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06/27/2020

For the week 6/22-6/26

[Posted 10:00 PM ET, Friday]

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Special thanks to Kirk N. for his ongoing support. Go Deacs!

Edition 1,106

With new daily highs this week in the three most populous states in the country – Florida, Texas and California – there have been moves to pull back on the reopening, or in the case of Texas, “pause.”

Texas, which has been at the forefront of states’ efforts to reopen after shutting down to curb the spread of the coronavirus, has seen one of the biggest surges in new cases, reporting over 6,000 new cases in a single day on Wednesday.

“This temporary pause will help our state corral the spread until we can safely enter the next phase of opening our state for business,” Texas Gov. Greg Abbot said in a statement.

Texas has also set record hospitalizations for 14 days in a row; with elective surgeries in the major cities suspended to free up hospital bed space.  Other states, such as Oregon and Utah, have paused or slowed lifting restrictions that have decimated local economies.

And then this afternoon Texas and Florida suddenly closed the bars, while Texas is also reducing restaurant indoor capacity from 75% to 50%; more than just a pause.  The state’s positivity rate on tests has been above 10% this week.

Florida announced a startling new 8,942 new cases today, vs. a previous record of 5,511 set on Wednesday.

Health and Human Services Secretary Alex Azar early in the week played down the surges as “localized.”  “So we’re working aggressively with states and local leaders in this situation but it’s important for the American people to know this is a localized situation, the counties that are in hotspots are 3% of American counties,” Azar told Fox News.

Meanwhile, New York, New Jersey, and Connecticut, ordered travelers from eight states, including Florida, Texas, and California, to self-quarantine for two weeks on arrival, though there is no real way to enforce this.  It’s more about moral suasion. 

Gov. Andrew Cuomo said of our tri-state region, “Together we bent the curve.  And we aren’t stopping now.”  Cuomo then said of President Trump and Republicans that they put politics and business above science in their handling of the outbreak.

“You played politics with this virus and you lost,” he said on CNN.

Centers for Disease Control and Prevention Director Robert Redfield estimated Thursday that for every one case detected, health officials are probably missing 10 other coronavirus cases.

“We’re still in the first wave,” he said during a press conference.  But as opposed to the outbreak two or three months ago, when many deaths were among older people and those with underlying medical conditions, now, the CDC is seeing a greater proportion of cases diagnosed in younger people.

“For the Fourth of July, which is a family event, we want to emphasize that it’s really important that we get back to being vigilant as our collective commitment…to protect vulnerable friends, family and the community,” Redfield said.

President Trump told a crowd at a shipyard in Marinette, Wisconsin, on Thursday, after another record day of coronavirus cases, that it was the result of “GREAT TESTING,” not of a contagion that appears to be spreading fastest in states that rushed to ease lockdown orders.

“If we didn’t test, we wouldn’t have cases. But we have cases because we test. We’ve done an incredible, historic job.”

Former Vice President Joe Biden replied: “Donald Trump needs to stop caring about how he looks and start caring about what’s happening to the rest of America.  He can’t bend it to meet his political wishes. There are no miracles coming,” Biden said.

“He’s like a child who can’t believe this has happened to him, and all his whining and self-pity,” Biden continued.  “This pandemic didn’t happen to him.  It happened to all of us. His job isn’t to whine about it.  His job is to do something about it.”

“The president wants us to believe there’s a choice between the economy and public health,” Biden said.  “Amazingly, he still hasn’t grasped the most basic fact of this crisis: to fix the economy, we have to get control over the virus.”

On the economy, President Trump, in a recorded statement last weekend, said:

“As many of you know, our country is coming back very, very strong economically.

“The jobs numbers from two weeks ago were record setting – record setting increase. We’ve never had anything like it. Record from day one. Nobody’d ever beaten it.”

Ah, Mr. President?  We saw a record gain in jobs in May of 2.5 million. That is true.  This followed a LOSS of 20.7 MILLION in April!!!

Trump continued:

“When we had to close it up to save millions of lives, we were able to open it, and now we’re doing well.

“So I just want to thank everybody. It’s been an interesting period of time, it’s been terrible so many lives have been lost.  We’ll never forget those incredible people.  But they will not have died in vain.

“Our country will go on, and we’re gonna be stronger than ever before.”

The comment on not having died in vain is perhaps the single dumbest statement made by an American president….ever.

Today, Mike Pence and the Coronavirus Task Force, and its “whole of government approach,” gave its first public update and news conference in over two months and it was beyond pathetic.

I excoriated the vice president last week after his Wall Street Journal op-ed days earlier that touted how cases had been coming down across the nation to the “20,000” level.

So let’s just look at the last three days.

June 24…39,103 new positive cases of the coronavirus in the U.S., besting a previous record of 39,072 set on April 24!
June 25…40,184
June 26…47,230! …20,000 alone in Florida, Texas and California combined.

Both Vice President Pence and President Trump have been touting a falling mortality rate, Pence today saying that one day this week (Sunday) it was under 300.

But as I’ve told you, any moron knows that the figures in the U.S., and much of the world for that matter, are lower Saturday through Monday due to a lack of full reporting of the statistics over a weekend and we all wait around for “Catch-up Tuesday” and the succeeding three or four days to see where we really stand.  So the death tolls Tuesday through Thursday this week were 863, 808 and 649….and then 663 today.

It is true that treatments such as remdesivir and dexamethasone appear to help reduce the rate of death in those most seriously ill.  Thank god. And our medical professionals have learned from experience how to better treat each case.  But it’s July and we obviously aren’t close to having a widely available vaccine…one that is proven to be safe.

And you need to pause here, because the story not being told, simply because no one knows, is not just the rate of death of Covid patients but also the long-term side effects.  We are barely beginning to understand what happens to the lungs, kidneys, heart, brain, intestines…how long the coronavirus incubates and “hides out,” attached to one of our organs, perhaps, until something triggers its reemergence, like perhaps the regular flu in the fall and winter, I can’t help but muse.

No one should want to catch this virus.  It treats each one of us differently.  We are beginning to see victims who have been essentially bedridden for 90 days, even if they weren’t sick enough to be hospitalized.  There are fears among medical professionals that young people, while not appearing to come down with severe symptoms, long-term may end up dealing with chronic fatigue.

But we just don’t know.

So in the midst of this s---show, including an economy that is not going to experience a V-shaped recovery, President Trump traveled to Tulsa last Saturday for his first big campaign rally in over 100 days, an overflow crowd expected at the BOK Center, and as one writer put it, it ended up being a #MAGA-flop!

Let’s be generous…we’ll say half the 19,000 seats were filled, and there was no overflow crowd that the president and vice president were supposed to address prior to going into the Center for the main event.  Embarrassingly the side rally was scrapped, an expensive stage built for the warm-up act dismantled.

President Trump had boasted all week of one million supporters that had RSVP’d to the event, which was billed as the “Great American Comeback.”

Once the president did take the stage, reportedly shocked and angered by the size of the crowd, rather than rally a nation beset by the pandemic, recession and a racial justice movement roiling communities across the country, Trump fell back on his same old red meat…only now his tired act is nothing but rancid, sulfuric…as well as incredibly boring.

He brought up his Golden Oldies of “VA Choice,” as I told you would be the case, with a death toll among Veterans in VA facilities from the coronavirus at 1,574 tonight.  “We have an approval rating among Veterans of 91%!”  Where do you get this?  Not anymore, if ever true.

“We will never kneel for our national anthem!”  Ilhan Omar needs to go back to Somalia.  “No administration has done more than we have in the first 3 ½ years.”  “I saved $billions on the new Air Force One…which is actually two planes, you know.” Angela Merkel sucks…we will get along with Russia….

The coronavirus was called the “Kung flu,” which I can guarantee Beijing will never forget.  Think of this next time one of our power plants gets hacked, or one of our satellites is incapacitated…the GPS for our weapons systems disabled.

[It was also beyond depressing to see the students in Arizona at the follow-up Trump rally a few days later cheer wildly when he mentioned “Kung flu,” having egged him on to say it.]

Meanwhile, at least six members of Trump’s campaign advance team tested positive for Covid-19, plus two on his Secret Service detail, meaning dozens of other agents had to quarantine.

The president’s performance the last few months in particular amid the pandemic has been pathetic and disgraceful.  He has failed the test of leadership, royally.  We are indeed the laughingstock of the world.  Trump’s rhetoric has been vile and despicable.

And the reopening has been an unmitigated disaster.  Overall, the president is going to be remembered through the ages for an historically atrocious job, a sickening tragedy.

This isn’t about Joe Biden, Crooked Hillary, or Barack Obama.

This is all about Donald Trump.

The president was supposed to be in New Jersey this weekend, at his Bedminister club.

But this afternoon he suddenly tweeted he “wanted to stay in Washington, D.C. to make sure LAW & ORDER is enforced. The arsonists, anarchists, looters, and agitators have been largely stopped…

“…I am doing what is necessary to keep our communities safe – and these people will be brought to justice!”

Covid-19 Global Death Tolls (as of tonight)

World…496,796
USA…127,640
Brazil…56,109
UK…43,414
Italy…34,708
France…29,778
Spain…28,338
Mexico…25,779

[Source: Worldometers.info]

Covid Bytes

--Demand for the generic drug dexamethasone has surged in a matter of days since researchers in the UK reported that the steroid reduced deaths in very sick Covid-19 patients, according to a major drug-purchasing firm.

Orders for dexamethasone surpassed 2.8 million last week as the University of Oxford released study results on June 16, up from nearly 397,500 the prior week, which was more typical, according to Vizient Inc., one of the largest group-purchasing organizations in the U.S. for hospitals.

Meanwhile, the U.S. Food and Drug Administration has authorized the emergency use of a different drug, remdesivir from Gilead Sciences Inc., because it was shown in a trial to speed up the recovery time of hospitalized Covid-19 patients.

The FDA hasn’t greenlighted the use of dexamethasone as yet, and hospitals have taken different positions on whether to incorporate the drug into care, industry officials say.

South Korea added remdesivir to its coronavirus treatment guidelines in its first revision of recommendations since the outbreak began but urged caution in the use of dexamethasone.

Dr. Song Dae-sub, professor of pharmacy at Korea University, said: “An excessive use of dexamethasone can trigger different side effects as it tamps down the immune system along with inflammation, possibly leading to even cataracts or glaucoma.”

Korean health authorities also advised the dropping of hydroxychloroquine after a study found it did not provide any benefit.

--IHME Director Dr. Christopher Murray said their research shows the death toll from the coronavirus in Latin America could skyrocket to 388,300 by October, with Brazil and Mexico seen accounting for two-thirds of fatalities.  Deaths in the region surpassed 100,000 this week, with Brazil and Mexico accounting for 80,000+ thus far.

Argentina, Chile, Colombia, Ecuador, Guatemala and Peru are each forecast to see over 10,000 fatalities.  Peru is already at nearly 9,000.

The IHME (out of the University of Washington) said Brazil in particular could drastically reduce its projected fatalities if they just wore masks.

--Iraq is beginning to get overwhelmed as cases spiked seven-fold since the end of May, deaths also spiking.  The cases have been rising after the Muslim holy month of Ramadan, when families and friends typically get together to break the daylong fast.

Among the recent dead was a beloved Iraqi soccer star, Ahmed Rahdi, 56, who died due to Covid-19 complications.

In Baghdad, the vast exhibition grounds have been turned into a large field hospital.

--Spain has reopened its borders, including to British tourists who won’t have to quarantine.  This is nuts, but the people of Spain, their tourism-driven economy in shambles, are desperate and the government is in deep trouble unless it gives in.  A potential recipe for disaster.

--I literally follow every country as closely as any single person can and today Ukraine, four full months into it, reported its first day with 1,000 new cases.  That’s worrisome.

--The largest U.S. meatpacking union said on Thursday that 93 meatpacking and food-processing workers have died from Covid-19 and continue to face risks.  The United Food and Commercial Workers International Union, which also represents workers at grocers and drug stores, told reporters on a call that more than 196 of its members have died in the pandemic.

--A surprise birthday party turned into a nightmare for a Texas family – with the gathering sparking a coronavirus cluster that has now infected 18 relatives, according to a report.

Seven family members who attended the May 30 surprise party contracted the bug, but then took it home and infected nearly a dozen others, KHOU-TV reported Thursday.

---

Ken Burns…and the Reckoning

Mr. Burns is right up there among modern, living American heroes/historians along with David McCullough.

So the other night Burns was interviewed by CNN’s Chris Cuomo and Burns said the country is “in the middle of an enormous reckoning” and endorsed the removal of statues of Confederate soldiers and the renaming of military bases.

“I think we’re in the middle of an enormous reckoning right now in which the anxieties and the pains and the torments of injustice are bubbling up to the surface,” Burns said. “It’s very important for people like me, of my complexion, to be as quiet as possible and to listen.  What I know from my reading of history is that the Confederate monuments have to go.”

Burns then noted that much of the Confederate iconography was installed during waves of backlash to the freeing of the slaves and enfranchising of African-Americans that occurred decades after the Civil War.

“They’re an attempt to rewrite history and to essentially celebrate a false narrative about what happened during the Civil War and to send the wink-winks, the dog whistles, as we’re fond of saying today, across the generations of what the Civil War was about,” Burns explained  “It’s so interesting we’re having this argument because the people…are responsible for the deaths of the loyal American citizens.”

When Chris Cuomo asked if some of the protesters are going too far by attacking statues of former Presidents Thomas Jefferson, George Washington, and Ulysses Grant, Burns acknowledged that, but pleaded for patience.

“Of course there’s a danger in going too far.  It’s the passions of the moment.  And let’s think about it,” Burns added.  “Let’s hold off and reserve judgment for one second and consider that more than a quarter of the Presidents of the United States of America, founded on the idea that all men are created equal, the guy who wrote that [Jefferson] owned 300 human beings in his lifetime, by the way.  More than a quarter of the United States presidents owned other human beings.  This is a huge thing that we cannot just dismiss.  But I would say that the Confederate monuments for me is an easy decision.  We have to get rid of them. They’re not about heritage.  This is a specious argument.  This is about the reimposition of white supremacy in the South at various periods.  The names of the bases and forts should be changed. We’ve taken down the statues.  It’s a good thing to do.  And we now need to continue this reckoning by looking as carefully as we can, monuments are hugely important.  They’re acts of fact but also acts of mythology.”

On “60 Minutes” last Sunday, Minneapolis Police Chief Medaria Arradondo added:

“You need to come to a reckoning…either they are going to be on the right side of history or the wrong side of history…or they will be left behind.”

Amen.

Trump World

--It was a horrible week for the president, his performance in Tulsa, his crumbling poll numbers, the surging coronavirus cases in the three most populous states in the country, and elsewhere, and a message that is about nothing more than slamming Joe Biden.  Will this last bit be enough to win reelection?  Regardless of the current polling data we have a long ways to go, including a scheduled three debates that could be catastrophic for Biden.

That said…Peggy Noonan / Wall Street Journal

“Something shifted this month.  Donald Trump’s hold on history loosened, and may be breaking.  In some new way his limitations are being seen and acknowledged, and at a moment when people are worried about the continuance of their country and their own ability to continue within it.  He hasn’t  been equal to the multiple crises. Good news or bad, he rarely makes any situation better. And everyone kind of knows….

“The latest White House memoir paints the president as ignorant, selfish and unworthy of high office.  Two GOP House primary candidates the president supported lost their primaries resoundingly. Internet betting sites that long saw Mr. Trump as the front-runner now favor Mr. Biden.  The president’s vaunted Tulsa, Okla., rally was a dud with low turnout. Senior officials continue to depart the administration – another economic adviser this week, the director of legislative affairs and the head of the domestic policy council before him.  Why are they fleeing the ship in a crisis, in an election year?

“Judgments on the president’s pandemic leadership have settled in.  It was inadequate and did harm.  He experienced Covid-19 not as a once-in-a-lifetime medical threat but merely a threat to his re-election argument, a gangbusters economy.  He denied the scope and scale of the crisis, sent economic adviser Larry Kudlow out to say we have it ‘contained’ and don’t forget to buy the dip.  Mr. Trump essentially admitted he didn’t want more testing because it would result in more positives.

“And the virus rages on, having hit blue states first and now tearing through red states in the South and West – Arizona, Florida, the Carolinas, Texas.

“The protests and riots of June were poorly, embarrassingly handled. They weren’t the worst Washington had ever seen, they were no 1968, but still he wound up in the White House bunker. Then out of the bunker for an epically pointless and manipulative photo-op in front of a boarded-up church whose basement had been burned.  Through it all the angry, blustering tweets issued from the White House like panicked bats fleeing flames in the smokestack.

“It was all weak, unserious and avoidant of the big issues. He wasn’t equal to that moment either.

“His long-term political malpractice has been his failure – with a rising economy, no unemployment and no hot wars – to build his support beyond roughly 40% of the country.  He failed because he obsesses on his base and thinks it has to be fed and greased with the entertainments that alienate everyone else.  But his base, which always understood he was a showman, wanted steadiness and seriousness in these crises, because they have a sense of the implications of things.

“He doesn’t understand his own base. I’ve never seen that in national politics.

“Some of them, maybe half, are amused by his nonsense decisions and statements – let’s ban all Muslims; let’s end this deadbeat alliance; we have the biggest, best tests.  But they are half of 40%, and they would stick with him no matter what. He doesn’t have to entertain them!  He had to impress and create a bond with others.

“The other half of his base is mortified by his antics and shallowness.  I hear from them often.  They used to say yes, he’s rough and uncouth and unpolished, but only a rough man can defeat the swamp.  Now they say I hate him and what he represents but I’ll vote for him because of the courts, etc.  How a lot of Trump supporters feel about the president has changed.  The real picture at the Tulsa rally was not the empty seats so much as the empty faces – the bored looks, the yawning and phone checking, as if everyone was re-enacting something, hearing some old song and trying to remember how it felt a few years ago, when you heard it the first time.

“In the end, if the president loses, he’ll turn on them too.  They weren’t there for him, they didn’t work hard enough, they’re no good at politics.  ‘After all I did.’

“That will be something, when that happens.

“Nobody knows what’s coming.  On New Year’s Eve we couldn’t imagine the pandemic, economic contraction and protests.  We don’t know what will happen in the next four months, either.  I believe in the phenomenon of silent Trump voters, people who don’t tell anyone, including pollsters, that they’re for him because they don’t want to be hassled.  But eight, 10 or 14 points worth?  No.”

--House Democrats approved their police reform bill Thursday, 236-181, but Republicans said the Justice in Policing Act vote was a PR stunt that wasted an opportunity for consensus.  Republicans added the bill won’t pass the Senate or reach President Trump’s desk. Three Republicans and all Democrats voted in favor.

The bill would restrict chokeholds and ban federal agents from conducting no-knock drug raids. It would also curtail transfers of military equipment to police, create an officer misconduct registry, end qualified immunity from lawsuits and lower the threshold to federally prosecute officers if they show “reckless disregard” for someone’s life.

A competing Republican proposal written by Sen. Tim Scott (R-SC) was blocked from a vote by Senate Democrats on Wednesday and Democrats blocked GOP amendments to the House bill in committee.

