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Week in Review

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10/17/2020

For the week 10/12-10/16

[Posted 10:00 PM ET, Friday]

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Edition 1,122

President Trump was cleared by doctors to return to the campaign trail after his bout with the coronavirus, holding his first superspreader rally in Florida on Monday, and after that he crisscrossed the battleground states of Michigan, Pennsylvania, Florida a few more times, North Carolina, Georgia…Macon, Georgia, where I’m watching him now before posting.  The president is undermining trust in the democracy and the voting process, with countless falsehoods about illegal balloting tonight.  And the coronavirus. 

In fact right now he’s again going after Joe Biden for wearing a mask.  So pathetic.  As a recent Cornell University study concluded, President Trump is the single biggest source of Covid disinformation, like the falsehood he trumpeted all week that 85% of those who wear masks get the virus.

But the fact is while the president lies about “rounding the corner” on the pandemic, cases in the U.S., and elsewhere around the world, spiked this week to either record highs (as was the case in many of the states) or near highs.  Tonight, we hit our highest case level since July 31st, over 70,000 new infections.  We needed to be around 20,000 heading into flu season, and instead we were running at 40,000, and now this.  Hospitalizations are rising again, to crisis levels in many areas.

No problem, says the president.

Eighteen days until the election.  Eighteen days until Armageddon and the president’s claims on Election Night that he has won with the initial polls showing him ahead, before the tens of millions of mail-in ballots are counted, a large majority of which will be for Biden.  We are already at over 21 million votes in.  It’s exhilarating to see the throngs waiting in lines for early voting.  It’s also unsettling to think about the aftermath. 

This week we also had the “no debate” fiasco and the decision on the part of NBC to give the president a town hall at the same time as ABC’s forum with Joe Biden.  Many of us were ticked at NBC News, but it ended up working out.

A combative Trump, sparring with moderator Savannah Guthrie, refused to condemn the bizarre conspiracy theory QAnon, reiterated his unsubstantiated assertion that the 2020 election was rife with fraud, questioned whether masks help fight the spread of Covid-19, and defended his retweet of another conspiracy theory that purports the U.S. did not kill Osama bin Laden, but rather got his body double. 

On the other channels, Joe Biden delivered policy-heavy answers that focused his attacks on Trump’s handling of the pandemic, but refused to answer a question, again, on whether he will pack the Supreme Court should he win the election and Democrats take the Senate.  Biden did say, though, he would have an answer before the election and that he was waiting to see how the Senate handled Amy Coney Barrett’s nomination first, as in whether she was seated before Nov. 3rd.

Biden blasted the president’s foreign policy, declaring that “America first” has made “America alone” and “this president embraces all things in the world.”

And then Nebraska Republican Sen. Ben Sasse eviscerated President Trump during a phone call with constituents in which he accused the president of cozying up to dictators, mistreating women, flirting with white supremacists and irresponsibly handling the pandemic.

Sasse’s comments were disclosed by the Washington Examiner, which obtained an audio recording of the call, a campaign telephone townhall with Nebraska voters.

Sasse has been among the few Republican lawmakers willing to criticize the president from time to time but has mostly supported him and his policies.

But in the call, Sasse unleashed a torrent of criticisms at Trump.

“The way he kisses dictators’ butts.  I mean, the way he ignores the Uighurs, (the) literal concentration camps in Xinjiang. Right now, he hasn’t lifted a finger on behalf of Hong-Kongers,” Sasse said.

“The United States now regularly sells out our allies under his leadership, the way he treats women, spends like a drunken sailor,” Sasse continued.  “The ways I criticize President Obama for that kind of spending; I’ve criticized President Trump for as well.  He mocks evangelicals behind closed doors.  His family has treated the presidency like a business opportunity.  He’s flirted with white supremacists.”

Sasse then shifted to what he characterized as Trump’s failure in leadership with the pandemic, saying Trump treated it like a “PR crisis rather than a multiyear public health challenge.”

“I don’t think the way he’s led through Covid has been reasonable or responsible or right,” he said.  “But the reality is that he careened from curb to curb.  First, he ignored Covid.  And then he went into full economic shutdown mode,” Sasse said.  ‘He was the one who said 10 to 14 days of shutdown would fix this.  And that was always wrong.  I mean, and so I don’t think the way he’s led through Covid has been reasonable or responsible, or right.”

Sasse concedes that he gives Trump credit for certain things, like appointing conservative judges, but emphasized that his unease with Trump isn’t just policy based but existential.

“It’s also a…political question about whether or not he’s ultimately driving the country further to the left, because that’s what I think is ultimately going to happen because of Donald Trump,” Sasse explained.

He called the Republican Party entwining itself with the “Trumpian brand” imprudent and said that his fear is that Trump will bring down the Republican-controlled Senate in November.

“I’m now looking at the possibility of a Republican bloodbath in the Senate, and that’s why I’ve never been on the Trump train. It’s why I didn’t agree to serve on his reelection committee and that’s why I’m not campaigning for him, because I spend all my time thinking about the one political question that’s most central next month, which is holding the U.S. Senate.”

Sasse is up for reelection this year and is expected to easily win in his GOP-leaning state.

Finally, former New Jersey governor and Trump adviser, Chris Christie, commented on his week in the ICU at a local hospital after contracting the coronavirus.  On Thursday he admitted he was “wrong” not to wear a mask at an event honoring Judge Amy Coney Barrett and in his debate preparation sessions with President Trump, and that people should take the threat of the virus seriously.

In an interview with the New York Times and in an open statement, Christie said that he had believed he was in a “safe zone” at the White House while he was there.  He urged people to follow best practices, like mask wearing and social distancing, but argued there’s a middle ground between extensive, large-scale shutdowns and reopening cities and states without taking proper precautions.

“I hope that my experience shows my fellow citizens that you should follow C.D.C. guidelines in public no matter where you are and wear a mask to protect yourself and others,” he said.

Christie said that the virus is “something to take very seriously.  The ramifications are wildly random and potentially deadly.”

Covid-19 death tolls, as of tonight….

World…1,109,070
USA…223,644
Brazil…153,229
India…113,032
Mexico…85,704
UK…43,429
Italy…36,427
Spain…33,775
Peru…33,648
France…33,303
Iran…29,870
Colombia…28,616
Argentina…25,723
Russia…23,723

Source: worldometers.info

U.S. daily death tolls…Sun. 325; Mon. 316; Tues. 843; Wed. 970; Thurs. 874; Fri. 928

Week eleven of my Wednesday comparison on the case and death tolls of the Euro six (Germany, France, Spain, Italy, UK and Belgium, with a combined population of 336 million) and the U.S. (population 330 million).

The first week, the U.S. had 55,148 cases and 1,319 deaths, while the Euro six had a combined 7,281 and 100.

This week, we are at 59,693 cases and 970 deaths in the U.S., with cases in the Euro six soaring to 75,040, with 557 deaths.  Just awful.  Only better treatment methods compared with April are preventing both the U.S. and Europe from far more fatalities, but now once again the story becomes hospital capacity, which is near the breaking point anew in many European and U.S. cities.

The news out of Europe is truly horrific…new highs in cases in Italy, France, UK, Germany, Belgium, Ukraine, Poland, Netherlands, and Russia, for starters.  And you see the deaths beginning to follow.

Covid Bytes

--Johnson & Johnson paused trials of its Covid-19 vaccine candidate due to an unexplained illness in a participant in a phase 3 study.

The company said the illness was being reviewed by the independent data safety monitoring board of the late-stage Ensemble trial and by internal clinical and safety physicians.  It added that temporary pause should not be confused with a regulatory hold and that adverse events are not uncommon, especially in large studies such as its vaccine program.

--Eli Lilly paused an antibody treatment trial Tuesday, citing a “potential safety concern.”  A company spokeswoman told CNBC, “We are aware that, out of an abundance of caution, the ACTIV-3 independent data safety monitoring board has recommended a pause in enrollment.”

The trial was testing the benefits of the therapy on hundreds of volunteers hospitalized with Covid-19, according to the New York Times. It was not clear how many of those patients were sick, or how they were affected.

The Eli Lilly treatment was in a late stage, and the company had last month already requested emergency use authorization.  It’s similar to the Regeneron antibody treatment administered to President Trump.

--Gilead Sciences shares were down nearly 2% after a clinical trial by the World Health Organization found that the company’s Covid-19 treatment remdesivir has “no substantial effect” on a hospitalized patient’s chances of survival, the Financial Times reported Thursday, citing a copy of the study.

The WHO’s Solidarity trial studied the effects of remdesivir, along with hydroxychloroquine, lopinavir and interferon regimens in 11,266 patients and found that none of the treatments “substantially affected mortality” or had any effect on the need to ventilate patients.

The study, however, has yet to be peer-reviewed, according to researchers at WHO.

Gilead disputed the initial data.

--Pfizer said it may file for emergency authorization of its Covid vaccine being developed with German partner BioNTech in late November, which means a vaccine will not be available before the presidential election.

Pfizer CEO Albert Bourla said the company expects to have key safety data in the third week of November.

--Dr. Anthony Fauci said a vaccine for Covid could be widely available as soon as this April, a timeline that runs slightly longer than President Trump’s previous predictions.

Trump has been targeting the release of a vaccine by Nov. 3 – even going so far as to say that one could be released within the next few weeks.

Fauci expressed caution at expecting a vaccine too soon, saying, “that would be predicated on the fact that all of the vaccines that are in clinical trials have been proven to be safe and effective.”

--Less than one month after Israeli citizens were put under lockdown, the coronavirus cabinet ruled Thursday to begin lifting restrictions.

Beginning on Sunday, businesses that don’t serve customers, preschools for children ages newborn to six, nature reserves, national parks, beaches and various tourist facilities will open.

At the same time, restaurants will be able to serve takeaway, the ban on traveling more than one kilometer from home will be lifted and people will be allowed to visit the homes of their extended family and friends.

Finally, people will be able to gather in groups of 10 inside and 20 outside.

“As of now, the lockdown has been a major success. We are seeing a decline in all data, a clear and consistent decline,” Prime Minister Benjamin Netanyahu said at the start of the meeting.  Nonetheless, he added, “the exit needs to be gradual, responsible, careful and controlled.”

Israel had opened up after the first wave too recklessly back in May.

--French President Emmanuel Macron announced a night-time curfew in Paris and eight other cities to try to curb the rapid spread of coronavirus.  The measure, from 21:00 to 06:00 – will go into effect Saturday and will last for at least four weeks, Macron said in a televised interview.

Germany announced that bars and restaurants in higher-risk areas must close early.  The country reported its highest figures this week since the start of the pandemic.  Private gatherings will be limited to 10 people from two households.

--Poland reported a new daily record of 132 coronavirus-related deaths today and counted 7,705 new confirmed cases (which was after Thursday’s record of 8,099), amid fears the pandemic is testing the country’s supply of hospital beds and ventilators.

The people are upset at their government for not handling the second wave well.  A recent survey carried out by state pollster CBOS said around 43% of Poles negatively assessed the government’s efforts in fighting the pandemic in October, compared to 25% in May and June.

--Ireland has been spiking and Northern Ireland is imposing a four-week lockdown, effective today, to curb the spread.  I keep thinking of my friends over on the Emerald Isle whose businesses are suffering mightily.

Trump World

--The stage was set for President Trump’s town hall in Miami last night when he tweeted out the following hours before:

“I will be doing a major Fake @NBCNews Town Hall Forum, live tonight from Miami, at 8:00 P.M.  They asked me to do it in place of the Rigged Steve Scully (he is now suspended from @cspan for lying) Debate.  I wonder if they’ll treat me as well as Sleepy Joe?  They should!”

So among the statements made by the president at the town hall.

President Trump defended his amplification of a laughable QAnon conspiracy theory claiming the Navy SEAL team who killed Osama bin Laden only killed a body double.

Earlier this week, former SEAL Team 6 member and Trump supporter Robert O’Neil swatted down the conspiracy theory after the president retweeted a QAnon believer who has been pushing the claim.  During Trump’s intense town hall with Savannah Guthrie, the NBC anchor brought this up and asked him: “Why would you send a lie like that to your followers?’

“That was a retweet,” Trump answered.  “That was an opinion of somebody and that was a retweet.  I’ll put it out there, people can decide for themselves.”

“You’re the president!” an exasperated Guthrie exclaimed.  “You’re not someone’s crazy uncle who can retweet whatever.”

Trump responded by briefly defending his retweets, then by complaining about the “fake” and “corrupt” media while saying “if I didn’t have social media…I wouldn’t be able to get the word out.”

“The word is false,” Guthrie pointed out, which Trump didn’t even acknowledge.

On QAnon overall, Trump praised followers for “very strongly” fighting pedophilia, giving credence to a completely baseless far-right conspiracy theory that has been tied to violent crimes.

But here’s how the conversation with Savannah Guthrie went down:

GUTHRIE: Let me ask you about QAnon.  It is this theory that Democrats are a satanic pedophile ring and that you are the savior of that.  Now, can you just once and for all state that that is completely not true and disavow QAnon in its entirety?

TRUMP: I know nothing about QAnon –

GUTHRIE: I just told you.

TRUMP: You told me. But what you tell me doesn’t necessarily make it fact, I hate to say that. I know nothing about it.  I do know they are very much against pedophilia. They fight it very hard, but I know nothing about it. If you’d like me to –

GUTHRIE: They believe it is a satanic cult run by the deep state.

TRUMP: - study the subject.  I’ll tell you what I do know about: I know about antifa and I know about the radical left.  And I know how violent they are and how vicious they are.  And I know how they’re burning down cities run by Democrats, not run by Republicans.

GUTHRIE: Republican Senator Ben Sasse said, “QAnon is nuts, and real leaders call conspiracy theories conspiracy theories.”

TRUMP: He may be right.

GUTHRIE: Why not just say it’s crazy and not true?

TRUMP: He may be right. I just don’t know about QAnon.

GUTHRIE: You do know!

TRUMP: I don’t know.  No, I don’t know. I don’t know.

GUTHRIE: Let me ask you for another thing.

TRUMP: Let’s waste a whole show.  You start off with white supremacy, I denounce it.  You start off with something else – let’s go.  Keep asking me these questions.

GUTHRIE: OK. I do have one more in this vein.

TRUMP: Let me just – let me just tell you, what I do hear about it, is they are very strongly against pedophilia. And I agree with that.  I mean, I do agree with that.  And I agree with it very strongly.

GUTHRIE: But there is not a Satanic pedophile cult being run by –

TRUMP: I have no idea.  I know nothing about it.

GUTHRIE: You don’t know that?

TRUMP: No, I don’t know that. And neither do you know that.

Republican Senator Mitt Romney tweeted today:

“The President’s unwillingness to denounce an absurd and dangerous conspiracy theory last night continues an alarming pattern: politicians and parties refuse to forcefully and convincingly repudiate groups like antifa, white supremacists, and conspiracy peddlers.  Similarly troubling is their silence regarding anti-vaxxers, militias, and anarchists. Rather than expel the rabid fringes and the extremes, they have coddled or adopted them, eagerly trading their principles for the hope of electoral victories.  As the parties rush down a rabbit hole, they may be opening a door to a political movement that could eventually eclipse them both.”

--Prior to last night’s Town Hall, in his clearest answer on the issue of what he would do with the Supreme Court if elected president, Joe Biden on Monday said he is “not a fan” of expanding it.

“I’ve already spoken on – I’m not a fan of court packing, but I don’t want to get off on that whole issue,” Biden said in an interview with a Cincinnati television station.  “I want to keep the focus – the president would like nothing better than to fight about whether or not I would in fact pack the court or not pack the court.”

Biden, former chairman of the Senate Judiciary Committee during his decades as a senator, had expressed opposition to adding to the number of justices on the high court as recently as last year.

But the issue of adding Amy Coney Barrett to the high court changed everything in establishing a conservative majority on the court, perhaps for decades to come.

As for Judge Barrett’s testimony, she is a very impressive nominee who, par for the course since the nomination of Robert Bork, said little, evading questions about her views on key issues of the day, such as healthcare and abortion.

Barrett stated she had “no agenda” and vowed to stick to “the rule of law.”

It seems clear she will be seated before the election.   There’s really nothing more to say about this at this point.  You can argue and protest all you want, but the Court will be 6-3 on the side of the conservatives, and potentially for a long time to come.  Some of the impacts will be monumental.

--While discussing the issue of his taxes, President Trump did not deny that he owes entities about $400 million and pledged to tell Americans to whom he owes money.

“I will not mind at all saying who it is,” Trump said Thursday’s town hall.  He said he doesn’t owe money to Russians, and said of whether he owes to any foreign interests, “Not that I know of.”

When pressed on the numbers, Trump said, “$400 million compared to the assets that I have, all of these great properties all over the world,” he said.

--Melania Trump said Wednesday that after an initial negative test, 14-year-old Barron Trump tested positive for Covid, but has since tested negative again.  The First Lady for the first time talked about her own symptoms, saying in a note on social media:

“I experienced body aches, a cough and headaches, and felt extremely tired most of the time,” she claimed.  “I chose to go a more natural route in terms of medicine, opting more for vitamins and healthy food.”

--The federal prosecutor appointed by Attorney General William P. Barr to review whether Obama-era officials improperly requested the identities of individuals whose names were redacted in intelligence documents has completed his work without finding any substantive wrongdoing, sources told the Washington Post.

“The revelation that U.S. Attorney John Bash, who left the department last week, had concluded his review without criminal charges or any public report will rankle President Trump at a moment when he is particularly upset at the Justice Department.  The department has so far declined to release the results of Bash’s work, though people familiar with his findings say they would likely disappoint conservatives who have tried to paint the ‘unmasking’ of names – a common practice in government to help understand classified documents – as a political conspiracy.”

President Trump in recent weeks has been pressing federal law enforcement to move against his political adversaries to little effect.

--Republicans on the Senate Judiciary Committee plan to issue a subpoena to Twitter CEO Jack Dorsey to testify on Oct. 23 about the social media company’s move to block the links to a New York Post article concerning Hunter Biden.

Twitter also blocked people from sharing the links, in line with its company policy of restricting the distribution of “hacked materials.”

“Never before have we seen active censorship of a major press publication with serious allegations of corruption of one of the two candidates for president,” said Sen. Ted Cruz.

Dorsey said in a tweet Wednesday that the company’s communications surround the Post article “was not great” and that blocking links without explanation is “unacceptable.”

