offer any details whatsoever on how her department would advise or help school districts and states with their reopenings amid a resurgence in coronavirus cases across the country.  DeVos also downplayed the risk of children bringing the virus home to parents, grandparents or caregivers.

Asked if schools should follow the recommendations of the federal Centers for Disease Control and Prevention, which President Trump criticized last week as too stringent, DeVos said every school building is different.  No kidding.

So the states are once again fending for themselves and tonight, California Gov. Gavin Newsom said most public and private school campuses in his state will not reopen when the academic year begins under statewide rules just announced, shifting instead toward full-time distance learning in response to the summer surge in cases in his state.

“We all prefer in-classroom instructions for all the obvious reasons – social, and emotional foundationally.  But only, only if it can be done safely,” Newsom said.

No doubt most schools will at least attempt a hybrid approach, as it appears Chicago will start out with, but this is an issue that is going to infuriate President Trump more and more.

Yet much of it comes down to the administration’s ongoing attempt to undermine the CDC.  Four former directors of the CDC, including Tom Frieden and Richard Besser, penned an op-ed in the Washington Post this week on the undermining of public health.

“As of this date, the CDC guidelines, which were designed to protect children, teachers, school staffers and their families – no matter the state and no matter the politics – have not been altered.  It is not unusual for CDC guidelines to be changed or amended during a clearance process that moves through multiple agencies and the White House. But it is extraordinary for guidelines to be undermined after their release.  Through last week, and into Monday, the administration continued to cast public doubt on the agency’s recommendations and role in informing and guiding the nation’s pandemic response.  On Sunday, Education Secretary Betsy DeVos characterized the CDC guidelines as an impediment to reopening schools quickly rather than what they are: the path to doing so safely.  The only valid reason to change released guidelines is new information and new science – not politics.

“One of the many contributions the CDC provides our country is sound public health guidance that states and communities can adapt to their local context – expertise even more essential during a pandemic, when uncertainty is the norm.  The four of us led the CDC over a period of more than 15 years, spanning Republican and Democratic administrations alike. We cannot recall over our collective tenure a single time when political pressure led to a change in the interpretation of scientific evidence….

“(These) are the people best positioned to help our country emerge from this crisis as safely as possible.  Unfortunately, their sound science is being challenged with partisan potshots, sowing confusion and mistrust at a time when the American people need leadership, expertise and clarity.  These efforts have even fueled a backlash against public health officials across the country: Public servants have been harassed, threatened and forced to resign when we need them most.  This is unconscionable and dangerous.”

But this is Trump World.

Yes, children are at lower risk for serious illness and death from Covid-19, but the same is not true for everyone else involved in educating and caring for your kids.  It’s not just teachers, but it’s bus drivers, custodians, cafeteria workers, coaches, let alone the families all the preceding go home to at the end of the day.

It’s going to take the whole community, with state and federal help, to get the kids in schools at least two days a week.  But when we can’t even agree on wearing face coverings, such as in the battle today between Georgia’s governor and his mayors, how the heck are we going to work together on the schools when the health experts are blasted in public, such as in the following….

….The Discrediting of Dr. Fauci

Peter Navarro / USA TODAY

“Dr. Anthony Fauci has a good bedside manner with the public, but he has been wrong about everything I have interacted with him on.

“In late January, when I was making the case on behalf of the president to take down the flights from China, Fauci fought against the president’s courageous decision – which might well have saved hundreds of thousands of American lives.

“When I warned in late January in a memo of a possibly deadly pandemic, the director of the National Institute of Allergy and Infectious Diseases was telling the news media not to worry.

“When I was working feverishly on behalf of the president in February to help engineer the fastest industrial mobilization of the health care sector in our history, Fauci was still telling the public the China virus was low risk.

“When we were building new mask capacity in record time, Fauci was flip-flopping on the use of masks.

“And when Fauci was telling the White House Coronavirus Task Force that there was only anecdotal evidence in support of hydroxychloroquine to fight the virus, I confronted him with scientific studies providing evidence of safety and efficacy.  A recent Detroit hospital study showed a 50% reduction in the mortality rate when the medicine is used in early treatment.

“Now Fauci says a falling mortality rate doesn’t matter when it is the single most important statistic to help guide the pace of our economic reopening.  The lower the mortality rate, the faster and more we can open.

“So when you ask me whether I listen to Dr. Fauci’s advice, my answer is: only with skepticism and caution.”

This is from the same a-hole who in his many interviews, including on CNN, says when confronted with a medical question, “I need to stay in my lane…that’s production (of PPE) these days…”

Yes, Navarro wrote the January memo telling the president to take Covid-19 more seriously, but why didn’t he influence the president on all his myriad of godawful decisions after?  Why did he just play loyal tool?!

It’s a “novel” coronavirus.  ‘Novel’ as in ‘new.’  Dr. Fauci has changed as the science has changed.  He’s done his best. There would be no national confusion as there is today had President Trump just done his own job…which is to lead!  He’d also be romping all over Joe Biden in the polls if he had.  But this is no stable genius in the Oval Office, sports fans.

John M. Barry / New York Times…author of the definitive book on the 1918 pandemic, “The Great Influenza.”

“When you mix science and politics, you get politics.  With the coronavirus, the United States has proved politics hasn’t worked.  If we are to fully reopen both the economy and schools safely – which can be done – we have to return to science.

“To understand just how bad things are in the United States and, more important, what can be done about it requires comparison.  At this writing, Italy, once the poster child of coronavirus devastation and with a population twice that of Texas, has recently averaged about 200 new cases a day when Texas has had over 9,000.  Germany, with a population four times that of Florida, has had fewer than 400 new cases a day.  On Sunday, Florida reported over 15,300, the highest single-day total of any state.

“The White House says the country has to learn to live with the virus.  That’s one thing if new cases occurred at the rates in Italy or Germany, not to mention South Korea or Australia or Vietnam (which so far has zero deaths).  It’s another thing when the United States has the highest growth rate of new cases in the world, ahead even of Brazil.

“Italy, Germany and dozens of other countries have reopened almost entirely, and they had every reason to do so.  They all took the virus seriously and acted decisively, and they continue to: Australia just issued fines totaling $18,000 because too many people attended a birthday party in someone’s home.

“In the United States, public health experts were virtually unanimous that replicating European success required, first, maintaining the shutdown until we achieved a steep downward slope in cases; second, getting widespread compliance with public health advice; and third, creating a work force of at least 100,000 – some experts felt 300,000 were needed – to test, trace and isolate cases.  Nationally we came nowhere near any of those goals, although some states did and are now reopening carefully and safely.  Other states fell far short but reopened anyway. We now see the results.

“While New York City just recorded its first day in months without a Covid-19 death, the pandemic is growing across 39 states.  In Miami-Dade County in Florida, six hospitals have reached capacity.  In Houston, where one of the country’s worst outbreaks rages, officials have called on the governor to issue a stay-at-home order.

“As if explosive growth in too many states isn’t bad enough, we are also suffering the same shortages that haunted hospitals in March and April.  In New Orleans, testing supplies are so limited that one site started testing at 8 a.m. but had only enough to handle the people lined up by 7:33 a.m.

“And testing by itself does little without an infrastructure to not only trace and contact potentially infected people but also manage and support those who test positive and are isolated along with those urged to quarantine.  Too often this has not been done; in Miami, only 17 percent of those testing positive for the coronavirus had completed questionnaires to help with contact tracing, critical to slowing spread.  Many states now have so many cases that contact tracing has become impossible anyway.

“What’s the answer?

“Social distancing, masks, hand washing and self-quarantine remain crucial.  Too little emphasis has been placed on ventilation, which also matters.  Ultraviolet lights can be installed in public areas.  These things will reduce spread, and President Trump finally wore a mask publicly, which may somewhat depoliticize the issue.  But at this point all these things together, even with widespread compliance, can only blunt dangerous trends where they are occurring.  The virus is already too widely disseminated for these actions to quickly bend the curve downward….

“During the 1918 influenza pandemic, almost every city closed down much of its activity.  Fear and caring for sick family members did the rest; absenteeism even in war industries exceeded 50 percent and eviscerated the economy.  Many cities reopened too soon and had to close a second time – sometimes a third time – and faced intense resistance. But lives were saved.

“Had we done it right the first time, we’d be operating at near 100 percent now, schools would be preparing for a nearly normal school year, football teams would be preparing to practice – and tens of thousands of Americans would not have died.

“This is our second chance. We won’t get a third.  If we don’t get the growth of this pandemic under control now, in a few months, when the weather turns cold and forces people to spend more time indoors, we could face a disaster that dwarfs the situation today.”

Editorial / Wall Street Journal

“President Trump’s coronavirus management ratings have been plummeting (67% disapproval in an ABC/Ipsos poll last week) and if a better public-relations plan is in the works, it’s not apparent. Wednesday’s news on this front was an op-ed by Peter Navarro, a top economic adviser, attacking the judgment of Anthony Fauci of the National Institutes of Health.  The White House formally disavowed the op-ed, but it came after the White House social-media director posted an anti-Fauci cartoon on Sunday.

“The point is not that Dr. Fauci has been right about everything – the now-reversed early guidance against masks, in particular, hurt public confidence in health experts.  Nor should the doctor set virus policy, which is up to elected representatives.  The problem is that the White House sems to have given up on projecting any consistent virus message, and the descent into internal sniping amplifies a perception of dysfunction that is politically damaging.

“The media are propagating the view that the U.S. is a coronavirus basket case.  In fact, the per-capita death rate remains lower than that of some major countries in Western Europe.  A more significant reason voters are souring on Mr. Trump’s virus management is his unwillingness to be candid or consistent about the disease’s likely toll.

“Americans will accept bad news if it’s in the context of realism about the problem and a strategy to address it.  Mr. Trump’s messaging has caromed from saying the virus isn’t a problem, to the economy must shut down to crush it, to the economy must open and everything will soon go back to normal, to barely talking about it at all as cases rise.  Now his aides are filling the vacuum by attacking the government health expert who sees it as his role to warn of worst-case scenarios.

“This is a mess, and if it continues Republicans will be routed in November.  Leaning into a culture war against experts won’t win undecided voters.  Americans want a realistic assessment, which is that infections are not going to be eliminated in the U.S. in the immediate future but that does not justify the public-health and economic harm of indefinite lockdowns.  If the Administration had said that there would likely be virus flareups in parts of the country amid reopenings and civil unrest, fewer Americans would have been caught by surprise.

“Today President Trump’s opponents can depict the White House as resigned, lacking direction, and more eager to disparage medical authorities than rally them to implement the Administration’s strategy.  Time is running out to change that perception.”

Lastly, this was a big week in U.S.-China relations.  A massive step into a full-blown Cold War.  I detail the rhetoric below but the two sides are headed towards a nasty collision, perhaps precipitated by an “accident” in the South China Sea.  President Trump and his aides no doubt see it as a deflection from the heat the administration is facing in its handling of the pandemic, but China won’t respond well.

