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04/03/2021

For the week 3/29-4/2

[Posted 9:30 PM ET, Friday]

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Edition 1,146

Another depressing day in our nation’s capital as a motorist rammed his vehicle into U.S. Capitol police on Friday, killing one officer and injuring another and forcing the Capitol complex to lock down in an attack that police said did not appear to be terrorism-related.

Officer William “Billy” Evans, an 18-year veteran of the force, was killed by the impact of the vehicle, traveling at a high rate of speed.

The suspect died after he exited his car, brandishing a knife, and was shot and killed by responding officers. [At least this is what is being reported as I go to post.]  The suspect, from his social media posts, talked of the U.S. government being his enemy and “mind control.”

Our prayers go out to Officer Evans’ family.

Biden’s Agenda

President Joe Biden unveiled his $2.25 trillion infrastructure program this week, loaded with road repairs, internet upgrades and other initiatives that are normally popular on their own, according to a Reuters/Ipsos poll, but public support declines when the initiatives are packed into a Democratic bill and sold as a Biden-backed plan.

The poll, taken March 31-April 1, highlights the challenges facing Biden and fellow Democrats in Congress as they roll out the “American Jobs Plan” in front of Republican opposition and a hyper-partisan American public.

While most Americans, including many Republicans, like the ideas in the plan in general, they are less likely to support legislation written by Democrats to make those ideas a reality, the poll shows.

The poll found: 79% of Americans supported a government overhaul of American roadways, railroads, bridges, and ports.  71% support a plan to extend high-speed internet to all Americans.  68% support an initiative to replace every lead pipe in the country.  66% supported tax credits for renewable energy.  64% in the survey of 1,005 American adults (including 398 who identified as Republicans or Republican-leaning independents and 445 Democrats or Democratic-leaning independents) support a tax hike on corporations and large businesses, and 56% supported ending tax breaks for the fossil fuel industry.

However, only 45% of Americans said they would support a jobs and infrastructure plan that was “recently released by the Biden administration.” Another 27% said they were opposed and the remaining 28% said they were not sure.  The decline in support appears to be mostly a partisan reaction: only about two in 10 Republicans and three in 10 independents said they supported a Biden infrastructure plan, compared with seven out of 10 Democrats.

So therein lies President Biden’s problem with his “American Jobs Plan,” which he formally unveiled in Pittsburgh on Wednesday.

The eight-year stimulus program allocates $620 billion to transportation and $650 billion to quality-of-life improvements such as clean water and high-speed broadband.  About $580 billion is earmarked for manufacturing and $400 billion targets improved care for the elderly and people with disabilities.  Under the program, the corporate income tax would increase to 28% from 21%.

“It is not a plan that tinkers around the edges,” President Biden said on Wednesday.  “It is a once-in-a-generation investment in America.”

While many local and state Republican officials love some of the components, particularly the new infrastructure spending, generating sustained support for the proposal is a daunting challenge to the White House.  Influential groups like the Business Roundtable and the U.S. Chamber of Commerce warn lawmakers against raising taxes as the United States emerges from a deep economic crisis caused by the pandemic.

Senate Minority Leader Mitch McConnell called the plan “another Trojan horse for far-left demands.”

“I’m going to fight them every step of the way, because I think this is the wrong prescription for America,” McConnell told a news conference in Owensboro, Kentucky.  “That package that they’re putting together now, as much as we would like to address infrastructure, is not going to get support from our side,” McConnell added.

McConnell is pointing at the ‘other half’ of the bill, the half not addressing traditional infrastructure.  It’s the half that makes investments to reduce climate change and modernize schools, manufacturing hubs and eldercare facilities.  The White House argues these should also be viewed as critical infrastructure, but others see them as partisan Democratic priorities.  This second $1 trillion in spending is where most of the debate is going to center.

Meanwhile, a key House of Representatives Democrat said lawmakers could significantly change the tax proposals.  “We will accept some of what (Biden) is proposing,” said Democratic Representative Richard Neal, who chairs the tax-writing House Ways and Means Committee.  “If we can improve upon the president’s proposal, we want to do that,” Neal added. 

House Democrats have a goal of passing the package by July 4.  But without Republican support, Democrats would have to resort to a parliamentary procedure (budget reconciliation) that would enable them to pass the bill with a simple majority vote rather than the 60 votes needed to advance most legislation.  But that would require them to drop elements that do not affect taxes and spending, such as provisions that would make it easier for workers to organize labor unions.

President Biden understands he has laid out a marker.  He will have to negotiate with Republicans on this one, and they will insist on breaking up the proposal into individual pieces.

Biden Bits….