The Post published a story saying Hunter Biden allegedly introduced a Ukrainian businessman to Joe Biden. The newspaper obtained the emails from Donald Trump’s personal lawyer, Rudy Giuliani.  The information originally came from a computer-repair person in Delaware, said the reports.

Meanwhile, Twitter unblocked on Thursday a Trump campaign account that shared the post.  Twitter did not respond to requests on the reason for the unblocking.

Sources today say the intelligence agencies are investigating whether Russia has planted this story as part of its disinformation campaign, with Rudy Giuliani the target of an influence operation by Russian intelligence.

--President Trump pleaded for support from suburban women at this Tuesday night rally in Johnstown, Pa., citing his decision to repeal a low-income housing initiative that he said “saved” their neighborhoods.

“So can I ask you to do me a favor: suburban women, will you please like me?  I saved your damned neighborhood, OK?”

--Kind of funny that according to Nielsen, Joe Biden averaged 13.9 million viewers Thursday night on ABC, while Trump pulled in 13 million across NBC and Comcast Corp.’s MSNBC and CNBC cable channels.  The president prior to the night was all set to declare a ratings rout.

Personally, I stayed with the Trump Show.

--Trump tweets:

“There is a nasty rumor out there that @SenatorCollins of Maine will not be supporting our great United States Supreme Court Nominee. Well, she didn’t support Healthcare or my opening up 5000 square miles of Ocean to Maine, so why should this be any different.  Not worth the work!”

“Very good reviews on last night’s @NBCNews Town Hall in Miami. Thank you!!!”

“Poll numbers are looking very strong. Big crowds, great enthusiasm.  Massive RED WAVE coming!!!”

[Ed. No it isn’t…a Red Tide instead, perhaps, killing all marine life.]

“If we don’t win, the Radical Left will destroy our Country.  Biden refuses to answer questions on packing the SCOTUS! Dems will pack the Court w/radical left justices who will shred the #2A, empower violent mobs, and protect terrorists & violent criminals!”

“Joe Biden and the Democrat Socialists will kill your jobs, dismantle your police departments, dissolve your borders, release criminal aliens, raise your taxes, confiscate your guns, end fracking, destroy your suburbs, and drive God from the public square.”

“The Economy is about ready to go through the roof.  Stock Market ready to break ALL-TIME RECORD. 401K’s incredible.  New Jobs Record. Remember all of this when you VOTE.  Sleepy Joe wants to quadruple your Taxes. Depression!!!  Don’t let it happen! #MAGA”

“Republicans must state loudly and clearly that WE are going to provide much better Healthcare at a much lower cost.  Get the word out!  Will always protect pre-existing conditions!!!”

“We will have Healthcare which is FAR BETTER than ObamaCare, at a FAR LOWER COST – BIG PREMIUM REDUCTION. PEOPLE WITH PRE EXISTING CONDITIONS WILL BE PROTECTED AT AN EVEN HIGHER LEVEL THAN NOW. HIGHLY UNPOPULAR AND UNFAIR INDIVIDUAL MANDATE ALREADY TERMINATED. YOU’RE WELCOME!”

“Totally Negative China Virus Reports. Hit it early and hard. Fake News is devastated. They are very bad (and sick!) people!”

“Actually, Tony’s pitching arm is far more accurate than his prognostications. ‘No problem, no masks.’ WHO no longer likes Lockdowns – just came out against.  Trump was right. We saved 2,000,000 USA lives!!!”

Wall Street and the Economy

The International Monetary Fund predicted Tuesday that the global economic collapse caused by the pandemic won’t be as severe as estimated earlier, thanks to strong government intervention world-wide and a swift recovery in China.

The world’s gross domestic product is forecast to decline by 4.4% this year, not as sharp as the 5.2% drop the IMF projected in June but still the most severe downturn since the Great Depression.  World output will grow 5.2% in 2021, down from an earlier estimate of 5.4%.

China will be the only major economy to grow this year, the IMF predicted, 1.9%, compared with growth of 6.1% last year.  China’s growth will accelerate to 8.2% next year, the IMF said.

The IMF said the outcome would have been “much weaker if it weren’t for sizable, swift and unprecedented fiscal, monetary, and regulatory responses.”

World trade volumes are likely to rise by 8.3% in 2021, after falling 10.4% this year, the IMF said.

U.S. growth is expected to decline 4.3% this year, and grow 3.1% next year.

The eurozone will expand 5.2% after shrinking 8.3%.  Japan is likely to see 2.3% growth, following a 5.3% drop.

Minneapolis Federal Reserve President Neel Kashkari said Thursday that the economic recovery in the U.S. will slow down if unemployed Americans and struggling businesses do not receive more assistance.

Thousands more businesses could fail if they do not get more support, Kashkari said during a virtual discussion.  The financial pain felt by jobless consumers who are struggling to pay their bills could also spill over to other parts of the economy.

“If you can’t pay your bills, more quantitative easing is a poor substitute for extended unemployment insurance,” Kashkari said.  “Only Congress has the ability to get that direct fiscal aid to the small businesses and to the Americans who have lost their jobs and who are facing real hardship.”

But as of this weekend, prospects for a coronavirus relief package out of Congress are not good, at least before the election.  Senate Majority Leader Mitch McConnell said Thursday that President Trump is talking about “a much larger amount than I can sell to my members” in the Senate.

As for this week’s data, consumer prices in September rose 0.2%, ditto ex-food and energy; 1.4% year-over-year, 1.7% yoy on core.  Producer prices in the month rose 0.4%, ditto on core; 0.4% year-over-year on headline, 1.2% ex-food and energy.

Today we had a report on September retail sales, up a strong 1.9%, 1.5% ex-autos.  But industrial production fell 0.3% when a rise was expected, and factory production remains down 6.4% from pre-pandemic levels.

The weekly jobless claims figure was a worse than expected 898,000.  While there is a lot of questioning of this number due to various state issues, such as California’s backlog in claims, the fact is we have now had 30 straight weeks where the figure has exceeded the previous all-time high of 665,000 set during the financial crisis.

Separately, the World Trade Organization said the European Union may impose tariffs on $3.99 billion in Boeing Co. jets and other U.S. goods annually as part of a long-running trade dispute.

Tuesday’s ruling clears the way for the EU to respond to tariffs that the trade body last October authorized the U.S. to impose on $5.7 billion in Airbus SE jets and other imported European products, the largest arbitration award in WTO history.

EU officials have said they hope to negotiate a settlement with the U.S., and many observers expect Europe to refrain from levying tariffs quickly.  The bloc last year said it had prepared a preliminary list of U.S. products to target in retaliation, if necessary.

The jetliner dispute is the longest since the WTO’s inception.  In 2004, the U.S. took European countries to the WTO over subsidies to Airbus, and Europe responded soon after with a case against U.S. support for Boeing.

WTO rulings since then have found that both sides provided prohibited subsidies, but Europe did so to a greater extent. Tuesday’s pronouncement ends years of suits and countersuits and leaves the two sides with the choice of negotiating a solution or fighting a protracted trade battle.

President Trump on Thursday threatened to “strike back” against the European Union if it put tariffs on U.S. goods.  “If they strike back, then we’ll strike back harder than they’ll strike.  They don’t want to do it,” Trump told reporters at the White House.

Finally, the Treasury Department released its September report on the federal budget deficit, $-124.6 billion, the last month of the 2020 fiscal year, bringing the overall budget shortfall for the year to $3.1 trillion, swelling the national debt to exceed the economy’s size, after lawmakers opened the spending spigots to soften the blow from the coronavirus pandemic, Treasury Department data showed Friday.

The deficit as a share of the economy surged to 16%, the largest since 1945. At the end of the financial crisis in 2009, the ratio was close to 10% before slowly narrowing through 2015.

Fed Chairman Jerome Powell last week warned of a tepid recovery without additional government aid and said providing too much stimulus wouldn’t be a problem.

Such an attitude is made easier by the record low interest rates that make it cheaper for the government to borrow, but to beat a dead horse, at some point down the road we will pay the piper.

Debt-to-GDP is now above 100% and borrowing will continue climbing over the next 2-3 decades, as an aging population places more demands on Medicaid and Social Security.

Europe and Asia

Nothing of import economically from the eurozone (EA19) this week, except industrial production in August rose 0.7% vs. July, down 7.2% from a year ago.  And the surge in Covid cases will no doubt be reflected in future data.

Brexit: British Prime Minister Boris Johnson said today it was now time to prepare for a no-trade deal Brexit as the European Union has refused to negotiate seriously and that unless Brussels changed course there would not be an agreement.

A “no deal” finale to the UK’s five-year Brexit crisis would sow chaos through the supply chains that stretch across Britain, the EU and beyond – just as the economic hit from the pandemic worsens.

At what was supposed to be the “Brexit summit” on Thursday, EU leaders delivered an ultimatum: it said it was concerned by a lack of progress and called on London to yield on key sticking points or see a rupture of ties with the bloc from Jan. 1.

“I have concluded that we should get ready for January 1 with arrangements that are more like Australia’s based on simple principles of global free trade,” Johnson said.  “Unless there is a fundamental change of approach, we’re going to go for the Australia solution. And we should do it with great confidence,” he said.  “It’s becoming clear the EU don’t want to do the type of Canada deal that we originally asked for.  It does seem curious that after 45 years of our membership they can offer Canada terms they won’t offer us.”

Yesterday, EU leaders granted more time for negotiations with Britain to produce a trade pact before the end of the year.

“We want a deal, but obviously not at any price.  It has to be a fair agreement that serves the interests of both sides.  This is worth every effort,” German Chancellor Angela Merkel said.

The estranged allies have been locked in complex negotiations to keep trade between them free of tariffs or quotas from 2021.  Talks have narrowed gaps on issues from social welfare to transport but three contentious areas have so far prevented a deal: fair competition, dispute resolution and fisheries, which is particularly important to France.

“In no case shall our fishermen be sacrificed for Brexit,” said French President Emmanuel Macron.  “If the right terms can’t be found at the end of these discussions, we’re ready for a no-deal for our future relations.”

EU leaders demanded Britain “make the necessary moves to make an agreement possible” and decided to step up their own contingency preparations for an abrupt split.

Given the economic malaise and global instability, it would be “crazy” if the two sides failed to make a deal, said Dutch Prime Minister Mark Rutte.

As I go to post, there is still hope for a skinny deal in November, but the sides are far apart on the issue of fair competition safeguards covering social, labor and environmental standards, as well as state aid.

Nonetheless, EU negotiators are heading to London next week to continue talks.  Chief EU negotiator Michel Barnier said he was ready for “intensive” discussions with his British counterparts in the coming weeks and that the EU side would never walk away from the talks.

“We are determined to reach a fair deal with the UK.  We will do everything we can, but not at any price,” Mr. Barnier told journalists.  “Our positions have been crystal clear from day one of this negotiations, if you want access to our market of 450 million people, there must be a level playing field.”

Turning to AsiaChina reported strong trade data for September, with exports up 9.9% year-on-year, while imports rose a strong 13.2% (vs. -2.1% in August).

China’s exports to the U.S. rose 20.4% year-on-year, while imports surged 24% in September, owing to grain imports (up 35%), meat (up 40.5%) and soybeans (up 17.6% yoy).

Exports to the eurozone, however, fell 7.8%.

Separately, China’s inflation rate in September was 1.7% annualized, while producer (factory-gate) prices fell 2.1%.

Sunday, China reports its third-quarter GDP and other important data.

Japan reported August industrial production rose 1.0% over July, but was down 13.8% vs. a year earlier.

Sunday, Japan reports Sept. export data.

Street Bytes

--Stocks rose slightly this week as the uncertainty of the upcoming election, a rise in weekly jobless claims, and the lack of another fiscal stimulus plan added to investors’ jitters.  Nonetheless the Dow gained 0.1% to 28606, while the S&P rose 0.2% and Nasdaq 0.8%, the fourth straight weekly gain for the tech-heavy index.

With earnings season underway, it is projected that EPS for the S&P 500 will be down 20% from a year earlier in the third quarter, which would be an improvement from Q2’s -32%.

--U.S. Treasury Yields

6-mo. 0.11%  2-yr. 0.15%  10-yr. 0.75%  30-yr. 1.53%

Treasuries were little changed on the week.  But yields fell broadly in Europe.  The yield on the German 10-year is -0.62%, France -0.35%...Italy’s 10-year yield is down to 0.65%!  Greece’s 0.77%! 

--The American Petroleum Institute said U.S. crude inventories fell more than expected in the latest week, and then Energy Information Administration revealed Thursday that weekly inventories of crude fell 3.8 million barrels after a small gain the week before.

OPEC said conformity with the oil output reduction in September was 105%, while non-OPEC compliance was 97%.

“There is a risk that the demand recovery is stalled by the recent increase in Covid-19 cases in many countries,” the International Energy Agency said on Wednesday.

The IEA did say global oil supply in September was 9% below the pre-pandemic average of 2019.

But that decline is happening from record-high levels and the drawdown in oil stocks could falter in the months ahead, with Covid cases sharply rising in the developed world.

OPEC cut its oil demand forecast on Tuesday, citing economic dislocations caused by the virus.

--United Airlines said on Wednesday it cut operating costs by 59% in the third quarter and had nearly $20 billion of liquidity to position it for an eventual recovery from the Covid-19 crisis that has hammered global airlines.

“We’re ready to turn the page on seven months that have been dedicated to developing and implementing extraordinary and often painful measures, like furloughing 13,000 team members, to survive the worst financial crisis in aviation history,” said United CEO Scott Kirby.

United said its daily cash burn slowed to an average $25 million in the quarter ended September from $40 million in the second quarter, and included $4 million per day in severance and debt payments.  The company had $19.4 billion of liquidity at Sept. 30, so more than enough to weather the crisis.

“Even though the negative impact of Covid-19 will persist in the near term, we are now focused on positioning the airline for a strong recovery that will allow United to bring our furloughed employees back to work and emerge as the global leader in aviation,” said Kirby.

On CNBC Kirby added, the worst seems to be over but still expects travel demand to stay lower than normal until there is a vaccine that becomes widely available.

“We think we’ve turned the corner and can see it,” Kirby said.

Revenue fell 78% to $2.49 billion, slowing from a plunge of about 87% in the previous quarter.  United will see increasing competition domestically after low-cost rival Southwest Airlines said this week it plans to add services at two United hub airports: Chicago O’Hare and Houston’s George Bush Intercontinental.

United and Delta, along with American Airlines, rely on business and international travelers for much of their revenue, but those high-fare customers will return more slowly than leisure travelers booking trips closer to home.  The industry is pushing governments to test travelers for Covid-19 instead of closing borders or imposing long quarantine requirements on international travelers.

--Delta Air Lines offered cautious optimism that demand for travel is starting to return but said its losses were mounting.

“The virus has had a much broader impact over the course of the year than any of us were suspecting,” Delta CEO Ed Bastian said in an interview.

Delta ended September burning through $18 million a day in cash but expects to cut that to $10 million a day by the end of the year.

However, Bastian said: “We’re seeing a steady progression and steady improvement.”

I don’t see it! The TSA daily checkpoint numbers at U.S. airports have ticked up, but to just 36-37% of 2019 levels.  If you want to call from 28-34% to 36-37% steady improvement over a month, go ahead…but that’s not where the airlines thought they’d be at this time of year going back to April and May.

Delta said it has built its war chest to close to $22 billion in liquidity and that it has cut costs.  It is also deferring new aircraft orders – a move it said would save $5 billion through 2022 – and retiring older jets.

On Tuesday, Delta reported a net loss of $5.4 billion for the September quarter, compared with a profit of $1.5 billion a year earlier, with sales down 76% at $3.1 billion.

--In Ireland, Ryanair is closing its Cork and Shannon bases for the winter as the airline cuts its schedule to 40 percent of last years’ capacity, warning that more layoffs and unpaid leave were “inevitable” this winter.  Europe’s largest discount airliner said its forward bookings had weakened “materially” in November and December.

The group said it would maintain up to 65 percent of its winter route network, but with reduced flights.  It is also closed its Toulouse base for the winter, and is making significant base aircraft cuts in Belgium, Germany, Spain, Portugal and Vienna.

Ryanair is already operating at a 70 percent load factor – a measure of how full its planes are – and expects to carry a total of 38 million passengers in its 2021 financial year, but it warned that this could be revised downward if more lockdowns were imposed during the winter.

--Boeing deliveries for the third quarter, released on Tuesday, remained deeply depressed.  The company delivered 28 planes in Q3, up from 20 planes in the second quarter.  It delivered 11 in September, 13 in August and 4 in July.

The company delivered 62 jets in the third quarter of 2019, which was unusually low, as well – depressed by the 737 MAX. No MAX jets were delivered in the third quarter last year, after it was grounded worldwide in March 2019.  For comparison, deliveries in the third quarter of 2018 amounted to 190 jets.

Boeing reports third-quarter earnings on Oct. 28.

But then Friday, Europe’s top aviation regulator said he’s satisfied that changes to Boeing’s 737 MAX have made the plane safe enough to return to the region’s skies before 2020 is out, even as a further upgrade his agency demanded won’t be ready for up to two years.

After test flights conducted in September, EASA is performing final document reviews ahead of a draft airworthiness directive it expects to issue next month, said Patrick Ky, executive director of the European Union Aviation Safety Agency.

That will be followed by four weeks of public comment, while the development of a so-called synthetic sensor to add redundancy will take 20 to 24 months, he said.

While the FAA, Boeing’s main regulator, is preparing to clear the plane’s return, EASA’s views carry outsize weight, in light of flaws in the original certification process that hurt the U.S. regulator’s sterling reputation.

--JPMorgan Chase reported better-than-expected third-quarter results on Tuesday as the financial giant set aside less money for losses while higher revenue from markets and investment banking helped bolster the results.

Net revenue dipped to $29.1 billion from $29.3 billion a year earlier, beating consensus.  Profit came in at $9.44 billion, up from $9.08bn a year earlier.  The bank set aside $611 million in its provision for credit losses, down from $10.5 billion in the second quarter of this year and also 60% less than a year earlier.

Chief Executive Jamie Dimon said corporate and investment banking “continues to be a big driver of firm performance.”  Revenue in the segment rose 21% to $11.5 billion with a surge of 29% in markets and securities services amid gains in products including commodities and equities.

Assets under management jumped 16% to $2.6 trillion.