House Speaker Nancy Pelosi and House Minority Leader Kevin McCarthy took shots at each other.

Republican opposition is centered largely on elimination of qualified immunity, though some conservatives support the idea.  The GOP Senate plan also would not bar the transfer of military equipment and its misconduct registry would not be public.

Rep. John Rutherford (R-Fla.), a former sheriff, defended qualified immunity, saying it doesn’t apply for blatant misconduct and protects cops from ruinous lawsuits.

--In a surprise move, the Justice Department said on Friday that it was replacing Geoffrey Berman, the U.S. Attorney in Manhattan whose office has been investigating Rudy Giuliani. Attorney General William Barr said in a press release late on Friday evening that Trump intends to nominate SEC Chairman Jay Clayton, who has zero prosecutorial experience, to replace Berman as head of the Southern District of New York.

Berman immediately said: “I learned in a press release from the Attorney General tonight that I was ‘stepping down’ as United States Attorney. I have not resigned, and have no intention of resigning my position, to which I was appointed by the Judges of the United States District Court for the Southern District of New York.”

Berman said that until a presidentially appointed nominee was confirmed by the Senate, the office’s “investigations will move forward without delay or interruption.”

Well, in the end, Barr said the president fired Berman; Trump said Barr fired Berman; Berman quickly stepped down; and Clayton said about two weeks ago he told Trump he was interested in the job.

Berman did not shy away from taking on powerful figures in Trump’s orbit.  He oversaw the prosecution of Michael Cohen, Trump’s former personal lawyer, indicted two Giuliani associates and launched a probe into Giuliani in connection with his efforts to dig up dirt in the Ukraine on Trump’s political adversaries.

Berman had replaced Preet Bharara, who was himself fired soon after Trump became president. Bharara said the timing and manner of the move to replace Berman was strange.  “Why does a president get rid of his own hand-picked U.S. Attorney in SDNY on a Friday night, less than 5 months before the election?” Bharara wrote on Twitter.

William Barr gave no reason for the move.  But Berman stepped down after Barr backtracked on his original demand that his successor be Jay Clayton, saying in a letter:

“In light of Attorney General Barr’s decision to respect the normal operation of law and have Deputy U.S. Attorney Audrey Strauss become Acting U.S. Attorney, I will be leaving the U.S. Attorney’s Office…effective immediately.”

--A federal appeals court on Wednesday ordered a judge to drop charges against former national security adviser Michael Flynn.

The three-judge panel in Washington, D.C., approved Flynn’s defense team’s request to throw out the conviction after the Justice Department announced it would no longer pursue the case.

Flynn admitted to lying to FBI agents in 2017 about his contacts with then-Russian ambassador Sergey Kislyak in the transition period before President Trump’s inauguration in January 2017.

After getting a new defense team earlier this year, Flynn decided to change his plea.

President Trump cheered the development in a Twitter post.

“Great! Appeals Court Upholds Justice Departments Request To Drop Criminal Case Against General Michael Flynn!,” he wrote.

In the 2-1 decision, Judge Neomi Rao, a Trump appointee, said Federal Judge Emmet Sullivan, who presided over Flynn’s case, overstepped his authority by questioning the prosecutors.

“If evidence comes to light calling into question the integrity or purpose of an underlying criminal investigation, the Executive Branch must have the authority to decide that further prosecution is not in the interest of justice,” she continued.

But Judge Robert Wilkins said the appeals court was the one exceeding its legal boundaries.

“It is a great irony that, in finding the District Court to have exceeded its jurisdiction, this Court so grievously oversteps its own,” Wilkins, an appointee of President Obama, wrote in his dissent.

--There was a dispute over whether President Trump had directed a slowdown in coronavirus testing, per his comment at the Tulsa rally.  The White House press secretary, Kayleigh McEnany, said on Monday, “It was a comment that he made in jest.”  She said Trump had not told officials to slow the rate of testing.

All the members of the Coronavirus Task Force confirmed they had not been directed to slow down testing.

McEnany also said Trump’s new use of “Kung flu” is not racist.  “He is linking it to its place of origin,” she said.  “I think the media is trying to play games with the terminology of this virus where the focus should be on the fact that China let this out of their country.”

--In one of his many interviews related to his book, “The Room Where It Happened,” John Bolton depicted President Trump as an “erratic and impulsive” leader, who cares only about his own needs, does not fully understand democracy or the Constitution, is played “like a fiddle” by Russia and is not “fit for office.”

“The concern I have, speaking as a conservative Republican, is that once the election is over, if the president wins, the political constraint is gone,” Bolton told Martha Raddatz of ABC News.  “And because he has no philosophical grounding, there’s no telling what will happen in a second term.”

Members of Congress from both sides of the aisle criticized Bolton, saying he should have testified under oath in the House’s impeachment inquiry; others called him a profiteer and political opportunist.

--Trump tweets:

“Told that @NYCMayor Bill de Blasio wants to paint the fabled & beautiful Fifth Avenue, right in front of Trump Tower/Tiffany, with a big yellow Black Lives Matter sign. ‘Pigs in a Blanket, Fry ‘Em Like Bacon’, referring to killing Police, is their chant.  NYC Police are furious!

“Black Lives Matter leader states, ‘If U.S. doesn’t give us what we want, then we will burn down this system and replace it’.  This is Treason, Sedition, Insurrection!”

[Ed. which is exactly what the Confederacy committed…treason, sedition, insurrection. So if this is where the president wants to cast his lot come November in terms of the black vote, well, good luck to him.]

“When are the thugs, looters, and anarchists moving out of the so-called ‘Autonomous Zone’ in Seattle?  Get going!”

[Ed. I told you two weeks ago that in ‘two weeks’ it wouldn’t be a story anymore.  It’s not, even if some on Fox News, and in the White House, want to try to make it one. We have just a few, wee stories a bit more important than a six-block area of a really ‘out-there’ city to begin with.  I’ve been all over the Pacific Northwest…lots of beauty…the best walking beaches in the world in Oregon…but otherwise not a fan.]

“The number of China Virus cases goes up, because of GREAT TESTING, while the number of deaths (mortality rate), goes way down.  The Fake News doesn’t like telling you that!”

“Failed presidential candidate (thank you President Trump!), Carly Fiorina, said she will be voting for Corrupt Joe Biden. She lost so badly to me, twice in one campaign, that she should be voting for Joe.  No complaints!”

“The Fake News and phony Fake Suppression Polls have never been worse. The Lamestream Media has gone CRAZY!”

“A @FoxNews commentator just ripped me with lies, with nobody defending. They talked about the ‘friendly’ protesters (they set the Church on fire the day before. They were anything but friendly), and how I stood and held the Bible upside down – it wasn’t upside down. @edhenry”

“Trump rally gives Fox News largest Saturday night audience in its history.”

“We did a great job on Coronavirus, including the very early ban on China, Ventilator production, and Testing, which is by far the most, and best, in the World.  We saved millions of U.S. lives.!  Yet the Fake News refuses to acknowledge this in a positive way.  But they do give….

“….Dr. Anthony Fauci, who is with us in all ways, a very high 72% Approval Rating. So, if he is in charge along with V.P. etc., and with us doing all of these really good things, why doesn’t the Lamestream Media treat us as they should?  Answer: Because they are Fake News!

“Cases are going up in the U.S. because we are testing far more than any other country, and ever expanding. With smaller testing we would show fewer cases!”

“I have authorized the Federal Government to arrest anyone who vandalizes or destroys any monument, statue or other such Federal property in the U.S. with up to 10 years in prison, per the Veteran’s Memorial Preservation Act, or such other laws that may be pertinent….

“….This action is taken effective immediately, but may also be used retroactively for destruction or vandalism already caused.  There will be no exceptions!”

“Washed up Creepster John Bolton is a lowlife who should be in jail, money seized, for disseminating, for profit, highly Classified information. Remember what they did to the young submarine sailor, but did nothing to Crooked Hillary.  I ended up pardoning him – it wasn’t fair!”

“I gave John Bolton, who was incapable of being Senate confirmed because he was considered a wacko, and was not liked, a chance.  I always like hearing differing points of view.  He turned out to be grossly incompetent, and a liar. See judge’s opinion.  CLASSIFIED INFORMATION!!!”

“RIGGED 2020 ELECTION: MILLIONS OF MAIL-IN BALLOTS WILL BE PRINTED BY FOREIGN COUNTRIES, AND OTHERS. IT WILL BE THE SCANDAL OF OUR TIMES!”

Wall Street and the Global Economy

This week the International Monetary Fund revised its forecasts for global growth this year downward, from -3.0% to -4.9%, with an expected rebound of 5.4% in 2021.

It projects the United States economy will shrink 8% this year, before expanding 4.5% next.

So on the economic front, we had mixed data on housing, with May existing home sales at an adjusted annual rate of 3.91 million, down 26.6% year-over-year, to the lowest level since Oct. 2010.  The median home price was $284,600, up 2.3% from a year ago, the smallest gain since Feb. 2012.

But May new home sales remained surprisingly strong, an annualized 676,000 unit pace, home buyers wanting ‘new’ product, with low interest rates a huge help.

May durable goods orders (big-ticket items) surged 15.8%, though this was against a downwardly revised crash of 18.1% in April.  Ex-transportation, durable goods were up 4.0% vs. -8.7% the prior month, while a key measure of capital spending, core capital goods, rose 2.3% vs. -6.5% in April.

May personal income and consumption were also volatile, reflecting the reopening in much of the country in May.  The former was down 4.2% (as fewer Americans received Covid-19 relief payments following reopenings), but this is after a surge of 10.8% in April due to the various payroll protection plans and enhanced unemployment benefits, while consumption rose 8.2% after plunging 12.6% in April.

A key inflation barometer, the core personal consumption expenditure index, the Fed’s preferred benchmark, rose just 1.0% in May from a year ago.

With the data on durable goods, personal income and consumption, you can see by the historically volatile nature of the moves recently that we still need more time to shake things out, which is why I said about a month ago that it won’t be until August that we get a true reflection of where we are once all the paycheck protection and enhanced unemployment benefit programs run out.  In terms of the jobs data, it won’t be until September and August’s report that we get a true reflection, and that’s because July’s survey is taken mid-month and the enhanced unemployment benefits expire (as currently established) July 25 and 26, last I saw.

Meanwhile, we had our final reading on first-quarter GDP and it was unchanged, -5.0%.

The Atlanta Fed’s GDPNow barometer for the second quarter has improved, as I said it would on the generally strong data for May, now -39.5%.

But we also had our fourteenth straight week with well over 1 million new jobless claims, when as I’ve told you the high for any single week before the pandemic and lockdowns was 660,000 during the Great Recession.

Chicago Federal Reserve Bank President Charles Evans had some pessimistic views on the economy. Speaking to an online audience for a conference in Iowa, Evans said:

“The economic impact has been catastrophic for an extraordinarily large number of people and businesses, (and) sadly, the cost has fallen most heavily on some of our most vulnerable populations….

“My forecast assumes growth is held back by the response to intermittent localized outbreaks – which might be made worse by the faster-than-expected reopenings,” he said.

The Fed is forecasting GDP will shrink 6.5% this year and unemployment will end the year at 9%, which I’ve said I don’t see.

But with some 20 million Americans out of a job, a drop in spending and economic activity weighing on inflation, and the most uncertain outlook he’s ever seen in his career, Evans said, risks are “weighted to the downside” for even that grim forecast.

“Other forecasts with more severe effects on economic activity are almost equally as plausible in my view,” Evans said, adding that while fiscal and monetary policy support have helped, “more may be necessary,” echoing a refrain from many of his fellow Fed governors and Chairman Jerome Powell.

In particular need are state and local governments, even the most fiscally responsible of which could not have been expected to be prepared to withstand the drop in sales tax and other revenues that are forcing tens of billions of dollars of budget cuts across the country, Evans said.  “There is a role for the federal government to provide relief assistance of some magnitude,” he added, noting the “awful lot of employment in state and local government and the associated impact from the things that those employees buy or don’t buy if they are laid off.”

Europe and Asia

The aforementioned revised IMF economic forecast has the eurozone economy declining 10.2% in 2020, and expanding 6.0% in 2021.  The UK is forecast to fall 10% this year, with a partial recovery in 2021.

This week saw a release of the flash June PMI readings, courtesy of IHS Markit.

The flash composite reading for June was 47.5 vs. 31.9 in May (50 being the dividing line between growth and contraction), with manufacturing at 46.9 vs. 39.4, and services at 47.3 vs. 30.5, so improvement, as containment measures were eased considerably across the eurozone during the month.

Germany’s flash manufacturing reading for June was 44.6 vs 36.6 in May, with services at 45.8 vs. 32.6.

France’s flash June manufacturing reading was 52.1, expansion, vs. 40.6 the prior month, services at 50.3 vs. 31.1. …encouraging.

In the UK, the flash manufacturing PMI for June was 50.1 vs. 40.7, with services at 47.0 vs. 29.0 in May.

We will get final readings for June next week across the euro region and elsewhere.

Chris Williamson / IHS Markit

“The flash eurozone PMI indicated another substantial easing of the region’s downturn in June.  Output and demand are still falling but no longer collapsing.  While second quarter GDP is still likely to have dropped at an unprecedented rate, the rise in the PMI adds to expectations that the lifting of lockdown restrictions will help bring the downturn to an end as we head into the summer.

“France has even staged a tentative return to growth, albeit having suffered a steeper decline at the height of the Covid-19 pandemic than Germany.  Germany and the rest of the euro area meanwhile saw welcome moderations in rates of decline.

“However, with the timing of a return to normal still something that can only be speculated upon, and virus-related restrictions likely to continue to hit many businesses for the rest of the year, we remain very cautious of the strength and sustainability of any economic rebound.

“The job market remains a particular area of concern, especially if demand fails to pick up sharply in coming months.  We therefore continue to expect GDP to slump by over 8% in 2020 and, while the recovery may start in the third quarter, momentum could soon fade meaning it will likely take up to three years before the eurozone regains its pre-pandemic level of GDP.”

European Central Bank President Christine Lagarde said today the euro region is “probably past” the worst of the economic crisis, while urging authorities to prepare for a possible second wave.

“We probably are past the lowest point and I say that with some trepidation because of course there could be a severe second wave,” Lagarde told an online event.

Brexit: Nothing new to see here, people…just move along….

Italy: With a new spending package of 15-20 billion euros to help its battered economy through the coronavirus crisis, Italy’s budget deficit will soar to beyond 11% of GDP, compared with last year’s 1.6%, the lowest for 12 years.  Italy’s public debt will approach 157% of GDP, up from the 135% range it’s been stuck in for a while.

I can’t imagine what will happen here if the continent gets a true second wave.

Turning to Asia…the IMF is predicting China will now grow just 1% in 2020, but rise 8.2% in 2021.   There was no other economic news of import, but next week we get China’s PMIs.

Japan’s flash June manufacturing PMI came in at just 28.9 vs. 30.3 in May, while services rose to 42.3 from 26.5.  [IHS Markit]

Japan’s manufacturing sector continues to get hammered by the global growth picture.

Street Bytes

--Stocks suffered their second big decline in three weeks on the surge in Covid-19 cases in major states from Florida to California, thus giving ‘bulls’ pause when it comes to their overly optimistic views on the economy’s reopening.

The Dow Jones fell 3.3% to 25015, while the S&P 500 declined 2.9% and Nasdaq 1.9%, after hitting a new all-time high of 10131 on Tuesday.

--U.S. Treasury Yields

6-mo. 0.16%  2-yr. 0.17%  10-yr. 0.64%  30-yr. 1.37%

Yields on the long end of the curve fell in a renewed flight to quality amidst the surge in new cases.

--The price of crude oil, as measured by West Texas Intermediate, fell back to $38.16 this week on renewed fears the global economy may not bounce back as quickly as first thought owing to the surge in the U.S. and a potential second wave elsewhere.  We also still have record inventories of crude, even with a slight drawdown in recent weeks.

Separately, the Baker Hughes weekly rig count hit another 11-year low today, 265 combined for oil and gas rigs in the U.S. vs. 793 on March 6.

--The Federal Reserve on Thursday temporarily restricted shareholder payouts by the nation’s biggest banks, barring them from buying back their own shares or increasing dividend payments in the third quarter as regulators try to ensure the banks are strong enough so that they can continue to lend through the pandemic.

The Fed is saying that while the big banks are in much better shape than they were in the financial crisis, they remain vulnerable to an economic downturn as severe as any in history.  And now the strength of the recovery is in doubt with the surge in coronavirus cases.

The Fed, in holding its annual stress tests, did not release results for individual banks, as it normally does, but it did show that about a quarter of banks would nearly breach minimum capital ratios in a double-dip recession scenario, based on the report.

Critics of the Fed’s relatively benign moves feel that the Fed could have placed formal restrictions on shareholder payouts earlier in the coronavirus crisis, and the decision to do so now is a sign that regulators believe the financial system could face threats if the downturn drags on.

According to analysis of the Fed’s stress test results, JPMorgan Chase, Citigroup, Bank of America and Wells Fargo, the nation’s four largest banks, all came through with sufficient capital, but Goldman Sachs fell slightly below the required level.

--Befitting the huge issues faced by corporate American in reopening, Disney is postponing its mid-July reopening of its Southern California theme parks until it receives guidelines from the state, the company announced Wednesday.

Disney was hoping to reopen Disneyland and Disney California Adventure in Anaheim on July 17 after a four-month closure due to the coronavirus.  But the state isn’t issuing guidelines until after July 4.

“Given the time required for us to bring thousands of cast members back to work and restart our business, we have no choice but to delay the reopening of our theme parks and resort hotels until we receive approval from government officials,” Disney said in a statement.

Disney is still planning on a phased reopening of Disneyworld in Orlando, Fla., on July 11, but with the spike in cases in that state, who knows.

--Delta Air Lines says an estimated 500 employees have contracted coronavirus during the pandemic – and the virus has killed at least 10, according to a report.

CEO Ed Bastian said at a shareholders’ meeting earlier this month the “vast majority” of the employees have recovered.

The 500 positives are a fraction of the 90,000 employed by the airline.

--The Allied Pilots Association (APA) representing American Airlines’ 15,000 pilots, said it has begun discussing with lawmakers a plan for the government to purchase seats on each flight to prevent passengers from having to sit next to strangers; as the airlines aim to ease a return to pre-pandemic passenger levels while creating an even playing field across the airline industry.  As of now, like everything else in the country, there is no one policy, with some but not all U.S. airlines blocking middle seats or capping the number of seats they are selling on each flight in order to allow for more space between passengers, while requiring them to wear masks.

Peter DeFazio, a Democrat who chairs the Transportation and Infrastructure Committee, told Reuters on Wednesday that airlines should voluntarily keep seats open between passengers, noting Congress already awarded airlines nearly $25 billion for payroll costs through Sept. 30.  But DeFazio said he will consider additional steps beyond Sept. 30 to ensure spacing on airlines.

The House approved legislation in May requiring airline passengers to wear masks or face potential criminal penalties, but the Senate has not taken up the bill.

FAA Administrator Steve Dickson said last week the U.S. Centers for Disease Control and Prevention has responsibility for public health, while the FAA has oversight of aviation safety.