--Fox News host Chris Wallace ripped White House press secretary Jen Psaki on Sunday over media access at border facilities – saying the Biden Administration is being “less transparent than the Trump administration.”

It was part of a tense exchange between the two during an interview on “Fox News Sunday.”

Wallace said “the only way we know how bad conditions are” at the border is because of photographs taken and released by Republican and Democratic members of Congress.

“These kids are living in these conditions now. They’re not living in these conditions some indeterminate time from now when the president says everything will be fixed,” Wallace said.

He also pushed back on Psaki’s insistence during White House news briefings that the visits must be conducted safely because of the coronavirus pandemic.

Psaki said the president is “absolutely committed” to allowing media access.

“When?” Wallace asked.

“We want to provide access into the border patrol facilities.  We are mindful of the fact that we are in the middle of a pandemic,” she said.  “We want to keep these kids safe, keep the staff safe, but we are absolutely committed to transparency and providing access to media to the border patrol facilities.”

But Wallace pressed about the lack of access and how the length of time minors are being held violates the law, saying the Biden White House is “being less transparent than the Trump administration.”

Rep. Alexandria Ocasio-Cortez (D-N.Y.) on Wednesday night slammed the overcrowded conditions for immigrants at the U.S.-Mexican border under President Biden as “inhumane,” “horrifying,” “unacceptable” and “barbaric.”

She also blamed decades of U.S. foreign policy with countries in neighboring Central America as contributing to the perpetual crisis of desperate residents from poor, violence-torn countries flooding the border.

AOC unloaded on the border crisis during a virtual town hall meeting Wednesday night.

“The fact that this keeps happening is a political failure of both parties,” Ocasio-Cortez said.

The administration finally allowed journalists inside its main border detention facility for migrant children, revealing a severely overcrowded tent structure where more than 4,000 people, including children and families, were crammed into a space intended for 250 and the youngest were kept in a large play pen with mats on the floor for sleeping.

Two journalists from the Associated Press and a crew from CBS were allowed to tour the facility in Donna, Texas, in the Rio Grande Valley, the nation’s busiest corridor for illegal crossings.  But that’s been it in terms of the promised transparency.

So an ABC News/Ipsos poll shows 75% of Americans approve of how President Biden is handling the distribution of coronavirus vaccines (even 53% of Republicans approve) and the response to the virus itself (72%), but on the issues of gun violence and the situation at the border, 57% disapprove of the president’s actions, or lack of same, on each.

54% of Americans believe the situation with migrants and unaccompanied children showing up at the border is currently a crisis.

--The controversial Georgia election ‘reform’ legislation adds a photo ID requirement for voting absentee by mail, cuts the amount of time people have to request an absentee ballot and limits where drop boxes can be placed and when they can be accessed. It also bans people from handing out food or water to voters waiting in line and allows the Republican-controlled State Election Board to remove and replace county election officials while curtailing the power of the secretary of state as Georgia’s chief elections officer.

It’s this last bit, the ability to remove and replace county election officials, and more, that is not getting the press it deserves, as it’s too easy to go after perceived restrictions on mail-in voting, limited voting sites and denial of food and water.

Down below I simply report the ‘pressured’ reactions of the likes of Delta and American Airlines, without comment, but the likes of the Wall Street Journal editorial board in criticizing the CEOs, or Major League Baseball, does not bring up the Election Board shenanigans which states like Georgia, Arizona and Texas are putting in place, and it’s these moves that threaten the democratic process.  It’s the very card that then-President Trump was attempting to play, post-election.  To get state legislatures and/or election boards to overturn the certified votes in the key battleground states he had lost.

For example, the Georgia law replaces the elected secretary of state as the chair of the state election board with a new appointee of the legislature after Republican Secretary of State Brad Raffensperger rebuffed Trump’s attempts to overturn the state’s election results.  It also allows the board to remove and replace county election officials deemed to be underperforming.  How is that defined?

Republican Rep. Barry Fleming, a driving force in crafting the law, said the provision to replace county election officials would only be a “temporary fix, so to speak, that ends and the control is turned back over to the locals after the problems are resolved.”

What?!  You kidding me?!  If you don’t find this scary, look down below at what just happened with Hong Kong’s election commission and legislative council, which once had a democratic component and no longer does.

As in, once we fix the 2022 or 2024 election in our favor, Georgia district X voters (or Texas, or Arizona), you’ll get your control back.