You know where I stand on the place.  I’m not a fan.  But we’ve seen how they’ve taken over Hong Kong with the snap of a finger.  And they are working on Taiwan.  And they know that for all our bluster, we won’t do anything.

We should be easing tensions for at least the next four months and a bit after.  This is a time for heavy diplomacy…but behind the scenes.  Not in the open. 

But we also need to reinvigorate our alliances and Donald Trump is not the man for that job.

Covid-19 Death Tolls (as of tonight)

World…599,273
USA…142,064
Brazil…77,932
UK…45,233
Mexico…38,310
Italy…35,028
France…30,152
Spain…28,420
India…26,285

Further proof of “Catch-up Tuesday.”

U.S. death tolls…Sun. 380; Mon. 465; Tues 937; Wed. 999; Thurs. 963; Fri. 946.

[Source: Worldometers.info]

Covid Bytes

--Johnson & Johnson is in talks with the government of Japan and the Bill and Melinda Gates Foundation about locking up allocations of its potential Covid-19 vaccine as it prepares to kick off human trials, the company’s CFO Joseph Wolk told Reuters in an interview.  More than a hundred vaccines are under development and drugmakers including J&J are working to ramp up supply for their vaccines in the face of unprecedented demand.

J&J has already agreed to prioritize an allocation to the United States as part of its funding agreement with the government’s Biomedical Advanced Research and Development Authority.

The Bill and Melinda Gates Foundation would focus on allocating any vaccine it acquired to developing countries, Wolk added.

--Moderna Inc.’s experimental vaccine for Covid-19 showed it was safe and provoked immune responses in all 45 healthy volunteers in an ongoing early-stage study, U.S. researchers reported on Tuesday.  No study volunteers experienced a serious side effect, but more than half reported moderate reactions such as fatigue, headache, chills, muscle aches or pain at the injection site.  These were more likely after the second dose and in people who got the highest dose, the team reported in the New England Journal of Medicine.

Moderna was the first to start human testing of a vaccine for the novel coronavirus on March 16, some 66 days after the genetic sequence of the virus was released.  The federal government is supporting the Cambridge, Mass.-based company’s effort with nearly half a billion dollars and has chosen it as one of the first to enter large-scale human trials.

Moderna is now due to start a Phase 3 study on July 27 with 30,000 adults.  The company has been criticized for seemingly hyping its vaccine without sharing backup data, which is what the journal published Tuesday.  We’ll see.

[The shares surged anew late today on potential distribution deals for any vaccines with the European Union.]

--Dr. Anthony Fauci told Facebook Inc.’s Mark Zuckerberg that he expects results for a clinical trial on monoclonal antibodies (i.e., perhaps Moderna’s) by late summer or early fall, underscoring the speed at which the government has been working to quickly approve and roll out treatment for the novel coronavirus.

Fauci described a monoclonal antibody treatment as “precise bullets” that can be developed from antibodies from other people who’ve been infected and used as a treatment to fight the virus at multiple stages.

“What we really need are drugs that, when given early, can prevent a symptomatic person from requiring hospitalization or very dramatically diminish the time that they’re symptomatic,” Fauci said during the Facebook Live interview on Thursday.

--The European Union on Thursday placed further restrictions at its borders on foreign travelers and extended its ban on Americans. The EU shuttered its borders in March due to the pandemic, but began easing those restrictions to 15 countries on July 1, including Montenegro and Serbia, which with its twice-monthly review process, the EU has now removed from the ‘permitted’ list due to rising coronavirus cases in the two countries.

Most Americans won’t be able to visit much of Europe.  In order for the EU to lift its travel restriction on a country, the country must have an average new case rate at or below the EU average on June 15, have a stable or decreasing trend of new cases over the previous 14 days, and meet certain standards on testing, surveillance, contact tracing and containment.

Approved countries must also lift their restrictions on EU travelers.

--Brazilian President Jair Bolsonaro has again tested positive for coronavirus, he told reporters on Wednesday, suggesting he has yet to recover from an infection first diagnosed last week.    Since catching the virus, the president has said he remains in good health as he takes hydroxychloroquine, and a lot of other stuff, while alienating two health ministers who resigned in the middle of the pandemic.  The ministry is being led on an interim basis by an active duty army general.

Speaking of hydroxychloroquine, researchers reported Thursday that it didn’t reduce the severity of Covid-19 symptoms in people newly diagnosed and reporting mild symptoms any better than those who received a placebo.

The results of a 491-person study were published in the Annals of Internal Medicine and led by researchers at the University of Minnesota.

Researchers didn’t find any serious safety problems associated with the drug’s use, such as irregular heart rhythms or deaths.

The trial was conducted from March 22 through May 20.

--Monsoon floods have swamped large parts of India’s densely populated eastern states, forcing more than a million people into makeshift shelters despite the risk of coronavirus.

India needs the annual torrential rains for agriculture, but with thousands of villages submerged, authorities are trying to ensure social distancing in relief camps.

John Fleming of the International Federation of Red Cross and Red Crescent Societies said: “Covid-19 is spreading at an alarming rate in South Asia, home to a quarter of humanity.  India alone is nearing 1 million infections in the coming days.”  [Indian crossed the 1 million mark on Thursday.]

--Tokyo saw a second straight day of record coronavirus cases Friday, with 293 reported amid growing concern about the ability of authorities to suppress the outbreak.  The city had 286 cases Thursday.  But the minister in charge of the virus stressed that serious cases – those in an ICU or needing a ventilator – weren’t’ rising, and that while hospitalizations in Tokyo had increased to 760, the city’s health care system wasn’t under pressure.

But any story like this concerning Tokyo brings us one day closer to the day when officials cancel the 2021 Tokyo Olympics.

--Travelers were left stranded and residents scrambled to buy groceries as Urumqi – capital of China’s Xinjiang region – went into sudden lockdown on Thursday after confirming one new local Covid-19 patient and three asymptomatic cases.

Think about that.  Sudden lockdown over four cases…a city of 3.5 million.  There were scenes of panic buying in supermarkets when residential compounds learned movement would be restricted.

Xinjiang’s Communist Party committee said on Friday, “[We] will resolutely cut off the channel of transmission…”

Of course Xinjiang is also where China is suppressing the Uighur Muslim minority.

--More than 3,000 healthcare workers are known to have died from Covid-19 around the world, with Russia having the highest known total, 545, though this figure is almost certain to be higher.  A study by Amnesty International also concludes the global total is likely to be a “significant underestimate” due to under-reporting.

There is currently no systematic global tracking of health and essential workers mortality rates, according to Amnesty, which has estimated the numbers in its report.

Disgustingly, in many countries, the healthcare workers are met with reprisals from their governments, such as in Egypt, where nine were “arbitrarily detained” between March and June on “vague and overly broad charges of ‘spreading false news’ and ‘terrorism,’” Amnesty’s report said.  “All those detained had expressed safety concerns or criticized the government’s handling of the pandemic.”

--Britain faces a potentially more deadly second wave of Covid-19 in the coming winter that could kill up to 120,000 people over nine months in a worst-case scenario, health experts said on Tuesday.

“This is not a prediction, but it is a possibility,” said Stephen Holgate, a professor and co-lead author of a report by Britain’s Academy of Medical Sciences.

--Almost 100,000 mink at a farm in northeastern Spain are to be culled after many of them tested positive for coronavirus, health authorities say.

The outbreak in Aragon province was discovered after a farm employee’s wife contracted the virus in May.  Her husband and six other farm workers have since tested positive for the disease.

The mink were bred for their prized fur and had been isolated but when tests on July 13 showed that 87% of them were infected, health authorities ordered all 92,700 to be culled.

Trump World

--In reply to President Trump’s commutation of Roger Stone’s prison sentence, Robert S. Mueller III opined in the Washington Post….

“The work of the special counsel’s office – its report, indictments, guilty pleas and convictions – should speak for itself.  But I feel compelled to respond to broad claims that Roger Stone was a victim of our office. The Russia investigation was of paramount importance. Stone was prosecuted and convicted because he committed federal crimes. He remains a convicted felon, and rightly so.

“Russia’s actions were a threat to America’s democracy.  It was critical that they be investigated and understood.  By late 2016, the FBI had evidence that the Russians had signaled to a Trump campaign adviser that they could assist the campaign through the anonymous release of information damaging to the Democratic candidate. And the FBI knew that the Russians had done just that: Beginning in July 2016, WikiLeaks released emails stolen by Russian military intelligence officers from the Clinton campaign. Other online personas using false names – fronts for Russia military intelligence – also released Clinton campaign emails.

“Following FBI Director James B. Comey’s termination in May 2017, the acting attorney general named me as special counsel and directed the special counsel’s office to investigate Russian interference in the 2016 presidential election…One of our cases involved Stone, an official on the campaign until mid-2015 and a supporter of the campaign throughout 2016.  Stone became a central figure in our investigation for two key reasons: He communicated in 2016 with individuals known to us to be Russian intelligence officers, and he claimed advance knowledge of WikiLeaks’ release of emails stolen by those Russian intelligence officers.

“We now have a detailed picture of Russia’s interference in the 2016 presidential election.  The special counsel’s office identified two principal operations directed at our election: hacking and dumping Clinton campaign emails, and an online social media campaign to disparage the Democratic candidate.  We also identified numerous links between the Russian government and Trump campaign personnel – Stone among them. We did not establish that members of the Trump campaign conspired with the Russian government in its activities.  The investigation did, however, establish that the Russian government perceived it would benefit from a Trump presidency and worked to secure that outcome….

“Uncovering and tracing Russian outreach and interference activities was a complex task.  The investigation to understand these activities took two years and substantial effort.  Based on our work, eight individuals pleaded guilty or were convicted at trial, and more than two dozen Russian individuals and entities, including senior Russian intelligence officers, were charged with federal crimes….

“When a subject lies to investigators, it strikes at the core of the government’s efforts to find the truth and hold wrongdoers accountable. It may ultimately impede those efforts.

“We made every decision in Stone’s case, as in all our cases, based solely on the facts and the law and in accordance with the rule of law.  The women and men who conducted these investigations and prosecutions acted with the highest integrity. Claims to the contrary are false.”

--In his ongoing effort to bend the curve, the percentage of black people who will vote for him in November, the president claimed Tuesday in an interview with CBS News’ Catherine Herridge that “more white people” die at the hands of police, despite studies that show Black people are more likely to be killed by law enforcement.  It was the tone that was so disturbing.

Herridge brought up the case of George Floyd.

“Why are African Americans still dying at the hands of law enforcement in this country?” she asked.

“So are white people. So are white people,” Trump replied.  “What a terrible question to ask. So are white people.  More white people, by the way.  More white people.”

Multiple studies have shown that Black men are 2.5 times more likely to be killed by police than white men, according to a University of Michigan, Rutgers University and Washington University study released last year.  The study found that about 100 Black men and boys per 100,000, and 39 white men and boys per 100,000, are killed by police during their lifetimes.