JPM’s biggest revenue-generating segment, consumer and community banking, saw a 9% slide year-on-year to $12.8 billion with a drop of 18% in consumer and business banking.  Home lending revenue, though, jumped 17% in the third quarter.  Also, Dimon said “combined debit and credit card spend showed positive year-on-year growth in September for the first time since the widespread shutdowns.”

Dimon warned that without more public assistance for the economy, unemployment would remain high and more customers could start to default on their loans.

“A good, well-designed stimulus package will simply increase the chance we get better outcomes, but there is so much uncertainty we’re not saying that that’s definitive,” Dimon said on a call with reporters.

--Citigroup said profit fell 34% in the third quarter due to weakness in its consumer banking division, as the pandemic continues to make it tough for millions of Americans and businesses to pay their bills.

The bank said third-quarter net income fell to $3.23 billion from $4.91 billion in the year ago quarter.

Citigroup posted revenue of $20.12 billion in the period.  Its revenue net of interest expense was $17.3 billion, basically in line with expectations.  The bank set aside less money for potential bad loans in the latest quarter, a sign that some of the economic strain from the coronavirus pandemic could be easing.  Citi’s provision for credit losses was $2.26 billion in the third quarter compared to $7.9 billion in the second quarter.

--Goldman Sachs Group Inc. posted its best quarterly performance in a decade by some measures, as trading moved back into the limelight and its lack of a big consumer business switched from a curse to a blessing.  Goldman posted a quarterly return-on-equity of 17.5%, its highest since 2010.  The figure shows how well a bank uses shareholder money to produce profits.

The investment bank’s performance was driven in large part by a 29% jump in trading revenue, as clients responded to news about the pandemic by shifting their portfolios.  While rivals like JPMorgan Chase have also benefited from the markets boom this year, they are far more exposed to vulnerable consumers and businesses suffering from unemployment and Covid lockdowns.  Goldman’s consumer bank is relatively small.

Goldman’s $4.6 billion in quarterly trading revenue included gains across fixed income (up 49%)  and equity markets, with the business overall accounting for 42% of the bank’s revenue, while consumer and wealth management represented 14%.

The bank set aside $278 million to cover loans that go bad, bringing its year-to-date total credit provisions to $2.8 billion.  By comparison, JPM, Bank of America and Citigroup have set aside anywhere from $10-$20 billion this year.

Goldman’s investment banking business benefited from several high-profile IPOs, including Snowflake and Rocket Companies.

The bank’s overall profit nearly doubled to $3.5 billion from $1.8 billion a year ago.

--Bank of America joined the chorus of bank officials predicting an economic recovery would improve business in the quarters ahead, after lower interest rates fueled a miss on third-quarter revenue.

BofA set aside lower provisions for potential loan losses, mirroring other Main Street peers.

“Our decision to add less to our credit reserves this quarter than in the two previous quarters was largely based on an improving economy relative to 90 days ago,” said Chief Financial Officer Paul Donofrio.

Bank of America set aside $1.4 billion to meet future losses in its commercial loan portfolio in the quarter, far less than the $5.1 billion it provided for during the June quarter. 

Revenue in the core consumer bank fell 17% to $8 billion in the third quarter, mainly due to lower interest income and reduced credit card activity.  Net interest income at the bank, a key measure of how much it can make from lending, sank 17%, showing the effects of the Federal Reserve’s moves to slash interest rates to near-zero and promise to keep them there to help spur growth.

BofA also posted weak results in its sales and trading arm, in stark contrast to JPM and Citigroup.

--Wells Fargo on Wednesday reported lower third-quarter earnings that missed expectations as the bank saw its revenue fall while it weathers the pandemic.

Wells said revenue in the three months through September fell to $18.86 billion from $22.01 billion in the prior-year period.

“Our third-quarter results reflect the impact of aggressive monetary and fiscal stimulus on the U.S. economy,” CEO Charles Scharf said.  “Strong mortgage banking fees, higher equity markets, and declining sequential charge-offs positively impacted our results, while historically low interest rates reduced our net interest income and our expenses continued to remain elevated.”

The bank recorded a $718 million restructuring charge, consisting largely of severance expenses as it reduced staff.

Net interest income fell 19% to $9.37 billion, while community-banking revenue fell to $10.72 billion from $11.24 billion, pulled down by lower net interest income, service charges on deposit accounts, and lower gains from residential mortgage loan sales.

Separately, Wells Fargo said it fired more than 100 employees suspected of improperly collecting coronavirus relief funds.  The company determined that the staffers defrauded the Small Business Administration “by making false representations in applying for coronavirus relief funds for themselves,” according to an internal memo reviewed by Bloomberg.  The review focused on employees who tapped the Economic Injury Disaster Loan program, a key part of the government’s effort to prop up businesses during the pandemic.

“We have terminated the employment of those individuals and will cooperate fully with law enforcement,” David Galloreese, Wells Fargo’s head of human resources, said in the memo.  “These wrongful actions were personal actions, and do not involve our customers.”

It’s legally possible to tap funds for businesses operated on the side, but Wells found no evidence this was the case in these instances and also adds to evidence the program was widely abused.  An earlier review by JPMorgan Chase found that more than 500 employees tapped the EIDL program, and dozens did so improperly.

--Morgan Stanley eased past Wall Street estimates for profit on Thursday, wrapping up the mixed third-quarter earnings season for big banks.  Like Goldman Sachs, Morgan Stanley capitalized on a flurry of activity in financial markets as clients bought and sold stocks in response to the pandemic, while many companies went public or raised fresh capital.

Revenue from Morgan Stanley’s institutional securities division, which is the bank’s largest breadwinner and houses its investment banking and trading businesses, rose 21% to $6.06 billion.  Equities underwriting revenue more than doubled due to nice fees from a number of high-profile IPOs.  But revenue from underwriting bonds dropped from last year due to declines in loan issuances and muted dealmaking activity.

Revenue rose 16% to $11.7 billion, while net income came in at $2.60 billion in the quarter, up from $2.06bn.

--The world’s largest asset manager, BlackRock, reported third-quarter revenue of $4.37 billion, up from $3.69 billion a year ago and well-exceeding expectations, the shares rising sharply in response.

Assets under management sit at $7.81 trillion at the end of the quarter, up from $6.96 trillion in the year-earlier period.

--Apple unveiled its first iPhone capable of using speedy 5G wireless networks, calling the next generation of phones the iPhone 12.

The new phone features a new display technology developed with Corning, called Ceramic Shield, with the company saying it has four times better “drop performance,” meaning the screen is less likely to break if you drop it.

The iPhone 12 also has improved wireless charging.

Pricing starts at $699 for the iPhone 12 mini and $799 for base iPhone 12. And there are two higher end phones with better camaras and such that run for $999 and $1,099.

But when it comes to 5G, a lot of folks are asking, ‘Yeah, it’s a little speedier…but it is worth all the hoopla, the multi-year buildup for marginally better performance, especially as the cellphone companies haven’t built out their 5G networks yet?’

--Ford Motor Co. announced it was delaying the launch of its plug-in hybrid Escape sport-utility vehicle to 2021 after thousands of similar SUVs in Europe were recalled for problems involving fires while recharging.

The Escape plug-in hybrid originally was scheduled to go into production this past spring but Ford changed it to summer after the pandemic shut factories for two months.  Now Ford is pushing it into 2021.

SUV sales overall have been soft, down 23% in the third quarter and 32% for the year.

Ford of Europe is working to fix a problem with its Kuga plug-in related to venting heat from the batteries.  There have been seven vehicle fires in Europe, triggering a recall of 20,500 Kuga models sold there.

--China’s car market recorded its first quarter of year-over-year sales growth in two years as a broad economic recovery bolstered consumer confidence and discounts boosted demand, especially for electric vehicles.

Retail passenger-car sales in the country increased by 7.9% in the three months ended Sept. 30 compared with a year earlier, the China Passenger Car Association said Tuesday.  For just the month of September, sales increased by 7.3% from last year, reaching 1.91 million vehicles.

General Motors said Monday its sales in China grew 12% in the third quarter compared with a year earlier.

Ford said Friday it sold 164,352 vehicles in Greater China in Q3, up 25.4% from the year-ago quarter.

--Johnson & Johnson on Tuesday raised its full-year outlook for earnings and sales as the consumer products and pharmaceutical giant’s third-quarter results rose despite being pressured by the ongoing coronavirus crisis.

Sales in the September quarter rose 1.7% from the prior year to $21.08 billon.  JNJ is now projecting full-year sales of $81.2 billion to $82 billion, up from a prior forecast.  Profits more than doubled to $3.55 billion in the third quarter from a year earlier.

CEO Alex Gorsky said, “Our third-quarter results reflect solid performance and positive trends across Johnson & Johnson, powered by better-than-expected procedure recovery in medical devices, growth in consumer health, and continued strength in pharmaceuticals.”

Pharmaceutical sales rose 4.7% to $11.42 billion in the period, driven by demand for Crohn’s disease drug Stelara and cancer drugs Darzalex and Imbruvica.

Medical-device sales slipped 3.3% owing to the outbreak as medical procedures continued to be delayed.  Consumer health sales rose 3.1% to $3.51 billion, lifted by sales of Tylenol and oral care products.

JNJ’s results came after it said late Monday it paused trials of a Covid-19 vaccine candidate, per the above.

--Walt Disney Co. announced a major reorganization meant to give priority to its streaming-video services and ensure they get a steady flow of the company’s best content, in a shift similar to moves made by other entertainment giants.

Disney will be creating content groups for movies, general entertainment and sports, while forming a distribution arm to determine the best platform for any given content, whether that is a streaming service, a TV network or movie theaters.

Disney is thus emphasizing its new streaming platform, Disney+, as well as Hulu, with the various programming arms aimed at feeding those two platforms, over traditional outlets, from movie theaters to broadcast and cable channels.

Disney CEO Bob Chapek said the moves are a recognition of how consumers are changing their consumption habits.

“There is a seismic shift happening in the marketplace, and you can either lead or follow and we chose to lead,” Chapek said, adding the focus is now on “what platform is best to meet those consumer needs.”

Disney said back in August it had over 60 million subscribers for Disney+ worldwide and the company has faced pressure to pivot more aggressively to its streaming business, especially given the struggles in the cable industry.

--Speaking of movies, the world’s largest movie theater chain, AMC Theatres, says it could run out of cash by the end of this year or early 2021, in the latest sign of how badly the pandemic has wrecked the film industry.

Leawood, Kan.-based AMC, which operates 598 locations in the U.S., said in a regulatory filing that, since reopening, its cinemas have suffered an 85% decline in same-theater attendance compared with that period last year.

“At the existing cash burn rate, the company anticipates that existing cash resources would be largely depleted by the end of 2020 or early 2021,” AMC said in its filing.  “Thereafter, to meet its obligations as they become due, the company will require additional sources of liquidity or increases in attendance levels.”

--Walmart is revamping its Black Friday sale by offering shoppers three chances to get the “best prices of the season.”

Walmart unveiled Wednesday how it will spread out the savings in November with “Black Friday Deals for Days.”  Instead of one sale that has traditionally started on Thanksgiving, there will be three different events online and in stores.

Walmart will be closed this Thanksgiving for the first time since the late 1980s and other retailers including Target and Best Buy are following suit.

Walmart’s three November sales all start online first and then continue in stores. The first sale starts online at 7 p.m. ET Nov. 4, the second starts Veterans Day and the third begins the night before Thanksgiving.

“The doorbuster deals will be online, but we’re also going to have great prices in-store,” the company said, making for a “safer and more convenient way to shop” as well as helping to manage in-store traffic.

According to a holiday survey from DealAid.org, 60.2% of consumers plan to shop in-store during the 2020 holiday shopping season compared to 87.4% in 2019.

--The National Retail Federation said retailers are rushing to import holiday inventory.  U.S. ports processed about 2.1 million cargo-container equivalents in August, up 8% from a year earlier. That is the highest number of containers imported monthly since the NRF began tracking imports in 2002, the group said.

“Some holiday merchandise that normally wouldn’t arrive until Halloween is already here,” said Jonathan Gold, the NRF’s vice president for supply chain and customs policy.

PricewaterhouseCoopers LLP didn’t release a holiday sales prediction this year. A survey from the consulting firm showed 40% of shoppers plan to spend less this year than last.  Deloitte released two holiday sales predictions – a 0% to 1% sales increase at the low end and a 2.5% to 3.5% sales increase at the high end – depending on the strength of the economy and consumer confidence.

Executives say tension and uncertainty around the election could dampen spending.  Some businesses are also preparing for social unrest after the election.

--Personal computer sales rose in the third quarter owing to the surge in remote work, study and home entertainment during the pandemic, which drove the strongest growth in a decade in the U.S., according to industry data.

Much of the growth came from Chromebooks, with a roughly 90% surge in the third quarter driven by distance learning, per preliminary data from Gartner Inc., one of the firms that tracks PC shipments.

Gartner doesn’t include Chromebooks in its traditional PC market results, but it said including Chromebooks, world-wide PC shipments rose around 9% year over year in the quarter, with Chromebooks representing about 11% of the combined PC/Chromebook market.

Data from research firm Canalys showed notebook and mobile workstation shipments also drove growth in the quarter, while sales of desktops and desktop workstations declined 26%.

International Data Corp. recorded growth in notebook shipments driven by consumer sales and education, but the desktop segment saw a year-over-year decline with gaming offering some respite.

Overall, PC shipments rose 3.6% to 71.4 million units in the third quarter, driven by an 11.4% growth in the U.S., the first time in a decade that the region has seen double-digit growth, according to preliminary data from Gartner.

IDC pegged the increase at 14.6% to 81.3 million units, based on its preliminary data.

--The world’s largest container shipping firm, AP Moller-Maersk, raised its full-year earnings outlook for a second time this year after cutting costs including 2,000 jobs and as demand improves.

The Copenhagen-based company said its full-year adjusted earnings were expected to be between $7.5 billion to $8 billion.

The company said in a statement: “Trading conditions for the quarters ahead remain subject to a higher than normal volatility given the disruptions caused or potentially being caused by Covid-19.”

Volumes in the Ocean business slipped 3% year-over-year, but this was better than its forecast for a mid-single-digit contraction.

--Billionaire Robert Smith (a frequent guest on CNBC), will pay about $140 million and acknowledge wrongdoing to end a four-year U.S. tax investigation involving assets held in offshore tax havens, a story that Bloomberg News first reported in terms of a tax investigation into Smith in August.

Smith, the CEO of the private equity firm Vista Equity Partners, informed some executives and investors of the pending agreement on Wednesday, as reported by Bloomberg Thursday.  Smith, 57, is cooperating with related tax investigations as part of a deal in which he will admit misconduct but won’t be prosecuted.

Smith, with a net worth of $7 billion, is the wealthiest Black person in America.  He gained widespread acclaim last year when he vowed to pay off the student loans of the graduating class of Morehouse College.

The Smith case is tied to an offshore foundation tied to Robert Brockman, a Houston software businessman, with prosecutors saying they are investigating “a major and very large tax fraud” in the U.S., believing $2 billion of revenue was fraudulently concealed, according to Bermuda court records.

Brockman was then charged on Thursday; the indictment alleging he appointed nominees to manage the off-shore entities for him as a means of hiding his involvement, saying he even went so far as to establish a proprietary encrypted email system and use code words such as ‘Permit,’ ‘Red fish’ and ‘Snapper’ to communicate. 

Well, if you’re going to commit tax fraud, no more pleasant place to do same than lovely Bermuda, I always say.  And who doesn’t like Red fish, especially blackened?

--New Jersey’s fast-growing sports betting market blew past its own national record in September, taking in more than $748 million in bets from sports gamblers finally able to wager on football amid the pandemic.

Figures released Thursday from the New Jersey Division of Gaming Enforcement show Atlantic City’s nine casinos and the three horse racing tracks that offer sports betting handled over $748 million in bets, easily surpassing the national monthly record they set just a month earlier, when $668 million was wagered on sports in August.

The previous U.S. record of $614 million was set in Nevada in Nov. 2019.

The $748 million includes the total amount of bets accepted by the casinos and tracks.  After paying off winning bets and expenses, they kept $45 million of that total.

Foreign Affairs

China: Beijing said on Thursday the United States was seriously undermining peace and stability in the Taiwan Strait after a U.S. Navy destroyer sailed through the waters amid escalating tensions between Beijing and Taipei.

Zhang Chunhui, spokesman for China’s eastern theater command, said in a statement that the Chinese military followed and monitored the USS Barry when the destroyer made what the U.S. Navy called a “routine Taiwan Strait transit” on Wednesday.  Zhang said the United States should stop its provocative words and actions in the Taiwan Strait, adding the Chinese military will resolutely defend the country’s territorial integrity and maintain peace and stability in the Taiwan Strait.

Meanwhile, the White House is moving forward with more sales of sophisticated military equipment to Taiwan, telling Congress on Tuesday that it will seek to sell Taipei MQ-9 drones and a coastal defensive missile system.

A Chinese foreign ministry spokesman Zhao Lijian said U.S. arms sales to Taiwan severely damaged China’s sovereignty and security interests, and that “China will make a legitimate and necessary response according to how the situation develops.”

Taiwan has been seeking to procure sea mines from the U.S. to deter amphibious landings, or immediate attack.

China’s top diplomat, Wang Yi, urged Asian countries to remain “vigilant” over the risk of U.S. strategy stoking geopolitical competition in the South China Sea and other parts of the region.

In a visit to a military base in eastern Guangdong province on Tuesday, President Xi Jinping said marines need to focus on “preparing to go to war” and that they have an “important responsibility” to safeguard the country’s territory, sovereignty and maritime interests.

Wednesday, Xi went to Shenzhen to take part in ceremonies marking the 40th anniversary of the special economic zone, where he was seen coughing violently during a speech.  As the Daily Mail reported, State TV repeatedly cut away from Xi during the bouts of coughing, but caught the moment he lifted his hand to his mouth.  So there are questions about his health

North Korea: It was January 1, 2020, that Kim Jong Un gave his annual New Year’s address wherein he announced that North Korea was “developing a state-of-the-art weapons system possessed only by advanced countries.”

He specifically referred to a “strategic” – meaning nuclear – weapons system under development.