DeFazio said Dickson told him the FAA does not have the authority to mandate masks.  But DeFazio said the FAA clearly has the authority.  “It is just not forthcoming because of the politics of this administration.”

DeFazio is right. 

Meanwhile, American said on Friday that flights will be booked to full capacity starting July 1, meaning that passengers may notice more crowded flights as more people continue to travel.  Previously American was limiting its seating capacity at 85% on each flight, or roughly 50% of the main cabin middle seats.

--Qantas Airways Ltd. said on Thursday it is axing at least 20% of its workforce and plans to raise up to $1.3 billion of equity as part of drastic measures in response to the coronavirus crisis.  The Australian airline also said it will ground 100 aircraft for up to 12 months and some for longer, as well as retire its six-strong remaining Boeing 747 fleet immediately, six months ahead of schedule.

“We have to position ourselves for several years when revenue will be much lower,” Qantas CEO Clan Joyce said in a statement.

Qantas said it will cut at least 6,000 positions among its 29,000 employees, while another 15,000 staff would remain stood down temporarily.

--Up to 20,000 jobs could be lost at Britain’s airports, an industry group warned, calling on the government to do more to help an aviation industry that was shut down by the pandemic and is now struggling to restart under quarantine rules.

The Airport Operators Association said the government should scrap the quarantine regime, provide relief from business rates, extend a job retention program, directly fund the sector regulator and suspend air passenger taxes to help save jobs, the AOA said.

Separately, already at UK-based airlines British Airways, Virgin Atlantic and easyJet, close to 20,000 job cuts have been announced between the three of them combined.

Britain has a 14-day quarantine policy in place for arrivals in the country from abroad, which airlines, airports and the hospitality sector have said is deterring international travel at a time when they had been hoping for it to recover.  The rule is due to be reviewed on June 29.

--The Dutch government said on Friday it would provide $3.8 billion in support to the Dutch arm of Air France-KLM, capping months of wrangling with France over the role each country should play in a coronavirus rescue deal.

Ryanair called on the European Union to block the support package, which CEO Michael O’Leary said “will further reduce competition and consumer choice in the Dutch and French markets.”

Previously, Paris announced a $7.7 billion bailout package for Air France.

Both the Dutch and French governments each hold a 14% stake in the group.

--Staying in the UK, the Royal Mail laid out a restructuring plan that included 2,000 job cuts on Thursday, as management sought to push through change at Britain’s former postal monopoly after a battle with unions drove out the previous CEO.  As it reported a 31% fall in profits, the company said it plans to save $162 million in staff costs next year and cut over $350 million in capital spending.

--Tesla vehicles scored the worst among major auto makers in a closely watched survey of customers by researcher J.D. Power.

J.D. Power asks vehicle buyers about their experience during the first 90 days of owning a newly purchased car or truck, but Tesla has avoided past scrutiny because of a quirk in some state laws that require an auto maker’s permission to use new-vehicle registration data to contact customers. Tesla hasn’t provided that permission, according to J.D. Power.  But because of the success of the Model 3 compact car, J.D. Power says it was finally able to collect enough sales data from 35 states that do allow access to shed light on customers’ experience.  Since J.D. Power wasn’t able to get registration data from all states, including California – Tesla’s largest U.S. market – it didn’t formally rank the brand at the bottom of its league table.

But the survey shows Tesla vehicles were found to have 250 problems per 100 vehicles compared with an industry average this year of 166 problems, according to the annual Initial Quality Study released Wednesday.  The second-worst-performing brand, Land Rover – owned by Tata Motors of India – had 228 problems per 100 vehicles, J.D. Power said.

Of the 33 brands rated…Dodge and Kia were first at 136 problems per 100 vehicles, followed by Chevrolet and Ram at 141 and Genesis at 142.  I always like to see Genesis do well…and I admit a lot of this has to do with their sponsorship of the PGA Tour event at Riviera in Los Angeles, one of my favorite events of the year.  So good on Genesis!

The Dodge models surveyed, by the way, include the Challenger, Charger, Journey, Grand Caravan and Durango.  The fact that these cars have not been redesigned for many years helped, said Dave Sargent of J.D. Power.  “They’ve done a really good job of improving their quality.  It’s not a fluke that they did well.”

--Bayer AG said Wednesday it would pay up to $10.9 billion to settle tens of thousands of lawsuits with U.S. plaintiffs alleging the company’s Roundup herbicide causes cancer.  Investors have long been waiting for a settlement to bring clarity over how much the litigation will cost Bayer, following the German company’s purchase of U.S. agricultural giant Monsanto Co.

After the deal, Bayer had to deal with thousands of lawsuits pertaining to Roundup, with three jury-trial losses tanking the shares, while shareholders were furious at Bayer management for the worst crisis in its history with the $63 billion Monsanto acquisition.

Bayer, despite the deal to settle the suits, still views glyphosate, the active ingredient in Roundup, as being safe and not causing cancer.  Bayer also continues to defend its purchase of Monsanto and Bayer will continue to sell Roundup…and without a cancer warning label, leaving the company open to future lawsuits.

As part of the deal, Bayer said it has set aside between $8.8 billion and $9.6 billion to settle claims brought by lawyers representing some 95,000 plaintiffs, as well as some 30,000 more claims that haven’t yet agreed to the settlement.  Bayer is setting aside another $1.25 billion to work toward a resolution of future claims.

--Apple confirmed on Monday that it would design the processors inside its new Mac computers, ditching Intel, its partner of 15 years, thus completing a yearslong effort to control the core components underpinning its main devices.

While companies like Dell and HP still rely on Intel for the chips inside their laptops, Apple has become large enough to design and produce its own with the help of Asian chip-making partners.  Apple already has made custom chips for its iPhones, iPads and the Apple Watch, and now it will do so for its final major product line: the Mac.

Apple’s Mac chips are expected to be built by Taiwan Semiconductor Manufacturing, the partner Apple uses to build similar components it designs for iPhones and iPads – an arrangement much like Apple’s use of Foxconn to assemble iPhones.

As for Intel, it’s both a symbolic and financial hit, the company selling about $3.4 billion in chips to Apple for Macs each year, or less than 5 percent of Intel’s annual sales.

The full transition will take two years.

--Finland’s Nokia plans to cut 1,233 jobs at its French subsidiary Alcatel-Lucent International, equivalent to a third of the local workforce.

Nokia, which competes with Ericsson and Huawei for work on lucrative 5G networks, said the staff reduction was needed because of “very important” pressures on costs in the market.

The announcement is likely to have political ramifications in France, as Nokia bought the parent company of Alcatel-Lucent five years ago on the condition it would keep jobs and expand its research and development teams in the country.  Nokia became totally free of such commitments this month.

--A Facebook ad boycott gathered more steam on Thursday, as telecom giant Verizon said it would pull ads in July over criticisms of the social media giant’s failure to monitor hate speech.

The “Stop the Hate for Profit” campaign had already convinced Unilever-owned ice cream maker Ben & Jerry’s to join the campaign, as well as clothing brands North Face and Patagonia, and REI.

Ad Age said that through the first three weeks of June, Verizon had spent $850,000 on Facebook ads.

EMarketer recently lowered its projection for Facebook’s ad spending in 2020 to $31.4 billion; down from previous forecasts of $36.25 billion, but still a 4.9 percent gain.

In response to Verizon’s move, along those of others, Facebook shares sank 8% today.

So this afternoon, CEO Mark Zuckerberg said the company is going to start labeling all posts  that include information about voting along with a link for users to get facts from the company’s new voting hub.

In a live-streamed video, Zuckerberg said the social media company will take additional steps to restrict hate speech in advertising.

--Google’s U.S. advertising revenue will decline this year for the first time since eMarketer began modeling it in 2008, the research firm said, largely because Google’s core search product is so reliant on the pandemic-battered travel industry.

According to research from Needham, travel represented about 11% of search ad revenue in 2019.

Expedia Group Inc., which owns brands such as Travelocity, Orbitz and Vrbo, has historically been one of Google search’s biggest advertisers.

Emarketer estimates that Google’s gross U.S. advertising revenue will decline 4%.

Overall, eMarketer estimates that digital advertising will increase its share of the advertising market by about 5 percentage points this year, to 60% from 55%.  But in absolute terms, the pie is shrinking.  The firm expects digital to grow by nearly 2%, television ad spending to decline by 15% and print to drop by 25%.

The “triopoly” of Google, Facebook and Amazon controls about 62% of the digital ad market.

--Wirecard, a German payments firm that had soared in recent years as it provided a widening array of payment services around the world, suddenly collapsed going back to last Friday amid questions surrounding missing cash balances amounting to $2.1 billion.

Then the scandal continued to unravel this week, amid threats of shareholder lawsuits and an investigation by prosecutors and the German financial regulator.

The company’s longtime CEO, Markus Braun, stepped down last Friday.

Wirecard, a fintech company that was founded in 1999 and is based in Munich, boomed in recent years as a provider of digital payment services, and developed a client base including Apple Pay, Google Pay and Visa.

In 2018, Wirecard was promoted into Frankfurt’s blue-chip stock index, the DAX, pushing out an aging bank of a different era, Commerzbank.

The crisis first stemmed from an article in the Financial Times, which reported in October that staff appeared to conspire to fraudulently inflate sales and profit and mislead EY, the company’s auditor.

Wirecard then delayed EY’s annual report for 2019 and brought in KPMG to provide an independent assessment of the company’s books.

The shares then further collapsed Thursday after it was discovered it owed creditors almost $4 billion after disclosing a gaping hole in its books in Germany’s worst accounting scandal.

It also became the first member of the DAX to go bust, less than two years after making the Select 30 list, like the Dow Jones Industrial Average.

Creditors have little hope of getting back the $4 billion.  Wirecard has borrowed about $1.9 billion from 15 banks and $550 million from bond investors.  By the end of the day, Wirecard’s new management had filed for “insolvency and over-indebtedness.”

A source to the creditors told the press about two-thirds of its sales had been faked in its accounts.

By seeking insolvency, Wirecard thus beat its creditors who were thinking of calling in their loans to the punch.

Now I have not followed Wirecard over the years in the least, and did not know it was in the DAX, but it seems that for years the company was dogged by allegations from whistleblowers and reporters and speculators that its revenue and profits had been pumped up through fake transactions.

The shares were as high as $131 in April and are now a $dollar and change.

--Mexico’s economy suffered a record contraction in April, official data showed on Friday, as the effects of a coronavirus lockdown devastated economic activity across the country, down 17.3% from March, or 19.9% from a year earlier.  The government hopes May was better as sectors such as auto manufacturing, mining and construction gradually returned.

--Nike Inc. said sales fell 38% in the latest quarter, as mass closures of physical stores amid the coronavirus pandemic overshadowed surging demand online.

CEO John Donahoe said Nike has reopened most of its stores globally and had benefited from a 75% surge in online sales, cushioning the overall decline.

Nike continued to pay its workers during the closure and doubled down on digital sales.

Total sales for North America were $2.23 billion, down 46% from a year earlier.  Nike’s sales in Greater China slipped 3% to $1.6 billion.  Nearly all of its stores in Greater China had reopened as of mid-May.

The Beaverton, Ore.-based company swung to a loss of $790 million, or 51 cents a share, from a profit of $989 million, or 62 cents a share, a year earlier.

--Darden Restaurants Inc. (owner of Olive Garden and other chains) reported a fiscal fourth-quarter loss of $480 million, after reporting a profit in the same period a year earlier.

Posted revenue of $1.27 billion in the period was down 43% from a year ago, with comp-restaurant sales down 48%.

Sales at Olive Garden fell 34%, and LongHorn down almost 40%.

But 91% of its sites are now open with at least limited capacity as of Monday.

For the week ended Sunday, the company’s same-restaurant sales across all of its brands was down about 30% from the year before but improved from the almost 32% fall a week earlier.  For the quarter ended Sunday, sales were down more than 33%.

--The hits to retail just keep on coming.  Macy’s announced it will cut corporate and management headcount by 3,900.  By July 5, virtually all of its stores will have reopened but the lockdowns across the country were incredibly costly.

--According to the U.S. Bureau of Labor Statistics, Nevada (25.3% and Hawaii (22.6%) had the highest unemployment rates in May, both heavily dependent on tourism.  So it will be interesting to see what the June figure is with reopening.

Florida’s jobless rate hit a record 14.5% last month, but some of its biggest theme parks reopened with restrictions in June…Universal Orlando, Busch Gardens Tampa Bay and SeaWorld.  But as noted above, Walt Disney World is scheduled to reopen next month, maybe.

--A good measure of economic activity in New York City is ridership on Gotham’s two commuter railroads, subway and buses, which is still about 80% below pre-pandemic levels.  The city’s Metropolitan Transportation Authority (MTA) faces severe budget cuts, despite receiving $3.8 billion in the first round of coronavirus bailout money from the federal government.

--China has been ramping up its purchases of U.S. soybeans recently, sparking a rebound in the price to $8.71 on the most-active soybean futures Wednesday, with $8.50 a bushel the commonly accepted price for farmers to break even.  Traders are hoping for the rally to extend to $10, which would be the highest level in over a year.

It should be noted the price was $10.71 in early March 2018, before the trade war with China got going about four months later.

After China reopened its economy, it has bolstered its U.S. export purchases, with Chinese buying making up roughly 56% of all new soybean export sales in the past month.  By comparison, China was only 27% of U.S. soybean export sales through May, according to the U.S. Dept. of Agriculture.

A large portion of China’s purchases can be canceled, however – as they are scheduled for delivery later in the year.  But there are positive signs.

That said, there are still doubts about the U.S.-China agreement overall, witness Peter Navarro roiling markets after seemingly calling the trade agreement “over” in a Monday interview.

And this afternoon, according to the Wall Street Journal, China quietly told the U.S. that “meddling” in Hong Kong, Taiwan, and other matters could jeopardize Chinese goods purchases under the trade deal.  [More down below.]

--President Trump signed an order aimed at protecting American lobster fishermen who have found export markets drying up, with the aforementioned Peter Navarro adding China could face new tariffs.

“If those purchase commitments are not met, the United States Trade Representative has been directed to use his discretion to impose…reciprocal tariffs on the China seafood industry.”

Navarro was referring to $150 million in purchase commitments Beijing made under the Phase 1 U.S.-China trade deal.

In his memorandum, Trump also directed the Agriculture Department to provide lobster fishermen with the same type of assistance other parts of the agriculture sector are receiving to protect them from harmful trade practices, Navarro said. 

Maine has been doubly hit; both by Chinese tariffs imposed in 2018 and the collapse of sales to restaurants during the coronavirus lockdowns. The lobster industry there supports 4,500 state-licensed lobstermen and an additional 10,000 people, generating about $1.5 billion in economic impact each year.

I just have to add, as I’ve said before, you are nuts to buy any seafood from China, like salmon that is farmed in disgusting pools of sewage…just my opinion…having personally seen the duck ponds there.  Always check the label, and pray the distributor is being honest.  Buy salmon from Norway, if you can’t buy American.

--U.S. whiskey distillers have lost out on nearly $340 million in sales to the European Union over the past two years because of a tit-for-tat trade spat between Washington and Brussels.

Exports to the EU of bourbon, Tennessee whiskey and rye whiskey have declined by a third since a 25% tariff went into effect in June 2018, according to a report released Monday by the Distilled Spirits Council of the United States.

“The tariffs have derailed a great American export success story,” Chris Swonger, CEO of the Council, said in a statement.  “American distillers enjoyed two decades of unparalleled growth in the EU prior to the implementation of these retaliatory tariffs, he added.

The EU imposed tariffs in 2018 on whiskey, U.S. motorcycles and denim, in response to U.S tariffs on EU steel and aluminum put in place by the Trump administration.  The tariffs temporarily boosted profits at American steelmakers, but problems quickly returned to the industry and U.S. Steel announced plans to close a mill near Detroit late last year.

The European Union accounts for more than half of all American whiskey exports; with the numbers increasing more than five-fold between Jan. 1997, when most tariffs were eliminated, and June 2018, surging from $143 million to $750 million annually.

That figure fell to $514 million at the end of 2019, and has declined further since, due to the impact of the pandemic on Europe’s hospitality sector, according to the report.

Now the EU and U.S. are sparring over aircraft subsidies and further tariffs on American spirits, such as gin and rum, could be in the mix.

Meanwhile, the U.S. government imposed a 25% tariff on imports of Scotch and Irish whiskies in October, as part of measures targeting $7.5 billion worth of European goods.

--One of the stupidest ideas of all time, the Segway, is ending production of its original two-wheeler, which never gained public popularity because it was freakin’ dangerous as hell!

I blasted this idea in this space when it launched in 2001, invented by U.S. engineer Dean Kamen, the company acquired by a Chinese rival in 2015.

Segway initially gained some popularity among security and law enforcement, but it was the subject of mockery and high-profile collisions as well as a tragic death.

In 2003, then-President George W. Bush took a tumble off a Segway at his parents’ summer home in Kennebunkport, Maine.

In 2015, sprinter Usain Bolt collided with a cameramen on a Segway that could have ended his track career, after celebrating his fourth consecutive world 200 meters title.

In 2009, Jimi Heselden, just 10 months after buying the firm, died when he crashed into a river while using a Segway on his estate.

Foreign Affairs

China: FBI Director Christopher Wray on Wednesday described China’s Communist government as the biggest threat to the U.S. – revealing his agency has more than 2,000 active investigations which trace back to the shadowy regime.

In an interview with Fox News’ Bret Baier, Wray revealed there had been a 1,300 percent increase in espionage investigations into the Chinese region in the past decade and said the party was actively spying on Fortune 100 countries and trying to influence U.S. politics.

“There’s no country that presents a broader or more comprehensive threat to America’s innovation, to our economic security and to our democratic ideas,” he said.

Wray described a chilling effort by the Chinese Communist Party to pursue a campaign of “economic espionage” which relied on “businessmen, high level scientists, high-level academics” to try to steal confidential information and American innovation to take back to China.

“It’s everything from Fortune 100 companies to startups. It’s agriculture, it’s high tech, it’s aviation, it’s healthcare,” he said.

Yup, I’ve told you for years of the agents/spies in my own building, conveniently across from Celgene, now Bristol-Myers.  You know they are evil when their eyes pierce right through you.

Canadian Prime Minister Justin Trudeau on Thursday rejected a call to swap an imprisoned Huawei Technologies Co. Ltd. executive for two citizens held by Beijing, saying such a move would set a bad precedent and harm Canada.

Shortly after Vancouver police arrested Huawei CFO Meng Wanzhou on a U.S. arrest warrant in Dec. 2018, Beijing detained two Canadian men on security charges.  Last week they were charged with suspected spying.

Trudeau has rejected calls inside Canada to halt extradition proceedings against Meng, with the prime minister saying “(This) would endanger the millions of Canadians who live and travel overseas every single year. We cannot allow political pressures or random arrests of Canadian citizens to influence the functioning of our justice system,” he told reporters.

Although Beijing insists there is no connection between Meng and the two Canadians, Trudeau said there was a clear link.  “We deplore what China did…and will continue to remain steadfast and strong,” he said, adding that it would be “absolutely unacceptable” to let Beijing think it could get what it wanted by arresting Canadians. 