A Harvard analysis of deaths by police from 2013-2017 and published last month found Black men are more than three times more likely than white men to be killed by police.

During the interview that had to have floored former Fox News reporter Herridge, Trump  also defended displays of the Confederate flag as “freedom of speech.”  Trump said that people who love the Confederate flag are “not thinking about slavery,” citing NASCAR fans who displayed the flag before its ban at events as an example.

“All I say is freedom of speech.  It’s very simple.  My attitude is, freedom of speech.  Very strong views on the Confederate flag.  With me, it’s freedom of speech.  Very simple.  Like it, don’t like it, it’s freedom of speech,” Trump told Herridge.

Asked if he would be comfortable with his supporters displaying the flag at political events, Trump said “It depends on what your definition is.  But I am comfortable with freedom of speech.”

“I just think it’s freedom of speech, whether it’s freedom of speech, whether it’s Confederate flags or Black Lives Matter or anything else you want to talk about. It’s freedom of speech,” Trump said.

[The Pentagon today announced its ‘approved’ list of flags allowed on military bases and the Confederate flag was not among them.]

--President Trump demoted Campaign Manager Brad Parscale, a move of desperation with just 100+ days left before the election.

Trump tweeted: “I am pleased to announce that Bill Stepien has been promoted to the role of Trump Campaign Manager.  Brad Parscale, who has been with me for a very long time and has led our tremendous digital and data strategies, will remain in that role, while being a Senior Advisor to the…

“…campaign. Both were heavily involved in our historic 2016 win, and I look forward to having a big and very important second win together.  This one should be a lot easier as our poll numbers are rising fast*, the economy is getting better, vaccines and therapeutics will soon…

“…be on the way, and Americans want safe street and communities!”

*Ed. No they aren’t.

Bill Stepien was a field director in 2016 who previously worked for former New Jersey Gov. Chris Christie.

Ivanka Trump and Jared Kushner are both reported to have blamed Parscale for the disastrous Tulsa rally.

--The administration on Tuesday abandoned its attempt to force foreign students to leave the United States if all of their classes will be taught online this fall, in a dramatic reversal from a cruel policy announced just days earlier.  The government and Harvard University and MIT who sued over the measure reached a settlement that would make the rule moot.

--A New York prosecutor on Thursday warned against allowing President Trump to run out the clock on the Manhattan district attorney’s criminal probe into the president.  Carey Dunne, general counsel for District Attorney Cyrus Vance, spoke at a hearing in federal court in Manhattan to discuss Trump’s renewed legal challenge to block or narrow Vance’s ability to see his tax returns.  The case concerns an August 2019 subpoena to Trump’s accounting firm Mazars USA for eight years of personal and corporate tax returns, related to Vance’s criminal probe into Trump and his Trump Organization.

Dunne told U.S. District Judge Victor Marrero there are looming deadlines to prosecute cases because of statutes of limitations, and more delays could give Trump the “absolute temporary immunity” the Supreme Court has rejected.  “Let not let delay kill this case,” Dunne said.  “Justice delayed becomes justice denied.”

Trump now has until July 27 to file papers formally opposing the subpoena and its scope.

In a Reuters/Ipsos poll this week, 66% of adults agreed that Trump should release his tax returns from earlier years, and 68% said Americans have a right to see presidential candidates’ returns before the Nov. 3 election.

--Mary Trump’s book had sales of 950,000 through Tuesday, the book’s first day of sales, and a first-day record for publisher Simon & Schuster.

--President Trump retweeted the accusations of former game show host Chuck Woolery that “everyone is lying” when it comes to the coronavirus.

“The most outrageous lies are the ones about Covid 19.  Everyone is lying. The CDC, Media, Democrats, our Doctors, not all but most, that we are told to trust.”

Woolery cited no evidence.  The next day he then tweeted: “To further clarify and add perspective, COVID-19 is real and it is here.  My son tested positive for the virus, and I feel for those suffering and especially for those who have lost loved ones.”

Soon thereafter, Woolery deactivated his Twitter account.

There was no further comment from the president.

--Former acting chief of staff and OMB head Mick Mulvaney, as part of an op-ed for CNBC.com, went off on the pandemic effort as he talked about another stimulus program.

“Any stimulus should be directed at the root cause of our recession: dealing with Covid.  I know it isn’t popular to talk about in some Republican circles, but we still have a testing problem in this country.  My son was tested recently; we had to wait 5 to 7 days for results.  My daughter wanted to get tested before visiting her grandparents, but was told she didn’t qualify.  That is simply inexcusable at this point in the pandemic.”

Funny comments from a guy who back in February was dismissing Covid-19.

--Republican Oklahoma Gov. Kevin Stitt announced on Wednesday he has tested positive for the coronavirus and will self-isolate; significant because aside from the fact he is the first governor to test positive, he attended President Trump’s Tulsa rally last month.

--Trump tweets:

“Corrupt Joe Biden wants to defund our police.  He may use different words, but when you look at his pact with Crazy Bernie, and other things, that’s what he wants to do. It would destroy America!”

[Ed. This tweet was issued about an hour before I posted tonight.  It’s all about an interview with Fox News’ Chris Wallace for his Sunday show wherein Wallace points out that in the Biden-Sanders platform, the words ‘defund the police’ don’t exist, despite Trump’s protestations they do.  Trump has his staff get him a copy and the words indeed are not in there. So this is Trump’s attempt to work around what America will see for itself Sunday.]

“I am the ultimate member of The Book of the Month Club. First, I have lowlife dummy John Bolton, a war mongering fool, violating the law (he released massive amounts of Classified Information) and an NDA in order to build badly needed credibility and make a few dollars which….

“….will all end up going to the government anyway.  Next up is Mary Trump, a seldom seen niece who knows little about me, says untruthful things about my wonderful parents (who couldn’t stand her!) and me, and violated her NDA. She also broke the Law by giving out my….

“….Tax Returns.  She’s a mess! Many books have been written about me, some good, some bad.  Both happily and sadly, there will be more to come!”

“Roger Stone was targeted by an illegal Witch Hunt that never should have taken place.  It is the other side that are criminals, including Biden and Obama, who spied on my campaign – AND GOT CAUGHT!”

[Mitt Romney tweeted: “Unprecedented, historic corruption: an American president commutes the sentence of a person convicted by a jury of lying to shield that very president.”]

“Would be so great if the Media would get the word out to the people in a “fair and balanced” way. We will win anyway, but they are a far more difficult adversary than their Radical Left Do Nothing Democrat Partner!”

“Joe Biden claims to be prioritizing ‘safety of kids’ by keeping schools closed this Fall.  Yet he remains silent about children being slaughtered by violence on the streets of Democrat run cities.  You & your children won’t be SAFE in Biden’s America, and neither will anyone else!”

“The Lamestream Media is not talking about what is happening with the Stock Market and JOBS. Both are doing GREAT!  The Radical Left will destroy the USA.  Be careful what you wish for!”

“The Silent Majority will reign!”

“So hard to watch @Foxnews anymore. They are working so hard against the people (viewers) that got them there. Their contributors are a disaster, and all over the place. The Radical Left has scared Fox into submission, just like they have so many others. Sad, but we will WIN!”

“There is so much evidence, yes scientific evidence, that schools should open this fall.  It’s worldwide and it’s overwhelming. BUT NO.”

“We have now built 240 Miles of new Border Wall on our Southern Border.  We will have over 450 Miles built by the end of the year.  Have established some of the best Border Numbers ever. The Radical Left Democrats want Open Borders for anyone, including many criminals, to come in!”

On being slammed for playing a lot of golf…Trump felt compelled to tweet on the topic.

“I know many in business and politics that work out endlessly, in some cases to a point of exhaustion. It is their number one passion in life, but nobody complains.  My ‘exercise’ is playing, almost never during the week, a quick round of golf.  Obama played more and much longer….

“….rounds, no problem.  When I play, Fake News CNN, and others, park themselves anywhere they can get a picture, then scream ‘President Trump is playing golf.’  Actually, I play VERY fast, get a lot of work done on the golf course, and also get a ‘tiny’ bit of exercise.  Not bad!”

Wall Street and the Economy    

We had some important data releases for June this week and retail sales were up a stronger than expected 7.5% after May’s 18.2% record rise.  Industrial production for June was also better than expected, up 5.4%.

June housing starts came in at a 1,186,000 annualized level, a little shy of forecasts but up 17% over the prior month.  And this week, the average rate on a 30-year mortgage was below 3.00% for the first time ever, 2.98%, per Freddie Mac.

June consumer prices rose 0.6%, which ordinarily would be highly worrisome, but the core figure, ex-food and energy, was up just 0.2% and, year-over-year, the headline CPI is the same 0.6%, 1.2% on core.

The Atlanta Fed’s GDPNow barometer for second-quarter activity still reflects a 34.7% historic rate of decline.

But all the above was before the big surge in coronavirus cases in July, which clearly has an impact on the economy of some big states, i.e, California, Arizona, Texas, Georgia and Florida, as well as a few others, such as the Carolinas.  It certainly makes a V-shaped recovery harder to come by.  And the stimulus programs continue to come to an end in July, at least until a new package from Congress, including, critically, moratoriums on evictions and payments of rent and mortgages.

Philadelphia Federal Reserve Bank President said on Tuesday that the economy remains “mired” in crisis and policymakers need to create solutions that offer better support to struggling small businesses.

“Indeed, even as the economy is reopening in fits and starts, the pandemic’s effects are proving not to be just a brief setback” Harker said in remarks to small businesses organized by the Fed.  “We are in a downturn that is both exceptionally painful and stubbornly long-lasting.”

Harker said the Paycheck Protection Program, which offered loans to small businesses that could be converted to grants, was an “immense help” to millions of businesses. But Harker called the program a “blunt instrument,” saying it fell short when it came to aiding businesses in areas hit hard by the virus.  For example, the state of Nebraska, which was less affected by the virus, received a higher rate of PPP loans than states such as New York, New Jersey or Pennsylvania, which were harder hit, he said.

Part of the problem is that many of the smallest businesses in affected areas faced a harder time applying for the program because they did not have existing banking relationships, Harker said.

“And so, when PPP loans became available, these business owners had no ability to access them,” Harker said.  “This is a problem that has disproportionately affected racial minorities and communities of color.”

Or as JPMorgan Chase CEO Jamie Dimon said in releasing his bank’s earnings this week, “The recessionary part of this (economy) you’re going to see down the road.”  You don’t see it now because of all the stimulus that is running off.

Lastly, last week I reported on the Congressional Budget Office’s projections for the deficit in fiscal 2020 and then on Monday, the Treasury Department confirmed the figures I noted from the CBO…the federal budget deficit in June surged to $864 billion from single digits a year earlier amid continued strong spending on coronavirus relief programs and a drop in individual and corporate tax receipts.  The June deficit brought the year-to-date fiscal deficit to $2.7 trillion, far eclipsing the previous full-year record of $1.4 trillion in 2009…and with three months to go in the fiscal year ending Sept. 30.        