Again, this is codifying Trump’s grievances against Republican officials in Georgia who resisted his efforts to overturn the vote there.  Trump is even being investigated today for pressuring current Secretary of State Raffensperger to “find” enough votes to reverse his loss in the state.  Yet the new law strips the sec. of state, the state’s top elections official, of his seat and his role as chair of the elections board and endows the state legislature with the power to fill three of that board’s five seats – essentially giving the legislature control over the certification of elections and voting rules.  The new law also empowers the state election board to suspend or replace local election officials and delay certification, making it potentially easier for them to meddle with results.

This is what should piss off most Americans.  Not mail-in ballot limitations, or denial of food and water, or lack of poll locations in some traditionally Democratic areas.  As I said the other week, once you know the rules, you have to deal with it…and plan way ahead.

But you can’t plan for what the Georgia (fill in the state) legislature is preparing to do to upend your vote.

The Pandemic

This week, Dr. Rochelle Walensky of the Centers for Disease Control bluntly admitted she is gripped by a “feeling of impending doom” over a looming so-called fourth wave of the pandemic driven by more-contagious variants of Covid-19.

“Right now, I’m scared,” Walensky said during a briefing.  “I’m asking you to hold on just a little bit longer…so all those people will still be here when the pandemic ends.”

She said if Americans do not change course immediately and return to stricter public health precautions, the nation is facing a huge spike of illnesses even as the end of the pandemic appears to be in sight.

“We do not have the luxury of inaction.  For the good of our country we must work together to prevent a fourth surge,” Walensky said.

In my little town of Summit, I just saw that infections rose 50% in March over February, with over 60 schoolkids becoming infected in the month, a lot.  Hospitalizations among the young are also increasing in my state of New Jersey.

Meanwhile, death and case levels continue to spike ferociously in eastern Europe, particularly Poland, Ukraine and Hungary, with global cases at their highest levels since mid-January.  Turkey saw its highest number of cases yet on Thursday, and its highest death toll since mid-January.

Thursday saw 76,000 cases in the U.S., when we should be well below 40,000, preferably 20,000.  This weekend’s numbers will be skewed by the holiday and lack of reporting, though today’s case figure was disconcerting, 70,000.

Covid-19 death tolls, as of tonight….

World…2,850,149
USA…567,610
Brazil…328,366
Mexico…203,664 (see below)
India…164,141
UK…126,816
Italy…110,328
Russia…99,633
France…96,280
Germany…77,421
Spain…75,541
Colombia…63,777
Iran…62,876
Argentina…56,023
Poland…54,165
South Africa…52,946
Peru…52,331
Indonesia…41,151
Ukraine…33,679
Turkey…31,892
Czechia…26,765
Romania…23,819
Chile…23,421
Belgium…23,045
Canada…23,008

Source: worldometers.info

U.S. daily death tolls…Sun. 510; Mon. 639; Tues. 873; Wed. 1,115; Thurs. 952; Fri. 1,001.

Covid Bytes

--On Monday, President Biden said that 90% of American adults will be eligible for Covid-19 vaccines by April 19, and vaccination sites would be within five miles of an individual’s home.

Biden’s new timeline beats his previous May 1 goal for nationwide eligibility by nearly two weeks.  The remaining 10% of the population would be eligible by that time, he said.

--Pfizer/BioNTech and Moderna vaccines have been found to be 90% effective after two doses in a study of real-life conditions, the CDC confirmed on Monday.

In a study of about 4,000 health-care personnel, police, firefighters and other essential workers, the CDC found that the vaccines reduced the risk of infection by 80 percent after one shot.  Protection increased to 90 percent following the second dose.

Pfizer then announced Wednesday that its Covid-19 vaccine is safe and strongly protective in kids as young as 12, a step toward possibly beginning shots in this age group before they head back to school in the fall.

Most of the vaccines have been rolled out worldwide for adults, who are at higher risk from the coronavirus, while Pfizer’s is authorized for ages 16 and older. 

Pfizer reported that in a study of 2,260 volunteers ages 12 to 15, preliminary data showed there were no cases of Covid-19 among fully vaccinated adolescents compared to 18 among those given dummy shots.

The study hasn’t been published as yet, but researchers reported high levels of virus-fighting antibodies, somewhat higher than were seen in studies of young adults.

The kids had the same side effects as young adults, Pfizer said, particularly after the second dose.

Pfizer and its German partner BioNTech in the coming weeks plan to ask the U.S. Food and Drug Administration and European regulators to allow emergency use of the shots starting at age 12.

Moderna is also in the process of testing its vaccine on 12- to 17-year-olds.  AstraZeneca recently began a study of its vaccine among 6- to 17-year-olds in Britain.  And in China, Sinovac recently announced it has submitted preliminary data to Chinese regulators showing its vaccine is safe in children as young as 3.