China has been blocking imports of Canadian canola seed and meat products and Trudeau said his government is reviewing its options on the sanctions front.

Secretary of State Mike Pompeo said of the charges against the Canadians they were “politically motivated and completely groundless.”

Former Google CEO Eric Schmidt told the BBC that Huawei challenges national security, adding that “there’s no question that information from Huawei routers has ultimately ended up in hands that would appear to be the state.”

As the Wall Street Journal editorialized: “The fate of the two Canadians is another lesson for the world in the character of President Xi Jinping’s aggressive authoritarianism.”

Speaking of sanctions, the U.S. Senate backed legislation this week that would impose mandatory sanctions on individuals or companies that back efforts by China to restrict Hong Kong’s autonomy, as the government in Beijing moves to implement a new security law for the city.  The “Hong Kong Autonomy Act” passed by unanimous consent.  To become law it needs to be passed by the House and then signed by President Trump.

Democratic Senator Chris Van Hollen, a lead sponsor, said the legislation would send a clear message to Beijing that there would be consequences if it acts to undermine Hong Kong’s autonomy.  “This could be our last opportunity to stay Beijing’s hand before it destroys what is left of freedom in the city,” said Republican Senator Josh Hawley, another sponsor.

Last weekend, China’s top legislative body announced it will meet on June 28, Sunday, at which time it may pass Hong Kong’s security law.  The draft law has greatly alarmed foreign governments and Hong Kong democracy activists, who are concerned that Beijing is eroding the high degree of autonomy granted to the territory in 1997 with the handover to China by Britain.

The National People’s Congress Standing Committee, which usually meets every two months, is due to meet June 28 to 30 in Beijing, Xinhua reports.

Pro-democracy groups rally in Hong Kong every year on July 1, the anniversary of the city’s handover to the mainland.

Details of the new law show China will have overarching powers over the enforcement of a new security law, in what would be the deepest change to the city’s way of life since it returned to Chinese rule.  Hong Kong will establish a local national security council to enforce the legislation, headed by the city’s leader Carrie Lam and supervised and guided by a new central government commission created by Beijing.  A mainland adviser will also sit on the new Hong Kong body.  New local police and prosecution units will be set up to investigate and to enforce the law, backed by mainland security and intelligence officers deployed to Beijing’s new commission.  Lam will also have the power to appoint judges to hear cases related to national security, an unprecedented move likely to unnerve some investors, diplomats and business leaders in Hong Kong.

Editorial / Washington Post

“The worst fears about China’s ambitions to dominate Hong Kong and destroy its democratic ways are materializing.  China’s ruling Communist Party intends to impose a security law that will create a powerful new secret police.  Judging by China’s use of coercive repression on the mainland, free speech and rule of law will be on the run.  President Trump’s recent warning of sanctions appears to have done absolutely nothing to stop Beijing from steamrolling Hong Kong.

“A summary of the new law was published over the weekend by the official Xinhua News Agency. The Standing Committee of the National People’s Congress has scheduled a decision on an unusually rapid timetable, starting another three-day meeting June 28.  The new law, according to Xinhua would create a Commission for Safeguarding National Security, answerable to the central government in Beijing, with new police and prosecuting departments to enforce new statutes.  The structure allows the chief of the new commission to appoint judges and hear national security cases, which China has often defined as anything that threatens the party-state’s monopoly on power.  China has used similar laws in recent years to punish labor organizers, lawyers, bloggers and peasants fighting development land grabs….

“When Chinese leaders were irked a few years ago at freewheeling Hong Kong booksellers, they kidnapped them and subjected them to secret interrogations and forced confessions on the mainland.  This was a blatant intrusion on Hong Kong’s long-established autonomy and rule of law, supposedly guaranteed for 50 years under the 1997 handoff from Britain and the concept of ‘one country, two systems.’  Now, China won’t have to extradite people to the mainland; it will have its own secret police right in Hong Kong. One country, one brutal system.

“Mr. Trump, in Rose Garden remarks May 29, correctly criticized China for ‘absolutely smothering Hong Kong’s freedom’ and announced he would ‘begin the process’ of eliminating policy exemptions that give Hong Kong special treatment, and imposing sanctions on officials who participate in the ‘smothering’ of rights and freedoms.  But China’s leaders, including President Xi Jinping, appear to have calculated that they have nothing to lose by defying Mr. Trump.  Perhaps they have concluded the president will run a China-bashing reelection campaign no matter what they do.  Perhaps they think Mr. Trump will never follow through.  Or, perhaps Mr. Xi remembers his June 18, 2019, phone conversation with Mr. Trump.  According to the new memoir of former national security adviser John Bolton, Mr. Trump pledged that U.S. officials would not speak out about Hong Kong and gave in to Mr. Xi’s desire that it be treated as entirely an internal Chinese affair.  ‘Trump acquiesced,’ Mr. Bolton writes, quoting the president as saying, ‘I don’t want to get involved.’

“Mr. Trump’s indifference was dangerous.  China is now exploiting it.”

North Korea: South Korean President Moon Jae-in on Thursday warned North Korea against conducting any armed attack on Seoul following weeks of rising tensions that have dragged inter-Korean relations to their lowest point in years.

Mr. Moon’s stern remarks were unusually strong for a president who has dedicated the last three years to improving relations with Pyongyang.  During that period, he engaged North Korean leader Kim Jong Un in three summits and in 2018 facilitated the first summit between a sitting U.S. president and a North Korean leader.

“We want peace.  But we will respond resolutely to anyone who threatens our people’s safety or lives,” he said, without naming Kim.

Moon spoke at a live televised event commemorating the 70th anniversary of the start of the 1950-53 Korean War, where one million+ South Koreans died during the conflict, and 37,000 Americans.

“We have defense capabilities strong enough to deny any provocation, from any direction,” Moon said, drawing applause from a crowd that included U.S. officials.

Earlier, North Korea, in a classic maneuver, suspended plans for “military action” against the South, according to state media.

The Central Military Commission made its decision after taking what it called the “prevailing situation” into consideration.

The North also began to dismantle loudspeakers it had erected only last week, traditionally used to blast anti-South Korean messages over the border, Yonhap reported.

So the North escalates, then de-escalates…escalates, de-escalates.  They’ve been doing it for decades.  It was just the week before that Kim Jong Un’s sister, Kim Yo-Jong, had ordered the army to “decisively carry out the next action” – in part because of what Pyongyang said was Seoul’s failure to stop activists from floating balloons with anti-regime leaflets over the border.

Before that, Pyongyang blew up a joint liaison office on its side of the border.

Then Thursday, on the 70th anniversary of the start of the war, Pyongyang ramped up the rhetoric anew, saying that in the face of “hostile policy” by the U.S., it had no choice but to counter “nuclear with nuclear.”

Japan’s defense minister, Taro Kono, is suggesting that Kim Jong Un’s saber-rattling may be due to his poor health and the spread of Covid-19 in the Hermit Kingdom, as reported by NK News.

In a briefing at the Japanese Correspondents Club in Tokyo, Kono said he believed the escalations may be to “take away the attention of North Korean people away from Kim’s health, or the bad harvest or the bad economy.”

“We suspect, number one, that Covid-19 is spreading around North Korea as well, and Kim is trying to…not [be] infected… So sometimes he doesn’t come [out] in public.”

“Number two,” Kono continued, “we have some suspicion about his health.  Thirdly, the harvest last year in North Korea wasn’t quite good – bad, actually… The economy in North Korea is not doing well.”

Russia:  President Vladimir Putin on Wednesday celebrated his country’s victory 75 years ago against Nazi Germany, presiding over an enormous military parade through Red Square, featuring thousands of soldiers (an estimated 14,000) marching shoulder-to-shoulder, sans masks.  Beyond nuts.

Moscow is touting the lowest rate of infections in months at week’s end, but we are still talking thousands of cases, and yet they do this?!

It’s all about politics and the upcoming election that will likely see constitutional amendments adopted that could pave the way for Putin to stay in power long beyond 2024, when his current term expires.  The parade was originally scheduled for May 9, a joyous annual holiday known as Victory Day, but was delayed for six weeks due to the pandemic.

Putin said in his speech: “Our duty is to remember that the Soviet people bore the brunt of fighting Nazism.  It was namely our people who were able to defeat the horrible, total evil.”

Iran: Member states from the United Nations atomic agency board voted recently to condemn Iran for failing to cooperate with its probe of Tehran’s nuclear activities, a move that gives the Trump administration new ammunition in its push to kill the Iranian nuclear deal.

The resolution, the first since 2012 to call out Iran for not cooperating with the International Atomic Energy Agency, comes as the U.S. mounts a multi-front campaign to press Iran to come back to the negotiating table and agree to a new, stricter and broader agreement on nuclear and other activities.

The U.S. is pressing for an indefinite extension to a conventional weapons embargo on Iran, due to expire in October under the 2015 nuclear deal.  U.S. officials have warned they will move to reimpose international sanctions unilaterally on Iran if the embargo isn’t continued, a move seen by Russia, China and the other members of the P5+1 (Germany, France and the UK…the U.S. the sixth) as illegal, though Britain, France and Germany have called on Iran to “fully cooperate with the Agency and satisfy the Agency’s requests without any further delay.”

However, the issue may be complicated by a massive explosion in Iran last night either outside or in the secretive military base of Parchin, where Iran was once thought to have conducted nuclear weapon trigger-testing.  The site was abandoned a number of years ago, but there have been conflicting reports on whether Iran just moved some equipment around and is still operating at some level there.

Iran said it was a gas leak. There is zero reason to believe them.

Balkans: The Trump administration had hoped to broker a peace summit between Serbia and Kosovo to burnish its foreign policy credentials in an election year, but the meeting slated for the White House was squelched with the indictment of President Hashim Thaci of Kosovo on war crimes charges.

Thaci had been expected to meet on Saturday at the White House with his Serbian counterpart, President Aleksandar Vucic, at a summit mediated by Richard Grenell, an envoy for President Trump.  The hope was the gathering might help pave the way for peace between the two Balkan countries who have been at odds for decades.

Kosovo broke away from Serbia in 1999, aided by NATO-led bombing campaign, but Serbia has never recognized Kosovo’s independence.

The U.S. was hoping to galvanize trade and business relationships between the two countries, providing an impetus for formal peace talks later in the year.

But Wednesday, prosecutors in the Netherlands announced they had filed war crimes charges against Thaci for his alleged role in the murder and abuse of Serbs, Roma and Kosovar Albanians while he was a guerrilla leader during the 1998-99 Kosovo War and its aftermath.

Thaci then called off the meeting at the White House.

Random Musings

--Presidential tracking polls….

Gallup:  39% approve of President Trump’s job performance, 57% disapprove; 85% of Republicans approve, 39% of independents (May 28-June 4).
Rasmussen: 44% approve, 53% disapprove (June 26).

--A New York Times/Siena College national poll of registered voters presents further poor news for President Trump, with Joe Biden having a 50-36 percent lead.  This is totally in line with other recent national surveys.

Biden is up 22 points among women, while Trump is 3 points ahead among men.

But among white women with college degrees, Biden has a 39-point lead.  In 2016 exit polls, Clinton led Trump in that group by just 7 points.

In the idiotic mask debate, which shouldn’t be a debate at all…54 percent of people said they always wear a mask when they expect to be in proximity to other people, while another 22 percent said they usually wear a mask.

Just 22 percent said they rarely or never wear a mask.

61 percent of voters said they disapproved of Mr. Trump’s handling of race, versus 33 percent who said they approved.

--A Quinnipiac University poll of Ohio registered voters released Wednesday had Biden leading Trump 46-45, a statistical dead heat, which is nonetheless significant because Trump won the state in 2016 by eight points.

Among Republicans, Trump wins 92-5 percent, while Democrats go for Biden 93-3 percent.  Independents are divided with Trump receiving 44 percent and Biden 40 percent.

Women go to Biden 53-37 percent, while men go to Trump also by 16 points, 54-38 percent. Biden leads among Black voters 81-8, while Trump leads among white folk 50-42.

Further proof of how close this race could be…Biden leads among white voters with a college degree by 21 points, 57-36, while Trump also leads by 21 among white voters without a college degree, 56-35 percent.

Trump’s job approval rating in the state is similar to his national ratings, 44 percent, while 53 percent disapprove.  [July 2019, Trump’s split was 43-52.]

Ohio has picked the eventual presidential winner each election since 1964.

Separately, an overwhelming majority of voters, 75-19 percent, approve of the job Ohio Gov. Mike DeWine is doing, a huge spike from a year ago, when DeWine had a 44-33 percent job approval rating.

DeWine’s improving numbers are a result of his handling of the coronavirus, where he has a 77 percent approval rating.  Only 43 percent of Ohio voters approve of how Trump has handled the pandemic.

Where Trump can take heart is that while 52 percent of Ohio voters support banning Confederate flags from public places in the state, 51 percent oppose removing Confederate statues from public places around the country, and 52 percent oppose renaming military bases that were named after Confederate generals.

--A new Marquette Law School Poll of Wisconsin registered voters finds Biden with a solid 8-point lead over President Trump, 49-41 percent.  In May, Biden led 46-43.

Trump’s overall job approval rating in the state is 45 percent, 51 percent disapproval.

Approval of his handling of the pandemic is 44 percent, and disapproval is 52 percent.

Only 30 percent approve of his handling of the protests over the death of George Floyd, and 58 percent disapprove.

--A separate New York Times/Siena poll of six battleground states had Biden leading in all six – Michigan, Wisconsin, Pennsylvania, Florida, Arizona and North Carolina – by six to 11 points, all six having been won by Trump in 2016.

--A Fox News Poll of the traditionally ruby red states of Texas, Georgia, North Carolina and Florida, found Biden leading in all four, including Florida by 9 points, 49-40 percent.  Biden is also ahead in Texas by one point (a state Trump won by 9 in 2016) and by two in North Carolina and Georgia.

But it’s still early.

--The Democratic National Committee announced that Joe Biden will accept the presidential nomination in Milwaukee, but the party will urge delegates to skip the summer convention because of coronavirus concerns.

The DNC is encouraging state delegations to plan to conduct their official business remotely.  The committee is developing a process to ensure that delegates can cast their votes on convention matters, including the presidential nomination, without being at the convention in person.

Organizers are also moving proceedings from the Fiserv Forum, home of the NBA’s Milwaukee Bucks, to the Wisconsin Center, a smaller and less expensive downtown convention center.

--Joe Biden’s first 2020 fundraiser with former President Barack Obama raised $7.6 million from more than 175,000 people on Tuesday, the campaign said, the most Biden has collected at a single event thus far.

At the end of May, though, President Trump’s campaign, party and other fundraising entities had $265 million in cash, while the Democrats and Biden held a combined $122 million.

But Biden outraised Trump in May, $81 million to $74 million.  How the money was spent is due out in days.

--Due to a large number of absentee ballots, the results of Tuesday’s New York primary races may not be known until mid to late next week, and U.S. Democratic Reps. Carolyn Maloney and Eliot Engel are in deep trouble.

Jamaal Bowman, a middle-school principal and first-time candidate, held a lead of 26 points – or almost 12,000 votes – over Mr. Engel, who has represented his Westchester County/Bronx district since 1989.

Ms. Maloney, who has represented parts of Brooklyn, Queens and the East Side of Manhattan since 1993, faced three primary challengers, including Suraj Patel, a lawyer and former Barack Obama aide.  After 40,000 votes that were cast at polling places, Maloney led Patel by just one point.

--For the first time since the establishment of the District of Columbia 230 years ago, the House voted to declare the city as the nation’s 51st state, a move that supporters say begins to right historic wrongs.

But this is going nowhere and Senate Majority Leader Mitch McConnell says he will not bring the legislation to a vote.  The move would also require a constitutional amendment.

Now as one Democratic congressman suggested, Andy Harris of Maryland, the best way to enfranchise the 700,000 people who live in the District would be for D.C. to rejoin Maryland, which ceded part of the land needed to create the nation’s capital on swampland.  But that ain’t happening.

Of course if D.C. ever got statehood, it would get two senators.

--A Georgia grand jury has indicted all three white men accused in the shooting death of unarmed black jogger Ahmaud Arbery on murder charges, prosecutors announced Wednesday.

The indictment charges Travis McMichael, 34, his 64-year-old father, Gregory McMichael, and William “Roddie” Bryan, 50, with nine counts, including malice murder, felony murder, aggravated assault, and false imprisonment, the Atlanta Journal-Constitution reported.

Personally, and just an opinion, I am confident justice will be served in the case of Arbery and George Floyd.  I am not confident when it comes to the case of Rayshard Brooks because of the incompetent DA handling it.

--What has been described as a “Godzilla” dust storm is hitting the Gulf Coast, promising hazy skies and fiery red sunsets but also potential health problems.

The plume of Saharan dust began to emerge off western Africa last weekend and has now traveled over 4,000 miles from the Atlantic to the Caribbean and Gulf of Mexico, the Weather Channel reported. 

Several Caribbean islands were coated with dust earlier this week.

“This is the most significant event in the past 50 years,” said Pablo Mendez Lazaro, an environmental health specialist with the University of Puerto Rico.  Due to the extremely poor air quality, “conditions are dangerous in many Caribbean islands,” he said Monday.

Most others agree this is the worst air quality caused by Saharan dust in recent memory.

The mass could settle over east Texas, including Houston, and that might actually help keep people indoors, i.e., the surge in Covid-19 cases there.  It could eventually reach the mid-Atlantic in a few days.

--A Siberian town with the world’s widest temperature range has recorded a new high amid a heat wave that is contributing to severe forest fires.

The temperature in Verkhoyansk hit 100.4 degrees on Saturday, according to a website that compiles Russian meteorological data. 

The town is located above the Arctic Circle in the Sakha Republic, 2,900 miles northeast of Moscow.

The town of about 1,300 is recognized by the Guinness World Records for the most extreme temperature range, with a low of minus-90 degrees and a previous high of 98.96 degrees.

Good lord!  What a pain in the butt to shop for clothing if you’re thinking of retiring there.

--Meanwhile, yesterday in northern and eastern parts of India, the annual monsoon season commenced and heavy thunderstorms have always been proven to be deadly in this region.

But Thursday, lightning strikes killed 107 people and injured dozens more.  The majority of the deaths, 83, occurred in the state of Bihar on the Nepal border.

So next time someone tells you, “You have a better chance of getting hit by lightning than winning the lottery,” just say, “Yes, you’re right.”

---

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

We honor our healthcare workers and first responders.

God bless America.

---

Gold: $1784
Oil: $38.16

Returns for the week 6/22-6/26

Dow Jones  -3.3%  [25015]
S&P 500  -2.9%  [3009]
S&P MidCap  -3.7%
Russell 2000  -2.8%
Nasdaq  -1.9%  [9757]

Returns for the period 1/1/20-6/26/20

Dow Jones  -12.3%
S&P 500  -6.9%
S&P MidCap  -16.7%
Russell 2000  -17.4%
Nasdaq  +8.7%

Bulls 57.3
Bears
18.4…reminder, this is a contrarian indicator

Hang in there. Wear a mask and wash your hands.

Or as Sgt. Phil Esterhaus used to say on Hill Street Blues, “Let’s be careful out there.”