Robert J. Samuelson / Washington Post

“It is impossible not to marvel at the apparently indestructible gap between the buoyant stock market and the less-than-buoyant real economy of workers, companies and jobs.  One must say ‘apparently indestructible,’ because maybe there is some simple and obvious explanation that eludes your correspondent.  Otherwise, either the stock market is too high, or the economic outlook is too low.  One or both must be wrong.

“Just last week, the Organization for Economic Cooperation and Development (OECD) – a group of 36 countries – issued its forecast for the United States through 2021.  It is unlikely to inspire much cheering. Acknowledging that much depends on the severity of the coronavirus, the OECD report constructs two scenarios: one that might be termed ‘pessimistic’ and a second that is ‘more pessimistic.’

“Under the ‘pessimistic’ assumptions, the unemployment rate is projected at 11.3 percent at the end of 2020 and the economy (gross domestic product) falls 7.3 percent for the year.  Both the unemployment rate and the GDP decline are larger than in any previous post-World War II recession.  By way of comparison, the peak monthly jobless rate in the Great Recession of 2007-2009 was 10 percent.

“The ‘more pessimistic’ forecast assumes that there is a second wave of coronavirus cases. This delays the economy’s recovery and results in more deaths.  In the ‘double-hit’ scenario, the year-end unemployment rate is 12.9 percent, and the GDP drops by 8.5 percent.  ‘The recession risks leaving behind a long-lasting negative economic impact,’ the OECD warns.  ‘Policies are needed…to help workers and businesses avoid scarring effects and fully recover from the crisis.’

“Of course, the OECD could be too glum.  A new report from the Congressional Budget Office foresees a slightly brighter future.  It reckons the GDP decline for 2020 at 5.9 percent and year-end unemployment at 10.5 percent.  Hardly a boom.  The presidential campaign magnifies the uncertainty….

“The most popular view (for today’s lofty stock market valuations) involves the Federal Reserve’s policy of holding short-term interest rates near zero and flooding financial markets with money.  The idea is that the low interest rates push investors into riskier financial assets, including stocks.  Implied (but not yet said openly) is that the Fed might actually buy stocks to prevent a horrific crash….

“Writing for Project Syndicate, an opinion website, Nobel Prize-winning economist Robert Shiller of Yale University argues that crowd psychology has driven prices up.  He divides the current market move into three separate periods: a 3 percent increase from Jan. 30 to Feb. 19; a 34 percent decline from there to March 23; and about a 40 percent rise from the end of March until now.

“Once the Fed made clear its determination to foster recovery, ‘FOMO’ – fear of missing out – took over, says Shiller. What happens now is anyone’s guess.

“ ‘The stock market and the economy have parted ways,’ says Mark Zandi, chief economist for Moody’s Analytics.  ‘I’m not sure what will trigger a sustained sell-off in stocks, but surging [virus] infections and another round of more business closures will be difficult for investors to ignore much longer.’”

Editorial / Wall Street Journal

It barely gets a headline these days, but we thought readers might like to know that federal spending for the first nine months of fiscal 2020 hit a record $5.005 trillion. Congratulations to everyone, and especially young Americans.  You’ll be paying for it the rest of your lives.

“The Congressional Budget Office fiscal report for June says outlays rose 49% in the first nine months, or $1.649 trillion more than a year earlier.  Most of this was due to the four coronavirus relief bills that Congress passed in recent months.  Unemployment payments were $277 billion compared to $24 billion a year ago, while the new Paycheck Protection Program (PPP) doled out $537 billion.

“Receipts were down only 13% in the first nine months, and much of that reduction came from deferred tax payments. Some of that tax revenue may be collected later in the year, starting with this week’s delayed IRS tax filing deadline for individuals.  But the overall budget deficit from October through June rolled in at $2.744 trillion…and it will get much higher.

“Some of this spending was necessary, especially for health care, and PPP loans have kept many small businesses alive and workers on the job. But tens of billions haven’t even been spent so far, and Congress still wants more.  House Democrats have passed a fifth virus bill spending $3 trillion more, and President Trumps says he wants a fifth bill too.  This means there is likely to be one, as the U.S. tests whether there are limits to what the Treasury can borrow on the cheap. The Federal Reserve is financing deficits for now, but taxpayers will start paying – and paying – next year.”

Europe and Asia

Just a few data points on the eurozone (EA19) economy.  May industrial production rose 12.4% over April (which was down 18.2%) due to an easing of lockdown restrictions.  But year-over-year, industrial production is down 20.9%.

June inflation was up just 0.3% annualized in the euro area.  A year earlier, the rate was 1.3%.

Annualized rates – Germany 0.8%, France 0.2%, Italy -0.4%, Spain -0.3%.

Meanwhile, the European Central Bank announced it will use its stimulus firepower fully even as the eurozone economy shows some signs of rebounding from its pandemic-induced recession, ECB President Christine Lagarde said on Thursday.

Tackling the biggest economic collapse in living memory, the ECB is buying massive amounts of debt and paying banks to lend out its cash in an effort to salvage the bloc’s economy until Europe is ready to reopen after coronavirus lockdowns

Lagarde said economic activity in the EA19 had shown signs of a “significant, though uneven and partial recovery” but the outlook remained uncertain amid risks of a second wave of infections.

“Uncertainty over the scale of the rebound remains high,” Lagarde said.  “The balance of risks remain on the downside.”

Accordingly, the central bank sees no reason to hold back when deploying a $1.49 trillion envelope it has earmarked for buying financial assets under its Pandemic Emergency Purchase Program, Lagarde said. 

“Unless, and we don’t see for the moment frankly, but unless there are significant upside surprises, our base line is that we will need the entire envelope of PEPP,” she added.

Well, today the 27 leaders of the European Union gathered in Brussels and they ended their first day of discussions over an economic recovery fund plan with no agreement after 13 hours of discussions. Talks resume tomorrow.

Brexit: Zero new to report.

Turning to Asia…China released some important data for June.  First and foremost, China’s economy grew 3.2% in the second quarter from a year earlier, better than expected, after a 6.8% decline in the first quarter as the country was in the midst of its Covid-19 crisis.

In Q2 the lockdown measures ended and policymakers stepped up stimulus to combat the shock of February and March, in particular.

President Xi Jinping said China’s long-term sound economic growth fundamentals will not change, the official Xinhua news agency reported on Thursday.  Xi made the remarks in a letter to global CEOs.

But for the first time since 1990 when records began, China still has no GDP target for all of 2020.  For the first six months, the economy fell 1.6%, according to the National Bureau of Statistics.

Separately, industrial production in June was up 4.8% vs. a year earlier, solid, but retail sales unexpectedly fell 1.8% last month from a year ago, as consumer demand continues to be weak despite a lifting of restrictions following the nationwide lockdown.

Fixed asset investment (roads, railroads, airports) was up 3.1% in the first half.

We also had reports on trade for June.  Exports rose just 0.5% year-over-year, with imports up 2.7% yoy when a drop was expected.

Exports to the U.S. were up 1.4% in June vs. a year ago after a 1.3% drop in May.  Imports from the U.S. were up 11.3% after a decline of 13.5% vs. a year ago in May. [Data from the General Administration of Customs]

In Japan, industrial production in May was down 8.9% over April, which was down 9.8% over March.  Industrial production is down 26.3% vs. a year ago.  We get important data on trade this weekend.

Street Bytes

--Earnings for the second quarter started rolling in this week and the next two will see all the tech heavyweights and their hoped for comments on the future.  This was ‘bank week’ and I give a tale of the tape down below.  Otherwise, the market was mixed, with the Dow Jones and S&P 500 rising for a third week in a row by 2.3% and 1.2%, respectively.  The S&P is just six points shy of its Dec. 31 close of 3230.

Nasdaq took a breather after two powerful weeks, down 1.1%.

--U.S. Treasury Yields

6-mo. 0.13%  2-yr. 0.14%  10-yr. 0.62%  30-yr. 1.33%

Virtually unchanged on the week.  Ditto Euro bond yields.

--Oil rallied to over $41 on Wednesday, before falling back a bit to finish the week at $40.57, virtually unchanged on the week, on the heels of the vaccine news and then a bullish inventory report from the Energy Information Administration revealing a sizable drop in domestic crude stockpiles.

The number of oil rigs operating in the U.S. fell by one to 180 in the week through Friday, the lowest since the week ended June 5, 2009, according to data compiled by energy-services firm Baker Hughes.  A year earlier, the U.S. had 779 rigs in operation.

--American Airlines told employees on Wednesday that it could furlough as many as 20,000 people starting Oct. 1, after federal stimulus funds expire.

“We know American will be smaller going forward and we must right-size all aspects of our airline to adjust to that new reality,” CEO Doug Parker and President Robert Isom said in a letter to employees.  “Although this is a day none of us wanted to see, we have created new, generous programs intended to help offset as many frontline furloughs as possible.”

American is actually sending out legally required warnings to 25,000 employees, but the airline said it expects to be overstaffed by 20,000 workers this fall.  10,000 flight attendants, 3,200 maintenance workers, 2,900 passenger service employees and 2,500 pilots, among others, received the notice.

Last week, I detailed United Airlines’ plan to furlough as many as 36,000 workers come October.

Separately, American and JetBlue Airways Corp. announced an alliance that the carriers said would speed their recovery from the pandemic-driven downturn by boosting their position in large Northeast markets.

The two airlines want to market each other’s flights and link loyalty programs to improve their competitiveness at the three New York area airports and in Boston.

--Delta Air Lines said it expects to take a charge of $2.7 billion to $3.3 billion to cover the costs of early retirements and buyouts for employees as it shrinks in response to a sharp decline in air travel.

The airline said this week that 17,000 employees have agreed to depart.  Employees who agree to leave get cash payments, health insurance, and, in some cases, retiree health care benefits.

Delta CEO Ed Bastian said the airline hopes to carry out the “vast majority of the head count changes we need” through voluntary departures, “minimizing, if not eliminating, the need for involuntary furloughs.”

Delta, American and United all received between $5 billion and $5.8 billion in CARES Act funding back in March to help the companies pay workers through Sept. 30.

Meanwhile, Delta announced it was trimming plans for more summer flights after a $5.7 billion loss for the latest quarter underscored the depth of the crisis facing the aviation industry.

CEO Bastian said the recovery from April’s near-collapse in domestic flying had stalled, and the TSA checkpoint numbers bear that out; 22% to 28% of last year’s numbers the last seven days.

The airlines have been adding back flights at a faster clip than demand to protect market share and to be well-positioned for a return to pre-pandemic levels, though that is expected to take three years or more.

“We expect this to be a very choppy recovery,” Bastian said in an interview.  He added that the pause in the demand recovery would leave the airline burning through $27 million in cash a day this month, in line with last month.