So at Saturday’s military parade marking the 75th anniversary of the founding of its ruling Workers’ Party, wherein Kim addressed an unusual predawn spectacular, appearing emotional at times as he thanked the military for working hard to respond to natural disasters and to prevent a coronavirus outbreak, the regime also unveiled a monstrous new ICBM.

Editorial / Washington Post

“Iran, Secretary of State Mike Pompeo declared in an interview Friday, is ‘the greatest threat, frankly, to Americans all across this great country.’ Around  the same time he delivered that dubious assessment, North Korea was staging a military parade to celebrate the 75th anniversary of its ruling party – and displaying, for the first time, what appears to be a huge new intercontinental ballistic missile that could be capable of carrying multiple nuclear warheads to the U.S. homeland.

“For the record: Iran does not yet have an atomic bomb, though it has more than quintupled its stockpile of enriched uranium since 2018, when President Trump withdrew from the multilateral accord limiting its nuclear program.  Nor does Tehran have a missile capable of reaching the continental United States.  North Korea, in contrast, has continued to expand both its arsenal of nuclear warheads and its missile capabilities while Mr. Trump has romanced its murderous ruler, Kim Jong Un.  Mr. Pompeo’s claim underlined that, in assessing risks to U.S. security, the Trump administration is dangerously out of touch with reality.

“Experts are still assessing photographs of the giant rocket displayed early Saturday in Pyongyang on a truck with 11 axles.  It is thought to be an expanded version of a mobile ICBM known as the Hwasong-15, which North Korea successfully tested in November 2017.  The earlier missile is believed capable of travelling 8,000 miles and striking any target in the continental United States.  Experts believe the more powerful version could carry two to three times the payload, which means it could be intended to deliver multiple warheads, or decoys to throw off U.S. missile defenses.

“To be sure, the missile has not been tested yet; it’s possible what appeared in the parade was merely a mock-up.  If it is operational, it may be vulnerable to preemption, because it relies on liquid fuel and because its sheer size makes it easier to spot.  Still, the appearance in North Korea of what would be the world’s largest mobile ICBM is vivid evidence of Mr. Trump’s failure to contain, much less eliminate, the regime’s nuclear program and the threat it poses to the United States.”

Patrick Tucker / Defense One

“Two ballistic missiles made their debut in Saturday’s North Korea military parade: a sub-launched weapon and what appeared to be an enormous new intercontinental ballistic missile borne on a long, 11-axle mobile launcher. Analysts have long scrutinized Pyongyang’s parades for what they reveal about the military capabilities of one of the world’s most secretive regimes – but the Oct. 10 event also offered the latest and clearest signal yet that the Trump administration’s efforts to curb North Korea’s nuclear ambitions have failed.  One expert called the new ICBM a destabilizing capability that would exacerbate tensions between North Korea and the rest of the world, particularly the United States.

“The new ICBM isn’t exactly a surprise, said Jeffrey Lewis, a scholar at the Middlebury Institute of International Studies at Monterey and the founding publisher of the Arms Control Wonk blog.  North Korea tested liquid-fuel rockets last December at the vertical engine test stand at the Sohae testing site.  ‘It was a really big test. They bothered to announce it. But for whatever reason,’ it didn’t get much coverage in international media, Lewis said.

“Lewis believes that the missile is intended to carry multiple warheads, another new capability. That means North Korea is improving the likelihood of slipping a nuclear weapon past the ground-based midcourse defense interceptors that the United States would deploy against an incoming ICBM.

“ ‘It’s so much cheaper to add warheads than interceptors,’ said Lewis.

“He acknowledged that the missile hasn’t been flight-tested yet, so there’s no way to tell if it actually works. But it need not be 100-percent reliable to post a large threat that could change U.S. calculations.  ‘We are standing by while they deploy very destabilizing capabilities,’ he said….

“If Washington does not find a way to restart talks, Lewis said, Pyongyang will continue to develop weapons that put U.S. forces and territory more and more at risk – and therefore continue to raise the incentive for the U.S. to strike preemptively.  That reality is surely a part of the North Korean calculus as well, said Lewis, who has written a novel about a North Korean regime concluding that it must launch nuclear weapons to survive.

“ ‘We should not be allowing a situation to exist in which there are strong incentives to go first’ into conflict, he said.”

A senior U.S. administration official called North Korea’s display of a previously unseen ICBM “disappointing” and called on the government to negotiate to achieve a complete denuclearization.

Azerbaijan and Armenia: So much for last Saturday’s ceasefire.  On Wednesday, Azerbaijan accused Armenia of trying to attack its gas and oil pipelines and warned of a “severe” response as tensions rose sharply around the fraying supposed lull in fighting.

Armenia denied the claim and said Azeri forces were trying to seize control of the tiny territory of Nagorno-Karabakh, which is governed by ethnic Armenians but internationally recognized as part of Azerbaijan.

Russia tried to silence the angry rhetoric and appealed to both sides to observe the ceasefire it brokered over Nagorno-Karabakh.

But Moscow and Turkey also exchanged recriminations over the fighting, as fears grow the two big  regional powers could be sucked into the conflict that is being fought close to Azeri pipelines which carry gas and oil to international markets.

“Armenia is trying to attack and take control of our pipelines,” Azeri President Aliyev said in an interview with a Turkish broadcaster.  “If Armenia tries to take control of the pipelines there, I can say that the outcome will be severe for them.”

Azerbaijan has superior weaponry in this fight. But Russia has a defense pact with Armenia, though there are no plans as yet to do more than station some military observers in the disputed area.

The defense ministry of the Nagorno-Karabakh region said on Friday it had recorded another 29 casualties among its military, pushing the military death toll to 633 since fighting with Azeri forces erupted on Sept. 27.

Afghanistan: A week ago President Trump promised to abruptly pull all U.S. troops out of Afghanistan by year’s end, causing confusion as the Pentagon indicated that it had  received no such orders to alter plans for a conditions-based withdrawal and Afghan negotiators voiced concern that a hasty exit would intensify challenges to peace talks with the Taliban.

Trump then doubled down in his campaign appearances all this week. 

But today, National Security Adviser Robert O’Brien said that some 2,500 troops will remain in Afghanistan beyond Christmas, seeking to clarify a series of mixed messages from both senior Trump administration officials and dismissing a tweet from the president last week.

Editorial / Washington Post

“In the past few days, President Trump has produced a torrent of provocative statements that have been extreme even by his standards.  Among other things, he called on Attorney General William P. Barr to indict former vice president and Democratic presidential nominee Joe Biden and former president Barack Obama; complained that Secretary of State Mike Pompeo had not unearthed more of Hillary Clinton’s emails at the State Department; and said Democratic vice-presidential nominee Kamala D. Harris was a ‘monster’ and a ‘communist’ who would quickly replace Mr. Biden if he were elected.

“It’s sad testimony to Mr. Trump’s degradation of political discourse during the past four years that relatively little attention was paid to these toxic outbursts. Few expect the actions he called for or predicted to occur. Yet one of the president’s statements stood out for its potential to torpedo one of the most significant national security policies.  ‘We should have the small remaining number of our BRAVE Men and Women serving in Afghanistan home by Christmas!’ he tweeted Wednesday evening. The next morning, he reiterated in a Fox Business interview that the troops will be ‘home by the end of the year.’

“As has happened before, Mr. Trump’s troop withdrawal announcement took the Pentagon by surprise; PBS cited senior officials as saying they had received no order to pull out the 4,500 remaining U.S. soldiers in Afghanistan by the end of the year and were not even sure they could do so safely.  Even Mr. Trump’s national security adviser, Robert C. O’Brien, must have been flummoxed: He delivered a speech hours before the president’s tweet saying that U.S. forces would be reduced by 2,500 by early next year, not withdrawn completely.

“Perhaps, like his call for the jailing of his opponent in the upcoming election, Mr. Trump’s words will not be acted on; in the past, his generals have deftly diverted his attempts to remove all U.S. forces from Syria. But the statements are almost certain to have the effect of undermining one of his administration’s few solid accomplishments abroad, the convening of peace talks last month between the Afghan government and the Taliban.  As part of the deal to begin the negotiations, the United States reduced its forces in the country by half, and promised to remove them all by next May – provided that the Taliban met several conditions, including breaking its ties with al-Qaeda.

“According to U.S. commanders and Mr. Trump’s own special envoy to Afghanistan, those conditions have not been met.  The talks themselves have gotten off to a predictably slow start and have not yet produced results.  Yet Mr. Trump is now sending the insurgents the message that they need only wait until next year – or maybe Christmas – and they will get the U.S. withdrawal they have sought without having to make any meaningful concessions.

“Mr. Trump’s reckless pronouncement may or may not have any effect on the U.S. voters he no doubt was aiming to impress.  But, like so much of what the president has been doing and saying, it will please America’s enemies.”

Belarus: The government put opposition leader Sviatlana Tsikhanouskaya on its wanted listed for allegedly making calls to overthrow the constitutional order, the interior ministry said on Friday.  Tsikhanouskaya fled to neighboring Lithuania shortly after a disputed Aug. 9 election and has since met European political leaders and called for her country’s longtime president Alexander Lukashenko, to leave power.  She later appeared on Russia’s wanted list as well.

Meanwhile, the protests against President Lukashenko continue, with security forces having detained more than 13,000 people during a post-election crackdown.  Today, a senior police official said on television that officers would use firearms if needed against demonstrators ahead of the next big weekly protest on Sunday, further raising the stakes in the standoff.

Kyrgyzstan: Parliament voted today to end a state of emergency imposed by its ousted president as interim Prime Minister Sadyr Japarov, a Kyrgyz nationalist, took temporary control of the presidency of one of Russia’s key partner states (which is why this story is worth mentioning).

Former president Neenbekov, who resigned on Thursday, had ordered troops to be deployed in Bishkek last week after days of unrest triggered by parliamentary elections on Oct. 4, which the opposition said were fraudulent.

But now the prime minister is also president, at least temporarily.  The parliamentary election will be rerun later this year.  Then there would be a new presidential election.

Kyrgyzstan borders China so this whole situation bears watching for another reason.

Random Musings

--Presidential polls….

Gallup: No update…46% approve of President Trump’s job performance, 52% disapprove; 94% of Republicans approve, 39% of independents (Sept. 14-28).
Rasmussen: 48% approve of Trump’s performance, 50% disapprove (Oct. 16).

--A new NBC News/Wall Street Journal national poll of registered voters finds Biden is ahead by 11 points in the survey, 53% to 42%, following a tumultuous few weeks. 

The survey finds Trump rebounding from a 14-point deficit earlier this month in a poll taken immediately after the debate with Mr. Biden, but still in a weaker position than in September, when he trailed by 8 points.

Some 50% say they are better off than they were four years ago, compared with 34% who say they are worse off.  However, 58% say the country is worse off than four years ago, compared with 38% who say it is better off.  Moreover, 62% of voters say they country is headed in the wrong direction.

The No. 1 election issue among those surveyed was the economy, and voters gave Republicans a 13-point advantage over Democrats as the better economic manager.  Yet, the pollsters said voters this election cycle don’t seem to be voting based on that issue alone.

Biden’s biggest advantages are among Black voters (he gets 91 percent to Trump’s 4 percent), Latinos (62 percent to 26 percent), women (60 percent to 34 percent), voters ages 18 to 34 (57 percent to 34 percent), whites with college degrees (57 percent to 38 percent), seniors (54 percent to 44 percent) and independents (46 percent to 39 percent).

Trump holds the edge among men (50 percent to 45 percent), whites (50 percent to 46 percent) and whites without college degrees (59 percent to 38 percent).

Trump receives an overall approval rating of 44 percent.

--A new Washington Post/ABC News national poll has Biden leading among likely voters 54% to 42%.

Trump’s overall approval rating is at 45 percent, 54 percent disapproval.

By a 58 to 41 margin, voters disapprove of the president’s handling of the pandemic.  54 percent approve of his handling of the economy, vs. 45 percent who disapprove.

In the Post/ABC survey, Biden holds a 59 to 36 percent edge among female likely voters, while Trump and Biden split men, 48 percent each.

In 2016, men backed Trump by 11 points, women favored Hillary Clinton by 13.

Independents back Biden by 52 percent to 40 percent.  In 2016, Trump beat Clinton by four points among self-identified independent voters.

Suburban women favor Biden by a 62 to 34 margin.  Suburban men lead toward Trump, 54 to 43.

--In a series of New York Times / Siena College Battleground Polls, likely voters….

Michigan: Biden 48% - Trump 40%

Wisconsin: Biden 51% - Trump 41%

North Carolina: Biden 46% - Trump 42%

Pennsylvania: Biden 49% - Trump 42%

Florida: Biden 47% - Trump 42%

Biden has a 17-point lead among independent voters in Michigan.  By a 61-30 margin, voters say the President’s lack of taking adequate precautions is to blame for his getting Covid-19, a view held by more than 90 percent of Democrats, more than two-third of independents, and even a quarter of Republicans.

In a key Senate race, the Times/Siena poll has Michigan incumbent Democrat Gary Peters neck-and-neck with Republican challenger John James, 43 to 42 percent.

The Times / Siena College poll of South Carolina voters has incumbent Republican Sen. Lindsey Graham ahead of Democratic challenger Jamie Harrison 46% to 40%.  [Trump leads Biden in the survey in S.C., 49% to 41%.]

--A Reuters/Ipsos series of polls in battleground states has Biden with a 7-point lead over Trump in Pennsylvania, 51-44, among likely voters, with a majority saying the former vice president would do a better job of handling the pandemic, 51% to 42%.

Wisconsin: 51-44 Biden here as well.

Florida: Biden 49% to 45%.

Arizona: Biden 48% to 46%.

Michigan: Biden 51% to 43%.

North Carolina: Biden 47%, Trump 47%.

Reminder…in 2016, Trump won all the following:

Michigan: 47.5 - 47.3 percent
Pennsylvania: 48.2 - 47.5
Wisconsin: 47.2 - 46.5

Arizona: 48.7 - 45.1
North Carolina: 49.8 - 46.2
Florida: 49.0 - 47.8

--Joe Biden and his party raised a record-shattering $383 million in September for his presidential bid, bolstering his financial advantage over President Donald Trump ahead of the Nov. 3 election.  The campaign had $432 million in cash at month’s end for the final five weeks of the race, campaign manager Jen O’Malley Dillon said on Twitter.  The haul outstripped the $365 million that Democrats raised in August, which was itself a monthly record for any U.S. presidential campaign.

“To every person who chipped in a few dollars last month – thank you,” Biden wrote on Twitter in announcing the sum.  “I’m incredibly humbled.”

The Trump campaign then announced today it raised some $247.8 million in September, but it pulled in $210 million in August along with the Republican National Committee.

--In a separate NBC News/Wall Street Journal poll, about 70% of registered voters surveyed said they would take a Covid-19 vaccine, although many want to wait until it has been available for a while to see if there are major problems or side effects.

The survey found that 20% of respondents said they would take a vaccine as soon as one becomes available, while about half the respondents wanted to wait until they learned more information about the shot.

17% said they would not take a vaccine at all, according to the poll. Ten percent said they would eventually take a vaccine, but only if it was mandatory.

So 27% wouldn’t want to get vaccinated, which compares with earlier polls showing about a third of people surveyed were opposed to same.

If too many people refuse to get the shots, businesses, schools and other establishments won’t be able to safely reopen, according to health authorities.

Personally, I will take the vaccine, but I’m not going to be first in line to do so, nor do I deserve to be. Take care of every first responder, schoolteacher, and everyone in a nursing home and other elderly long before someone like me.  And any good-minded person is expecting this to be the order in line…but things don’t go according to Hoyle in this nation these days. 

--C-Span’s Steve Scully, who was to have moderated the second debate between Trump and Biden, was suspended by the network after he admitted to lying about his Twitter account being hacked last week.

Scully had appeared to solicit advice from a former Trump adviser, Anthony Scaramucci, after President Trump criticized Scully, calling him a “Never Trumper.”

Scully responded, tagging Scaramucci, asking him “should I respond to Trump.”

Scully, in a statement, said he had sent the tweet “out of frustration” after “relentless criticism” regarding his role as moderator, including from President Trump.

“The next morning when I saw that this tweet had created a new controversy, I falsely claimed that my Twitter account had been hacked,” he wrote, apologizing for these two “errors in judgement.”

Soon after Scully’s suspension was announced, Trump responded to the news, heralding his own “good instincts.”

--We note the passing of Roberta McCain, mother of the late Senator John McCain, who died at the age of 108.

“It is with great sadness that I announce the death of my wonderful Mother In-law, Roberta McCain,” Cindy McCain wrote on Twitter.  “I couldn’t have asked for a better role model or a better friend.  She joins her husband Jack, her son John and daughter Sandy.”

Roberta McCain was cherished by her late son.  Her vibrance, charm and penchant for speaking her mind made her a popular attraction during her son’s unsuccessful 2008 president campaign.

McCain had taken his mother on the trail as a living response to those who thought that at age 71 he was too old to be president.  She was 95 at the time, proving that longevity was a family trait, he said.

--Australia’s Great Barrier Reef has lost more than half of its corals since 1995 due to warmer seas driven by climate change, a study has found.

Scientists found all types of corals had suffered a decline across the world’s largest reef system.

The steepest falls came after mass bleaching events in 2016 and 2017.  More mass bleaching occurred this year.

“There is no time to lose – we must sharply decrease greenhouse gas emissions ASAP,” the researchers said.

The study, published in the journal Proceedings of the Royal Society B, was conducted by marine scientists at the ARC Centre of Excellence for Coral Reef Studies in Queensland.

Scientists assessed the health and size of coral colonies across the reef from 1995 to 2017.

They found populations had dropped by more than 50% in all coral sizes and species, but especially in branching and table-shaped corals.

These are the large, structural species which usually provide habitats for fish and other marine life.

---

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

God bless America.

---

Gold: $1902
Oil: $40.76

Returns for the week 10/12-10/16

Dow Jones  +0.1%  [28606]
S&P 500  +0.2%  [3483]
S&P MidCap  +0.1%
Russell 2000  -0.2%
Nasdaq  +0.8%  [11671]

Returns for the period 1/1/20-10/16/20

Dow Jones  +0.2%
S&P 500  +7.8%
S&P MidCap  -3.2%
Russell 2000  -2.1%
Nasdaq  +30.1%

Bulls 56.6
Bears
21.2 [prior week’s official split was 54.6 / 23.2]

Hang in there…Mask up, wash your hands.