Brian Trumbore



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Week in Review

06/27/2020

For the week 6/22-6/26

[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.

Special thanks to Kirk N. for his ongoing support. Go Deacs!

Edition 1,106

With new daily highs this week in the three most populous states in the country – Florida, Texas and California – there have been moves to pull back on the reopening, or in the case of Texas, “pause.”

Texas, which has been at the forefront of states’ efforts to reopen after shutting down to curb the spread of the coronavirus, has seen one of the biggest surges in new cases, reporting over 6,000 new cases in a single day on Wednesday.

“This temporary pause will help our state corral the spread until we can safely enter the next phase of opening our state for business,” Texas Gov. Greg Abbot said in a statement.

Texas has also set record hospitalizations for 14 days in a row; with elective surgeries in the major cities suspended to free up hospital bed space.  Other states, such as Oregon and Utah, have paused or slowed lifting restrictions that have decimated local economies.

And then this afternoon Texas and Florida suddenly closed the bars, while Texas is also reducing restaurant indoor capacity from 75% to 50%; more than just a pause.  The state’s positivity rate on tests has been above 10% this week.

Florida announced a startling new 8,942 new cases today, vs. a previous record of 5,511 set on Wednesday.

Health and Human Services Secretary Alex Azar early in the week played down the surges as “localized.”  “So we’re working aggressively with states and local leaders in this situation but it’s important for the American people to know this is a localized situation, the counties that are in hotspots are 3% of American counties,” Azar told Fox News.

Meanwhile, New York, New Jersey, and Connecticut, ordered travelers from eight states, including Florida, Texas, and California, to self-quarantine for two weeks on arrival, though there is no real way to enforce this.  It’s more about moral suasion. 

Gov. Andrew Cuomo said of our tri-state region, “Together we bent the curve.  And we aren’t stopping now.”  Cuomo then said of President Trump and Republicans that they put politics and business above science in their handling of the outbreak.

“You played politics with this virus and you lost,” he said on CNN.

Centers for Disease Control and Prevention Director Robert Redfield estimated Thursday that for every one case detected, health officials are probably missing 10 other coronavirus cases.

“We’re still in the first wave,” he said during a press conference.  But as opposed to the outbreak two or three months ago, when many deaths were among older people and those with underlying medical conditions, now, the CDC is seeing a greater proportion of cases diagnosed in younger people.

“For the Fourth of July, which is a family event, we want to emphasize that it’s really important that we get back to being vigilant as our collective commitment…to protect vulnerable friends, family and the community,” Redfield said.

President Trump told a crowd at a shipyard in Marinette, Wisconsin, on Thursday, after another record day of coronavirus cases, that it was the result of “GREAT TESTING,” not of a contagion that appears to be spreading fastest in states that rushed to ease lockdown orders.

“If we didn’t test, we wouldn’t have cases. But we have cases because we test. We’ve done an incredible, historic job.”

Former Vice President Joe Biden replied: “Donald Trump needs to stop caring about how he looks and start caring about what’s happening to the rest of America.  He can’t bend it to meet his political wishes. There are no miracles coming,” Biden said.

“He’s like a child who can’t believe this has happened to him, and all his whining and self-pity,” Biden continued.  “This pandemic didn’t happen to him.  It happened to all of us. His job isn’t to whine about it.  His job is to do something about it.”

“The president wants us to believe there’s a choice between the economy and public health,” Biden said.  “Amazingly, he still hasn’t grasped the most basic fact of this crisis: to fix the economy, we have to get control over the virus.”

On the economy, President Trump, in a recorded statement last weekend, said:

“As many of you know, our country is coming back very, very strong economically.

“The jobs numbers from two weeks ago were record setting – record setting increase. We’ve never had anything like it. Record from day one. Nobody’d ever beaten it.”

Ah, Mr. President?  We saw a record gain in jobs in May of 2.5 million. That is true.  This followed a LOSS of 20.7 MILLION in April!!!

Trump continued:

“When we had to close it up to save millions of lives, we were able to open it, and now we’re doing well.

“So I just want to thank everybody. It’s been an interesting period of time, it’s been terrible so many lives have been lost.  We’ll never forget those incredible people.  But they will not have died in vain.

“Our country will go on, and we’re gonna be stronger than ever before.”

The comment on not having died in vain is perhaps the single dumbest statement made by an American president….ever.

Today, Mike Pence and the Coronavirus Task Force, and its “whole of government approach,” gave its first public update and news conference in over two months and it was beyond pathetic.

I excoriated the vice president last week after his Wall Street Journal op-ed days earlier that touted how cases had been coming down across the nation to the “20,000” level.

So let’s just look at the last three days.

June 24…39,103 new positive cases of the coronavirus in the U.S., besting a previous record of 39,072 set on April 24!
June 25…40,184
June 26…47,230! …20,000 alone in Florida, Texas and California combined.

Both Vice President Pence and President Trump have been touting a falling mortality rate, Pence today saying that one day this week (Sunday) it was under 300.

But as I’ve told you, any moron knows that the figures in the U.S., and much of the world for that matter, are lower Saturday through Monday due to a lack of full reporting of the statistics over a weekend and we all wait around for “Catch-up Tuesday” and the succeeding three or four days to see where we really stand.  So the death tolls Tuesday through Thursday this week were 863, 808 and 649….and then 663 today.

It is true that treatments such as remdesivir and dexamethasone appear to help reduce the rate of death in those most seriously ill.  Thank god. And our medical professionals have learned from experience how to better treat each case.  But it’s July and we obviously aren’t close to having a widely available vaccine…one that is proven to be safe.

And you need to pause here, because the story not being told, simply because no one knows, is not just the rate of death of Covid patients but also the long-term side effects.  We are barely beginning to understand what happens to the lungs, kidneys, heart, brain, intestines…how long the coronavirus incubates and “hides out,” attached to one of our organs, perhaps, until something triggers its reemergence, like perhaps the regular flu in the fall and winter, I can’t help but muse.

No one should want to catch this virus.  It treats each one of us differently.  We are beginning to see victims who have been essentially bedridden for 90 days, even if they weren’t sick enough to be hospitalized.  There are fears among medical professionals that young people, while not appearing to come down with severe symptoms, long-term may end up dealing with chronic fatigue.

But we just don’t know.

So in the midst of this s---show, including an economy that is not going to experience a V-shaped recovery, President Trump traveled to Tulsa last Saturday for his first big campaign rally in over 100 days, an overflow crowd expected at the BOK Center, and as one writer put it, it ended up being a #MAGA-flop!

Let’s be generous…we’ll say half the 19,000 seats were filled, and there was no overflow crowd that the president and vice president were supposed to address prior to going into the Center for the main event.  Embarrassingly the side rally was scrapped, an expensive stage built for the warm-up act dismantled.

President Trump had boasted all week of one million supporters that had RSVP’d to the event, which was billed as the “Great American Comeback.”

Once the president did take the stage, reportedly shocked and angered by the size of the crowd, rather than rally a nation beset by the pandemic, recession and a racial justice movement roiling communities across the country, Trump fell back on his same old red meat…only now his tired act is nothing but rancid, sulfuric…as well as incredibly boring.

He brought up his Golden Oldies of “VA Choice,” as I told you would be the case, with a death toll among Veterans in VA facilities from the coronavirus at 1,574 tonight.  “We have an approval rating among Veterans of 91%!”  Where do you get this?  Not anymore, if ever true.

“We will never kneel for our national anthem!”  Ilhan Omar needs to go back to Somalia.  “No administration has done more than we have in the first 3 ½ years.”  “I saved $billions on the new Air Force One…which is actually two planes, you know.” Angela Merkel sucks…we will get along with Russia….

The coronavirus was called the “Kung flu,” which I can guarantee Beijing will never forget.  Think of this next time one of our power plants gets hacked, or one of our satellites is incapacitated…the GPS for our weapons systems disabled.

[It was also beyond depressing to see the students in Arizona at the follow-up Trump rally a few days later cheer wildly when he mentioned “Kung flu,” having egged him on to say it.]

Meanwhile, at least six members of Trump’s campaign advance team tested positive for Covid-19, plus two on his Secret Service detail, meaning dozens of other agents had to quarantine.

The president’s performance the last few months in particular amid the pandemic has been pathetic and disgraceful.  He has failed the test of leadership, royally.  We are indeed the laughingstock of the world.  Trump’s rhetoric has been vile and despicable.

And the reopening has been an unmitigated disaster.  Overall, the president is going to be remembered through the ages for an historically atrocious job, a sickening tragedy.

This isn’t about Joe Biden, Crooked Hillary, or Barack Obama.

This is all about Donald Trump.

The president was supposed to be in New Jersey this weekend, at his Bedminister club.

But this afternoon he suddenly tweeted he “wanted to stay in Washington, D.C. to make sure LAW & ORDER is enforced. The arsonists, anarchists, looters, and agitators have been largely stopped…

“…I am doing what is necessary to keep our communities safe – and these people will be brought to justice!”

Covid-19 Global Death Tolls (as of tonight)

World…496,796
USA…127,640
Brazil…56,109
UK…43,414
Italy…34,708
France…29,778
Spain…28,338
Mexico…25,779

[Source: Worldometers.info]

Covid Bytes

--Demand for the generic drug dexamethasone has surged in a matter of days since researchers in the UK reported that the steroid reduced deaths in very sick Covid-19 patients, according to a major drug-purchasing firm.

Orders for dexamethasone surpassed 2.8 million last week as the University of Oxford released study results on June 16, up from nearly 397,500 the prior week, which was more typical, according to Vizient Inc., one of the largest group-purchasing organizations in the U.S. for hospitals.

Meanwhile, the U.S. Food and Drug Administration has authorized the emergency use of a different drug, remdesivir from Gilead Sciences Inc., because it was shown in a trial to speed up the recovery time of hospitalized Covid-19 patients.

The FDA hasn’t greenlighted the use of dexamethasone as yet, and hospitals have taken different positions on whether to incorporate the drug into care, industry officials say.

South Korea added remdesivir to its coronavirus treatment guidelines in its first revision of recommendations since the outbreak began but urged caution in the use of dexamethasone.

Dr. Song Dae-sub, professor of pharmacy at Korea University, said: “An excessive use of dexamethasone can trigger different side effects as it tamps down the immune system along with inflammation, possibly leading to even cataracts or glaucoma.”

Korean health authorities also advised the dropping of hydroxychloroquine after a study found it did not provide any benefit.

--IHME Director Dr. Christopher Murray said their research shows the death toll from the coronavirus in Latin America could skyrocket to 388,300 by October, with Brazil and Mexico seen accounting for two-thirds of fatalities.  Deaths in the region surpassed 100,000 this week, with Brazil and Mexico accounting for 80,000+ thus far.

Argentina, Chile, Colombia, Ecuador, Guatemala and Peru are each forecast to see over 10,000 fatalities.  Peru is already at nearly 9,000.

The IHME (out of the University of Washington) said Brazil in particular could drastically reduce its projected fatalities if they just wore masks.

--Iraq is beginning to get overwhelmed as cases spiked seven-fold since the end of May, deaths also spiking.  The cases have been rising after the Muslim holy month of Ramadan, when families and friends typically get together to break the daylong fast.

Among the recent dead was a beloved Iraqi soccer star, Ahmed Rahdi, 56, who died due to Covid-19 complications.

In Baghdad, the vast exhibition grounds have been turned into a large field hospital.

--Spain has reopened its borders, including to British tourists who won’t have to quarantine.  This is nuts, but the people of Spain, their tourism-driven economy in shambles, are desperate and the government is in deep trouble unless it gives in.  A potential recipe for disaster.

--I literally follow every country as closely as any single person can and today Ukraine, four full months into it, reported its first day with 1,000 new cases.  That’s worrisome.

--The largest U.S. meatpacking union said on Thursday that 93 meatpacking and food-processing workers have died from Covid-19 and continue to face risks.  The United Food and Commercial Workers International Union, which also represents workers at grocers and drug stores, told reporters on a call that more than 196 of its members have died in the pandemic.

--A surprise birthday party turned into a nightmare for a Texas family – with the gathering sparking a coronavirus cluster that has now infected 18 relatives, according to a report.

Seven family members who attended the May 30 surprise party contracted the bug, but then took it home and infected nearly a dozen others, KHOU-TV reported Thursday.

---

Ken Burns…and the Reckoning

Mr. Burns is right up there among modern, living American heroes/historians along with David McCullough.

So the other night Burns was interviewed by CNN’s Chris Cuomo and Burns said the country is “in the middle of an enormous reckoning” and endorsed the removal of statues of Confederate soldiers and the renaming of military bases.

“I think we’re in the middle of an enormous reckoning right now in which the anxieties and the pains and the torments of injustice are bubbling up to the surface,” Burns said. “It’s very important for people like me, of my complexion, to be as quiet as possible and to listen.  What I know from my reading of history is that the Confederate monuments have to go.”

Burns then noted that much of the Confederate iconography was installed during waves of backlash to the freeing of the slaves and enfranchising of African-Americans that occurred decades after the Civil War.

“They’re an attempt to rewrite history and to essentially celebrate a false narrative about what happened during the Civil War and to send the wink-winks, the dog whistles, as we’re fond of saying today, across the generations of what the Civil War was about,” Burns explained  “It’s so interesting we’re having this argument because the people…are responsible for the deaths of the loyal American citizens.”

When Chris Cuomo asked if some of the protesters are going too far by attacking statues of former Presidents Thomas Jefferson, George Washington, and Ulysses Grant, Burns acknowledged that, but pleaded for patience.

“Of course there’s a danger in going too far.  It’s the passions of the moment.  And let’s think about it,” Burns added.  “Let’s hold off and reserve judgment for one second and consider that more than a quarter of the Presidents of the United States of America, founded on the idea that all men are created equal, the guy who wrote that [Jefferson] owned 300 human beings in his lifetime, by the way.  More than a quarter of the United States presidents owned other human beings.  This is a huge thing that we cannot just dismiss.  But I would say that the Confederate monuments for me is an easy decision.  We have to get rid of them. They’re not about heritage.  This is a specious argument.  This is about the reimposition of white supremacy in the South at various periods.  The names of the bases and forts should be changed. We’ve taken down the statues.  It’s a good thing to do.  And we now need to continue this reckoning by looking as carefully as we can, monuments are hugely important.  They’re acts of fact but also acts of mythology.”

On “60 Minutes” last Sunday, Minneapolis Police Chief Medaria Arradondo added:

“You need to come to a reckoning…either they are going to be on the right side of history or the wrong side of history…or they will be left behind.”

Amen.

Trump World

--It was a horrible week for the president, his performance in Tulsa, his crumbling poll numbers, the surging coronavirus cases in the three most populous states in the country, and elsewhere, and a message that is about nothing more than slamming Joe Biden.  Will this last bit be enough to win reelection?  Regardless of the current polling data we have a long ways to go, including a scheduled three debates that could be catastrophic for Biden.

That said…Peggy Noonan / Wall Street Journal

“Something shifted this month.  Donald Trump’s hold on history loosened, and may be breaking.  In some new way his limitations are being seen and acknowledged, and at a moment when people are worried about the continuance of their country and their own ability to continue within it.  He hasn’t  been equal to the multiple crises. Good news or bad, he rarely makes any situation better. And everyone kind of knows….

“The latest White House memoir paints the president as ignorant, selfish and unworthy of high office.  Two GOP House primary candidates the president supported lost their primaries resoundingly. Internet betting sites that long saw Mr. Trump as the front-runner now favor Mr. Biden.  The president’s vaunted Tulsa, Okla., rally was a dud with low turnout. Senior officials continue to depart the administration – another economic adviser this week, the director of legislative affairs and the head of the domestic policy council before him.  Why are they fleeing the ship in a crisis, in an election year?

“Judgments on the president’s pandemic leadership have settled in.  It was inadequate and did harm.  He experienced Covid-19 not as a once-in-a-lifetime medical threat but merely a threat to his re-election argument, a gangbusters economy.  He denied the scope and scale of the crisis, sent economic adviser Larry Kudlow out to say we have it ‘contained’ and don’t forget to buy the dip.  Mr. Trump essentially admitted he didn’t want more testing because it would result in more positives.

“And the virus rages on, having hit blue states first and now tearing through red states in the South and West – Arizona, Florida, the Carolinas, Texas.

“The protests and riots of June were poorly, embarrassingly handled. They weren’t the worst Washington had ever seen, they were no 1968, but still he wound up in the White House bunker. Then out of the bunker for an epically pointless and manipulative photo-op in front of a boarded-up church whose basement had been burned.  Through it all the angry, blustering tweets issued from the White House like panicked bats fleeing flames in the smokestack.

“It was all weak, unserious and avoidant of the big issues. He wasn’t equal to that moment either.

“His long-term political malpractice has been his failure – with a rising economy, no unemployment and no hot wars – to build his support beyond roughly 40% of the country.  He failed because he obsesses on his base and thinks it has to be fed and greased with the entertainments that alienate everyone else.  But his base, which always understood he was a showman, wanted steadiness and seriousness in these crises, because they have a sense of the implications of things.

“He doesn’t understand his own base. I’ve never seen that in national politics.

“Some of them, maybe half, are amused by his nonsense decisions and statements – let’s ban all Muslims; let’s end this deadbeat alliance; we have the biggest, best tests.  But they are half of 40%, and they would stick with him no matter what. He doesn’t have to entertain them!  He had to impress and create a bond with others.

“The other half of his base is mortified by his antics and shallowness.  I hear from them often.  They used to say yes, he’s rough and uncouth and unpolished, but only a rough man can defeat the swamp.  Now they say I hate him and what he represents but I’ll vote for him because of the courts, etc.  How a lot of Trump supporters feel about the president has changed.  The real picture at the Tulsa rally was not the empty seats so much as the empty faces – the bored looks, the yawning and phone checking, as if everyone was re-enacting something, hearing some old song and trying to remember how it felt a few years ago, when you heard it the first time.

“In the end, if the president loses, he’ll turn on them too.  They weren’t there for him, they didn’t work hard enough, they’re no good at politics.  ‘After all I did.’

“That will be something, when that happens.

“Nobody knows what’s coming.  On New Year’s Eve we couldn’t imagine the pandemic, economic contraction and protests.  We don’t know what will happen in the next four months, either.  I believe in the phenomenon of silent Trump voters, people who don’t tell anyone, including pollsters, that they’re for him because they don’t want to be hassled.  But eight, 10 or 14 points worth?  No.”

--House Democrats approved their police reform bill Thursday, 236-181, but Republicans said the Justice in Policing Act vote was a PR stunt that wasted an opportunity for consensus.  Republicans added the bill won’t pass the Senate or reach President Trump’s desk. Three Republicans and all Democrats voted in favor.

The bill would restrict chokeholds and ban federal agents from conducting no-knock drug raids. It would also curtail transfers of military equipment to police, create an officer misconduct registry, end qualified immunity from lawsuits and lower the threshold to federally prosecute officers if they show “reckless disregard” for someone’s life.

A competing Republican proposal written by Sen. Tim Scott (R-SC) was blocked from a vote by Senate Democrats on Wednesday and Democrats blocked GOP amendments to the House bill in committee.

House Speaker Nancy Pelosi and House Minority Leader Kevin McCarthy took shots at each other.