--Southwest Airlines CEO Gary Kelly told employees on Monday it needs a dramatic jump in passenger demand or it will be forced to take new steps to reduce staffing.  Employees faced a Wednesday deadline whether to participate in a voluntary incentive program to leave the airline.

“Although furloughs and layoffs remain our very last resort, we can’t rule them out as a possibility obviously in this very bad environment,” Kelly said in his message to employees.  “We need a significant recovery by the end of this year, and that’s roughly triple the number of passengers from where we are today.”

Kelly added that the “recent rise in Covid cases and increasing regional restrictions on businesses and states requiring quarantine aren’t positive developments for our business, and we are concerned about the impact on already weak travel demand.”

--Ryanair will cut 1,000 flights between Ireland and the UK in August and September due to the 14-day quarantine rule on visitors to Ireland, which will suppress demand.  [Ireland announced this week it wasn’t reopening its pubs until at least Aug. 10 due to a rising transmission rate.]

--Emirates is cutting as many as 9,000 jobs because of the pandemic.  Prior to the crisis the Middle East airline that is the world’s biggest long-haul carrier had 60,000 employees.

--El Al Israel Airlines extended its suspension of flights to the end of August and said it reached cost-cutting agreements with the country’s main labor union that will facilitate a government bailout.

The Israel flag carrier, which sent nearly all 6,500 employees on unpaid leave since the coronavirus outbreak, has said it will go bankrupt without state assistance. The government is demanding an overhaul, including some $400 million in cutbacks.

--Boeing delivered just 20 planes in the second quarter, which is not unexpected but this is the lowest quarterly number since 1963.  Boeing delivered 149 planes in the second quarter of 2019 and 184 planes in the second quarter of 2018. 

The aerospace giant on Tuesday reported another 60 cancellations for its grounded 737 MAX jet and removed 123 more aircraft, including 119 MAX jets, from its order backlog because of doubts those deals will be concluded.

Separately, British Airways said it will retire all of its Boeing 747s as it suffers from the travel downturn.  The UK airline is the world’s largest operator of the jumbo jets, with 31 in the fleet.

BA had planned on retiring the planes in 2024 but has brought forward the date due to the crisis in the industry.

--In a serious attack by hackers on Twitter, billionaires Elon Musk, Jeff Bezos and Bill Gates were among the many prominent U.S. figures targeted in an apparent Bitcoin scam.  Others attacked were the official accounts of Joe Biden, Barack Obama and Kanye West.

The message posted requested donations in the cryptocurrency.

“Everyone is asking me to give back,” a tweet from Mr. Gates’ account said.  “You send $1,000, I send you back $2,000.”

Twitter said it was a “coordinated” attack targeting its employees “with access to internal systems and tools.”

“We know they [the hackers] used this access to take control of many highly-visible (including verified) accounts and Tweet on their behalf,” the company said in a series of tweets.

It added that “significant steps” were taken to limit access to such internal systems and tools while the company’s investigation was ongoing.

But this is obviously a huge danger as we approach Nov. 3rd.  Much more to follow and Twitter owes us answers.

--It was Big Bank earnings week….

JPMorgan Chase set aside $10.47 billion to cover potential losses on loans to borrowers hurt by the pandemic.  The nation’s biggest bank by assets is stockpiling reserves with so much uncertainty.  JPM set aside $8 billion in the first quarter.

JPMorgan posted a profit of $4.60 billion, down from $9.65 billion a year earlier, with revenue rising 15% to $33 billion.

JPM’s trading revenue surged 77% in a quarter that saw record-breaking volumes in financial markets.  Bond trading alone generated $7.3 billion in revenue as central banks bought billions more in government paper under the huge stimulus programs to deal with the pandemic.

In a release, CEO Jamie Dimon said that despite some recent positive data and decisive government action, “we still face much uncertainty regarding the future path of the economy.”

“The consumer’s incomes are up, savings are up and home prices are up.  The recessionary part will come later,” Dimon said, when I was wrote earlier all the stimulus washes out.

The bank is expecting double-digit unemployment in the U.S. through the first half of 2021, but warned that it may not have much visibility into the damage it is dealing with.

--Wells Fargo & Co. posted its first quarterly loss since the 2008 financial crisis as the coronavirus forced it to set aside $9.57 billion to cover potential loan losses while slashing its dividend, thus derailing efforts to recover from a sales scandal.

Wells has suffered because it does not have a strong capital markets business to lean on like its peers.

The bank reported a net loss of $2.4 billion for the quarter ending June 30, compared with a profit of $6.2 billion in the year-earlier period.  Most analysts called Wells’ results “awful.”

The Federal Reserve placed an asset cap on the bank as a penalty for its misdeeds.

CEO Charlie Scharf promised changes to improve the bank’s performance and said while the hit from the pandemic was unprecedented, its franchise should perform better.

“We are extremely disappointed in both our second quarter results and our intent to reduce our dividend.  Our view of the length and severity of the economic downturn has deteriorated considerably from the assumptions used last quarter,” Scharf said.

--Citigroup Inc. saw its profit fall 73%, weighed down by the $7.9 billion the bank set aside for an expected increase in soured loans.

“The pandemic has a grip on the economy, and it doesn’t seem likely to loosen until vaccines are widely available,” Citigroup CEO Michael Corbat said.

--Goldman Sachs blew away market expectations with earnings of $6.26 per share, $2.35 better than the Street’s estimate of $3.91, while revenues rose 40.5% year-over-year to $13.29bn vs. estimates of $9.76bn, as its trading desks rocked; benefiting from heightened market volatility that impacted markets in April, May and June as anxious investors tried to determine the economic impact of the pandemic.

Net revenues in Global Markets were $7.18bn for Q2, 93% higher than the second quarter of 2019 and 39% higher than the first quarter of 2020.  Investment Banking generated record quarterly net revenues of $2.66bn, including record quarterly net revenues in both Equity and Debt underwriting.

Goldman had to set aside $1.59bn to cover potentially bad loans in the quarter, but this is significantly less than the amounts JPMorgan Chase, Citigroup and Wells Fargo had to set aside, due to the small size of Goldman’s consumer banking business compared to its competition.

--Morgan Stanley posted a record quarterly profit on Thursday that blew past analysts’ expectations, gaining from its trading operations.  But CEO James Gorman cautioned that the record-setting numbers would be hard to repeat in the coming quarters.

“Clearly, it will be challenging for the back half of 2020 to meet the record first half results… That said, many parts of our business should continue to perform well,” said Gorman.  He attributed the success of the quarter to the bank’s decade-long plan that balances the stability of the wealth management business and a minimal exposure to consumer loans against the unpredictability of its trading business.

MS set aside just $239 million to brace for potential credit losses, lower than the previous quarter, as the bank doesn’t have a credit-card business nor does it lend to small businesses – sectors badly hit by the pandemic.

Equities trading revenue rose 23%, with overall revenue jumping 31% to a record $13.41 billion in the quarter.  The bank’s earnings rose 45% to $3.2 billion.

--Bank of America’s second quarter profits were sawed in half and the consumer banking giant set aside $4 billion to cover potentially bad loans, but less than most competitors.

Profit of $3.53 billion was down from $7.34 billion in the same period a year ago.  Wall Street had expected worse but the shares still fell.

Because it is so consumer-focused, BofA is feeling the effects of the coronavirus pandemic more acutely than other major banks.  During the quarter, the bank processed 1.8 million requests for payment deferrals on credit cards, mortgages and auto loans, of which 1.7 billion are still in place as of last week.

--Bank of New York reported earnings and revenue that exceeded expectations but the shares fell after CEO Todd Gibbons said in a statement that “downside risks remain from the economic uncertainty and the significant pressure from low interest rates” for the remainder of 2020.

The company did post earnings of $1.01 vs. Wall Street’s expectation for $0.87 on revenue of $4 billion vs. estimates of $3.89bn.

--Netflix reported second quarter earnings on Thursday that missed analyst expectations for earnings, but beat on new subscribers and total revenue.

The company added 10.1 million paid subscribers, a record number for the quarter, in a boost likely provided by the hundreds of millions of people spending more time at home due to the pandemic.

But the shares fell heavily in the aftermarket as Netflix announced it expected 2.5 million new paid subscribers in the third quarter, in a sign that easing lockdown measures may have negatively impacted the company.

“Growth is slowing as consumers get through the initial shock of Covid and social restrictions,” Netflix said in a statement.

The company also announced Chief Content Officer Ted Sarandos was being promoted to co-CEO, while retaining his chief content officer title.  He has long been expected to succeed Reed Hastings as CEO, having overseen content operations since 2000, while being pivotal in the company’s transition from a DVD rental business to a massively popular streaming hub with a raft of original productions such as “House of Cards” and “Orange is the New Black.”

--Walmart announced on Wednesday that as of this coming Monday, it will require shoppers to wear face coverings.

“While we’re certainly not the first business to require face coverings, we know this is a simple step everyone can take for their safety and the safety of others in our facilities,” Walmart officials said in an online post.

Walmart said it has created the new position of health ambassador who will be posted at a store’s entrance to remind shoppers about the mask requirement and to find a solution if a customer arrives without one.

Kohl’s then announced it would require shoppers to wear face coverings at its more than 1,100 stores nationwide starting Monday.  Kroger announced the same.

On Tuesday, Best Buy said it would require customers to wear face masks and would provide one if needed.  Ditto Starbucks.  Costco and Apple have required them since May.

Then Thursday, CVS and Target announced they too will require masks in their stores.

--UnitedHealth Group Inc. saw profits rise sharply because of savings from surgeries, hospital stays and doctor visits canceled amid the pandemic, though UNH said health care returned to near-normal levels in recent weeks.

UnitedHealth, parent of the largest U.S. health insurer, UnitedHealthcare, posted net income of $6.64 billion, compared with $3.29bn in the same period last year.

Elective surgeries paused for months this spring as hospitals braced for a surge of coronavirus patients and the insurers’ payouts for coronavirus care so far fall well short of the savings they have accrued from all of the foregone procedures and routine care.

The earnings report is really totally unprecedented and UnitedHealth says it expects higher health-care costs in the second half of the year, as people seek deferred care.

UNH’s enrollment in commercial plans dropped, a sign of the impact of the economic downturn, while insurers saw growing membership in its Medicaid and Medicare products.

--At its peak on Monday, Tesla was valued at more than $330 billion, more than Toyota, Ford Motor, General Motors and Fiat Chrysler combined, as the share price hit $1,795 before a wicked pullback, finishing the week at $1,500.

--Auto sales in China increased 10.4% in the second quarter year over year as dealers and automakers begin to recover from the coronavirus.

The government-backed China Association of Automobile Manufacturers said Friday that the industry had bounced back more strongly than expected, posting its first quarterly gain in two years.  June sales of 2.3 million were up 11.6% year over year, a record for the month.