As for Pfizer, it needs to make sure all eligible adults get the vaccines first, so it would be awhile before children start receiving doses.

Separately, Pfizer/BioNTech reported their vaccine was 91% effective up to six months following a second dose, per updated data from a trial started last year that led to the first U.S.-authorized preventative against the coronavirus.  There were no serious safety concerns seen in more than 12,000 people who have at least six months of follow-up after their second doses, the companies said.

Among 800 study participants in South Africa, all nine Covid-19 cases in the country, where the B.1.351 variant is common, were in the placebo group. That gives the Pfizer/BioNTech vaccine 100% effectiveness against the variant.

--Speaking of AstraZeneca, German health authorities have decided to restrict the use of their vaccine to people over 60 years of age amid concerns about the small number of younger people who have experienced blood clotting after getting the shot, media reports said Wednesday.

The Netherlands then halted use of the AstraZeneca vaccine for people under 60 today as well following the death of a woman who had received a shot, national news agency ANP said, citing the Health Ministry.

And then the UK government said there have been 25 new reports of rare types of blood clots linked to the AstraZeneca vaccine, bringing the total there to 30.  There were no reports of the same reactions to the Pfizer/BioNTech vaccine, Britain’s health agency said today.

Now the 30 were out of 18.1 million doses of the vaccine given by March 24, so the UK agency said, “On the basis of this ongoing review, the benefits of the vaccines against Covid-19 continue to outweigh any risks and you should continue to get your vaccine when invited to do so.”

--The Food and Drug administration is investigating what caused a batch of the active ingredient for Johnson & Johnson’s Covid vaccine to be scrapped for failing to meet quality standards at a contract manufacturing plant operated by Emergent BioSolutions Inc., which has had issues before.

15 million doses were impacted as J&J disclosed Wednesday that a batch didn’t meet standards and didn’t reach the vial-filling and finishing stage, and no doses from it were distributed. 

The White House said Thursday it didn’t expect the issue to affect the promised U.S. supply of J&J’s vaccine.  J&J still expects to deliver about 100 million doses for use in the U.S. by midyear, under the terms of a $1 billion purchase agreement with the federal government.

J&J downplayed the situation and said it met its most recent vaccine delivery target.  None of the doses produced and shipped so far in the U.S. have come from that plant.  Those doses used in the U.S. have been manufactured at J&J’s plant in the Netherlands.

--Countries in the Americas could see a worse surge in coronavirus cases than the previous surge last year, with Brazil, Uruguay and Cuba already suffering more, the Pan American Health Organization (PAHO) said on Wednesday.  Director Carissa Etienne said the end of the Southern Hemisphere summer, following holidays where people grouped together and spread cases, had prompted spikes. She urged citizens to stay at home and governments to think hard before lowering movement restrictions.

PAHO said at least one of the three Covid “variants in concern” have been identified in 32 regional countries, with Brazil’s P1 in Argentina, Chile, Uruguay, Colombia, Venezuela, Peru, the United States, Canada and Mexico.

--French President Emmanuel Macron on Wednesday ordered France into its third national lockdown and said schools would close for three weeks as he sought to push back a third wave of infections that threatens to overwhelm hospitals.

With the death toll nearing 100,000, intensive care units in the hardest-hit regions at breaking point and a slower-than-planned vaccine rollout, Macron was forced to abandon his goal of keeping the country open to protect the economy.

“We will lose control if we do not move now,” the president said in a televised address to the nation.  The announcement means that movement restrictions already in place for more than a week in Paris, and some northern and southern regions, will now apply to the whole country for at least a month, from Saturday.

Daily new infections in France have doubled since February to nearly 40,000. The number of Covid patients in intensive care has breached 5,000, exceeding the peak hit during a six-week-long lockdown late last year.

--Brazilian President Jair Bolsonaro on Monday lost two ministers when his combative Foreign Minister Ernesto Araujo stepped down over struggles to get coronavirus vaccines, and Defense Minister Fernando Azevedo e Silva unexpectedly quit.  The departure of the two key ministers in one day underlines the mounting pressure on Bolsonaro, as he faces ever-louder calls to improve management of the pandemic and slow a wave of new cases pushing hospitals to the brink.

--Mexico published revised figures indicating that the number of deaths caused by coronavirus is 60% higher than previously reported.

More than 321,000 people are now believed to have died from Covid-19 in the country, which would place Mexico with the second highest number of Covid-related deaths in the world, after the U.S.

The revised report issued by Mexico’s health ministry showed that by the end of the sixth week of 2021, there had been 294,287 deaths “associated with Covid-19” – up from the 182,301 confirmed figure given previously.  You see worldometers’ updated figure through April 2 up above, which doesn’t reflect the health ministry’s update.