Brian Trumbore

 



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Week in Review

10/17/2020

For the week 10/12-10/16

[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 1,122

President Trump was cleared by doctors to return to the campaign trail after his bout with the coronavirus, holding his first superspreader rally in Florida on Monday, and after that he crisscrossed the battleground states of Michigan, Pennsylvania, Florida a few more times, North Carolina, Georgia…Macon, Georgia, where I’m watching him now before posting.  The president is undermining trust in the democracy and the voting process, with countless falsehoods about illegal balloting tonight.  And the coronavirus. 

In fact right now he’s again going after Joe Biden for wearing a mask.  So pathetic.  As a recent Cornell University study concluded, President Trump is the single biggest source of Covid disinformation, like the falsehood he trumpeted all week that 85% of those who wear masks get the virus.

But the fact is while the president lies about “rounding the corner” on the pandemic, cases in the U.S., and elsewhere around the world, spiked this week to either record highs (as was the case in many of the states) or near highs.  Tonight, we hit our highest case level since July 31st, over 70,000 new infections.  We needed to be around 20,000 heading into flu season, and instead we were running at 40,000, and now this.  Hospitalizations are rising again, to crisis levels in many areas.

No problem, says the president.

Eighteen days until the election.  Eighteen days until Armageddon and the president’s claims on Election Night that he has won with the initial polls showing him ahead, before the tens of millions of mail-in ballots are counted, a large majority of which will be for Biden.  We are already at over 21 million votes in.  It’s exhilarating to see the throngs waiting in lines for early voting.  It’s also unsettling to think about the aftermath. 

This week we also had the “no debate” fiasco and the decision on the part of NBC to give the president a town hall at the same time as ABC’s forum with Joe Biden.  Many of us were ticked at NBC News, but it ended up working out.

A combative Trump, sparring with moderator Savannah Guthrie, refused to condemn the bizarre conspiracy theory QAnon, reiterated his unsubstantiated assertion that the 2020 election was rife with fraud, questioned whether masks help fight the spread of Covid-19, and defended his retweet of another conspiracy theory that purports the U.S. did not kill Osama bin Laden, but rather got his body double. 

On the other channels, Joe Biden delivered policy-heavy answers that focused his attacks on Trump’s handling of the pandemic, but refused to answer a question, again, on whether he will pack the Supreme Court should he win the election and Democrats take the Senate.  Biden did say, though, he would have an answer before the election and that he was waiting to see how the Senate handled Amy Coney Barrett’s nomination first, as in whether she was seated before Nov. 3rd.

Biden blasted the president’s foreign policy, declaring that “America first” has made “America alone” and “this president embraces all things in the world.”

And then Nebraska Republican Sen. Ben Sasse eviscerated President Trump during a phone call with constituents in which he accused the president of cozying up to dictators, mistreating women, flirting with white supremacists and irresponsibly handling the pandemic.

Sasse’s comments were disclosed by the Washington Examiner, which obtained an audio recording of the call, a campaign telephone townhall with Nebraska voters.

Sasse has been among the few Republican lawmakers willing to criticize the president from time to time but has mostly supported him and his policies.

But in the call, Sasse unleashed a torrent of criticisms at Trump.

“The way he kisses dictators’ butts.  I mean, the way he ignores the Uighurs, (the) literal concentration camps in Xinjiang. Right now, he hasn’t lifted a finger on behalf of Hong-Kongers,” Sasse said.

“The United States now regularly sells out our allies under his leadership, the way he treats women, spends like a drunken sailor,” Sasse continued.  “The ways I criticize President Obama for that kind of spending; I’ve criticized President Trump for as well.  He mocks evangelicals behind closed doors.  His family has treated the presidency like a business opportunity.  He’s flirted with white supremacists.”

Sasse then shifted to what he characterized as Trump’s failure in leadership with the pandemic, saying Trump treated it like a “PR crisis rather than a multiyear public health challenge.”

“I don’t think the way he’s led through Covid has been reasonable or responsible or right,” he said.  “But the reality is that he careened from curb to curb.  First, he ignored Covid.  And then he went into full economic shutdown mode,” Sasse said.  ‘He was the one who said 10 to 14 days of shutdown would fix this.  And that was always wrong.  I mean, and so I don’t think the way he’s led through Covid has been reasonable or responsible, or right.”

Sasse concedes that he gives Trump credit for certain things, like appointing conservative judges, but emphasized that his unease with Trump isn’t just policy based but existential.

“It’s also a…political question about whether or not he’s ultimately driving the country further to the left, because that’s what I think is ultimately going to happen because of Donald Trump,” Sasse explained.

He called the Republican Party entwining itself with the “Trumpian brand” imprudent and said that his fear is that Trump will bring down the Republican-controlled Senate in November.

“I’m now looking at the possibility of a Republican bloodbath in the Senate, and that’s why I’ve never been on the Trump train. It’s why I didn’t agree to serve on his reelection committee and that’s why I’m not campaigning for him, because I spend all my time thinking about the one political question that’s most central next month, which is holding the U.S. Senate.”

Sasse is up for reelection this year and is expected to easily win in his GOP-leaning state.

Finally, former New Jersey governor and Trump adviser, Chris Christie, commented on his week in the ICU at a local hospital after contracting the coronavirus.  On Thursday he admitted he was “wrong” not to wear a mask at an event honoring Judge Amy Coney Barrett and in his debate preparation sessions with President Trump, and that people should take the threat of the virus seriously.

In an interview with the New York Times and in an open statement, Christie said that he had believed he was in a “safe zone” at the White House while he was there.  He urged people to follow best practices, like mask wearing and social distancing, but argued there’s a middle ground between extensive, large-scale shutdowns and reopening cities and states without taking proper precautions.

“I hope that my experience shows my fellow citizens that you should follow C.D.C. guidelines in public no matter where you are and wear a mask to protect yourself and others,” he said.

Christie said that the virus is “something to take very seriously.  The ramifications are wildly random and potentially deadly.”

Covid-19 death tolls, as of tonight….

World…1,109,070
USA…223,644
Brazil…153,229
India…113,032
Mexico…85,704
UK…43,429
Italy…36,427
Spain…33,775
Peru…33,648
France…33,303
Iran…29,870
Colombia…28,616
Argentina…25,723
Russia…23,723

Source: worldometers.info

U.S. daily death tolls…Sun. 325; Mon. 316; Tues. 843; Wed. 970; Thurs. 874; Fri. 928

Week eleven of my Wednesday comparison on the case and death tolls of the Euro six (Germany, France, Spain, Italy, UK and Belgium, with a combined population of 336 million) and the U.S. (population 330 million).

The first week, the U.S. had 55,148 cases and 1,319 deaths, while the Euro six had a combined 7,281 and 100.

This week, we are at 59,693 cases and 970 deaths in the U.S., with cases in the Euro six soaring to 75,040, with 557 deaths.  Just awful.  Only better treatment methods compared with April are preventing both the U.S. and Europe from far more fatalities, but now once again the story becomes hospital capacity, which is near the breaking point anew in many European and U.S. cities.

The news out of Europe is truly horrific…new highs in cases in Italy, France, UK, Germany, Belgium, Ukraine, Poland, Netherlands, and Russia, for starters.  And you see the deaths beginning to follow.

Covid Bytes

--Johnson & Johnson paused trials of its Covid-19 vaccine candidate due to an unexplained illness in a participant in a phase 3 study.

The company said the illness was being reviewed by the independent data safety monitoring board of the late-stage Ensemble trial and by internal clinical and safety physicians.  It added that temporary pause should not be confused with a regulatory hold and that adverse events are not uncommon, especially in large studies such as its vaccine program.

--Eli Lilly paused an antibody treatment trial Tuesday, citing a “potential safety concern.”  A company spokeswoman told CNBC, “We are aware that, out of an abundance of caution, the ACTIV-3 independent data safety monitoring board has recommended a pause in enrollment.”

The trial was testing the benefits of the therapy on hundreds of volunteers hospitalized with Covid-19, according to the New York Times. It was not clear how many of those patients were sick, or how they were affected.

The Eli Lilly treatment was in a late stage, and the company had last month already requested emergency use authorization.  It’s similar to the Regeneron antibody treatment administered to President Trump.

--Gilead Sciences shares were down nearly 2% after a clinical trial by the World Health Organization found that the company’s Covid-19 treatment remdesivir has “no substantial effect” on a hospitalized patient’s chances of survival, the Financial Times reported Thursday, citing a copy of the study.

The WHO’s Solidarity trial studied the effects of remdesivir, along with hydroxychloroquine, lopinavir and interferon regimens in 11,266 patients and found that none of the treatments “substantially affected mortality” or had any effect on the need to ventilate patients.

The study, however, has yet to be peer-reviewed, according to researchers at WHO.

Gilead disputed the initial data.

--Pfizer said it may file for emergency authorization of its Covid vaccine being developed with German partner BioNTech in late November, which means a vaccine will not be available before the presidential election.

Pfizer CEO Albert Bourla said the company expects to have key safety data in the third week of November.

--Dr. Anthony Fauci said a vaccine for Covid could be widely available as soon as this April, a timeline that runs slightly longer than President Trump’s previous predictions.

Trump has been targeting the release of a vaccine by Nov. 3 – even going so far as to say that one could be released within the next few weeks.

Fauci expressed caution at expecting a vaccine too soon, saying, “that would be predicated on the fact that all of the vaccines that are in clinical trials have been proven to be safe and effective.”

--Less than one month after Israeli citizens were put under lockdown, the coronavirus cabinet ruled Thursday to begin lifting restrictions.

Beginning on Sunday, businesses that don’t serve customers, preschools for children ages newborn to six, nature reserves, national parks, beaches and various tourist facilities will open.

At the same time, restaurants will be able to serve takeaway, the ban on traveling more than one kilometer from home will be lifted and people will be allowed to visit the homes of their extended family and friends.

Finally, people will be able to gather in groups of 10 inside and 20 outside.

“As of now, the lockdown has been a major success. We are seeing a decline in all data, a clear and consistent decline,” Prime Minister Benjamin Netanyahu said at the start of the meeting.  Nonetheless, he added, “the exit needs to be gradual, responsible, careful and controlled.”

Israel had opened up after the first wave too recklessly back in May.

--French President Emmanuel Macron announced a night-time curfew in Paris and eight other cities to try to curb the rapid spread of coronavirus.  The measure, from 21:00 to 06:00 – will go into effect Saturday and will last for at least four weeks, Macron said in a televised interview.

Germany announced that bars and restaurants in higher-risk areas must close early.  The country reported its highest figures this week since the start of the pandemic.  Private gatherings will be limited to 10 people from two households.

--Poland reported a new daily record of 132 coronavirus-related deaths today and counted 7,705 new confirmed cases (which was after Thursday’s record of 8,099), amid fears the pandemic is testing the country’s supply of hospital beds and ventilators.

The people are upset at their government for not handling the second wave well.  A recent survey carried out by state pollster CBOS said around 43% of Poles negatively assessed the government’s efforts in fighting the pandemic in October, compared to 25% in May and June.

--Ireland has been spiking and Northern Ireland is imposing a four-week lockdown, effective today, to curb the spread.  I keep thinking of my friends over on the Emerald Isle whose businesses are suffering mightily.

Trump World

--The stage was set for President Trump’s town hall in Miami last night when he tweeted out the following hours before:

“I will be doing a major Fake @NBCNews Town Hall Forum, live tonight from Miami, at 8:00 P.M.  They asked me to do it in place of the Rigged Steve Scully (he is now suspended from @cspan for lying) Debate.  I wonder if they’ll treat me as well as Sleepy Joe?  They should!”

So among the statements made by the president at the town hall.

President Trump defended his amplification of a laughable QAnon conspiracy theory claiming the Navy SEAL team who killed Osama bin Laden only killed a body double.

Earlier this week, former SEAL Team 6 member and Trump supporter Robert O’Neil swatted down the conspiracy theory after the president retweeted a QAnon believer who has been pushing the claim.  During Trump’s intense town hall with Savannah Guthrie, the NBC anchor brought this up and asked him: “Why would you send a lie like that to your followers?’

“That was a retweet,” Trump answered.  “That was an opinion of somebody and that was a retweet.  I’ll put it out there, people can decide for themselves.”

“You’re the president!” an exasperated Guthrie exclaimed.  “You’re not someone’s crazy uncle who can retweet whatever.”

Trump responded by briefly defending his retweets, then by complaining about the “fake” and “corrupt” media while saying “if I didn’t have social media…I wouldn’t be able to get the word out.”

“The word is false,” Guthrie pointed out, which Trump didn’t even acknowledge.

On QAnon overall, Trump praised followers for “very strongly” fighting pedophilia, giving credence to a completely baseless far-right conspiracy theory that has been tied to violent crimes.

But here’s how the conversation with Savannah Guthrie went down:

GUTHRIE: Let me ask you about QAnon.  It is this theory that Democrats are a satanic pedophile ring and that you are the savior of that.  Now, can you just once and for all state that that is completely not true and disavow QAnon in its entirety?

TRUMP: I know nothing about QAnon –

GUTHRIE: I just told you.

TRUMP: You told me. But what you tell me doesn’t necessarily make it fact, I hate to say that. I know nothing about it.  I do know they are very much against pedophilia. They fight it very hard, but I know nothing about it. If you’d like me to –

GUTHRIE: They believe it is a satanic cult run by the deep state.

TRUMP: - study the subject.  I’ll tell you what I do know about: I know about antifa and I know about the radical left.  And I know how violent they are and how vicious they are.  And I know how they’re burning down cities run by Democrats, not run by Republicans.

GUTHRIE: Republican Senator Ben Sasse said, “QAnon is nuts, and real leaders call conspiracy theories conspiracy theories.”

TRUMP: He may be right.

GUTHRIE: Why not just say it’s crazy and not true?

TRUMP: He may be right. I just don’t know about QAnon.

GUTHRIE: You do know!

TRUMP: I don’t know.  No, I don’t know. I don’t know.

GUTHRIE: Let me ask you for another thing.

TRUMP: Let’s waste a whole show.  You start off with white supremacy, I denounce it.  You start off with something else – let’s go.  Keep asking me these questions.

GUTHRIE: OK. I do have one more in this vein.

TRUMP: Let me just – let me just tell you, what I do hear about it, is they are very strongly against pedophilia. And I agree with that.  I mean, I do agree with that.  And I agree with it very strongly.

GUTHRIE: But there is not a Satanic pedophile cult being run by –

TRUMP: I have no idea.  I know nothing about it.

GUTHRIE: You don’t know that?

TRUMP: No, I don’t know that. And neither do you know that.

Republican Senator Mitt Romney tweeted today:

“The President’s unwillingness to denounce an absurd and dangerous conspiracy theory last night continues an alarming pattern: politicians and parties refuse to forcefully and convincingly repudiate groups like antifa, white supremacists, and conspiracy peddlers.  Similarly troubling is their silence regarding anti-vaxxers, militias, and anarchists. Rather than expel the rabid fringes and the extremes, they have coddled or adopted them, eagerly trading their principles for the hope of electoral victories.  As the parties rush down a rabbit hole, they may be opening a door to a political movement that could eventually eclipse them both.”

--Prior to last night’s Town Hall, in his clearest answer on the issue of what he would do with the Supreme Court if elected president, Joe Biden on Monday said he is “not a fan” of expanding it.

“I’ve already spoken on – I’m not a fan of court packing, but I don’t want to get off on that whole issue,” Biden said in an interview with a Cincinnati television station.  “I want to keep the focus – the president would like nothing better than to fight about whether or not I would in fact pack the court or not pack the court.”

Biden, former chairman of the Senate Judiciary Committee during his decades as a senator, had expressed opposition to adding to the number of justices on the high court as recently as last year.

But the issue of adding Amy Coney Barrett to the high court changed everything in establishing a conservative majority on the court, perhaps for decades to come.

As for Judge Barrett’s testimony, she is a very impressive nominee who, par for the course since the nomination of Robert Bork, said little, evading questions about her views on key issues of the day, such as healthcare and abortion.

Barrett stated she had “no agenda” and vowed to stick to “the rule of law.”

It seems clear she will be seated before the election.   There’s really nothing more to say about this at this point.  You can argue and protest all you want, but the Court will be 6-3 on the side of the conservatives, and potentially for a long time to come.  Some of the impacts will be monumental.

--While discussing the issue of his taxes, President Trump did not deny that he owes entities about $400 million and pledged to tell Americans to whom he owes money.

“I will not mind at all saying who it is,” Trump said Thursday’s town hall.  He said he doesn’t owe money to Russians, and said of whether he owes to any foreign interests, “Not that I know of.”

When pressed on the numbers, Trump said, “$400 million compared to the assets that I have, all of these great properties all over the world,” he said.

--Melania Trump said Wednesday that after an initial negative test, 14-year-old Barron Trump tested positive for Covid, but has since tested negative again.  The First Lady for the first time talked about her own symptoms, saying in a note on social media:

“I experienced body aches, a cough and headaches, and felt extremely tired most of the time,” she claimed.  “I chose to go a more natural route in terms of medicine, opting more for vitamins and healthy food.”

--The federal prosecutor appointed by Attorney General William P. Barr to review whether Obama-era officials improperly requested the identities of individuals whose names were redacted in intelligence documents has completed his work without finding any substantive wrongdoing, sources told the Washington Post.

“The revelation that U.S. Attorney John Bash, who left the department last week, had concluded his review without criminal charges or any public report will rankle President Trump at a moment when he is particularly upset at the Justice Department.  The department has so far declined to release the results of Bash’s work, though people familiar with his findings say they would likely disappoint conservatives who have tried to paint the ‘unmasking’ of names – a common practice in government to help understand classified documents – as a political conspiracy.”

President Trump in recent weeks has been pressing federal law enforcement to move against his political adversaries to little effect.

--Republicans on the Senate Judiciary Committee plan to issue a subpoena to Twitter CEO Jack Dorsey to testify on Oct. 23 about the social media company’s move to block the links to a New York Post article concerning Hunter Biden.

Twitter also blocked people from sharing the links, in line with its company policy of restricting the distribution of “hacked materials.”

“Never before have we seen active censorship of a major press publication with serious allegations of corruption of one of the two candidates for president,” said Sen. Ted Cruz.

Dorsey said in a tweet Wednesday that the company’s communications surround the Post article “was not great” and that blocking links without explanation is “unacceptable.”