But sales were down 16.9% year over year in the first six months of 2020, basically assuring a third straight year of declines.

Ford Motor said its second-quarter sales in China increased 3% to 158,589, the first such increase in three years.  General Motors’ China sales declined 5.3% vs. a year ago to 713,600.

Toyota Motor Corp.’s China sales increased 23% in June, while the second-quarter surge meant for the first half, Toyota’s sales were down only 2%.  Ford and GM were down 10% and 25% in the first half, respectively.

Electric-vehicle sales in China continued to fall; down 37% year over year in the first half of 2020, though Tesla had the bestselling EV in China in the first six months.

--Last WIR I noted that British Prime Minister Boris Johnson was preparing to issue an order purging Huawei telecom equipment from Britain’s 5G network by the end of 2025.  When the order went through Tuesday, the deadline was extended to end of 2027.

Britain’s “discriminatory” ban on Huawei has severely damaged China’s investment confidence in the country, China’s commerce ministry said on Thursday, adding it will take necessary measures to defend Chinese firms’ legal rights.

“China is evaluating the UK actions that have betrayed free trade principles and will take necessary measures to resolutely defend Chinese firms’ legal rights,” ministry spokesman Gao Feng said during a weekly briefing, without giving any details.

Chinese ambassador Liu Xiaoming questioned whether the UK can provide a “fair” business environment for foreign firms.  “Disappointing and wrong decision by the UK on Huawei,” he tweeted.  China said the Huawei decision would cost Britain dearly in investment.

President Trump welcomed the UK decision, calling Huawei “unsafe.”

“We convinced many countries, many countries – and I did this myself for the most part – not to use Huawei because we think it’s an unsafe security risk, it’s a big security risk,” he said.

Britain denied Trump was responsible for its own decision.

--As I was going to post last Friday night, this story hit that Amazon had asked its employees to delete the Chinese-owned video app TikTok from their cellphones.  Five hours later, Amazon reversed course, saying the email to workers was sent in error.

Another classic case of ‘wait 24 hours.’ 

But the sentiment is now out there, part of a growing storm surrounding TikTok, which has Chinese ownership and has come under increased scrutiny in Washington over its security.

Wells Fargo told some workers who had installed TikTok on company-owned phone to delete the app.  “Due to concerns about TikTok’s privacy and security controls and practices, and because corporate-owned devices should be used for company business only, we have directed those employees to remove the app from their devices,” a Wells spokeswoman said in a statement.

--Walt Disney was forced to shut down Hong Kong Disneyland again after it reopened less than a month ago, as additional daily coronavirus cases confirmed by the local government rose to 52 on Monday.

But Disney World in Orlando resumed operations last Saturday amid the surge in cases in Florida.  Disneyland in Anaheim has not reopened.

Shanghai Disney Resort in China reopened on May 11, Tokyo Disney Resort in Japan reopened on July 1, and Disneyland Paris had a partial reopening Wednesday.

--Carnival’s Holland America Line unit said it will sell four of its ships to two unnamed buyers and cancel cruises for the ships’ deployments amid the Covid-19 crisis.

--Chipotle Mexican Grill said it is adding as many as 10,000 employees as it opens more stores with drive-through lanes for digital orders.

Chipotle expects more than 60% of new stores that it opens will include drive-through lanes, which are strictly for picking up orders placed in advance online.

--Domino’s Pizza reported fiscal Q2 net income of $2.99 per share, up from $2.19 per share in the prior-year period, as revenue for the quarter ended June 14 was $920 million, compared with $811.6 million a year earlier.

U.S. same-store sales growth was 16.1% vs. 3% a year ago with the most recent period “positively impacted by customer ordering behavior during the Covid-19 pandemic,” Domino’s said in a statement.

--JCPenney said it would cut 1,000 jobs and shutter 152 stores as the department store chain looks to emerge from Chapter 11 protection and the coronavirus crisis.  The layoffs affect corporate, field management and international roles.

--Carnegie Hall dipped into its endowment after a generous loan from the Paycheck Protection Program ran dry, the famed music hall furloughing 51 full-time staff, effective Monday.  The $5.5 million loan, secured from Citibank, kept 274 employees paid through the end of June. Carnegie Hall had 350 employees at the start of March.

--New York City’s unemployment rate climbed to 20.4% in June, with a loss of roughly 760,000 private-sector jobs compared to this time last year, the state Department of Labor said Thursday.  It was 3.4% in February.

--New York City’s mass transit system is run by the Metropolitan Transportation Authority, or MTA, which finds itself in a dire financial crisis, with the MTA currently projecting a shortfall of more than $10 billion through the end of 2021.

The MTA spends about $17 billion annually running buses and trains.  It relies for more than two-thirds of its revenues on fares, tolls and dedicated payroll and other taxes that have been decimated by the pandemic.

So picture that by April, mass transit ridership had fallen more than 90%; at its low point, 400,000 subway riders on a weekday from a pre-pandemic average of 5.5 million.

But today, with New York reopening, bus ridership is still down 50% and subway ridership down 80% from usual levels.  Yet the MTA runs an almost full schedule on trains and buses to reduce crowding.  And now it’s spending an additional $500 million to disinfect trains, buses and stations.

It’s just a freakin’ disaster.

--I asked a good friend and expert for an update on the inground pool business and I need to keep his name anonymous but he passed along a note from a company in Pennsylvania. 

“When you have a good company and product you sell 64 inground pools in the last 3.5 weeks!?  Average is 11.  Unfreakingbelievable… 2021 is now nearing a sellout.”

Yes, 2021.  If you order a pool today, you sure as heck aren’t able to put it in until next year.

You all know the reason. Staycations.  From my office perch, I look down on a slew of single-family homes and two of them have purchased very nice above-ground pools just for their kids this long summer.

--Fox News host Tucker Carlson distanced himself and his program from the incendiary hate speech posted online by a former writer, Blake Neff.

But critics who expected an apology from Carlson did not get one.  Instead Carlson delivered a parting shot as he suddenly headed off for a brief vacation.

“What Blake wrote anonymously was wrong,” Carlson said Monday on his program, reading from a statement.  “We don’t endorse those words, they have no connection to the show. It is wrong to attack people for qualities they cannot control.  In this country we judge people for what they do, not for how they were born.  We often say that because we mean it.  We’ll continue to defend that principle often alone among national news program because it is essential…Blake fell short of that standard and he has paid a very heavy price for it.”

Neff shared racist and bigoted opinions on Black and Asian people, the Mormon church and immigrants.

But Carlson had harsh words for his detractors whom he accused of reveling in Neff’s departure.  “We are all human,” he said.  “When we pretend we are holy, we are lying. When we pose as blameless in order to hurt other people we are committing the gravest sin of all and we will be punished for it. There is no question.”

“Tucker Carlson Tonight” is the most watched program in all of television, but he was struggling with advertisers lately prior to this episode.

Foreign Affairs

China, Hong Kong and Taiwan: In a blistering speech with long-range ramifications, Attorney General William Barr warned on Thursday that the Chinese Communist Party has launched an “economic blitzkrieg” to topple the U.S. from its perch as the world’s superpower, laying out the threat as the most important issue of this century and calling for the free world to join together in a “whole of society approach” against it.

“How the United States responds to this challenge will have historic implications and will determine whether the United States and its liberal democratic allies will continue to shape their own destiny or whether the CCP and its autocratic tributaries will control the future,” Barr said during a speech at the Gerald R. Ford Presidential Museum in Grand Rapids, Mich.

“The People’s Republic of China is now engaged in an economic blitzkrieg – an aggressive, orchestrated, whole-of-government (indeed, whole-of-society) campaign to seize the commanding heights of the global economy and to surpass the United States as the world’s preeminent superpower,” he continued.

By exceeding World Trade Organization quotas on domestic output, “it is clear that the PRC seeks not merely to join the ranks of other advanced industrial economies, but to replace them altogether.

“The General Secretary of the Chinese Communist Party, Xi Jinping, who has centralized power to a degree not seen since the dictatorship of Mao Zedong, now speaks openly of China moving ‘closer to center stage,’ ‘building a socialism that is superior to capitalism,’ and replacing the American Dream with the ‘Chinese solution.’

Barr said China’s “Made in China 2025” initiative seeks to dominate high-tech industries like robotics and information technology and electric vehicles, which “poses a real threat to U.S. technological leadership.”

“ ‘Made in China 2025’ is the latest iteration of the PRC’s state-led, mercantilist economic model. For American companies in the global marketplace, free and fair competition with China has long been a fantasy.”

Barr noted that America aided China’s rise by granting the country favored-trading status in 1980 and supporting its joining the World Trade Organization a decade later.

China “used tariffs and quotas to pressure American companies to give up their technology and form joint ventures with Chinese companies. Regulators then discriminated against American firms, using tactics like holding up permits. Yet few companies, even Fortune 500 giants, have been willing to bring a formal trade complaint for fear of angering Beijing,” he said.

Even more, Barr said American companies have become dependent on the China markets to provide “vital goods and services” – a situation that has been emphasized during the pandemic.

Barr said the Chinese Communist Party has launched an “orchestrated” campaign enlisting the government and society to “exploit the openness of our institutions in order to destroy them.”

To counter Beijing’s efforts and “to secure a world of freedom and prosperity for our children and grandchildren,” Barr said the free world will have to mount its own “whole-of-society approach.”

“America has done that before.  If we rekindle our love and devotion for our country and each other, I am confident that we – the American people, the American government, and American business together – can do it again.  Our freedom depends on it,” he said.

Barr called on America’s corporate executives and the tech giants of Silicon Valley to defy China’s encroachment.

“The ultimate ambition of China’s rulers isn’t to trade with the United States.  It is to raid the United States,” he said.

Barr also warned those who believe trade and investment would appease and liberalize China that it has no desire to be an open and democratic society.

“As its ruthless crackdown of Hong Kong demonstrates once again, China is no closer to democracy today than it was in 1989 when tanks confronted pro-democracy protesters in Tiananmen Square.  It remains an authoritarian, one-party state in which the Communist Party wields absolute power, unchecked by popular elections, the rule of law, or an independent judiciary,” he said.

Barr said American companies, hungry for short-term profits, have come under Beijing’s influence – “even at the expense of freedom and openness in the United States.”

“Globalization does not always point in the direction of greater freedom. A world marching to the beat of Communist China’s drums will not be a hospitable one for institutions that depend on free markets, free trade, or the free exchange of ideas,” he said.

So in retaliation for Beijing imposing its new strict national security law on Hong Kong to crackdown on pro-democracy protests, President Trump signed an executive order this week slapping sanctions on Chinese officials.

It also removes Hong Kong from special trade status it had enjoyed with the U.S. when it was semi-autonomous.

The president also said he’s “not interested” in meeting with his counterpart Xi to hammer out a phase two trade deal.

China’s foreign ministry said it will impose retaliatory sanctions against U.S. individuals and entities in response to the law targeting banks, saying in part, “Hong Kong affairs are purely China’s internal affairs and no foreign country has the right to interfere.”