Republican opposition is centered largely on elimination of qualified immunity, though some conservatives support the idea.  The GOP Senate plan also would not bar the transfer of military equipment and its misconduct registry would not be public.

Rep. John Rutherford (R-Fla.), a former sheriff, defended qualified immunity, saying it doesn’t apply for blatant misconduct and protects cops from ruinous lawsuits.

--In a surprise move, the Justice Department said on Friday that it was replacing Geoffrey Berman, the U.S. Attorney in Manhattan whose office has been investigating Rudy Giuliani. Attorney General William Barr said in a press release late on Friday evening that Trump intends to nominate SEC Chairman Jay Clayton, who has zero prosecutorial experience, to replace Berman as head of the Southern District of New York.

Berman immediately said: “I learned in a press release from the Attorney General tonight that I was ‘stepping down’ as United States Attorney. I have not resigned, and have no intention of resigning my position, to which I was appointed by the Judges of the United States District Court for the Southern District of New York.”

Berman said that until a presidentially appointed nominee was confirmed by the Senate, the office’s “investigations will move forward without delay or interruption.”

Well, in the end, Barr said the president fired Berman; Trump said Barr fired Berman; Berman quickly stepped down; and Clayton said about two weeks ago he told Trump he was interested in the job.

Berman did not shy away from taking on powerful figures in Trump’s orbit.  He oversaw the prosecution of Michael Cohen, Trump’s former personal lawyer, indicted two Giuliani associates and launched a probe into Giuliani in connection with his efforts to dig up dirt in the Ukraine on Trump’s political adversaries.

Berman had replaced Preet Bharara, who was himself fired soon after Trump became president. Bharara said the timing and manner of the move to replace Berman was strange.  “Why does a president get rid of his own hand-picked U.S. Attorney in SDNY on a Friday night, less than 5 months before the election?” Bharara wrote on Twitter.

William Barr gave no reason for the move.  But Berman stepped down after Barr backtracked on his original demand that his successor be Jay Clayton, saying in a letter:

“In light of Attorney General Barr’s decision to respect the normal operation of law and have Deputy U.S. Attorney Audrey Strauss become Acting U.S. Attorney, I will be leaving the U.S. Attorney’s Office…effective immediately.”

--A federal appeals court on Wednesday ordered a judge to drop charges against former national security adviser Michael Flynn.

The three-judge panel in Washington, D.C., approved Flynn’s defense team’s request to throw out the conviction after the Justice Department announced it would no longer pursue the case.

Flynn admitted to lying to FBI agents in 2017 about his contacts with then-Russian ambassador Sergey Kislyak in the transition period before President Trump’s inauguration in January 2017.

After getting a new defense team earlier this year, Flynn decided to change his plea.

President Trump cheered the development in a Twitter post.

“Great! Appeals Court Upholds Justice Departments Request To Drop Criminal Case Against General Michael Flynn!,” he wrote.

In the 2-1 decision, Judge Neomi Rao, a Trump appointee, said Federal Judge Emmet Sullivan, who presided over Flynn’s case, overstepped his authority by questioning the prosecutors.

“If evidence comes to light calling into question the integrity or purpose of an underlying criminal investigation, the Executive Branch must have the authority to decide that further prosecution is not in the interest of justice,” she continued.

But Judge Robert Wilkins said the appeals court was the one exceeding its legal boundaries.

“It is a great irony that, in finding the District Court to have exceeded its jurisdiction, this Court so grievously oversteps its own,” Wilkins, an appointee of President Obama, wrote in his dissent.

--There was a dispute over whether President Trump had directed a slowdown in coronavirus testing, per his comment at the Tulsa rally.  The White House press secretary, Kayleigh McEnany, said on Monday, “It was a comment that he made in jest.”  She said Trump had not told officials to slow the rate of testing.

All the members of the Coronavirus Task Force confirmed they had not been directed to slow down testing.

McEnany also said Trump’s new use of “Kung flu” is not racist.  “He is linking it to its place of origin,” she said.  “I think the media is trying to play games with the terminology of this virus where the focus should be on the fact that China let this out of their country.”

--In one of his many interviews related to his book, “The Room Where It Happened,” John Bolton depicted President Trump as an “erratic and impulsive” leader, who cares only about his own needs, does not fully understand democracy or the Constitution, is played “like a fiddle” by Russia and is not “fit for office.”

“The concern I have, speaking as a conservative Republican, is that once the election is over, if the president wins, the political constraint is gone,” Bolton told Martha Raddatz of ABC News.  “And because he has no philosophical grounding, there’s no telling what will happen in a second term.”

Members of Congress from both sides of the aisle criticized Bolton, saying he should have testified under oath in the House’s impeachment inquiry; others called him a profiteer and political opportunist.

--Trump tweets:

“Told that @NYCMayor Bill de Blasio wants to paint the fabled & beautiful Fifth Avenue, right in front of Trump Tower/Tiffany, with a big yellow Black Lives Matter sign. ‘Pigs in a Blanket, Fry ‘Em Like Bacon’, referring to killing Police, is their chant.  NYC Police are furious!

“Black Lives Matter leader states, ‘If U.S. doesn’t give us what we want, then we will burn down this system and replace it’.  This is Treason, Sedition, Insurrection!”

[Ed. which is exactly what the Confederacy committed…treason, sedition, insurrection. So if this is where the president wants to cast his lot come November in terms of the black vote, well, good luck to him.]

“When are the thugs, looters, and anarchists moving out of the so-called ‘Autonomous Zone’ in Seattle?  Get going!”

[Ed. I told you two weeks ago that in ‘two weeks’ it wouldn’t be a story anymore.  It’s not, even if some on Fox News, and in the White House, want to try to make it one. We have just a few, wee stories a bit more important than a six-block area of a really ‘out-there’ city to begin with.  I’ve been all over the Pacific Northwest…lots of beauty…the best walking beaches in the world in Oregon…but otherwise not a fan.]

“The number of China Virus cases goes up, because of GREAT TESTING, while the number of deaths (mortality rate), goes way down.  The Fake News doesn’t like telling you that!”

“Failed presidential candidate (thank you President Trump!), Carly Fiorina, said she will be voting for Corrupt Joe Biden. She lost so badly to me, twice in one campaign, that she should be voting for Joe.  No complaints!”

“The Fake News and phony Fake Suppression Polls have never been worse. The Lamestream Media has gone CRAZY!”

“A @FoxNews commentator just ripped me with lies, with nobody defending. They talked about the ‘friendly’ protesters (they set the Church on fire the day before. They were anything but friendly), and how I stood and held the Bible upside down – it wasn’t upside down. @edhenry”

“Trump rally gives Fox News largest Saturday night audience in its history.”

“We did a great job on Coronavirus, including the very early ban on China, Ventilator production, and Testing, which is by far the most, and best, in the World.  We saved millions of U.S. lives.!  Yet the Fake News refuses to acknowledge this in a positive way.  But they do give….

“….Dr. Anthony Fauci, who is with us in all ways, a very high 72% Approval Rating. So, if he is in charge along with V.P. etc., and with us doing all of these really good things, why doesn’t the Lamestream Media treat us as they should?  Answer: Because they are Fake News!

“Cases are going up in the U.S. because we are testing far more than any other country, and ever expanding. With smaller testing we would show fewer cases!”

“I have authorized the Federal Government to arrest anyone who vandalizes or destroys any monument, statue or other such Federal property in the U.S. with up to 10 years in prison, per the Veteran’s Memorial Preservation Act, or such other laws that may be pertinent….

“….This action is taken effective immediately, but may also be used retroactively for destruction or vandalism already caused.  There will be no exceptions!”

“Washed up Creepster John Bolton is a lowlife who should be in jail, money seized, for disseminating, for profit, highly Classified information. Remember what they did to the young submarine sailor, but did nothing to Crooked Hillary.  I ended up pardoning him – it wasn’t fair!”

“I gave John Bolton, who was incapable of being Senate confirmed because he was considered a wacko, and was not liked, a chance.  I always like hearing differing points of view.  He turned out to be grossly incompetent, and a liar. See judge’s opinion.  CLASSIFIED INFORMATION!!!”

“RIGGED 2020 ELECTION: MILLIONS OF MAIL-IN BALLOTS WILL BE PRINTED BY FOREIGN COUNTRIES, AND OTHERS. IT WILL BE THE SCANDAL OF OUR TIMES!”

Wall Street and the Global Economy

This week the International Monetary Fund revised its forecasts for global growth this year downward, from -3.0% to -4.9%, with an expected rebound of 5.4% in 2021.

It projects the United States economy will shrink 8% this year, before expanding 4.5% next.

So on the economic front, we had mixed data on housing, with May existing home sales at an adjusted annual rate of 3.91 million, down 26.6% year-over-year, to the lowest level since Oct. 2010.  The median home price was $284,600, up 2.3% from a year ago, the smallest gain since Feb. 2012.

But May new home sales remained surprisingly strong, an annualized 676,000 unit pace, home buyers wanting ‘new’ product, with low interest rates a huge help.

May durable goods orders (big-ticket items) surged 15.8%, though this was against a downwardly revised crash of 18.1% in April.  Ex-transportation, durable goods were up 4.0% vs. -8.7% the prior month, while a key measure of capital spending, core capital goods, rose 2.3% vs. -6.5% in April.

May personal income and consumption were also volatile, reflecting the reopening in much of the country in May.  The former was down 4.2% (as fewer Americans received Covid-19 relief payments following reopenings), but this is after a surge of 10.8% in April due to the various payroll protection plans and enhanced unemployment benefits, while consumption rose 8.2% after plunging 12.6% in April.

A key inflation barometer, the core personal consumption expenditure index, the Fed’s preferred benchmark, rose just 1.0% in May from a year ago.

With the data on durable goods, personal income and consumption, you can see by the historically volatile nature of the moves recently that we still need more time to shake things out, which is why I said about a month ago that it won’t be until August that we get a true reflection of where we are once all the paycheck protection and enhanced unemployment benefit programs run out.  In terms of the jobs data, it won’t be until September and August’s report that we get a true reflection, and that’s because July’s survey is taken mid-month and the enhanced unemployment benefits expire (as currently established) July 25 and 26, last I saw.

Meanwhile, we had our final reading on first-quarter GDP and it was unchanged, -5.0%.

The Atlanta Fed’s GDPNow barometer for the second quarter has improved, as I said it would on the generally strong data for May, now -39.5%.

But we also had our fourteenth straight week with well over 1 million new jobless claims, when as I’ve told you the high for any single week before the pandemic and lockdowns was 660,000 during the Great Recession.

Chicago Federal Reserve Bank President Charles Evans had some pessimistic views on the economy. Speaking to an online audience for a conference in Iowa, Evans said:

“The economic impact has been catastrophic for an extraordinarily large number of people and businesses, (and) sadly, the cost has fallen most heavily on some of our most vulnerable populations….

“My forecast assumes growth is held back by the response to intermittent localized outbreaks – which might be made worse by the faster-than-expected reopenings,” he said.

The Fed is forecasting GDP will shrink 6.5% this year and unemployment will end the year at 9%, which I’ve said I don’t see.

But with some 20 million Americans out of a job, a drop in spending and economic activity weighing on inflation, and the most uncertain outlook he’s ever seen in his career, Evans said, risks are “weighted to the downside” for even that grim forecast.

“Other forecasts with more severe effects on economic activity are almost equally as plausible in my view,” Evans said, adding that while fiscal and monetary policy support have helped, “more may be necessary,” echoing a refrain from many of his fellow Fed governors and Chairman Jerome Powell.

In particular need are state and local governments, even the most fiscally responsible of which could not have been expected to be prepared to withstand the drop in sales tax and other revenues that are forcing tens of billions of dollars of budget cuts across the country, Evans said.  “There is a role for the federal government to provide relief assistance of some magnitude,” he added, noting the “awful lot of employment in state and local government and the associated impact from the things that those employees buy or don’t buy if they are laid off.”

Europe and Asia

The aforementioned revised IMF economic forecast has the eurozone economy declining 10.2% in 2020, and expanding 6.0% in 2021.  The UK is forecast to fall 10% this year, with a partial recovery in 2021.

This week saw a release of the flash June PMI readings, courtesy of IHS Markit.

The flash composite reading for June was 47.5 vs. 31.9 in May (50 being the dividing line between growth and contraction), with manufacturing at 46.9 vs. 39.4, and services at 47.3 vs. 30.5, so improvement, as containment measures were eased considerably across the eurozone during the month.

Germany’s flash manufacturing reading for June was 44.6 vs 36.6 in May, with services at 45.8 vs. 32.6.

France’s flash June manufacturing reading was 52.1, expansion, vs. 40.6 the prior month, services at 50.3 vs. 31.1. …encouraging.

In the UK, the flash manufacturing PMI for June was 50.1 vs. 40.7, with services at 47.0 vs. 29.0 in May.

We will get final readings for June next week across the euro region and elsewhere.

Chris Williamson / IHS Markit

“The flash eurozone PMI indicated another substantial easing of the region’s downturn in June.  Output and demand are still falling but no longer collapsing.  While second quarter GDP is still likely to have dropped at an unprecedented rate, the rise in the PMI adds to expectations that the lifting of lockdown restrictions will help bring the downturn to an end as we head into the summer.

“France has even staged a tentative return to growth, albeit having suffered a steeper decline at the height of the Covid-19 pandemic than Germany.  Germany and the rest of the euro area meanwhile saw welcome moderations in rates of decline.

“However, with the timing of a return to normal still something that can only be speculated upon, and virus-related restrictions likely to continue to hit many businesses for the rest of the year, we remain very cautious of the strength and sustainability of any economic rebound.

“The job market remains a particular area of concern, especially if demand fails to pick up sharply in coming months.  We therefore continue to expect GDP to slump by over 8% in 2020 and, while the recovery may start in the third quarter, momentum could soon fade meaning it will likely take up to three years before the eurozone regains its pre-pandemic level of GDP.”

European Central Bank President Christine Lagarde said today the euro region is “probably past” the worst of the economic crisis, while urging authorities to prepare for a possible second wave.

“We probably are past the lowest point and I say that with some trepidation because of course there could be a severe second wave,” Lagarde told an online event.

Brexit: Nothing new to see here, people…just move along….

Italy: With a new spending package of 15-20 billion euros to help its battered economy through the coronavirus crisis, Italy’s budget deficit will soar to beyond 11% of GDP, compared with last year’s 1.6%, the lowest for 12 years.  Italy’s public debt will approach 157% of GDP, up from the 135% range it’s been stuck in for a while.

I can’t imagine what will happen here if the continent gets a true second wave.

Turning to Asia…the IMF is predicting China will now grow just 1% in 2020, but rise 8.2% in 2021.   There was no other economic news of import, but next week we get China’s PMIs.

Japan’s flash June manufacturing PMI came in at just 28.9 vs. 30.3 in May, while services rose to 42.3 from 26.5.  [IHS Markit]

Japan’s manufacturing sector continues to get hammered by the global growth picture.

Street Bytes

--Stocks suffered their second big decline in three weeks on the surge in Covid-19 cases in major states from Florida to California, thus giving ‘bulls’ pause when it comes to their overly optimistic views on the economy’s reopening.

The Dow Jones fell 3.3% to 25015, while the S&P 500 declined 2.9% and Nasdaq 1.9%, after hitting a new all-time high of 10131 on Tuesday.

--U.S. Treasury Yields

6-mo. 0.16%  2-yr. 0.17%  10-yr. 0.64%  30-yr. 1.37%

Yields on the long end of the curve fell in a renewed flight to quality amidst the surge in new cases.

--The price of crude oil, as measured by West Texas Intermediate, fell back to $38.16 this week on renewed fears the global economy may not bounce back as quickly as first thought owing to the surge in the U.S. and a potential second wave elsewhere.  We also still have record inventories of crude, even with a slight drawdown in recent weeks.

Separately, the Baker Hughes weekly rig count hit another 11-year low today, 265 combined for oil and gas rigs in the U.S. vs. 793 on March 6.

--The Federal Reserve on Thursday temporarily restricted shareholder payouts by the nation’s biggest banks, barring them from buying back their own shares or increasing dividend payments in the third quarter as regulators try to ensure the banks are strong enough so that they can continue to lend through the pandemic.

The Fed is saying that while the big banks are in much better shape than they were in the financial crisis, they remain vulnerable to an economic downturn as severe as any in history.  And now the strength of the recovery is in doubt with the surge in coronavirus cases.

The Fed, in holding its annual stress tests, did not release results for individual banks, as it normally does, but it did show that about a quarter of banks would nearly breach minimum capital ratios in a double-dip recession scenario, based on the report.

Critics of the Fed’s relatively benign moves feel that the Fed could have placed formal restrictions on shareholder payouts earlier in the coronavirus crisis, and the decision to do so now is a sign that regulators believe the financial system could face threats if the downturn drags on.

According to analysis of the Fed’s stress test results, JPMorgan Chase, Citigroup, Bank of America and Wells Fargo, the nation’s four largest banks, all came through with sufficient capital, but Goldman Sachs fell slightly below the required level.

--Befitting the huge issues faced by corporate American in reopening, Disney is postponing its mid-July reopening of its Southern California theme parks until it receives guidelines from the state, the company announced Wednesday.

Disney was hoping to reopen Disneyland and Disney California Adventure in Anaheim on July 17 after a four-month closure due to the coronavirus.  But the state isn’t issuing guidelines until after July 4.

“Given the time required for us to bring thousands of cast members back to work and restart our business, we have no choice but to delay the reopening of our theme parks and resort hotels until we receive approval from government officials,” Disney said in a statement.

Disney is still planning on a phased reopening of Disneyworld in Orlando, Fla., on July 11, but with the spike in cases in that state, who knows.

--Delta Air Lines says an estimated 500 employees have contracted coronavirus during the pandemic – and the virus has killed at least 10, according to a report.

CEO Ed Bastian said at a shareholders’ meeting earlier this month the “vast majority” of the employees have recovered.

The 500 positives are a fraction of the 90,000 employed by the airline.

--The Allied Pilots Association (APA) representing American Airlines’ 15,000 pilots, said it has begun discussing with lawmakers a plan for the government to purchase seats on each flight to prevent passengers from having to sit next to strangers; as the airlines aim to ease a return to pre-pandemic passenger levels while creating an even playing field across the airline industry.  As of now, like everything else in the country, there is no one policy, with some but not all U.S. airlines blocking middle seats or capping the number of seats they are selling on each flight in order to allow for more space between passengers, while requiring them to wear masks.

Peter DeFazio, a Democrat who chairs the Transportation and Infrastructure Committee, told Reuters on Wednesday that airlines should voluntarily keep seats open between passengers, noting Congress already awarded airlines nearly $25 billion for payroll costs through Sept. 30.  But DeFazio said he will consider additional steps beyond Sept. 30 to ensure spacing on airlines.

The House approved legislation in May requiring airline passengers to wear masks or face potential criminal penalties, but the Senate has not taken up the bill.

FAA Administrator Steve Dickson said last week the U.S. Centers for Disease Control and Prevention has responsibility for public health, while the FAA has oversight of aviation safety.