The Post published a story saying Hunter Biden allegedly introduced a Ukrainian businessman to Joe Biden. The newspaper obtained the emails from Donald Trump’s personal lawyer, Rudy Giuliani.  The information originally came from a computer-repair person in Delaware, said the reports.

Meanwhile, Twitter unblocked on Thursday a Trump campaign account that shared the post.  Twitter did not respond to requests on the reason for the unblocking.

Sources today say the intelligence agencies are investigating whether Russia has planted this story as part of its disinformation campaign, with Rudy Giuliani the target of an influence operation by Russian intelligence.

--President Trump pleaded for support from suburban women at this Tuesday night rally in Johnstown, Pa., citing his decision to repeal a low-income housing initiative that he said “saved” their neighborhoods.

“So can I ask you to do me a favor: suburban women, will you please like me?  I saved your damned neighborhood, OK?”

--Kind of funny that according to Nielsen, Joe Biden averaged 13.9 million viewers Thursday night on ABC, while Trump pulled in 13 million across NBC and Comcast Corp.’s MSNBC and CNBC cable channels.  The president prior to the night was all set to declare a ratings rout.

Personally, I stayed with the Trump Show.

--Trump tweets:

“There is a nasty rumor out there that @SenatorCollins of Maine will not be supporting our great United States Supreme Court Nominee. Well, she didn’t support Healthcare or my opening up 5000 square miles of Ocean to Maine, so why should this be any different.  Not worth the work!”

“Very good reviews on last night’s @NBCNews Town Hall in Miami. Thank you!!!”

“Poll numbers are looking very strong. Big crowds, great enthusiasm.  Massive RED WAVE coming!!!”

[Ed. No it isn’t…a Red Tide instead, perhaps, killing all marine life.]

“If we don’t win, the Radical Left will destroy our Country.  Biden refuses to answer questions on packing the SCOTUS! Dems will pack the Court w/radical left justices who will shred the #2A, empower violent mobs, and protect terrorists & violent criminals!”

“Joe Biden and the Democrat Socialists will kill your jobs, dismantle your police departments, dissolve your borders, release criminal aliens, raise your taxes, confiscate your guns, end fracking, destroy your suburbs, and drive God from the public square.”

“The Economy is about ready to go through the roof.  Stock Market ready to break ALL-TIME RECORD. 401K’s incredible.  New Jobs Record. Remember all of this when you VOTE.  Sleepy Joe wants to quadruple your Taxes. Depression!!!  Don’t let it happen! #MAGA”

“Republicans must state loudly and clearly that WE are going to provide much better Healthcare at a much lower cost.  Get the word out!  Will always protect pre-existing conditions!!!”

“We will have Healthcare which is FAR BETTER than ObamaCare, at a FAR LOWER COST – BIG PREMIUM REDUCTION. PEOPLE WITH PRE EXISTING CONDITIONS WILL BE PROTECTED AT AN EVEN HIGHER LEVEL THAN NOW. HIGHLY UNPOPULAR AND UNFAIR INDIVIDUAL MANDATE ALREADY TERMINATED. YOU’RE WELCOME!”

“Totally Negative China Virus Reports. Hit it early and hard. Fake News is devastated. They are very bad (and sick!) people!”

“Actually, Tony’s pitching arm is far more accurate than his prognostications. ‘No problem, no masks.’ WHO no longer likes Lockdowns – just came out against.  Trump was right. We saved 2,000,000 USA lives!!!”

Wall Street and the Economy

The International Monetary Fund predicted Tuesday that the global economic collapse caused by the pandemic won’t be as severe as estimated earlier, thanks to strong government intervention world-wide and a swift recovery in China.

The world’s gross domestic product is forecast to decline by 4.4% this year, not as sharp as the 5.2% drop the IMF projected in June but still the most severe downturn since the Great Depression.  World output will grow 5.2% in 2021, down from an earlier estimate of 5.4%.

China will be the only major economy to grow this year, the IMF predicted, 1.9%, compared with growth of 6.1% last year.  China’s growth will accelerate to 8.2% next year, the IMF said.

The IMF said the outcome would have been “much weaker if it weren’t for sizable, swift and unprecedented fiscal, monetary, and regulatory responses.”

World trade volumes are likely to rise by 8.3% in 2021, after falling 10.4% this year, the IMF said.

U.S. growth is expected to decline 4.3% this year, and grow 3.1% next year.

The eurozone will expand 5.2% after shrinking 8.3%.  Japan is likely to see 2.3% growth, following a 5.3% drop.

Minneapolis Federal Reserve President Neel Kashkari said Thursday that the economic recovery in the U.S. will slow down if unemployed Americans and struggling businesses do not receive more assistance.

Thousands more businesses could fail if they do not get more support, Kashkari said during a virtual discussion.  The financial pain felt by jobless consumers who are struggling to pay their bills could also spill over to other parts of the economy.

“If you can’t pay your bills, more quantitative easing is a poor substitute for extended unemployment insurance,” Kashkari said.  “Only Congress has the ability to get that direct fiscal aid to the small businesses and to the Americans who have lost their jobs and who are facing real hardship.”

But as of this weekend, prospects for a coronavirus relief package out of Congress are not good, at least before the election.  Senate Majority Leader Mitch McConnell said Thursday that President Trump is talking about “a much larger amount than I can sell to my members” in the Senate.

As for this week’s data, consumer prices in September rose 0.2%, ditto ex-food and energy; 1.4% year-over-year, 1.7% yoy on core.  Producer prices in the month rose 0.4%, ditto on core; 0.4% year-over-year on headline, 1.2% ex-food and energy.

Today we had a report on September retail sales, up a strong 1.9%, 1.5% ex-autos.  But industrial production fell 0.3% when a rise was expected, and factory production remains down 6.4% from pre-pandemic levels.

The weekly jobless claims figure was a worse than expected 898,000.  While there is a lot of questioning of this number due to various state issues, such as California’s backlog in claims, the fact is we have now had 30 straight weeks where the figure has exceeded the previous all-time high of 665,000 set during the financial crisis.

Separately, the World Trade Organization said the European Union may impose tariffs on $3.99 billion in Boeing Co. jets and other U.S. goods annually as part of a long-running trade dispute.

Tuesday’s ruling clears the way for the EU to respond to tariffs that the trade body last October authorized the U.S. to impose on $5.7 billion in Airbus SE jets and other imported European products, the largest arbitration award in WTO history.

EU officials have said they hope to negotiate a settlement with the U.S., and many observers expect Europe to refrain from levying tariffs quickly.  The bloc last year said it had prepared a preliminary list of U.S. products to target in retaliation, if necessary.

The jetliner dispute is the longest since the WTO’s inception.  In 2004, the U.S. took European countries to the WTO over subsidies to Airbus, and Europe responded soon after with a case against U.S. support for Boeing.

WTO rulings since then have found that both sides provided prohibited subsidies, but Europe did so to a greater extent. Tuesday’s pronouncement ends years of suits and countersuits and leaves the two sides with the choice of negotiating a solution or fighting a protracted trade battle.

President Trump on Thursday threatened to “strike back” against the European Union if it put tariffs on U.S. goods.  “If they strike back, then we’ll strike back harder than they’ll strike.  They don’t want to do it,” Trump told reporters at the White House.

Finally, the Treasury Department released its September report on the federal budget deficit, $-124.6 billion, the last month of the 2020 fiscal year, bringing the overall budget shortfall for the year to $3.1 trillion, swelling the national debt to exceed the economy’s size, after lawmakers opened the spending spigots to soften the blow from the coronavirus pandemic, Treasury Department data showed Friday.

The deficit as a share of the economy surged to 16%, the largest since 1945. At the end of the financial crisis in 2009, the ratio was close to 10% before slowly narrowing through 2015.

Fed Chairman Jerome Powell last week warned of a tepid recovery without additional government aid and said providing too much stimulus wouldn’t be a problem.

Such an attitude is made easier by the record low interest rates that make it cheaper for the government to borrow, but to beat a dead horse, at some point down the road we will pay the piper.

Debt-to-GDP is now above 100% and borrowing will continue climbing over the next 2-3 decades, as an aging population places more demands on Medicaid and Social Security.

Europe and Asia

Nothing of import economically from the eurozone (EA19) this week, except industrial production in August rose 0.7% vs. July, down 7.2% from a year ago.  And the surge in Covid cases will no doubt be reflected in future data.

Brexit: British Prime Minister Boris Johnson said today it was now time to prepare for a no-trade deal Brexit as the European Union has refused to negotiate seriously and that unless Brussels changed course there would not be an agreement.

A “no deal” finale to the UK’s five-year Brexit crisis would sow chaos through the supply chains that stretch across Britain, the EU and beyond – just as the economic hit from the pandemic worsens.

At what was supposed to be the “Brexit summit” on Thursday, EU leaders delivered an ultimatum: it said it was concerned by a lack of progress and called on London to yield on key sticking points or see a rupture of ties with the bloc from Jan. 1.

“I have concluded that we should get ready for January 1 with arrangements that are more like Australia’s based on simple principles of global free trade,” Johnson said.  “Unless there is a fundamental change of approach, we’re going to go for the Australia solution. And we should do it with great confidence,” he said.  “It’s becoming clear the EU don’t want to do the type of Canada deal that we originally asked for.  It does seem curious that after 45 years of our membership they can offer Canada terms they won’t offer us.”

Yesterday, EU leaders granted more time for negotiations with Britain to produce a trade pact before the end of the year.

“We want a deal, but obviously not at any price.  It has to be a fair agreement that serves the interests of both sides.  This is worth every effort,” German Chancellor Angela Merkel said.

The estranged allies have been locked in complex negotiations to keep trade between them free of tariffs or quotas from 2021.  Talks have narrowed gaps on issues from social welfare to transport but three contentious areas have so far prevented a deal: fair competition, dispute resolution and fisheries, which is particularly important to France.

“In no case shall our fishermen be sacrificed for Brexit,” said French President Emmanuel Macron.  “If the right terms can’t be found at the end of these discussions, we’re ready for a no-deal for our future relations.”

EU leaders demanded Britain “make the necessary moves to make an agreement possible” and decided to step up their own contingency preparations for an abrupt split.

Given the economic malaise and global instability, it would be “crazy” if the two sides failed to make a deal, said Dutch Prime Minister Mark Rutte.

As I go to post, there is still hope for a skinny deal in November, but the sides are far apart on the issue of fair competition safeguards covering social, labor and environmental standards, as well as state aid.

Nonetheless, EU negotiators are heading to London next week to continue talks.  Chief EU negotiator Michel Barnier said he was ready for “intensive” discussions with his British counterparts in the coming weeks and that the EU side would never walk away from the talks.

“We are determined to reach a fair deal with the UK.  We will do everything we can, but not at any price,” Mr. Barnier told journalists.  “Our positions have been crystal clear from day one of this negotiations, if you want access to our market of 450 million people, there must be a level playing field.”

Turning to AsiaChina reported strong trade data for September, with exports up 9.9% year-on-year, while imports rose a strong 13.2% (vs. -2.1% in August).

China’s exports to the U.S. rose 20.4% year-on-year, while imports surged 24% in September, owing to grain imports (up 35%), meat (up 40.5%) and soybeans (up 17.6% yoy).

Exports to the eurozone, however, fell 7.8%.

Separately, China’s inflation rate in September was 1.7% annualized, while producer (factory-gate) prices fell 2.1%.

Sunday, China reports its third-quarter GDP and other important data.

Japan reported August industrial production rose 1.0% over July, but was down 13.8% vs. a year earlier.

Sunday, Japan reports Sept. export data.

Street Bytes

--Stocks rose slightly this week as the uncertainty of the upcoming election, a rise in weekly jobless claims, and the lack of another fiscal stimulus plan added to investors’ jitters.  Nonetheless the Dow gained 0.1% to 28606, while the S&P rose 0.2% and Nasdaq 0.8%, the fourth straight weekly gain for the tech-heavy index.

With earnings season underway, it is projected that EPS for the S&P 500 will be down 20% from a year earlier in the third quarter, which would be an improvement from Q2’s -32%.

--U.S. Treasury Yields

6-mo. 0.11%  2-yr. 0.15%  10-yr. 0.75%  30-yr. 1.53%

Treasuries were little changed on the week.  But yields fell broadly in Europe.  The yield on the German 10-year is -0.62%, France -0.35%...Italy’s 10-year yield is down to 0.65%!  Greece’s 0.77%! 

--The American Petroleum Institute said U.S. crude inventories fell more than expected in the latest week, and then Energy Information Administration revealed Thursday that weekly inventories of crude fell 3.8 million barrels after a small gain the week before.

OPEC said conformity with the oil output reduction in September was 105%, while non-OPEC compliance was 97%.

“There is a risk that the demand recovery is stalled by the recent increase in Covid-19 cases in many countries,” the International Energy Agency said on Wednesday.

The IEA did say global oil supply in September was 9% below the pre-pandemic average of 2019.

But that decline is happening from record-high levels and the drawdown in oil stocks could falter in the months ahead, with Covid cases sharply rising in the developed world.

OPEC cut its oil demand forecast on Tuesday, citing economic dislocations caused by the virus.

--United Airlines said on Wednesday it cut operating costs by 59% in the third quarter and had nearly $20 billion of liquidity to position it for an eventual recovery from the Covid-19 crisis that has hammered global airlines.

“We’re ready to turn the page on seven months that have been dedicated to developing and implementing extraordinary and often painful measures, like furloughing 13,000 team members, to survive the worst financial crisis in aviation history,” said United CEO Scott Kirby.

United said its daily cash burn slowed to an average $25 million in the quarter ended September from $40 million in the second quarter, and included $4 million per day in severance and debt payments.  The company had $19.4 billion of liquidity at Sept. 30, so more than enough to weather the crisis.

“Even though the negative impact of Covid-19 will persist in the near term, we are now focused on positioning the airline for a strong recovery that will allow United to bring our furloughed employees back to work and emerge as the global leader in aviation,” said Kirby.

On CNBC Kirby added, the worst seems to be over but still expects travel demand to stay lower than normal until there is a vaccine that becomes widely available.

“We think we’ve turned the corner and can see it,” Kirby said.

Revenue fell 78% to $2.49 billion, slowing from a plunge of about 87% in the previous quarter.  United will see increasing competition domestically after low-cost rival Southwest Airlines said this week it plans to add services at two United hub airports: Chicago O’Hare and Houston’s George Bush Intercontinental.

United and Delta, along with American Airlines, rely on business and international travelers for much of their revenue, but those high-fare customers will return more slowly than leisure travelers booking trips closer to home.  The industry is pushing governments to test travelers for Covid-19 instead of closing borders or imposing long quarantine requirements on international travelers.

--Delta Air Lines offered cautious optimism that demand for travel is starting to return but said its losses were mounting.

“The virus has had a much broader impact over the course of the year than any of us were suspecting,” Delta CEO Ed Bastian said in an interview.

Delta ended September burning through $18 million a day in cash but expects to cut that to $10 million a day by the end of the year.

However, Bastian said: “We’re seeing a steady progression and steady improvement.”

I don’t see it! The TSA daily checkpoint numbers at U.S. airports have ticked up, but to just 36-37% of 2019 levels.  If you want to call from 28-34% to 36-37% steady improvement over a month, go ahead…but that’s not where the airlines thought they’d be at this time of year going back to April and May.

Delta said it has built its war chest to close to $22 billion in liquidity and that it has cut costs.  It is also deferring new aircraft orders – a move it said would save $5 billion through 2022 – and retiring older jets.

On Tuesday, Delta reported a net loss of $5.4 billion for the September quarter, compared with a profit of $1.5 billion a year earlier, with sales down 76% at $3.1 billion.

--In Ireland, Ryanair is closing its Cork and Shannon bases for the winter as the airline cuts its schedule to 40 percent of last years’ capacity, warning that more layoffs and unpaid leave were “inevitable” this winter.  Europe’s largest discount airliner said its forward bookings had weakened “materially” in November and December.

The group said it would maintain up to 65 percent of its winter route network, but with reduced flights.  It is also closed its Toulouse base for the winter, and is making significant base aircraft cuts in Belgium, Germany, Spain, Portugal and Vienna.

Ryanair is already operating at a 70 percent load factor – a measure of how full its planes are – and expects to carry a total of 38 million passengers in its 2021 financial year, but it warned that this could be revised downward if more lockdowns were imposed during the winter.

--Boeing deliveries for the third quarter, released on Tuesday, remained deeply depressed.  The company delivered 28 planes in Q3, up from 20 planes in the second quarter.  It delivered 11 in September, 13 in August and 4 in July.

The company delivered 62 jets in the third quarter of 2019, which was unusually low, as well – depressed by the 737 MAX. No MAX jets were delivered in the third quarter last year, after it was grounded worldwide in March 2019.  For comparison, deliveries in the third quarter of 2018 amounted to 190 jets.

Boeing reports third-quarter earnings on Oct. 28.

But then Friday, Europe’s top aviation regulator said he’s satisfied that changes to Boeing’s 737 MAX have made the plane safe enough to return to the region’s skies before 2020 is out, even as a further upgrade his agency demanded won’t be ready for up to two years.

After test flights conducted in September, EASA is performing final document reviews ahead of a draft airworthiness directive it expects to issue next month, said Patrick Ky, executive director of the European Union Aviation Safety Agency.

That will be followed by four weeks of public comment, while the development of a so-called synthetic sensor to add redundancy will take 20 to 24 months, he said.

While the FAA, Boeing’s main regulator, is preparing to clear the plane’s return, EASA’s views carry outsize weight, in light of flaws in the original certification process that hurt the U.S. regulator’s sterling reputation.

--JPMorgan Chase reported better-than-expected third-quarter results on Tuesday as the financial giant set aside less money for losses while higher revenue from markets and investment banking helped bolster the results.

Net revenue dipped to $29.1 billion from $29.3 billion a year earlier, beating consensus.  Profit came in at $9.44 billion, up from $9.08bn a year earlier.  The bank set aside $611 million in its provision for credit losses, down from $10.5 billion in the second quarter of this year and also 60% less than a year earlier.

Chief Executive Jamie Dimon said corporate and investment banking “continues to be a big driver of firm performance.”  Revenue in the segment rose 21% to $11.5 billion with a surge of 29% in markets and securities services amid gains in products including commodities and equities.

Assets under management jumped 16% to $2.6 trillion.