Separately, Secretary of State Mike Pompeo said China’s pursuit of offshore resources in parts of the South China Sea is “completely unlawful.”  Pompeo said he wanted to make clear that Beijing’s “campaign of bullying to control” the disputed waters was wrong.

As I’ve detailed over many years, China has been building military bases on artificial islands in the region also claimed by Brunei, Malaysia, the Philippines, Taiwan and Vietnam.

Beijing claims it essentially owns the entire area under its “nine-dash line.”  The sea is also a shipping route and has major fishing grounds.

In a statement on Monday, Pompeo denounced China’s claims on the disputed Spratly Islands in the South China Sea, saying Beijing had “no legal grounds to unilaterally impose its will on the region.”

He said the U.S., which has previously said it does not take sides in territorial disputes, rejected Beijing’s claims to waters off Vietnam, Malaysia and Indonesia.

“Any [People’s Republic of China] action to harass other states’ fishing or hydrocarbon development in these waters – or to carry out such activities unilaterally – is unlawful,” he said. 

“The world will not allow Beijing to treat the South China Sea as its maritime empire.”

In a statement posted on Twitter, the Chinese embassy in Washington, D.C. said the U.S. State Department “deliberately distorts the facts and international law including the United Nations Convention on the Law of the Sea.”

As if all the above isn’t disturbing enough, Friday, Taiwan officials in Hong Kong were told their visas will not be renewed if they don’t sign a document supporting Beijing’s claim to Taiwan under its “one China” policy, as first reported by Reuters.

The move comes after Taipei strongly criticized the new security law imposed on Hong Kong by Beijing, and opened an office in Taipei this month to help people who may want to leave the Asian financial hub.

Several Taiwanese officials at its de facto Hong Kong consulate who were due to renew their visas have been asked by the city’s government to sign the document, a senior official said, calling it an unprecedented move and an “unnecessary political obstacle” for Taipei-Hong Kong ties.

The Taiwanese official told Reuters, “We will try our best to defend our stance.  Our representatives in Hong Kong will hold fast to their position.”

Meanwhile, last weekend some 600,000 Hong Kongers cast votes in democratic primaries, which aren’t part of Hong Kong’s formal political process but determine who will run against pro-Beijing candidates in September’s Legislative Council elections.  Hong Kong’s elections are rigged to favor Beijing’s choices, but as the Wall Street Journal editorialized, “this year the pro-democracy camp hoped to gain enough seats to prevent the worst proposals from becoming law.  In last fall’s district-council elections, Hong Kongers elected pro-democracy candidates in a landslide.”

Editorial / Washington Post

“So far, Hong Kongers have received only limited support from Western democracies.  The United States and European Union have condemned the new security law; Britain and Australia have offered asylum to Hong Kong refugees, and the United States is imposing sanctions on some officials. The Xi regime brushes off such gestures; people in Hong Kong know that the repression will likely escalate.  Nevertheless, they persist.  It’s a historic display of civic will and courage.”

Lastly, the U.S. State Department warned American citizens to “exercise increased caution” in China due to heightened risk of arbitrary law enforcement including detention and a ban from exiting the country.

“U.S. citizens may be detained without access to U.S. consular services or information about their alleged crime,” the State Department said in a security alert.

Russia: Russian spies are targeting organizations trying to develop a coronavirus vaccine in the UK, U.S. and Canada, security services from all three have warned.

The UK’s National Cyber Security Centre (NCSC) said the hackers “almost certainly” operated as “part of Russian intelligence services.”

It did not specify which organizations had been targeted, or whether any information had been stolen.  But it said vaccine research had not been hindered by the hackers.

Russia has denied responsibility.

“We do not have information about how many have hacked into pharmaceutical companies and research centers in Great Britain. We can say one thing – Russia has nothing at all to do with these attempts,” said Dmitry Peskov, a spokesman for President Putin, according to the Tass news agency.

The warning was published by an international group of security services: the NCSC, the U.S. Department for Homeland Security Cyber-security Infrastructure Security Agency, the U.S. National Security Agency, and the Canadian Communication Security Establishment.

The latest accusations are unusual in that officials are directly pointing the finger at Russian spies rather than talking generally about “state-backed hackers” or using other more cautious references.

And they are also challenging them over targeting something that the general public recognizes as being highly sensitive – coronavirus vaccine research – rather than simply some company or government department’s information.

The UK, U.S. and Canadian agencies said the hackers had exploited software flaws to get access to vulnerable computer systems, and had used malware called WellMess andWellMail to upload and download files from infected machines.

They are also said to have tricked individuals into handing over login credentials with spear-phishing attacks.

Specifically, Western officials identified the hacking group as Russia-supported APT29, which is also known as Cozy Bear.

Iran: Authorities are investigating a blaze that damaged seven ships at the southern port of Bushehr, the latest in a string of fires and explosions that have raised suspicions of coordinated sabotage targeting the nation’s infrastructure and a nuclear facility.

It’s bizarre seven ships would catch fire like this, but the blaze follows a series of incidents, at least eight in less than three weeks, that the government has characterized as accidents.  Tehran has still not given a cause for the most serious incident, a massive explosion July 2 at Natanz, one of the country’s key nuclear facilities.  The blast dealt extensive damage to an assembly center for advanced centrifuges. 

Meanwhile, Iran and China are seeking to cement a wide-ranging partnership that would deflect U.S. economic pressure and ease Tehran’s global isolation. 

A draft of the deal, which requires Iranian parliamentary approval, would pave the way for Chinese investments in Iranian free-trade zones and for joint projects in countries such as Syria and Iraq.  Under a 25-year partnership, China would also import “sustainable” levels of Iranian oil, but offered no further details.

China has been resisting U.S. attempts to cut its consumption of Iran’s crude-oil supply to zero.  Sales to China still account for the majority of oil that Iran exports.

Israel: Prime Minister Benjamin Netanyahu’s popularity is plummeting amidst his government’s response to the coronavirus.  Israel essentially opened everything up in May, having seemingly defeated Covid-19, but now it is seeing record case numbers and is beginning to lockdown anew.

Netanyahu admitted Wednesday night that the government made a mistake in the way it opened: “The opening of the banquet halls and large gatherings…these things lead to a disaster and raise the level of morbidity,” he said.  “So, our guidelines will be very strict about gatherings.”

Unemployment in Israel has soared to 21%, while 387 have died from the coronavirus as of Friday.

Afghanistan: A Taliban attack on a government intelligence headquarters in the northern part of the country killed 11 security forces and injured dozens of civilians, further straining a peace process meant to pave the way for a withdrawal of American troops.

The assault Monday capped a bloody 24-hour wave of violence across Afghanistan, where Taliban insurgents killed at least 25 government forces in separate attacks on three security posts around the country and this comes amid a stalled peace process between the Afghan government and the Taliban, which was intended to follow a preliminary agreement in February between the U.S. and the insurgents.  At the same time, the government is struggling to respond to the coronavirus crisis.  Deaths have been spiking and now total nearly 1,150.

Poland: President Andrzej Duda won five more years in power on a socially conservative, religious platform in a closely fought election that makes renewed confrontation with the European Union’s executive likely.  Duda, 48, won 51.03% of the vote, the National Election Commission said, while Liberal Warsaw Mayor Rafal Trzaskowski received 48.97%.

Duda is allied with the ruling nationalist Law and Justice (PiS) party, and his victory reinforces the government’s mandate to pursue reforms of the judiciary and media which the European Commission says subvert democratic standards.

Duda has painted himself as a guardian of traditional values and the generous PiS welfare programs that have transformed life for many poorer Poles.

But he ran an acrimonious campaign laced with homophobic language, attacks on private media and accusations that Trzaskowski serves foreign interests.

Since the polls closed, Duda has been more conciliatory.

Canada: Prime Minster Justin Trudeau is embroiled in his third ethics commission inquiry, the latest involving a government contract to a charity that paid his family.

We Charity was tapped by his government to oversee a $664 million youth volunteer program in June and it later emerged that We previously paid Trudeau’s relatives about $200,000 to speak at events.

“I made a mistake for not recusing myself from the discussions immediately, given my family’s history,” Trudeau said Monday.

The prime minister has not been paid by the organization himself, although he has spoken at We events for free.  He said he should have known his family had been paid, since they are frequently hired for professional speaking engagements.

Random Musings

--Presidential tracking polls….

Gallup: 38% approval for President Trump’s job performance, 57% disapproval; 91% of Republicans approve, 33% of independents (June 8-30).
Rasmussen: 45% approve, 53% disapprove (June 17…same as last week).

--A new Wall Street Journal/NBC News national survey found that 51 percent of voters said they would vote for Joe Biden, with 40 percent backing Trump.  Last month in this poll, Biden’s lead was seven.

42 percent of voters approve of Trump’s job performance, with 56 percent disapproving – his lowest job-approval rating since April 2018.

--In a new Quinnipiac University national poll released Wednesday, registered voters back Joe Biden over Trump 52-37 percent, which compares to a June 18th national poll when Biden led 49-41.

Independents are a key factor behind Biden’s widening lead as they now back him 51-34 percent, while in June, independents were split with 43 percent for Biden and 40 percent for Trump.  Republicans back Trump 84-9 percent, compared to 92-7 percent in June.  Democrats back Biden 91-5, little changed from 93-4 in June.

On the coronavirus response, Biden leads 59-35 percent, with voters giving Trump a negative 35-62 percent approval rating for his handling of the crisis.  By a 67-30 margin they do not trust the information the president is providing about the pandemic.  *By 65-26 percent, on the other hand, voters trust the information Dr. Anthony Fauci is providing.

On the issue of “Honesty,” 31 percent say President Trump is honest; 66 percent say “no.”  46 percent say Biden is honest; 42 percent say no.

On the issue of reopening schools, voters say by more than 2 to 1, 61-29 percent, that they disapprove of the way Trump is handling things.

Slightly more than 7 in 10 Americans, 71-26 percent, think everyone should be required to wear face masks in public.

Voters say 54-40 percent they support removing Confederate statues from public spaces, while by a 51-42 margin, they support renaming military bases named after Confederate generals.

A majority, 56 percent, see the Confederate flag more as a symbol of racism.  35 percent see it more as a symbol of Southern pride.

Trump’s overall job approval rating is an abysmal 36 percent in the Q poll, with 60 percent disapproving, down from a June 18 split of 42-55.

--A new ABC News/Washington Post national poll shows six in 10 disapprove of how President Trump is handling the pandemic, up steeply from the early days of the outbreak.

Just 38% now approve of Trump’s response, down from 46% in late May and a narrow majority, 51%, in late March.  Disapproval gained 15% in the same period to 60%.

Only 34% of Americans place a great deal or good amount of trust in what Trump says on the coronavirus, while 64% trust him not so much or – in the case of nearly half the public – not at all.