Since mid-February, more than 26,770 Covid-19-related deaths have been reported across Mexico which would take the total to more than 321,000.

--New research published earlier this month in the American Journal of Public Health argues that Florida is undercounting the number of people who died from Covid by thousands of cases, casting new doubt on claims that Gov. Ron DeSantis navigated the coronavirus successfully.

--In interviews with CNN’s Sanjay Gupta, Deborah Birx, the former White House coronavirus response coordinator, said that U.S. deaths from the virus could have been sharply reduced if mitigation efforts to slow the spread had come more quickly last spring.

“The first time, we have an excuse. There were about 100,000 deaths that came from that original surge,” Birx said.  “All of the rest of them, in my mind, could have been mitigated or decreased substantially.”

Dr. Robert Redfield, the former director of the CDC, accused President Trump’s health secretary, Alex Azar, and the secretary’s leadership team of pressuring him to revise scientific reports.  “Now he may deny that, but it’s true,” Redfield told Sanjay Gupta.  Azar, in a statement, denied it.

Dr. Stephen Hahn, the former commissioner of the Food and Drug Administration, said his relationship with Azar grew “strained” after the health secretary revoked the agency’s power to regulate coronavirus tests.  “That was a line in the sand for me,” Dr. Hahn said.  When Gupta asked him if Azar had screamed at him, Dr. Hahn replied; “You should ask him that question.”

Admiral Brett Giroir, who served as the nation’s coronavirus testing czar, told CNN, “When we said there were millions of tests available, there weren’t, right?” referencing the administration’s repeated claims in March 2020 that anyone who sought a coronavirus test could get one.  “There were components of the test available, but not the full meal deal.”

The finger-pointing prompted critics to say that former Trump administration officials who managed the pandemic response have turned to a new project: managing their legacies.

“It’s ridiculous,” said Ashish Jha, dean of Brown University’s public health school and a prominent pandemic commentator.  “Brett Giroir knew we had a problem with testing. With PPE. With vaccine distribution. He told me as much. But he felt he needed to say what the administration wanted to hear publicly.”

But back to Birx, she’s the one who once praised Trump as being “so attentive to the scientific literature” and she’s been pilloried for not publicly correcting the president as he made outlandish claims about unproven theories.

Birx argues she was personally rebuked by Trump after warning in an August interview that Americans needed to take strict safety precautions because the virus was “extraordinarily widespread.”

“He felt very strongly that I misrepresented the pandemic in the United States, that I made it out to be much worse than it is,” she said.  “I feel like I didn’t even make it out as bad as it was.”

--Finally, on the topic of the origins of the virus….

A 124-page report of a joint inquiry by the World Health Organization and China contained a glut of new detail but offered no profound new insights.  And the report does little to allay Western concerns about the role of the Chinese Communist Party, which has been resistant to outside scrutiny and has at times sought to hinder any investigation by the WHO.  It’s unclear whether China will permit further outside experts to keep digging.

“The investigation runs the risk of going nowhere, and we may never find the true origins of the virus,” said Yanzhong Huang, senior fellow for global health at the Council on Foreign Relations.

Editorial / Washington Post

“The World Health Organization joint investigation with China into the origins of the coronavirus looked into a dark chasm and saw darkness. The report offer theories about pathways of a zoonotic spillover from animals to people, but not a single animal source among thousands has tested positive with SARS-CoV-2.  The investigators did not conduct a forensic probe into the possibility of a laboratory leak. The origins of the pandemic remain obscure.  Finding the answer is as important and elusive as ever.

“Overshadowing the whole exercise is the unspoken power of the Chinese party-state to determine the outcome.  China has strenuously denied that the virus may have leaked from the Wuhan Institute of Virology, which was carrying out risky gain-of-function experiments on bat coronaviruses.  This involves modifying viral genomes to give them new properties, including the ability to infect lung cells of laboratory mice that had been genetically changed to respond as human respiratory cells would.  According to the WHO-China report, during the team’s visit to the institute on Feb. 3, ‘rumors of a leak from the laboratory were refuted categorically by the laboratory director.’  The director said the laboratory handled some 13,000 samples over three years.  ‘No infection was ever reported.’  All staff are tested and the results all negative, he said.  A member of the WHO team, Dr. Dominic Dwyer of Australia, told reporters Tuesday, ‘I think we were satisfied that there was no obvious evidence of a problem.’  But he conceded the team had not conducted a forensic investigation of a possible laboratory leak.  Will China now permit one?  China’s reluctance only fuels suspicion.