JPM’s biggest revenue-generating segment, consumer and community banking, saw a 9% slide year-on-year to $12.8 billion with a drop of 18% in consumer and business banking.  Home lending revenue, though, jumped 17% in the third quarter.  Also, Dimon said “combined debit and credit card spend showed positive year-on-year growth in September for the first time since the widespread shutdowns.”

Dimon warned that without more public assistance for the economy, unemployment would remain high and more customers could start to default on their loans.

“A good, well-designed stimulus package will simply increase the chance we get better outcomes, but there is so much uncertainty we’re not saying that that’s definitive,” Dimon said on a call with reporters.

--Citigroup said profit fell 34% in the third quarter due to weakness in its consumer banking division, as the pandemic continues to make it tough for millions of Americans and businesses to pay their bills.

The bank said third-quarter net income fell to $3.23 billion from $4.91 billion in the year ago quarter.

Citigroup posted revenue of $20.12 billion in the period.  Its revenue net of interest expense was $17.3 billion, basically in line with expectations.  The bank set aside less money for potential bad loans in the latest quarter, a sign that some of the economic strain from the coronavirus pandemic could be easing.  Citi’s provision for credit losses was $2.26 billion in the third quarter compared to $7.9 billion in the second quarter.

--Goldman Sachs Group Inc. posted its best quarterly performance in a decade by some measures, as trading moved back into the limelight and its lack of a big consumer business switched from a curse to a blessing.  Goldman posted a quarterly return-on-equity of 17.5%, its highest since 2010.  The figure shows how well a bank uses shareholder money to produce profits.

The investment bank’s performance was driven in large part by a 29% jump in trading revenue, as clients responded to news about the pandemic by shifting their portfolios.  While rivals like JPMorgan Chase have also benefited from the markets boom this year, they are far more exposed to vulnerable consumers and businesses suffering from unemployment and Covid lockdowns.  Goldman’s consumer bank is relatively small.

Goldman’s $4.6 billion in quarterly trading revenue included gains across fixed income (up 49%)  and equity markets, with the business overall accounting for 42% of the bank’s revenue, while consumer and wealth management represented 14%.

The bank set aside $278 million to cover loans that go bad, bringing its year-to-date total credit provisions to $2.8 billion.  By comparison, JPM, Bank of America and Citigroup have set aside anywhere from $10-$20 billion this year.

Goldman’s investment banking business benefited from several high-profile IPOs, including Snowflake and Rocket Companies.

The bank’s overall profit nearly doubled to $3.5 billion from $1.8 billion a year ago.

--Bank of America joined the chorus of bank officials predicting an economic recovery would improve business in the quarters ahead, after lower interest rates fueled a miss on third-quarter revenue.

BofA set aside lower provisions for potential loan losses, mirroring other Main Street peers.

“Our decision to add less to our credit reserves this quarter than in the two previous quarters was largely based on an improving economy relative to 90 days ago,” said Chief Financial Officer Paul Donofrio.

Bank of America set aside $1.4 billion to meet future losses in its commercial loan portfolio in the quarter, far less than the $5.1 billion it provided for during the June quarter. 

Revenue in the core consumer bank fell 17% to $8 billion in the third quarter, mainly due to lower interest income and reduced credit card activity.  Net interest income at the bank, a key measure of how much it can make from lending, sank 17%, showing the effects of the Federal Reserve’s moves to slash interest rates to near-zero and promise to keep them there to help spur growth.

BofA also posted weak results in its sales and trading arm, in stark contrast to JPM and Citigroup.

--Wells Fargo on Wednesday reported lower third-quarter earnings that missed expectations as the bank saw its revenue fall while it weathers the pandemic.

Wells said revenue in the three months through September fell to $18.86 billion from $22.01 billion in the prior-year period.

“Our third-quarter results reflect the impact of aggressive monetary and fiscal stimulus on the U.S. economy,” CEO Charles Scharf said.  “Strong mortgage banking fees, higher equity markets, and declining sequential charge-offs positively impacted our results, while historically low interest rates reduced our net interest income and our expenses continued to remain elevated.”

The bank recorded a $718 million restructuring charge, consisting largely of severance expenses as it reduced staff.

Net interest income fell 19% to $9.37 billion, while community-banking revenue fell to $10.72 billion from $11.24 billion, pulled down by lower net interest income, service charges on deposit accounts, and lower gains from residential mortgage loan sales.

Separately, Wells Fargo said it fired more than 100 employees suspected of improperly collecting coronavirus relief funds.  The company determined that the staffers defrauded the Small Business Administration “by making false representations in applying for coronavirus relief funds for themselves,” according to an internal memo reviewed by Bloomberg.  The review focused on employees who tapped the Economic Injury Disaster Loan program, a key part of the government’s effort to prop up businesses during the pandemic.

“We have terminated the employment of those individuals and will cooperate fully with law enforcement,” David Galloreese, Wells Fargo’s head of human resources, said in the memo.  “These wrongful actions were personal actions, and do not involve our customers.”

It’s legally possible to tap funds for businesses operated on the side, but Wells found no evidence this was the case in these instances and also adds to evidence the program was widely abused.  An earlier review by JPMorgan Chase found that more than 500 employees tapped the EIDL program, and dozens did so improperly.

--Morgan Stanley eased past Wall Street estimates for profit on Thursday, wrapping up the mixed third-quarter earnings season for big banks.  Like Goldman Sachs, Morgan Stanley capitalized on a flurry of activity in financial markets as clients bought and sold stocks in response to the pandemic, while many companies went public or raised fresh capital.

Revenue from Morgan Stanley’s institutional securities division, which is the bank’s largest breadwinner and houses its investment banking and trading businesses, rose 21% to $6.06 billion.  Equities underwriting revenue more than doubled due to nice fees from a number of high-profile IPOs.  But revenue from underwriting bonds dropped from last year due to declines in loan issuances and muted dealmaking activity.

Revenue rose 16% to $11.7 billion, while net income came in at $2.60 billion in the quarter, up from $2.06bn.

--The world’s largest asset manager, BlackRock, reported third-quarter revenue of $4.37 billion, up from $3.69 billion a year ago and well-exceeding expectations, the shares rising sharply in response.

Assets under management sit at $7.81 trillion at the end of the quarter, up from $6.96 trillion in the year-earlier period.

--Apple unveiled its first iPhone capable of using speedy 5G wireless networks, calling the next generation of phones the iPhone 12.

The new phone features a new display technology developed with Corning, called Ceramic Shield, with the company saying it has four times better “drop performance,” meaning the screen is less likely to break if you drop it.

The iPhone 12 also has improved wireless charging.

Pricing starts at $699 for the iPhone 12 mini and $799 for base iPhone 12. And there are two higher end phones with better camaras and such that run for $999 and $1,099.

But when it comes to 5G, a lot of folks are asking, ‘Yeah, it’s a little speedier…but it is worth all the hoopla, the multi-year buildup for marginally better performance, especially as the cellphone companies haven’t built out their 5G networks yet?’

--Ford Motor Co. announced it was delaying the launch of its plug-in hybrid Escape sport-utility vehicle to 2021 after thousands of similar SUVs in Europe were recalled for problems involving fires while recharging.

The Escape plug-in hybrid originally was scheduled to go into production this past spring but Ford changed it to summer after the pandemic shut factories for two months.  Now Ford is pushing it into 2021.

SUV sales overall have been soft, down 23% in the third quarter and 32% for the year.

Ford of Europe is working to fix a problem with its Kuga plug-in related to venting heat from the batteries.  There have been seven vehicle fires in Europe, triggering a recall of 20,500 Kuga models sold there.

--China’s car market recorded its first quarter of year-over-year sales growth in two years as a broad economic recovery bolstered consumer confidence and discounts boosted demand, especially for electric vehicles.

Retail passenger-car sales in the country increased by 7.9% in the three months ended Sept. 30 compared with a year earlier, the China Passenger Car Association said Tuesday.  For just the month of September, sales increased by 7.3% from last year, reaching 1.91 million vehicles.

General Motors said Monday its sales in China grew 12% in the third quarter compared with a year earlier.

Ford said Friday it sold 164,352 vehicles in Greater China in Q3, up 25.4% from the year-ago quarter.

--Johnson & Johnson on Tuesday raised its full-year outlook for earnings and sales as the consumer products and pharmaceutical giant’s third-quarter results rose despite being pressured by the ongoing coronavirus crisis.

Sales in the September quarter rose 1.7% from the prior year to $21.08 billon.  JNJ is now projecting full-year sales of $81.2 billion to $82 billion, up from a prior forecast.  Profits more than doubled to $3.55 billion in the third quarter from a year earlier.

CEO Alex Gorsky said, “Our third-quarter results reflect solid performance and positive trends across Johnson & Johnson, powered by better-than-expected procedure recovery in medical devices, growth in consumer health, and continued strength in pharmaceuticals.”

Pharmaceutical sales rose 4.7% to $11.42 billion in the period, driven by demand for Crohn’s disease drug Stelara and cancer drugs Darzalex and Imbruvica.

Medical-device sales slipped 3.3% owing to the outbreak as medical procedures continued to be delayed.  Consumer health sales rose 3.1% to $3.51 billion, lifted by sales of Tylenol and oral care products.

JNJ’s results came after it said late Monday it paused trials of a Covid-19 vaccine candidate, per the above.

--Walt Disney Co. announced a major reorganization meant to give priority to its streaming-video services and ensure they get a steady flow of the company’s best content, in a shift similar to moves made by other entertainment giants.

Disney will be creating content groups for movies, general entertainment and sports, while forming a distribution arm to determine the best platform for any given content, whether that is a streaming service, a TV network or movie theaters.

Disney is thus emphasizing its new streaming platform, Disney+, as well as Hulu, with the various programming arms aimed at feeding those two platforms, over traditional outlets, from movie theaters to broadcast and cable channels.

Disney CEO Bob Chapek said the moves are a recognition of how consumers are changing their consumption habits.

“There is a seismic shift happening in the marketplace, and you can either lead or follow and we chose to lead,” Chapek said, adding the focus is now on “what platform is best to meet those consumer needs.”

Disney said back in August it had over 60 million subscribers for Disney+ worldwide and the company has faced pressure to pivot more aggressively to its streaming business, especially given the struggles in the cable industry.

--Speaking of movies, the world’s largest movie theater chain, AMC Theatres, says it could run out of cash by the end of this year or early 2021, in the latest sign of how badly the pandemic has wrecked the film industry.

Leawood, Kan.-based AMC, which operates 598 locations in the U.S., said in a regulatory filing that, since reopening, its cinemas have suffered an 85% decline in same-theater attendance compared with that period last year.

“At the existing cash burn rate, the company anticipates that existing cash resources would be largely depleted by the end of 2020 or early 2021,” AMC said in its filing.  “Thereafter, to meet its obligations as they become due, the company will require additional sources of liquidity or increases in attendance levels.”

--Walmart is revamping its Black Friday sale by offering shoppers three chances to get the “best prices of the season.”

Walmart unveiled Wednesday how it will spread out the savings in November with “Black Friday Deals for Days.”  Instead of one sale that has traditionally started on Thanksgiving, there will be three different events online and in stores.

Walmart will be closed this Thanksgiving for the first time since the late 1980s and other retailers including Target and Best Buy are following suit.

Walmart’s three November sales all start online first and then continue in stores. The first sale starts online at 7 p.m. ET Nov. 4, the second starts Veterans Day and the third begins the night before Thanksgiving.

“The doorbuster deals will be online, but we’re also going to have great prices in-store,” the company said, making for a “safer and more convenient way to shop” as well as helping to manage in-store traffic.

According to a holiday survey from DealAid.org, 60.2% of consumers plan to shop in-store during the 2020 holiday shopping season compared to 87.4% in 2019.

--The National Retail Federation said retailers are rushing to import holiday inventory.  U.S. ports processed about 2.1 million cargo-container equivalents in August, up 8% from a year earlier. That is the highest number of containers imported monthly since the NRF began tracking imports in 2002, the group said.

“Some holiday merchandise that normally wouldn’t arrive until Halloween is already here,” said Jonathan Gold, the NRF’s vice president for supply chain and customs policy.

PricewaterhouseCoopers LLP didn’t release a holiday sales prediction this year. A survey from the consulting firm showed 40% of shoppers plan to spend less this year than last.  Deloitte released two holiday sales predictions – a 0% to 1% sales increase at the low end and a 2.5% to 3.5% sales increase at the high end – depending on the strength of the economy and consumer confidence.

Executives say tension and uncertainty around the election could dampen spending.  Some businesses are also preparing for social unrest after the election.

--Personal computer sales rose in the third quarter owing to the surge in remote work, study and home entertainment during the pandemic, which drove the strongest growth in a decade in the U.S., according to industry data.

Much of the growth came from Chromebooks, with a roughly 90% surge in the third quarter driven by distance learning, per preliminary data from Gartner Inc., one of the firms that tracks PC shipments.

Gartner doesn’t include Chromebooks in its traditional PC market results, but it said including Chromebooks, world-wide PC shipments rose around 9% year over year in the quarter, with Chromebooks representing about 11% of the combined PC/Chromebook market.

Data from research firm Canalys showed notebook and mobile workstation shipments also drove growth in the quarter, while sales of desktops and desktop workstations declined 26%.

International Data Corp. recorded growth in notebook shipments driven by consumer sales and education, but the desktop segment saw a year-over-year decline with gaming offering some respite.

Overall, PC shipments rose 3.6% to 71.4 million units in the third quarter, driven by an 11.4% growth in the U.S., the first time in a decade that the region has seen double-digit growth, according to preliminary data from Gartner.

IDC pegged the increase at 14.6% to 81.3 million units, based on its preliminary data.

--The world’s largest container shipping firm, AP Moller-Maersk, raised its full-year earnings outlook for a second time this year after cutting costs including 2,000 jobs and as demand improves.

The Copenhagen-based company said its full-year adjusted earnings were expected to be between $7.5 billion to $8 billion.

The company said in a statement: “Trading conditions for the quarters ahead remain subject to a higher than normal volatility given the disruptions caused or potentially being caused by Covid-19.”

Volumes in the Ocean business slipped 3% year-over-year, but this was better than its forecast for a mid-single-digit contraction.

--Billionaire Robert Smith (a frequent guest on CNBC), will pay about $140 million and acknowledge wrongdoing to end a four-year U.S. tax investigation involving assets held in offshore tax havens, a story that Bloomberg News first reported in terms of a tax investigation into Smith in August.

Smith, the CEO of the private equity firm Vista Equity Partners, informed some executives and investors of the pending agreement on Wednesday, as reported by Bloomberg Thursday.  Smith, 57, is cooperating with related tax investigations as part of a deal in which he will admit misconduct but won’t be prosecuted.

Smith, with a net worth of $7 billion, is the wealthiest Black person in America.  He gained widespread acclaim last year when he vowed to pay off the student loans of the graduating class of Morehouse College.

The Smith case is tied to an offshore foundation tied to Robert Brockman, a Houston software businessman, with prosecutors saying they are investigating “a major and very large tax fraud” in the U.S., believing $2 billion of revenue was fraudulently concealed, according to Bermuda court records.

Brockman was then charged on Thursday; the indictment alleging he appointed nominees to manage the off-shore entities for him as a means of hiding his involvement, saying he even went so far as to establish a proprietary encrypted email system and use code words such as ‘Permit,’ ‘Red fish’ and ‘Snapper’ to communicate. 

Well, if you’re going to commit tax fraud, no more pleasant place to do same than lovely Bermuda, I always say.  And who doesn’t like Red fish, especially blackened?

--New Jersey’s fast-growing sports betting market blew past its own national record in September, taking in more than $748 million in bets from sports gamblers finally able to wager on football amid the pandemic.

Figures released Thursday from the New Jersey Division of Gaming Enforcement show Atlantic City’s nine casinos and the three horse racing tracks that offer sports betting handled over $748 million in bets, easily surpassing the national monthly record they set just a month earlier, when $668 million was wagered on sports in August.

The previous U.S. record of $614 million was set in Nevada in Nov. 2019.

The $748 million includes the total amount of bets accepted by the casinos and tracks.  After paying off winning bets and expenses, they kept $45 million of that total.

Foreign Affairs

China: Beijing said on Thursday the United States was seriously undermining peace and stability in the Taiwan Strait after a U.S. Navy destroyer sailed through the waters amid escalating tensions between Beijing and Taipei.

Zhang Chunhui, spokesman for China’s eastern theater command, said in a statement that the Chinese military followed and monitored the USS Barry when the destroyer made what the U.S. Navy called a “routine Taiwan Strait transit” on Wednesday.  Zhang said the United States should stop its provocative words and actions in the Taiwan Strait, adding the Chinese military will resolutely defend the country’s territorial integrity and maintain peace and stability in the Taiwan Strait.

Meanwhile, the White House is moving forward with more sales of sophisticated military equipment to Taiwan, telling Congress on Tuesday that it will seek to sell Taipei MQ-9 drones and a coastal defensive missile system.

A Chinese foreign ministry spokesman Zhao Lijian said U.S. arms sales to Taiwan severely damaged China’s sovereignty and security interests, and that “China will make a legitimate and necessary response according to how the situation develops.”

Taiwan has been seeking to procure sea mines from the U.S. to deter amphibious landings, or immediate attack.

China’s top diplomat, Wang Yi, urged Asian countries to remain “vigilant” over the risk of U.S. strategy stoking geopolitical competition in the South China Sea and other parts of the region.

In a visit to a military base in eastern Guangdong province on Tuesday, President Xi Jinping said marines need to focus on “preparing to go to war” and that they have an “important responsibility” to safeguard the country’s territory, sovereignty and maritime interests.

Wednesday, Xi went to Shenzhen to take part in ceremonies marking the 40th anniversary of the special economic zone, where he was seen coughing violently during a speech.  As the Daily Mail reported, State TV repeatedly cut away from Xi during the bouts of coughing, but caught the moment he lifted his hand to his mouth.  So there are questions about his health

North Korea: It was January 1, 2020, that Kim Jong Un gave his annual New Year’s address wherein he announced that North Korea was “developing a state-of-the-art weapons system possessed only by advanced countries.”

He specifically referred to a “strategic” – meaning nuclear – weapons system under development.