By 63% to 33%, Americans say it’s more important to control the spread of the virus than to restart the economy.

And 79% say they wear a mask all or most of the time when they’re around other people outside their home.

--A CNBC-Change Research poll of likely voters in six battleground states (Arizona, Florida, Michigan, North Carolina, Pennsylvania and Wisconsin) found 45 percent approval of Trump’s overall job performance versus 55 percent disapproval.

On the topic of the coronavirus, 54 percent said Biden and the Democrats would do a better job compared to 46 percent for Trump and the Republicans.

--A CBS News Battleground Tracker YouGov poll of three key Sun Belt states has Biden leading Trump by six points in Florida, while the two are tied in Arizona and virtually tied in Texas (46-45 Trump).

In Arizona, 31% believe the state’s coronavirus efforts are going well, while 69% say they are going badly; in Florida the ratio is 34-65; and in Texas it’s 37% going well, 62% going badly.

In all three states, most voters say their state reopened too soon, and those who say this feel their state went too fast under pressure from the Trump administration.

Trump won Florida 49.0%-47.8%, Texas 52.2%-43.2%, and Arizona 48.7%-45.1% in 2016.

[A new Dallas Morning News/University of Texas at Tyler poll found Biden had 46% support to Trump’s 41%.]

--A Monmouth University Poll of registered voters in Pennsylvania has Biden leading Trump 53% to 40%, with 3% saying they will vote for another candidate and 4% who are undecided.  Biden is in a relatively stronger position among his fellow Democrats (93% to 1%) than Trump is among Republican voters (84% to 12%).  Biden enjoys a 54% to 33% advantage among independents.

White voters without a college degree prefer Trump (55% to 39%), while Biden leads among white college graduates (61% to 34%) and voters who are Black, Hispanic, Asian or from other racial groups (76% to 16%).

But it’s going to be largely about turnout.  If there is a ‘lower’ turnout, Monmouth’s model has Biden with just a 51-44 margin.

Just 42% of registered voters in the state say Trump has done a good job on the coronavirus while 56% say he has done a bad job.  By contrast, Pennsylvania Gov. Tom Wolf, a Democrat, earns praise on the issue – 67% say he has done a good job and just 29% say he has done a bad job.

Trump defeated Hillary, 48.2% to 47.5%, in 2016.

--Jeff Sessions’ long political career in all probability came to a screeching halt on Tuesday.  The first senator to back Donald Trump’s candidacy in 2016, Trump tapped Sessions to be his first attorney general, after serving in the Senate from 1997 to 2017, but their relationship soured when Sessions recused himself from the investigation into Russian meddling in the election.  Sessions then resigned in late 2018 under withering criticism from Trump.

But Tuesday, Sessions lost a primary bout against former Auburn football coach Tommy Tuberville, whom Trump endorsed, 61% to 39%.  Tuberville now goes up against Democratic incumbent Sen. Doug Jones in November.

Sessions defended his actions as he backed Tuberville.

“On recusal, I followed the law, I did the right thing, and I saved the president’s bacon in the process,” he told supporters.  “I would do it again.  I leave elective office with my integrity intact and my head held high.”

Tuesday night Trump tweeted:

“Wow, just called! @TTuberville – Tommy Tuberville WON big against Jeff Sessions. Will be a GREAT Senator for the incredible people of Alabama. @DougJones is a terrible Senator who is just a Super Liberal puppet for Schumer & Pelosi.  Represents Alabama poorly. On to November 3rd.”

--There are at least five GOP groups aimed at denying President Trump a second term by encouraging just enough disaffected Republican voters that it is in the best interest of the nation to support Joe Biden.

Republican Voters Against Trump has conservative writer Bill Kristol among its leaders; the Lincoln Project, whose co-founders include George Conway, which has been producing some devastating ads; former Trump aide Anthony Scaramucci is supporting the Right Side PAC; former George W. Bush administration staffers launched the 43 Alumni for Biden super PAC; while a fifth group features Republican national security experts.

“We’re all in this together. We are allies, and we all see our efforts as complementary.  We all have our own ways of prosecuting our case against the president,” said Reed Galen, a top adviser to the Lincoln Project who previously worked for George W. Bush, the late Sen. John McCain and former Gov. Arnold Schwarzenegger.  “The Lincoln Project does its best to…take him on in a very direct manner that keeps him and his campaign off balance politically.”  [Seema Mehtastaff / Los Angeles Times]

--George F. Will / Washington Post

“Because of his incontinent use of it, the rhetorical mustard that the president slathers on every subject has lost its tang.  The entertainer has become a bore, and foretelling his defeat no longer involves peering into a distant future. Early voting begins in two states (South Dakota and Minnesota) 61 days from Sunday, which is 107 days before Election Day.

“Never has a U.S. election come at such a moment of national mortification.  In April 1970, President Richard M. Nixon told a national television audience that futility in Vietnam would make the United States appear to the world as “a pitiful, helpless giant.’  Half a century later, America, for the first time in its history, is pitied.

“Not even during the Civil War, when the country was blood-soaked by a conflict involving enormous issues, was it viewed with disdainful condescension as it now is, and not without reason: Last Sunday, Germany (population 80.2 million) had 159 new cases of Covid-19; Florida (population 21.5 million) had 15,300.

“Under the most frivolous person ever to hold any great nation’s highest office, this nation is in a downward spiral.  This spiral has not reached its nadir, but at least it has reached a point where worse is helpful, and worse can be confidently expected.

“The nation’s floundering government is now administered by a gangster regime.  It is helpful to have this made obvious as voters contemplate renewing the regime’s lease on the executive branch.  Roger Stone adopted the argot of B-grade mobster movies when he said he would not ‘roll on’ Donald Trump.  By commuting Stone’s sentence, Stone’s beneficiary played his part in this down-market drama, showing gratitude for Stone’s version of omerta (the Mafia code of silence), which involved lots of speaking but much lying.  Because the pandemic prevents both presidential candidates from bouncing around the continent like popcorn in a skillet, the electorate can concentrate on other things, including Trump’s selection of friends such as Stone and Paul Manafort, dregs from the bottom of the Republican barrel….

“This year, the pandemic will be an accelerant of preexisting trends: There will be a surge of early and mail voting.  So, an unambiguous decision by midnight Eastern time Nov. 3 will require (in addition to state requirements that mailed ballots be postmarked, say, no later than Oct. 31) a popular-vote tsunami so large against the president that there will be a continentwide guffaw when he makes charges, as surely he will, akin to those he made in 2016.  Then, he said he lost the popular vote by 2.9 million because ‘millions’ of undocumented immigrants voted against him.  Making a preemptive strike against civic confidence, Trump has announced that the 2020 election will be the ‘most corrupt’ in U.S. history….

“Larry Diamond of the conservative-leaning Hoover Institution at Stanford discerns another scandal:

“ ‘The hard truth is that there has been a rising tide of voter suppression in recent U.S. elections. These actions – such as overeager purging of electoral registers and reducing early voting – have the appearance of enforcing abstract principles of electoral integrity but the clear effect (and apparent intent) of disproportionately disenfranchising racial minorities.  One example was the decision of Georgia’s Republican Secretary of State (now Governor) Brian Kemp to suspend 53,000 predominantly African-American voter registration applications in 2018 because the names did not produce an ‘exact match’ with other records.’

“This nation built the Empire State Building, groundbreaking to official opening, in 410 days during the Depression, and the Pentagon in 16 months during wartime.  Today’s less serious nation is unable to competently combat a pandemic, or even reliably conduct elections.  This is what national decline looks like.”

--Supreme Court Justice Ruth Bader Ginsburg revealed Friday that she’s undergoing chemotherapy to treat a recurrence of cancer.  In a statement, Ginsburg said she began treatment in May after a scan in February discovered lesions on her liver.

At 87, Ginsburg is the court’s oldest member and leader of its liberal bloc.  She is a four-time cancer survivor.

Earlier this week, Ginsburg was hospitalized overnight for treatment of a possible infection she said Friday was “unrelated” to the cancer recurrence.

--After 31 years in office, New York Rep. Eliot Engel was sent packing as he officially lost a Democratic primary battle to newcomer and former Bronx middle school principal Jamaal Bowman.  Bowman, 44, was up double-digits after Election Day but they had to wait until more than half of the absentee mail-in ballots confirmed his lead.

As Bowman’s district is reliably Democratic, he’ll be an interesting new face in Congress.

--Democratic lawmakers in New Jersey gave final approval to a highly controversial bill authorizing $10 billion in state borrowing to fill a swelling budget gap amid Republican opposition and an expected court challenge.

Lawmakers largely passed the bill Thursday along party lines and Democratic Gov. Phil Murphy signed it into law last night.

The economic crisis forced the hands of lawmakers to take drastic measures, said Senate President Steve Sweeney, a Democrat.  “We are in a place we’ve never been before,” he said.

But the legislation creates a panel of two state senators (Sweeney one of them) and two members of the state Assembly that are authorized to approve or deny each borrowing request.

GOP officials argue the plan doesn’t require the typical voter approval and is unconstitutional and they are challenging it in court.

My state is known for massive borrowing to the detriment of the future.

--A 15-year-old boy died in western Mongolia of bubonic plague, the country’s national news agency reported.

The health ministry said lab tests confirmed the teenager died of plague that he contracted from an infected marmot, according to the Montsame News Agency.

The case prompted the government to impose a quarantine on a portion of the province of Gobi-Altai.

In an unrelated case in neighboring China, a patient who was infected with plague in the northern region of Inner Mongolia is improving, according to China’s official Xinhua News Agency.

Meanwhile, a squirrel is the first case of plague in the town of Morrison, Colorado, which is west of Denver.

Officials attempted to isolate the squirrel but it seems he broke free, attempted to cross a road, and, well, it did not end well.  Then again, I really don’t know what happened to the squirrel, just a good guess.

[I had to look up Morrison.  Looks like an idyllic area, lots of golf courses, Red Rocks Amphitheater…Red Rocks Beer Garden!]

--As if yearend isn’t already likely to be depressing enough, even if we have a vaccine by then, you’d at least like to turn on the television New Year’s Day and see the Rose Parade. Alas, it was canceled for the first time in 75 years.

Parade officials initially hoped they’d be able to hold the parade safely, but after weeks of assessment, it became clear this was impossible.

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

God bless America.

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Gold: $1812
Oil: $40.57

Returns for the week 7/13-7/17

Dow Jones  +2.3%  [26671]
S&P 500  +1.2%  [3224]
S&P MidCap  +3.6%
Russell 2000  +3.6%
Nasdaq  -1.1%  [10503]

Returns for the period 1/1/20-7/17/20

Dow Jones  -6.5%
S&P 500  -0.2% [just six points shy of 12/31/19 close]
S&P MidCap  -11.0%
Russell 2000  -11.7%
Nasdaq  +17.1%

Bulls 58.1
Bears 18.1

Hang in there…Mask up. Wash your hands.

Brian Trumbore