“The joint investigation – 17 Chinese and 17 international scientists working over 28 days in January and February – ran into many frustrating unknowns.  In search of clues from early cases in Wuhan, 233 health institutions checked 76,253 health records of respiratory conditions in October and November 2019 and identified 92 that might be SARS-CoV-2.  Upon testing, none were.  The Huanan food market in Wuhan sold seafood and wild animals, but ‘no firm conclusion’ can be drawn about its role because there were also virus cases with no connection to the market, the report says.  Viral genomes and epidemiological data showed ‘no obvious clustering’ by ‘exposure to raw meat or furry animals.’  The report adds, ‘Through extensive testing of animal products in the Huanan market, no evidence of animal infections was found.’  More than 80,000 wildlife, livestock and poultry samples were collected from 31 provinces in China and none tested positive for the virus before or after the outbreak.

“The Chinese and WHO scientists insisted the most likely pathway of the virus was a zoonotic spillover, either directly or indirectly from an animal species to humans.  They called a laboratory leak ‘an extremely unlikely pathway.’  But the WHO director-general, Dr. Tedros Adhanom Ghebreyesus, disagreed with the team, saying the laboratory leak ‘requires further investigation.’  He declared that all hypotheses remain on the table, and he is ready to deploy specialists to probe further.

“China has a responsibility to open its doors.  This is not a blame game, but an essential investigation into the cause of this pandemic to make another one less likely.”

Editorial / Wall Street Journal

“The WHO’s tissue-thin analysis isn’t surprising.  Chinese government scientists provided most of the data and worked with the international team to craft the report. Beijing has limited independent access to information on Covid-19’s origin, much as it silenced scientists and journalists who raised doubts about the official story last year. The report’s publication was repeatedly delayed, as both sides negotiated a report that is more political than scientific.

“The WHO team is also compromised by conflicts of interest. Zoologist Peter Daszak, the American on the team, has collaborated with the WIV (Wuhan Institute of Virology) for years and supported gain-of-function research.  As early as February 2020 he helped coordinate a statement in the Lancet condemning ‘conspiracy theories suggesting that Covid-19 does not have a natural origin.’  Another team member, virologist Marion Koopmans, oversees an outfit in the Netherlands that has conducted gain-of-function research and could face serious repercussions if the pandemic started in a lab.

“The Biden Administration hasn’t taken a definitive position on the lab-leak theory, but Covid-19 spokesman Anthony Fauci played down the idea last week.  Dr. Fauci’s institute financed work at the WIV and has backed gain-of-function research.  He’s the wrong man to reassure the public about lab research on coronaviruses.

“Dr. Fauci was trying to rebut Robert Redfield, the former chief of the Centers for Disease Control and Prevention, who said last week that ‘I still think the most likely etiology of this pathogen in Wuhan was from a laboratory.’  Dr. Redfield added that virus transfer to a lab worker is not unusual in such research.

“Even the WHO recognizes the implausibility of the report.  ‘I do not believe that this assessment was extensive enough.  Further data and studies will be needed to reach more robust conclusions,’ WHO director-general Tedros Ghebreyesus said Tuesday.  ‘Although the team has concluded that a laboratory leak is the least likely hypothesis, this requires further investigation.’  He’s ready to deploy more specialists, but don’t expect Beijing to welcome them.

“The U.S. and 13 other governments released a statement Tuesday expressing ‘shared concerns’ that the WHO study ‘was significantly delayed and lacked access to complete, original data and samples.’ That’s nice, but it sounds like they’re prepared to conclude that Covid’s origin story is unknowable and move on.

“That shouldn’t be the end of it. The Biden Administration knows the underlying intelligence and should release it to the public.  Unless it does, China’s propaganda backed by the WHO’s failure will prevail in much of world opinion.  The Biden Administration says it wants to revitalize multilateral institutions, and that should start with refusing to accept the WHO’s Wuhan whitewash.”

---

Wall Street and the Economy

Monday, tugs pulled the 400-meter-long Ever Given container carrier free from the Suez Canal, helped by a high tide, and traffic resumed, with about 140 ships passing through the Canal on Tuesday after it had been reopened.  It was estimated the traffic jam at the mouth of the Canal would be clear in about four or five days.

But it will take weeks, and months, to clear the cargo backlog, especially at the ports, the blockage having exacerbated an already severe global supply chain crisis.

The ripple effects will include higher shipping rates.  The ships run on schedules, with only a finite number of boxes to go around, so the ships aren’t easily repositioned to areas with high demand.

Meanwhile, today we saw the release of the March nonfarm payroll report and the economy added a whopping 916,000 jobs for the month, well above consensus of 650,000, with the unemployment rate dropping to 6.0% from 6.2% in February.  February’s jobs number was revised upward to 468,000.