DeFazio said Dickson told him the FAA does not have the authority to mandate masks.  But DeFazio said the FAA clearly has the authority.  “It is just not forthcoming because of the politics of this administration.”

DeFazio is right. 

Meanwhile, American said on Friday that flights will be booked to full capacity starting July 1, meaning that passengers may notice more crowded flights as more people continue to travel.  Previously American was limiting its seating capacity at 85% on each flight, or roughly 50% of the main cabin middle seats.

--Qantas Airways Ltd. said on Thursday it is axing at least 20% of its workforce and plans to raise up to $1.3 billion of equity as part of drastic measures in response to the coronavirus crisis.  The Australian airline also said it will ground 100 aircraft for up to 12 months and some for longer, as well as retire its six-strong remaining Boeing 747 fleet immediately, six months ahead of schedule.

“We have to position ourselves for several years when revenue will be much lower,” Qantas CEO Clan Joyce said in a statement.

Qantas said it will cut at least 6,000 positions among its 29,000 employees, while another 15,000 staff would remain stood down temporarily.

--Up to 20,000 jobs could be lost at Britain’s airports, an industry group warned, calling on the government to do more to help an aviation industry that was shut down by the pandemic and is now struggling to restart under quarantine rules.

The Airport Operators Association said the government should scrap the quarantine regime, provide relief from business rates, extend a job retention program, directly fund the sector regulator and suspend air passenger taxes to help save jobs, the AOA said.

Separately, already at UK-based airlines British Airways, Virgin Atlantic and easyJet, close to 20,000 job cuts have been announced between the three of them combined.

Britain has a 14-day quarantine policy in place for arrivals in the country from abroad, which airlines, airports and the hospitality sector have said is deterring international travel at a time when they had been hoping for it to recover.  The rule is due to be reviewed on June 29.

--The Dutch government said on Friday it would provide $3.8 billion in support to the Dutch arm of Air France-KLM, capping months of wrangling with France over the role each country should play in a coronavirus rescue deal.

Ryanair called on the European Union to block the support package, which CEO Michael O’Leary said “will further reduce competition and consumer choice in the Dutch and French markets.”

Previously, Paris announced a $7.7 billion bailout package for Air France.

Both the Dutch and French governments each hold a 14% stake in the group.

--Staying in the UK, the Royal Mail laid out a restructuring plan that included 2,000 job cuts on Thursday, as management sought to push through change at Britain’s former postal monopoly after a battle with unions drove out the previous CEO.  As it reported a 31% fall in profits, the company said it plans to save $162 million in staff costs next year and cut over $350 million in capital spending.

--Tesla vehicles scored the worst among major auto makers in a closely watched survey of customers by researcher J.D. Power.

J.D. Power asks vehicle buyers about their experience during the first 90 days of owning a newly purchased car or truck, but Tesla has avoided past scrutiny because of a quirk in some state laws that require an auto maker’s permission to use new-vehicle registration data to contact customers. Tesla hasn’t provided that permission, according to J.D. Power.  But because of the success of the Model 3 compact car, J.D. Power says it was finally able to collect enough sales data from 35 states that do allow access to shed light on customers’ experience.  Since J.D. Power wasn’t able to get registration data from all states, including California – Tesla’s largest U.S. market – it didn’t formally rank the brand at the bottom of its league table.

But the survey shows Tesla vehicles were found to have 250 problems per 100 vehicles compared with an industry average this year of 166 problems, according to the annual Initial Quality Study released Wednesday.  The second-worst-performing brand, Land Rover – owned by Tata Motors of India – had 228 problems per 100 vehicles, J.D. Power said.

Of the 33 brands rated…Dodge and Kia were first at 136 problems per 100 vehicles, followed by Chevrolet and Ram at 141 and Genesis at 142.  I always like to see Genesis do well…and I admit a lot of this has to do with their sponsorship of the PGA Tour event at Riviera in Los Angeles, one of my favorite events of the year.  So good on Genesis!

The Dodge models surveyed, by the way, include the Challenger, Charger, Journey, Grand Caravan and Durango.  The fact that these cars have not been redesigned for many years helped, said Dave Sargent of J.D. Power.  “They’ve done a really good job of improving their quality.  It’s not a fluke that they did well.”

--Bayer AG said Wednesday it would pay up to $10.9 billion to settle tens of thousands of lawsuits with U.S. plaintiffs alleging the company’s Roundup herbicide causes cancer.  Investors have long been waiting for a settlement to bring clarity over how much the litigation will cost Bayer, following the German company’s purchase of U.S. agricultural giant Monsanto Co.

After the deal, Bayer had to deal with thousands of lawsuits pertaining to Roundup, with three jury-trial losses tanking the shares, while shareholders were furious at Bayer management for the worst crisis in its history with the $63 billion Monsanto acquisition.

Bayer, despite the deal to settle the suits, still views glyphosate, the active ingredient in Roundup, as being safe and not causing cancer.  Bayer also continues to defend its purchase of Monsanto and Bayer will continue to sell Roundup…and without a cancer warning label, leaving the company open to future lawsuits.

As part of the deal, Bayer said it has set aside between $8.8 billion and $9.6 billion to settle claims brought by lawyers representing some 95,000 plaintiffs, as well as some 30,000 more claims that haven’t yet agreed to the settlement.  Bayer is setting aside another $1.25 billion to work toward a resolution of future claims.

--Apple confirmed on Monday that it would design the processors inside its new Mac computers, ditching Intel, its partner of 15 years, thus completing a yearslong effort to control the core components underpinning its main devices.

While companies like Dell and HP still rely on Intel for the chips inside their laptops, Apple has become large enough to design and produce its own with the help of Asian chip-making partners.  Apple already has made custom chips for its iPhones, iPads and the Apple Watch, and now it will do so for its final major product line: the Mac.

Apple’s Mac chips are expected to be built by Taiwan Semiconductor Manufacturing, the partner Apple uses to build similar components it designs for iPhones and iPads – an arrangement much like Apple’s use of Foxconn to assemble iPhones.

As for Intel, it’s both a symbolic and financial hit, the company selling about $3.4 billion in chips to Apple for Macs each year, or less than 5 percent of Intel’s annual sales.

The full transition will take two years.

--Finland’s Nokia plans to cut 1,233 jobs at its French subsidiary Alcatel-Lucent International, equivalent to a third of the local workforce.

Nokia, which competes with Ericsson and Huawei for work on lucrative 5G networks, said the staff reduction was needed because of “very important” pressures on costs in the market.

The announcement is likely to have political ramifications in France, as Nokia bought the parent company of Alcatel-Lucent five years ago on the condition it would keep jobs and expand its research and development teams in the country.  Nokia became totally free of such commitments this month.

--A Facebook ad boycott gathered more steam on Thursday, as telecom giant Verizon said it would pull ads in July over criticisms of the social media giant’s failure to monitor hate speech.

The “Stop the Hate for Profit” campaign had already convinced Unilever-owned ice cream maker Ben & Jerry’s to join the campaign, as well as clothing brands North Face and Patagonia, and REI.

Ad Age said that through the first three weeks of June, Verizon had spent $850,000 on Facebook ads.

EMarketer recently lowered its projection for Facebook’s ad spending in 2020 to $31.4 billion; down from previous forecasts of $36.25 billion, but still a 4.9 percent gain.

In response to Verizon’s move, along those of others, Facebook shares sank 8% today.

So this afternoon, CEO Mark Zuckerberg said the company is going to start labeling all posts  that include information about voting along with a link for users to get facts from the company’s new voting hub.

In a live-streamed video, Zuckerberg said the social media company will take additional steps to restrict hate speech in advertising.

--Google’s U.S. advertising revenue will decline this year for the first time since eMarketer began modeling it in 2008, the research firm said, largely because Google’s core search product is so reliant on the pandemic-battered travel industry.

According to research from Needham, travel represented about 11% of search ad revenue in 2019.

Expedia Group Inc., which owns brands such as Travelocity, Orbitz and Vrbo, has historically been one of Google search’s biggest advertisers.

Emarketer estimates that Google’s gross U.S. advertising revenue will decline 4%.

Overall, eMarketer estimates that digital advertising will increase its share of the advertising market by about 5 percentage points this year, to 60% from 55%.  But in absolute terms, the pie is shrinking.  The firm expects digital to grow by nearly 2%, television ad spending to decline by 15% and print to drop by 25%.

The “triopoly” of Google, Facebook and Amazon controls about 62% of the digital ad market.

--Wirecard, a German payments firm that had soared in recent years as it provided a widening array of payment services around the world, suddenly collapsed going back to last Friday amid questions surrounding missing cash balances amounting to $2.1 billion.

Then the scandal continued to unravel this week, amid threats of shareholder lawsuits and an investigation by prosecutors and the German financial regulator.

The company’s longtime CEO, Markus Braun, stepped down last Friday.

Wirecard, a fintech company that was founded in 1999 and is based in Munich, boomed in recent years as a provider of digital payment services, and developed a client base including Apple Pay, Google Pay and Visa.

In 2018, Wirecard was promoted into Frankfurt’s blue-chip stock index, the DAX, pushing out an aging bank of a different era, Commerzbank.

The crisis first stemmed from an article in the Financial Times, which reported in October that staff appeared to conspire to fraudulently inflate sales and profit and mislead EY, the company’s auditor.

Wirecard then delayed EY’s annual report for 2019 and brought in KPMG to provide an independent assessment of the company’s books.

The shares then further collapsed Thursday after it was discovered it owed creditors almost $4 billion after disclosing a gaping hole in its books in Germany’s worst accounting scandal.

It also became the first member of the DAX to go bust, less than two years after making the Select 30 list, like the Dow Jones Industrial Average.

Creditors have little hope of getting back the $4 billion.  Wirecard has borrowed about $1.9 billion from 15 banks and $550 million from bond investors.  By the end of the day, Wirecard’s new management had filed for “insolvency and over-indebtedness.”

A source to the creditors told the press about two-thirds of its sales had been faked in its accounts.

By seeking insolvency, Wirecard thus beat its creditors who were thinking of calling in their loans to the punch.

Now I have not followed Wirecard over the years in the least, and did not know it was in the DAX, but it seems that for years the company was dogged by allegations from whistleblowers and reporters and speculators that its revenue and profits had been pumped up through fake transactions.

The shares were as high as $131 in April and are now a $dollar and change.

--Mexico’s economy suffered a record contraction in April, official data showed on Friday, as the effects of a coronavirus lockdown devastated economic activity across the country, down 17.3% from March, or 19.9% from a year earlier.  The government hopes May was better as sectors such as auto manufacturing, mining and construction gradually returned.

--Nike Inc. said sales fell 38% in the latest quarter, as mass closures of physical stores amid the coronavirus pandemic overshadowed surging demand online.

CEO John Donahoe said Nike has reopened most of its stores globally and had benefited from a 75% surge in online sales, cushioning the overall decline.

Nike continued to pay its workers during the closure and doubled down on digital sales.

Total sales for North America were $2.23 billion, down 46% from a year earlier.  Nike’s sales in Greater China slipped 3% to $1.6 billion.  Nearly all of its stores in Greater China had reopened as of mid-May.

The Beaverton, Ore.-based company swung to a loss of $790 million, or 51 cents a share, from a profit of $989 million, or 62 cents a share, a year earlier.

--Darden Restaurants Inc. (owner of Olive Garden and other chains) reported a fiscal fourth-quarter loss of $480 million, after reporting a profit in the same period a year earlier.

Posted revenue of $1.27 billion in the period was down 43% from a year ago, with comp-restaurant sales down 48%.

Sales at Olive Garden fell 34%, and LongHorn down almost 40%.

But 91% of its sites are now open with at least limited capacity as of Monday.

For the week ended Sunday, the company’s same-restaurant sales across all of its brands was down about 30% from the year before but improved from the almost 32% fall a week earlier.  For the quarter ended Sunday, sales were down more than 33%.

--The hits to retail just keep on coming.  Macy’s announced it will cut corporate and management headcount by 3,900.  By July 5, virtually all of its stores will have reopened but the lockdowns across the country were incredibly costly.

--According to the U.S. Bureau of Labor Statistics, Nevada (25.3% and Hawaii (22.6%) had the highest unemployment rates in May, both heavily dependent on tourism.  So it will be interesting to see what the June figure is with reopening.

Florida’s jobless rate hit a record 14.5% last month, but some of its biggest theme parks reopened with restrictions in June…Universal Orlando, Busch Gardens Tampa Bay and SeaWorld.  But as noted above, Walt Disney World is scheduled to reopen next month, maybe.

--A good measure of economic activity in New York City is ridership on Gotham’s two commuter railroads, subway and buses, which is still about 80% below pre-pandemic levels.  The city’s Metropolitan Transportation Authority (MTA) faces severe budget cuts, despite receiving $3.8 billion in the first round of coronavirus bailout money from the federal government.

--China has been ramping up its purchases of U.S. soybeans recently, sparking a rebound in the price to $8.71 on the most-active soybean futures Wednesday, with $8.50 a bushel the commonly accepted price for farmers to break even.  Traders are hoping for the rally to extend to $10, which would be the highest level in over a year.

It should be noted the price was $10.71 in early March 2018, before the trade war with China got going about four months later.

After China reopened its economy, it has bolstered its U.S. export purchases, with Chinese buying making up roughly 56% of all new soybean export sales in the past month.  By comparison, China was only 27% of U.S. soybean export sales through May, according to the U.S. Dept. of Agriculture.

A large portion of China’s purchases can be canceled, however – as they are scheduled for delivery later in the year.  But there are positive signs.

That said, there are still doubts about the U.S.-China agreement overall, witness Peter Navarro roiling markets after seemingly calling the trade agreement “over” in a Monday interview.

And this afternoon, according to the Wall Street Journal, China quietly told the U.S. that “meddling” in Hong Kong, Taiwan, and other matters could jeopardize Chinese goods purchases under the trade deal.  [More down below.]

--President Trump signed an order aimed at protecting American lobster fishermen who have found export markets drying up, with the aforementioned Peter Navarro adding China could face new tariffs.

“If those purchase commitments are not met, the United States Trade Representative has been directed to use his discretion to impose…reciprocal tariffs on the China seafood industry.”

Navarro was referring to $150 million in purchase commitments Beijing made under the Phase 1 U.S.-China trade deal.

In his memorandum, Trump also directed the Agriculture Department to provide lobster fishermen with the same type of assistance other parts of the agriculture sector are receiving to protect them from harmful trade practices, Navarro said. 

Maine has been doubly hit; both by Chinese tariffs imposed in 2018 and the collapse of sales to restaurants during the coronavirus lockdowns. The lobster industry there supports 4,500 state-licensed lobstermen and an additional 10,000 people, generating about $1.5 billion in economic impact each year.

I just have to add, as I’ve said before, you are nuts to buy any seafood from China, like salmon that is farmed in disgusting pools of sewage…just my opinion…having personally seen the duck ponds there.  Always check the label, and pray the distributor is being honest.  Buy salmon from Norway, if you can’t buy American.

--U.S. whiskey distillers have lost out on nearly $340 million in sales to the European Union over the past two years because of a tit-for-tat trade spat between Washington and Brussels.

Exports to the EU of bourbon, Tennessee whiskey and rye whiskey have declined by a third since a 25% tariff went into effect in June 2018, according to a report released Monday by the Distilled Spirits Council of the United States.

“The tariffs have derailed a great American export success story,” Chris Swonger, CEO of the Council, said in a statement.  “American distillers enjoyed two decades of unparalleled growth in the EU prior to the implementation of these retaliatory tariffs, he added.

The EU imposed tariffs in 2018 on whiskey, U.S. motorcycles and denim, in response to U.S tariffs on EU steel and aluminum put in place by the Trump administration.  The tariffs temporarily boosted profits at American steelmakers, but problems quickly returned to the industry and U.S. Steel announced plans to close a mill near Detroit late last year.

The European Union accounts for more than half of all American whiskey exports; with the numbers increasing more than five-fold between Jan. 1997, when most tariffs were eliminated, and June 2018, surging from $143 million to $750 million annually.

That figure fell to $514 million at the end of 2019, and has declined further since, due to the impact of the pandemic on Europe’s hospitality sector, according to the report.

Now the EU and U.S. are sparring over aircraft subsidies and further tariffs on American spirits, such as gin and rum, could be in the mix.

Meanwhile, the U.S. government imposed a 25% tariff on imports of Scotch and Irish whiskies in October, as part of measures targeting $7.5 billion worth of European goods.

--One of the stupidest ideas of all time, the Segway, is ending production of its original two-wheeler, which never gained public popularity because it was freakin’ dangerous as hell!

I blasted this idea in this space when it launched in 2001, invented by U.S. engineer Dean Kamen, the company acquired by a Chinese rival in 2015.

Segway initially gained some popularity among security and law enforcement, but it was the subject of mockery and high-profile collisions as well as a tragic death.

In 2003, then-President George W. Bush took a tumble off a Segway at his parents’ summer home in Kennebunkport, Maine.

In 2015, sprinter Usain Bolt collided with a cameramen on a Segway that could have ended his track career, after celebrating his fourth consecutive world 200 meters title.

In 2009, Jimi Heselden, just 10 months after buying the firm, died when he crashed into a river while using a Segway on his estate.

Foreign Affairs

China: FBI Director Christopher Wray on Wednesday described China’s Communist government as the biggest threat to the U.S. – revealing his agency has more than 2,000 active investigations which trace back to the shadowy regime.

In an interview with Fox News’ Bret Baier, Wray revealed there had been a 1,300 percent increase in espionage investigations into the Chinese region in the past decade and said the party was actively spying on Fortune 100 countries and trying to influence U.S. politics.

“There’s no country that presents a broader or more comprehensive threat to America’s innovation, to our economic security and to our democratic ideas,” he said.

Wray described a chilling effort by the Chinese Communist Party to pursue a campaign of “economic espionage” which relied on “businessmen, high level scientists, high-level academics” to try to steal confidential information and American innovation to take back to China.

“It’s everything from Fortune 100 companies to startups. It’s agriculture, it’s high tech, it’s aviation, it’s healthcare,” he said.

Yup, I’ve told you for years of the agents/spies in my own building, conveniently across from Celgene, now Bristol-Myers.  You know they are evil when their eyes pierce right through you.

Canadian Prime Minister Justin Trudeau on Thursday rejected a call to swap an imprisoned Huawei Technologies Co. Ltd. executive for two citizens held by Beijing, saying such a move would set a bad precedent and harm Canada.

Shortly after Vancouver police arrested Huawei CFO Meng Wanzhou on a U.S. arrest warrant in Dec. 2018, Beijing detained two Canadian men on security charges.  Last week they were charged with suspected spying.

Trudeau has rejected calls inside Canada to halt extradition proceedings against Meng, with the prime minister saying “(This) would endanger the millions of Canadians who live and travel overseas every single year. We cannot allow political pressures or random arrests of Canadian citizens to influence the functioning of our justice system,” he told reporters.

Although Beijing insists there is no connection between Meng and the two Canadians, Trudeau said there was a clear link.  “We deplore what China did…and will continue to remain steadfast and strong,” he said, adding that it would be “absolutely unacceptable” to let Beijing think it could get what it wanted by arresting Canadians. 