So at Saturday’s military parade marking the 75th anniversary of the founding of its ruling Workers’ Party, wherein Kim addressed an unusual predawn spectacular, appearing emotional at times as he thanked the military for working hard to respond to natural disasters and to prevent a coronavirus outbreak, the regime also unveiled a monstrous new ICBM.

Editorial / Washington Post

“Iran, Secretary of State Mike Pompeo declared in an interview Friday, is ‘the greatest threat, frankly, to Americans all across this great country.’ Around  the same time he delivered that dubious assessment, North Korea was staging a military parade to celebrate the 75th anniversary of its ruling party – and displaying, for the first time, what appears to be a huge new intercontinental ballistic missile that could be capable of carrying multiple nuclear warheads to the U.S. homeland.

“For the record: Iran does not yet have an atomic bomb, though it has more than quintupled its stockpile of enriched uranium since 2018, when President Trump withdrew from the multilateral accord limiting its nuclear program.  Nor does Tehran have a missile capable of reaching the continental United States.  North Korea, in contrast, has continued to expand both its arsenal of nuclear warheads and its missile capabilities while Mr. Trump has romanced its murderous ruler, Kim Jong Un.  Mr. Pompeo’s claim underlined that, in assessing risks to U.S. security, the Trump administration is dangerously out of touch with reality.

“Experts are still assessing photographs of the giant rocket displayed early Saturday in Pyongyang on a truck with 11 axles.  It is thought to be an expanded version of a mobile ICBM known as the Hwasong-15, which North Korea successfully tested in November 2017.  The earlier missile is believed capable of travelling 8,000 miles and striking any target in the continental United States.  Experts believe the more powerful version could carry two to three times the payload, which means it could be intended to deliver multiple warheads, or decoys to throw off U.S. missile defenses.

“To be sure, the missile has not been tested yet; it’s possible what appeared in the parade was merely a mock-up.  If it is operational, it may be vulnerable to preemption, because it relies on liquid fuel and because its sheer size makes it easier to spot.  Still, the appearance in North Korea of what would be the world’s largest mobile ICBM is vivid evidence of Mr. Trump’s failure to contain, much less eliminate, the regime’s nuclear program and the threat it poses to the United States.”

Patrick Tucker / Defense One

“Two ballistic missiles made their debut in Saturday’s North Korea military parade: a sub-launched weapon and what appeared to be an enormous new intercontinental ballistic missile borne on a long, 11-axle mobile launcher. Analysts have long scrutinized Pyongyang’s parades for what they reveal about the military capabilities of one of the world’s most secretive regimes – but the Oct. 10 event also offered the latest and clearest signal yet that the Trump administration’s efforts to curb North Korea’s nuclear ambitions have failed.  One expert called the new ICBM a destabilizing capability that would exacerbate tensions between North Korea and the rest of the world, particularly the United States.

“The new ICBM isn’t exactly a surprise, said Jeffrey Lewis, a scholar at the Middlebury Institute of International Studies at Monterey and the founding publisher of the Arms Control Wonk blog.  North Korea tested liquid-fuel rockets last December at the vertical engine test stand at the Sohae testing site.  ‘It was a really big test. They bothered to announce it. But for whatever reason,’ it didn’t get much coverage in international media, Lewis said.

“Lewis believes that the missile is intended to carry multiple warheads, another new capability. That means North Korea is improving the likelihood of slipping a nuclear weapon past the ground-based midcourse defense interceptors that the United States would deploy against an incoming ICBM.

“ ‘It’s so much cheaper to add warheads than interceptors,’ said Lewis.

“He acknowledged that the missile hasn’t been flight-tested yet, so there’s no way to tell if it actually works. But it need not be 100-percent reliable to post a large threat that could change U.S. calculations.  ‘We are standing by while they deploy very destabilizing capabilities,’ he said….

“If Washington does not find a way to restart talks, Lewis said, Pyongyang will continue to develop weapons that put U.S. forces and territory more and more at risk – and therefore continue to raise the incentive for the U.S. to strike preemptively.  That reality is surely a part of the North Korean calculus as well, said Lewis, who has written a novel about a North Korean regime concluding that it must launch nuclear weapons to survive.

“ ‘We should not be allowing a situation to exist in which there are strong incentives to go first’ into conflict, he said.”

A senior U.S. administration official called North Korea’s display of a previously unseen ICBM “disappointing” and called on the government to negotiate to achieve a complete denuclearization.

Azerbaijan and Armenia: So much for last Saturday’s ceasefire.  On Wednesday, Azerbaijan accused Armenia of trying to attack its gas and oil pipelines and warned of a “severe” response as tensions rose sharply around the fraying supposed lull in fighting.

Armenia denied the claim and said Azeri forces were trying to seize control of the tiny territory of Nagorno-Karabakh, which is governed by ethnic Armenians but internationally recognized as part of Azerbaijan.

Russia tried to silence the angry rhetoric and appealed to both sides to observe the ceasefire it brokered over Nagorno-Karabakh.

But Moscow and Turkey also exchanged recriminations over the fighting, as fears grow the two big  regional powers could be sucked into the conflict that is being fought close to Azeri pipelines which carry gas and oil to international markets.

“Armenia is trying to attack and take control of our pipelines,” Azeri President Aliyev said in an interview with a Turkish broadcaster.  “If Armenia tries to take control of the pipelines there, I can say that the outcome will be severe for them.”

Azerbaijan has superior weaponry in this fight. But Russia has a defense pact with Armenia, though there are no plans as yet to do more than station some military observers in the disputed area.

The defense ministry of the Nagorno-Karabakh region said on Friday it had recorded another 29 casualties among its military, pushing the military death toll to 633 since fighting with Azeri forces erupted on Sept. 27.

Afghanistan: A week ago President Trump promised to abruptly pull all U.S. troops out of Afghanistan by year’s end, causing confusion as the Pentagon indicated that it had  received no such orders to alter plans for a conditions-based withdrawal and Afghan negotiators voiced concern that a hasty exit would intensify challenges to peace talks with the Taliban.

Trump then doubled down in his campaign appearances all this week. 

But today, National Security Adviser Robert O’Brien said that some 2,500 troops will remain in Afghanistan beyond Christmas, seeking to clarify a series of mixed messages from both senior Trump administration officials and dismissing a tweet from the president last week.

Editorial / Washington Post

“In the past few days, President Trump has produced a torrent of provocative statements that have been extreme even by his standards.  Among other things, he called on Attorney General William P. Barr to indict former vice president and Democratic presidential nominee Joe Biden and former president Barack Obama; complained that Secretary of State Mike Pompeo had not unearthed more of Hillary Clinton’s emails at the State Department; and said Democratic vice-presidential nominee Kamala D. Harris was a ‘monster’ and a ‘communist’ who would quickly replace Mr. Biden if he were elected.

“It’s sad testimony to Mr. Trump’s degradation of political discourse during the past four years that relatively little attention was paid to these toxic outbursts. Few expect the actions he called for or predicted to occur. Yet one of the president’s statements stood out for its potential to torpedo one of the most significant national security policies.  ‘We should have the small remaining number of our BRAVE Men and Women serving in Afghanistan home by Christmas!’ he tweeted Wednesday evening. The next morning, he reiterated in a Fox Business interview that the troops will be ‘home by the end of the year.’

“As has happened before, Mr. Trump’s troop withdrawal announcement took the Pentagon by surprise; PBS cited senior officials as saying they had received no order to pull out the 4,500 remaining U.S. soldiers in Afghanistan by the end of the year and were not even sure they could do so safely.  Even Mr. Trump’s national security adviser, Robert C. O’Brien, must have been flummoxed: He delivered a speech hours before the president’s tweet saying that U.S. forces would be reduced by 2,500 by early next year, not withdrawn completely.

“Perhaps, like his call for the jailing of his opponent in the upcoming election, Mr. Trump’s words will not be acted on; in the past, his generals have deftly diverted his attempts to remove all U.S. forces from Syria. But the statements are almost certain to have the effect of undermining one of his administration’s few solid accomplishments abroad, the convening of peace talks last month between the Afghan government and the Taliban.  As part of the deal to begin the negotiations, the United States reduced its forces in the country by half, and promised to remove them all by next May – provided that the Taliban met several conditions, including breaking its ties with al-Qaeda.

“According to U.S. commanders and Mr. Trump’s own special envoy to Afghanistan, those conditions have not been met.  The talks themselves have gotten off to a predictably slow start and have not yet produced results.  Yet Mr. Trump is now sending the insurgents the message that they need only wait until next year – or maybe Christmas – and they will get the U.S. withdrawal they have sought without having to make any meaningful concessions.

“Mr. Trump’s reckless pronouncement may or may not have any effect on the U.S. voters he no doubt was aiming to impress.  But, like so much of what the president has been doing and saying, it will please America’s enemies.”

Belarus: The government put opposition leader Sviatlana Tsikhanouskaya on its wanted listed for allegedly making calls to overthrow the constitutional order, the interior ministry said on Friday.  Tsikhanouskaya fled to neighboring Lithuania shortly after a disputed Aug. 9 election and has since met European political leaders and called for her country’s longtime president Alexander Lukashenko, to leave power.  She later appeared on Russia’s wanted list as well.

Meanwhile, the protests against President Lukashenko continue, with security forces having detained more than 13,000 people during a post-election crackdown.  Today, a senior police official said on television that officers would use firearms if needed against demonstrators ahead of the next big weekly protest on Sunday, further raising the stakes in the standoff.

Kyrgyzstan: Parliament voted today to end a state of emergency imposed by its ousted president as interim Prime Minister Sadyr Japarov, a Kyrgyz nationalist, took temporary control of the presidency of one of Russia’s key partner states (which is why this story is worth mentioning).

Former president Neenbekov, who resigned on Thursday, had ordered troops to be deployed in Bishkek last week after days of unrest triggered by parliamentary elections on Oct. 4, which the opposition said were fraudulent.

But now the prime minister is also president, at least temporarily.  The parliamentary election will be rerun later this year.  Then there would be a new presidential election.

Kyrgyzstan borders China so this whole situation bears watching for another reason.

Random Musings

--Presidential polls….

Gallup: No update…46% approve of President Trump’s job performance, 52% disapprove; 94% of Republicans approve, 39% of independents (Sept. 14-28).
Rasmussen: 48% approve of Trump’s performance, 50% disapprove (Oct. 16).

--A new NBC News/Wall Street Journal national poll of registered voters finds Biden is ahead by 11 points in the survey, 53% to 42%, following a tumultuous few weeks. 

The survey finds Trump rebounding from a 14-point deficit earlier this month in a poll taken immediately after the debate with Mr. Biden, but still in a weaker position than in September, when he trailed by 8 points.

Some 50% say they are better off than they were four years ago, compared with 34% who say they are worse off.  However, 58% say the country is worse off than four years ago, compared with 38% who say it is better off.  Moreover, 62% of voters say they country is headed in the wrong direction.

The No. 1 election issue among those surveyed was the economy, and voters gave Republicans a 13-point advantage over Democrats as the better economic manager.  Yet, the pollsters said voters this election cycle don’t seem to be voting based on that issue alone.

Biden’s biggest advantages are among Black voters (he gets 91 percent to Trump’s 4 percent), Latinos (62 percent to 26 percent), women (60 percent to 34 percent), voters ages 18 to 34 (57 percent to 34 percent), whites with college degrees (57 percent to 38 percent), seniors (54 percent to 44 percent) and independents (46 percent to 39 percent).

Trump holds the edge among men (50 percent to 45 percent), whites (50 percent to 46 percent) and whites without college degrees (59 percent to 38 percent).

Trump receives an overall approval rating of 44 percent.

--A new Washington Post/ABC News national poll has Biden leading among likely voters 54% to 42%.

Trump’s overall approval rating is at 45 percent, 54 percent disapproval.

By a 58 to 41 margin, voters disapprove of the president’s handling of the pandemic.  54 percent approve of his handling of the economy, vs. 45 percent who disapprove.

In the Post/ABC survey, Biden holds a 59 to 36 percent edge among female likely voters, while Trump and Biden split men, 48 percent each.

In 2016, men backed Trump by 11 points, women favored Hillary Clinton by 13.

Independents back Biden by 52 percent to 40 percent.  In 2016, Trump beat Clinton by four points among self-identified independent voters.

Suburban women favor Biden by a 62 to 34 margin.  Suburban men lead toward Trump, 54 to 43.

--In a series of New York Times / Siena College Battleground Polls, likely voters….

Michigan: Biden 48% - Trump 40%

Wisconsin: Biden 51% - Trump 41%

North Carolina: Biden 46% - Trump 42%

Pennsylvania: Biden 49% - Trump 42%

Florida: Biden 47% - Trump 42%

Biden has a 17-point lead among independent voters in Michigan.  By a 61-30 margin, voters say the President’s lack of taking adequate precautions is to blame for his getting Covid-19, a view held by more than 90 percent of Democrats, more than two-third of independents, and even a quarter of Republicans.

In a key Senate race, the Times/Siena poll has Michigan incumbent Democrat Gary Peters neck-and-neck with Republican challenger John James, 43 to 42 percent.

The Times / Siena College poll of South Carolina voters has incumbent Republican Sen. Lindsey Graham ahead of Democratic challenger Jamie Harrison 46% to 40%.  [Trump leads Biden in the survey in S.C., 49% to 41%.]

--A Reuters/Ipsos series of polls in battleground states has Biden with a 7-point lead over Trump in Pennsylvania, 51-44, among likely voters, with a majority saying the former vice president would do a better job of handling the pandemic, 51% to 42%.

Wisconsin: 51-44 Biden here as well.

Florida: Biden 49% to 45%.

Arizona: Biden 48% to 46%.

Michigan: Biden 51% to 43%.

North Carolina: Biden 47%, Trump 47%.

Reminder…in 2016, Trump won all the following:

Michigan: 47.5 - 47.3 percent
Pennsylvania: 48.2 - 47.5
Wisconsin: 47.2 - 46.5

Arizona: 48.7 - 45.1
North Carolina: 49.8 - 46.2
Florida: 49.0 - 47.8

--Joe Biden and his party raised a record-shattering $383 million in September for his presidential bid, bolstering his financial advantage over President Donald Trump ahead of the Nov. 3 election.  The campaign had $432 million in cash at month’s end for the final five weeks of the race, campaign manager Jen O’Malley Dillon said on Twitter.  The haul outstripped the $365 million that Democrats raised in August, which was itself a monthly record for any U.S. presidential campaign.

“To every person who chipped in a few dollars last month – thank you,” Biden wrote on Twitter in announcing the sum.  “I’m incredibly humbled.”

The Trump campaign then announced today it raised some $247.8 million in September, but it pulled in $210 million in August along with the Republican National Committee.

--In a separate NBC News/Wall Street Journal poll, about 70% of registered voters surveyed said they would take a Covid-19 vaccine, although many want to wait until it has been available for a while to see if there are major problems or side effects.

The survey found that 20% of respondents said they would take a vaccine as soon as one becomes available, while about half the respondents wanted to wait until they learned more information about the shot.

17% said they would not take a vaccine at all, according to the poll. Ten percent said they would eventually take a vaccine, but only if it was mandatory.

So 27% wouldn’t want to get vaccinated, which compares with earlier polls showing about a third of people surveyed were opposed to same.

If too many people refuse to get the shots, businesses, schools and other establishments won’t be able to safely reopen, according to health authorities.

Personally, I will take the vaccine, but I’m not going to be first in line to do so, nor do I deserve to be. Take care of every first responder, schoolteacher, and everyone in a nursing home and other elderly long before someone like me.  And any good-minded person is expecting this to be the order in line…but things don’t go according to Hoyle in this nation these days. 

--C-Span’s Steve Scully, who was to have moderated the second debate between Trump and Biden, was suspended by the network after he admitted to lying about his Twitter account being hacked last week.

Scully had appeared to solicit advice from a former Trump adviser, Anthony Scaramucci, after President Trump criticized Scully, calling him a “Never Trumper.”

Scully responded, tagging Scaramucci, asking him “should I respond to Trump.”

Scully, in a statement, said he had sent the tweet “out of frustration” after “relentless criticism” regarding his role as moderator, including from President Trump.

“The next morning when I saw that this tweet had created a new controversy, I falsely claimed that my Twitter account had been hacked,” he wrote, apologizing for these two “errors in judgement.”

Soon after Scully’s suspension was announced, Trump responded to the news, heralding his own “good instincts.”

--We note the passing of Roberta McCain, mother of the late Senator John McCain, who died at the age of 108.

“It is with great sadness that I announce the death of my wonderful Mother In-law, Roberta McCain,” Cindy McCain wrote on Twitter.  “I couldn’t have asked for a better role model or a better friend.  She joins her husband Jack, her son John and daughter Sandy.”

Roberta McCain was cherished by her late son.  Her vibrance, charm and penchant for speaking her mind made her a popular attraction during her son’s unsuccessful 2008 president campaign.

McCain had taken his mother on the trail as a living response to those who thought that at age 71 he was too old to be president.  She was 95 at the time, proving that longevity was a family trait, he said.

--Australia’s Great Barrier Reef has lost more than half of its corals since 1995 due to warmer seas driven by climate change, a study has found.

Scientists found all types of corals had suffered a decline across the world’s largest reef system.

The steepest falls came after mass bleaching events in 2016 and 2017.  More mass bleaching occurred this year.

“There is no time to lose – we must sharply decrease greenhouse gas emissions ASAP,” the researchers said.

The study, published in the journal Proceedings of the Royal Society B, was conducted by marine scientists at the ARC Centre of Excellence for Coral Reef Studies in Queensland.

Scientists assessed the health and size of coral colonies across the reef from 1995 to 2017.

They found populations had dropped by more than 50% in all coral sizes and species, but especially in branching and table-shaped corals.

These are the large, structural species which usually provide habitats for fish and other marine life.

---

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

God bless America.

---

Gold: $1902
Oil: $40.76

Returns for the week 10/12-10/16

Dow Jones  +0.1%  [28606]
S&P 500  +0.2%  [3483]
S&P MidCap  +0.1%
Russell 2000  -0.2%
Nasdaq  +0.8%  [11671]

Returns for the period 1/1/20-10/16/20

Dow Jones  +0.2%
S&P 500  +7.8%
S&P MidCap  -3.2%
Russell 2000  -2.1%
Nasdaq  +30.1%

Bulls 56.6
Bears
21.2 [prior week’s official split was 54.6 / 23.2]

Hang in there…Mask up, wash your hands.

Brian Trumbore