Leisure and hospitality added 280,000 amid the nation’s reopening, while construction gained 110,000 and manufacturing 53,000.

780,000 jobs were added in the private sector, 136,000 in government.

Average hourly earnings fell -0.1% for a 4.2% year-over-year increase, down from the prior month’s 5.2% pace.

The Black unemployment rate fell to 9.6%, while the Hispanic jobless rate is 7.9%.

We had a slew of other economic data this week.

The S&P CoreLogic Case-Shiller National Home Price Index, which measures average home prices in major metropolitan areas across the nation, rose 11.2% in the year that ended in January, the highest annual rate of price growth since February 2006, during the bubble.

The Case-Shiller 20-city index rose 11.1% from a year earlier, and price growth accelerated in all 20 cities.  Phoenix had the fastest home-price growth in the country for the 20th straight month, at 15.8%, followed by Seattle at 14.3%.

The ISM manufacturing reading for March was 64.7 (50 the dividing line between growth and contraction), the best reading in 11 years and the highest sector optimism level since 1983.  The Chicago PMI reading for manufacturing in the region was a robust 66.3, best since 2018. 

February construction spending was down 0.8%, as expected.

The initial weekly jobless claims figure was 719,000, up 61,000 from a revised 658,000 the week before, which thus becomes the first time we’ve been below the 665,000 peak set during the Great Recession, prior to the pandemic.

The Atlanta Fed’s GDPNow barometer for the first quarter rose to 6.0% this week.

Lastly, President Trump liked to tout his stock market performance since Election Day, while during the campaign, he continually said that if Joe Biden was elected, the market would crash.

Well, since Election Day, Nov. 3, the S&P 500 is up 19.3%, hardly a crash.  And Biden’s first 50 trading days performance from the Jan. 19 close to the close on March 31 was 4.6%. 

Europe and Asia

The euro region (EA19) released its final manufacturing PMIs for March (courtesy of IHS Markit) and the eurozone figure was 62.5 vs. February’s 57.9, with record increases in output, new orders, exports and purchasing activity.  Unprecedented supply-side delays, however, drove the sharpest rise in input costs for a decade.

Germany’s manufacturing PMI for March was an all-time high of 66.6.
France 59.3…246-month high
Italy 59.8…252-month high
Spain 56.9…171-month high
Ireland 57.1
Greece 51.8
Netherlands 64.7…record high

Chris Williamson / IHS Markit

“Eurozone manufacturing is booming, with production and order books growing at rates unprecedented in nearly 24 years of PMI survey history during March.

“Although centered on Germany, which saw a particularly strong record expansion during the month, the improving trend is broad based across the region as factories benefit from rising domestic demand and resurgent export growth.

“Driving the upturn has been a marked improvement in business confidence in recent months, with expectations of growth in the year ahead running at record highs in February and March. This has not only boosted spending but has also led to rising investment and restocking, as firms prepare for even stronger demand following the vaccine roll-out.

“The picture is blighted, however, by record supply chain disruptions, which will likely be exacerbated further by delays arising from the Suez Canal blockage.  Prices are already rising at the fastest rate for a decade as demand outstrips supply, resulting in a sellers’ market for many goods.

“While the forces driving prices higher appear to be temporary, linked to the initial rebound from Covid-19 lockdowns, any further upward pressure on firms’ costs and selling prices is unwelcome.

“Encouragingly, the recent expansion of output means production in the eurozone is likely to have surpassed its pre-Covid peak, and hiring has already accelerated markedly as producers seek to build additional capacity to meet higher demand.”

But next week we get the readings on the service sector, and that’s where the new lockdowns will be reflected in the data.

Separately, we had a flash reading on March inflation for the euro area, up 1.3% annualized, compared with February’s 0.9% pace.  Ex-food and energy, the rate was 1.0%.

Brexit: Ten EU member states, including Germany, France and Poland, have said they will no longer extradite their nationals to the UK following Brexit, the British Home Office said. 

Two more – Austria and the Czech Republic – will only hand over suspects to the UK with their consent.

The European Arrest Warrant was introduced in 2004 and obliged member states to arrest and transfer suspects to countries where they were wanted.

Separately, taking their first step to repair the rupture to banking and trade, the UK and the European Union agreed on a new forum on cross-border financial market regulation.  Some Brussels officials said securing a common framework could help unlock equivalence talks.

Turning to AsiaChina’s National Bureau of Statistics reported the official government manufacturing PMI in March rose to 51.9 from February’s 50.6, the 13th straight month above 50. The service sector reading surged to 56.3 from 51.4.