China has been blocking imports of Canadian canola seed and meat products and Trudeau said his government is reviewing its options on the sanctions front.

Secretary of State Mike Pompeo said of the charges against the Canadians they were “politically motivated and completely groundless.”

Former Google CEO Eric Schmidt told the BBC that Huawei challenges national security, adding that “there’s no question that information from Huawei routers has ultimately ended up in hands that would appear to be the state.”

As the Wall Street Journal editorialized: “The fate of the two Canadians is another lesson for the world in the character of President Xi Jinping’s aggressive authoritarianism.”

Speaking of sanctions, the U.S. Senate backed legislation this week that would impose mandatory sanctions on individuals or companies that back efforts by China to restrict Hong Kong’s autonomy, as the government in Beijing moves to implement a new security law for the city.  The “Hong Kong Autonomy Act” passed by unanimous consent.  To become law it needs to be passed by the House and then signed by President Trump.

Democratic Senator Chris Van Hollen, a lead sponsor, said the legislation would send a clear message to Beijing that there would be consequences if it acts to undermine Hong Kong’s autonomy.  “This could be our last opportunity to stay Beijing’s hand before it destroys what is left of freedom in the city,” said Republican Senator Josh Hawley, another sponsor.

Last weekend, China’s top legislative body announced it will meet on June 28, Sunday, at which time it may pass Hong Kong’s security law.  The draft law has greatly alarmed foreign governments and Hong Kong democracy activists, who are concerned that Beijing is eroding the high degree of autonomy granted to the territory in 1997 with the handover to China by Britain.

The National People’s Congress Standing Committee, which usually meets every two months, is due to meet June 28 to 30 in Beijing, Xinhua reports.

Pro-democracy groups rally in Hong Kong every year on July 1, the anniversary of the city’s handover to the mainland.

Details of the new law show China will have overarching powers over the enforcement of a new security law, in what would be the deepest change to the city’s way of life since it returned to Chinese rule.  Hong Kong will establish a local national security council to enforce the legislation, headed by the city’s leader Carrie Lam and supervised and guided by a new central government commission created by Beijing.  A mainland adviser will also sit on the new Hong Kong body.  New local police and prosecution units will be set up to investigate and to enforce the law, backed by mainland security and intelligence officers deployed to Beijing’s new commission.  Lam will also have the power to appoint judges to hear cases related to national security, an unprecedented move likely to unnerve some investors, diplomats and business leaders in Hong Kong.

Editorial / Washington Post

“The worst fears about China’s ambitions to dominate Hong Kong and destroy its democratic ways are materializing.  China’s ruling Communist Party intends to impose a security law that will create a powerful new secret police.  Judging by China’s use of coercive repression on the mainland, free speech and rule of law will be on the run.  President Trump’s recent warning of sanctions appears to have done absolutely nothing to stop Beijing from steamrolling Hong Kong.

“A summary of the new law was published over the weekend by the official Xinhua News Agency. The Standing Committee of the National People’s Congress has scheduled a decision on an unusually rapid timetable, starting another three-day meeting June 28.  The new law, according to Xinhua would create a Commission for Safeguarding National Security, answerable to the central government in Beijing, with new police and prosecuting departments to enforce new statutes.  The structure allows the chief of the new commission to appoint judges and hear national security cases, which China has often defined as anything that threatens the party-state’s monopoly on power.  China has used similar laws in recent years to punish labor organizers, lawyers, bloggers and peasants fighting development land grabs….

“When Chinese leaders were irked a few years ago at freewheeling Hong Kong booksellers, they kidnapped them and subjected them to secret interrogations and forced confessions on the mainland.  This was a blatant intrusion on Hong Kong’s long-established autonomy and rule of law, supposedly guaranteed for 50 years under the 1997 handoff from Britain and the concept of ‘one country, two systems.’  Now, China won’t have to extradite people to the mainland; it will have its own secret police right in Hong Kong. One country, one brutal system.

“Mr. Trump, in Rose Garden remarks May 29, correctly criticized China for ‘absolutely smothering Hong Kong’s freedom’ and announced he would ‘begin the process’ of eliminating policy exemptions that give Hong Kong special treatment, and imposing sanctions on officials who participate in the ‘smothering’ of rights and freedoms.  But China’s leaders, including President Xi Jinping, appear to have calculated that they have nothing to lose by defying Mr. Trump.  Perhaps they have concluded the president will run a China-bashing reelection campaign no matter what they do.  Perhaps they think Mr. Trump will never follow through.  Or, perhaps Mr. Xi remembers his June 18, 2019, phone conversation with Mr. Trump.  According to the new memoir of former national security adviser John Bolton, Mr. Trump pledged that U.S. officials would not speak out about Hong Kong and gave in to Mr. Xi’s desire that it be treated as entirely an internal Chinese affair.  ‘Trump acquiesced,’ Mr. Bolton writes, quoting the president as saying, ‘I don’t want to get involved.’

“Mr. Trump’s indifference was dangerous.  China is now exploiting it.”

North Korea: South Korean President Moon Jae-in on Thursday warned North Korea against conducting any armed attack on Seoul following weeks of rising tensions that have dragged inter-Korean relations to their lowest point in years.

Mr. Moon’s stern remarks were unusually strong for a president who has dedicated the last three years to improving relations with Pyongyang.  During that period, he engaged North Korean leader Kim Jong Un in three summits and in 2018 facilitated the first summit between a sitting U.S. president and a North Korean leader.

“We want peace.  But we will respond resolutely to anyone who threatens our people’s safety or lives,” he said, without naming Kim.

Moon spoke at a live televised event commemorating the 70th anniversary of the start of the 1950-53 Korean War, where one million+ South Koreans died during the conflict, and 37,000 Americans.

“We have defense capabilities strong enough to deny any provocation, from any direction,” Moon said, drawing applause from a crowd that included U.S. officials.

Earlier, North Korea, in a classic maneuver, suspended plans for “military action” against the South, according to state media.

The Central Military Commission made its decision after taking what it called the “prevailing situation” into consideration.

The North also began to dismantle loudspeakers it had erected only last week, traditionally used to blast anti-South Korean messages over the border, Yonhap reported.

So the North escalates, then de-escalates…escalates, de-escalates.  They’ve been doing it for decades.  It was just the week before that Kim Jong Un’s sister, Kim Yo-Jong, had ordered the army to “decisively carry out the next action” – in part because of what Pyongyang said was Seoul’s failure to stop activists from floating balloons with anti-regime leaflets over the border.

Before that, Pyongyang blew up a joint liaison office on its side of the border.

Then Thursday, on the 70th anniversary of the start of the war, Pyongyang ramped up the rhetoric anew, saying that in the face of “hostile policy” by the U.S., it had no choice but to counter “nuclear with nuclear.”

Japan’s defense minister, Taro Kono, is suggesting that Kim Jong Un’s saber-rattling may be due to his poor health and the spread of Covid-19 in the Hermit Kingdom, as reported by NK News.

In a briefing at the Japanese Correspondents Club in Tokyo, Kono said he believed the escalations may be to “take away the attention of North Korean people away from Kim’s health, or the bad harvest or the bad economy.”

“We suspect, number one, that Covid-19 is spreading around North Korea as well, and Kim is trying to…not [be] infected… So sometimes he doesn’t come [out] in public.”

“Number two,” Kono continued, “we have some suspicion about his health.  Thirdly, the harvest last year in North Korea wasn’t quite good – bad, actually… The economy in North Korea is not doing well.”

Russia:  President Vladimir Putin on Wednesday celebrated his country’s victory 75 years ago against Nazi Germany, presiding over an enormous military parade through Red Square, featuring thousands of soldiers (an estimated 14,000) marching shoulder-to-shoulder, sans masks.  Beyond nuts.

Moscow is touting the lowest rate of infections in months at week’s end, but we are still talking thousands of cases, and yet they do this?!

It’s all about politics and the upcoming election that will likely see constitutional amendments adopted that could pave the way for Putin to stay in power long beyond 2024, when his current term expires.  The parade was originally scheduled for May 9, a joyous annual holiday known as Victory Day, but was delayed for six weeks due to the pandemic.

Putin said in his speech: “Our duty is to remember that the Soviet people bore the brunt of fighting Nazism.  It was namely our people who were able to defeat the horrible, total evil.”

Iran: Member states from the United Nations atomic agency board voted recently to condemn Iran for failing to cooperate with its probe of Tehran’s nuclear activities, a move that gives the Trump administration new ammunition in its push to kill the Iranian nuclear deal.

The resolution, the first since 2012 to call out Iran for not cooperating with the International Atomic Energy Agency, comes as the U.S. mounts a multi-front campaign to press Iran to come back to the negotiating table and agree to a new, stricter and broader agreement on nuclear and other activities.

The U.S. is pressing for an indefinite extension to a conventional weapons embargo on Iran, due to expire in October under the 2015 nuclear deal.  U.S. officials have warned they will move to reimpose international sanctions unilaterally on Iran if the embargo isn’t continued, a move seen by Russia, China and the other members of the P5+1 (Germany, France and the UK…the U.S. the sixth) as illegal, though Britain, France and Germany have called on Iran to “fully cooperate with the Agency and satisfy the Agency’s requests without any further delay.”

However, the issue may be complicated by a massive explosion in Iran last night either outside or in the secretive military base of Parchin, where Iran was once thought to have conducted nuclear weapon trigger-testing.  The site was abandoned a number of years ago, but there have been conflicting reports on whether Iran just moved some equipment around and is still operating at some level there.

Iran said it was a gas leak. There is zero reason to believe them.

Balkans: The Trump administration had hoped to broker a peace summit between Serbia and Kosovo to burnish its foreign policy credentials in an election year, but the meeting slated for the White House was squelched with the indictment of President Hashim Thaci of Kosovo on war crimes charges.

Thaci had been expected to meet on Saturday at the White House with his Serbian counterpart, President Aleksandar Vucic, at a summit mediated by Richard Grenell, an envoy for President Trump.  The hope was the gathering might help pave the way for peace between the two Balkan countries who have been at odds for decades.

Kosovo broke away from Serbia in 1999, aided by NATO-led bombing campaign, but Serbia has never recognized Kosovo’s independence.

The U.S. was hoping to galvanize trade and business relationships between the two countries, providing an impetus for formal peace talks later in the year.

But Wednesday, prosecutors in the Netherlands announced they had filed war crimes charges against Thaci for his alleged role in the murder and abuse of Serbs, Roma and Kosovar Albanians while he was a guerrilla leader during the 1998-99 Kosovo War and its aftermath.

Thaci then called off the meeting at the White House.

Random Musings

--Presidential tracking polls….

Gallup:  39% approve of President Trump’s job performance, 57% disapprove; 85% of Republicans approve, 39% of independents (May 28-June 4).
Rasmussen: 44% approve, 53% disapprove (June 26).

--A New York Times/Siena College national poll of registered voters presents further poor news for President Trump, with Joe Biden having a 50-36 percent lead.  This is totally in line with other recent national surveys.

Biden is up 22 points among women, while Trump is 3 points ahead among men.

But among white women with college degrees, Biden has a 39-point lead.  In 2016 exit polls, Clinton led Trump in that group by just 7 points.

In the idiotic mask debate, which shouldn’t be a debate at all…54 percent of people said they always wear a mask when they expect to be in proximity to other people, while another 22 percent said they usually wear a mask.

Just 22 percent said they rarely or never wear a mask.

61 percent of voters said they disapproved of Mr. Trump’s handling of race, versus 33 percent who said they approved.

--A Quinnipiac University poll of Ohio registered voters released Wednesday had Biden leading Trump 46-45, a statistical dead heat, which is nonetheless significant because Trump won the state in 2016 by eight points.

Among Republicans, Trump wins 92-5 percent, while Democrats go for Biden 93-3 percent.  Independents are divided with Trump receiving 44 percent and Biden 40 percent.

Women go to Biden 53-37 percent, while men go to Trump also by 16 points, 54-38 percent. Biden leads among Black voters 81-8, while Trump leads among white folk 50-42.

Further proof of how close this race could be…Biden leads among white voters with a college degree by 21 points, 57-36, while Trump also leads by 21 among white voters without a college degree, 56-35 percent.

Trump’s job approval rating in the state is similar to his national ratings, 44 percent, while 53 percent disapprove.  [July 2019, Trump’s split was 43-52.]

Ohio has picked the eventual presidential winner each election since 1964.

Separately, an overwhelming majority of voters, 75-19 percent, approve of the job Ohio Gov. Mike DeWine is doing, a huge spike from a year ago, when DeWine had a 44-33 percent job approval rating.

DeWine’s improving numbers are a result of his handling of the coronavirus, where he has a 77 percent approval rating.  Only 43 percent of Ohio voters approve of how Trump has handled the pandemic.

Where Trump can take heart is that while 52 percent of Ohio voters support banning Confederate flags from public places in the state, 51 percent oppose removing Confederate statues from public places around the country, and 52 percent oppose renaming military bases that were named after Confederate generals.

--A new Marquette Law School Poll of Wisconsin registered voters finds Biden with a solid 8-point lead over President Trump, 49-41 percent.  In May, Biden led 46-43.

Trump’s overall job approval rating in the state is 45 percent, 51 percent disapproval.

Approval of his handling of the pandemic is 44 percent, and disapproval is 52 percent.

Only 30 percent approve of his handling of the protests over the death of George Floyd, and 58 percent disapprove.

--A separate New York Times/Siena poll of six battleground states had Biden leading in all six – Michigan, Wisconsin, Pennsylvania, Florida, Arizona and North Carolina – by six to 11 points, all six having been won by Trump in 2016.

--A Fox News Poll of the traditionally ruby red states of Texas, Georgia, North Carolina and Florida, found Biden leading in all four, including Florida by 9 points, 49-40 percent.  Biden is also ahead in Texas by one point (a state Trump won by 9 in 2016) and by two in North Carolina and Georgia.

But it’s still early.

--The Democratic National Committee announced that Joe Biden will accept the presidential nomination in Milwaukee, but the party will urge delegates to skip the summer convention because of coronavirus concerns.

The DNC is encouraging state delegations to plan to conduct their official business remotely.  The committee is developing a process to ensure that delegates can cast their votes on convention matters, including the presidential nomination, without being at the convention in person.

Organizers are also moving proceedings from the Fiserv Forum, home of the NBA’s Milwaukee Bucks, to the Wisconsin Center, a smaller and less expensive downtown convention center.

--Joe Biden’s first 2020 fundraiser with former President Barack Obama raised $7.6 million from more than 175,000 people on Tuesday, the campaign said, the most Biden has collected at a single event thus far.

At the end of May, though, President Trump’s campaign, party and other fundraising entities had $265 million in cash, while the Democrats and Biden held a combined $122 million.

But Biden outraised Trump in May, $81 million to $74 million.  How the money was spent is due out in days.

--Due to a large number of absentee ballots, the results of Tuesday’s New York primary races may not be known until mid to late next week, and U.S. Democratic Reps. Carolyn Maloney and Eliot Engel are in deep trouble.

Jamaal Bowman, a middle-school principal and first-time candidate, held a lead of 26 points – or almost 12,000 votes – over Mr. Engel, who has represented his Westchester County/Bronx district since 1989.

Ms. Maloney, who has represented parts of Brooklyn, Queens and the East Side of Manhattan since 1993, faced three primary challengers, including Suraj Patel, a lawyer and former Barack Obama aide.  After 40,000 votes that were cast at polling places, Maloney led Patel by just one point.

--For the first time since the establishment of the District of Columbia 230 years ago, the House voted to declare the city as the nation’s 51st state, a move that supporters say begins to right historic wrongs.

But this is going nowhere and Senate Majority Leader Mitch McConnell says he will not bring the legislation to a vote.  The move would also require a constitutional amendment.

Now as one Democratic congressman suggested, Andy Harris of Maryland, the best way to enfranchise the 700,000 people who live in the District would be for D.C. to rejoin Maryland, which ceded part of the land needed to create the nation’s capital on swampland.  But that ain’t happening.

Of course if D.C. ever got statehood, it would get two senators.

--A Georgia grand jury has indicted all three white men accused in the shooting death of unarmed black jogger Ahmaud Arbery on murder charges, prosecutors announced Wednesday.

The indictment charges Travis McMichael, 34, his 64-year-old father, Gregory McMichael, and William “Roddie” Bryan, 50, with nine counts, including malice murder, felony murder, aggravated assault, and false imprisonment, the Atlanta Journal-Constitution reported.

Personally, and just an opinion, I am confident justice will be served in the case of Arbery and George Floyd.  I am not confident when it comes to the case of Rayshard Brooks because of the incompetent DA handling it.

--What has been described as a “Godzilla” dust storm is hitting the Gulf Coast, promising hazy skies and fiery red sunsets but also potential health problems.

The plume of Saharan dust began to emerge off western Africa last weekend and has now traveled over 4,000 miles from the Atlantic to the Caribbean and Gulf of Mexico, the Weather Channel reported. 

Several Caribbean islands were coated with dust earlier this week.

“This is the most significant event in the past 50 years,” said Pablo Mendez Lazaro, an environmental health specialist with the University of Puerto Rico.  Due to the extremely poor air quality, “conditions are dangerous in many Caribbean islands,” he said Monday.

Most others agree this is the worst air quality caused by Saharan dust in recent memory.

The mass could settle over east Texas, including Houston, and that might actually help keep people indoors, i.e., the surge in Covid-19 cases there.  It could eventually reach the mid-Atlantic in a few days.

--A Siberian town with the world’s widest temperature range has recorded a new high amid a heat wave that is contributing to severe forest fires.

The temperature in Verkhoyansk hit 100.4 degrees on Saturday, according to a website that compiles Russian meteorological data. 

The town is located above the Arctic Circle in the Sakha Republic, 2,900 miles northeast of Moscow.

The town of about 1,300 is recognized by the Guinness World Records for the most extreme temperature range, with a low of minus-90 degrees and a previous high of 98.96 degrees.

Good lord!  What a pain in the butt to shop for clothing if you’re thinking of retiring there.

--Meanwhile, yesterday in northern and eastern parts of India, the annual monsoon season commenced and heavy thunderstorms have always been proven to be deadly in this region.

But Thursday, lightning strikes killed 107 people and injured dozens more.  The majority of the deaths, 83, occurred in the state of Bihar on the Nepal border.

So next time someone tells you, “You have a better chance of getting hit by lightning than winning the lottery,” just say, “Yes, you’re right.”

---

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

We honor our healthcare workers and first responders.

God bless America.

---

Gold: $1784
Oil: $38.16

Returns for the week 6/22-6/26

Dow Jones  -3.3%  [25015]
S&P 500  -2.9%  [3009]
S&P MidCap  -3.7%
Russell 2000  -2.8%
Nasdaq  -1.9%  [9757]

Returns for the period 1/1/20-6/26/20

Dow Jones  -12.3%
S&P 500  -6.9%
S&P MidCap  -16.7%
Russell 2000  -17.4%
Nasdaq  +8.7%

Bulls 57.3
Bears
18.4…reminder, this is a contrarian indicator

Hang in there. Wear a mask and wash your hands.

Or as Sgt. Phil Esterhaus used to say on Hill Street Blues, “Let’s be careful out there.”

Brian Trumbore