The private Caixin manufacturing reading for last month was 50.6, down from 50.9.  Caixin’s service sector reading comes next week.

Japan’s manufacturing PMI for March was 52.7 vs. February’s 51.4. 

Separate readings on retail sales for February, -1.5% year-over-year, and February industrial production, -2.6% Y/Y, were not as good.  February’s figures, however, owed to the semiconductor shortage, as well as a large earthquake off the eastern coast of Japan that impacted business in the northern region.

Taiwan’s manufacturing PMI for March was 60.8, an 11-year high, but supply chain delays worsened, with the worst such delays in 17 years of data.

South Korea’s manufacturing PMI for March was a solid 55.3.

Street Bytes

--Stocks finished up this holiday-shortened week, with the Dow Jones up 0.2% to 33153, having hit a new closing high Monday of 33171.  The S&P 500 ended the week at its new high, up 1.1% to 4019, the first time over 4000, and Nasdaq rebounded 2.6%. Much of the good feeling is over the expanding vaccine rollout, despite ongoing Covid concerns, both here and abroad, and the market hasn’t had a chance to respond to Friday’s terrific jobs report with no trading in stocks today.

For the first quarter, the Dow gained 7.8%, the S&P 5.8% and Nasdaq 2.8%. The S&P is now up 80% since the March 2020 low.

--U.S. Treasury Yields

6-mo. 0.03%  2-yr. 0.19%  10-yr. 1.72%  30-yr. 2.36%

The bond market was open briefly following the jobs report and the yield on the 10-year rose 5 basis points from Thursday’s close.

--The immediate crisis of the Suez Canal blockage is over, but the battle over damages will go on for months.

The long-term cost of the canal’s estimated $10-billion-a-day closure will likely be small, given that global merchandise trade amounts to $18 trillion a year.  But with cargoes delayed for weeks, if not months, the blockage will unleash a flood of claims by everyone affected, from the shipping lines to manufacturers and oil producers.

Everything was impacted, from oil, to grain, perishable commodities, consumer goods…but on the issue of perishables, that’s where the enormity of the claims may not be known for some time.

--Credit Suisse and Japanese bank Nomura Holdings Inc. told shareholders on Monday that they faced “significant losses” as a number of international investment banks were caught up in the collapse of previously little-known Archegos Capital Management, a U.S. hedge fund.

Nomura warned of a $2 billion loss, while Credit Suisse’s losses are estimated at $3 billion.  Another, Mitsubishi UFJ Financial, said it may have suffered losses of about $300 million at its European subsidiary.  It was reported the likes of Goldman Sachs Group and Morgan Stanley were quick to move large blocks of assets before other large banks that traded with Archegos, thus limiting their own losses.

Archegos ran into trouble last week when ViacomCBS, the media giant in which the hedge fund had built a large secret position, saw its stock plunge 29 percent over two days (27% Friday) after it accounted for a $3 billion share sale.  This forced prime brokers to make so-called margin calls for Archegos to place additional cash or collateral with them to make up for the losses in its leveraged bets.

When Archegos failed to meet the margin calls, investment banks started offloading about $20 billion of stocks on Friday that they held, linked to loans in the hedge fund. The forced selling prompted further share price pressure in ViacomCBS, and also saw another media company, Discovery, as well as the U.S.-listed shares of China-based Baidu and Tencent Music plunge.  Discovery, like Viacom, crashed 27% last Friday as well.

Archegos was a more than $10 billion fund led by investor Bill Hwang, a 57-year-old who cut his teeth at the hedge fund Tiger Management, run by the legendary Julian Robertson, Hwang becoming one of the firm’s famous alumni, or “Tiger Cubs,” when he started his own fund, Tiger Asia.  But in 2012, he faced an insider-trading investigation; securities regulators said Tiger Asia had used confidential information to bet against the shares of Chinese stocks and had manipulated other shares.

Hwang then rebuilt his fortune to about $10 billion and turned his firm into a family office, renaming it Archegos Capital Management.  Little regulated, family offices are created to manage the wealth of private individuals and their families, as opposed to hedge funds, which traditionally manage money for outside clients.

But after building large holdings in a small number of stocks, including ViacomCBS and Discovery, which also operated the cable channels TLC and the Food Network, Archegos rattled markets in the past week after the firm and its banks began liquidating huge positions in Hwang’s holdings. Archegos’ total positions that were unwound approached $30 billion thanks to the leverage it obtained from the banks.

Archegos’ investments were partly concentrated in a common Wall Street derivative, a total return swap, that has long faced scrutiny. 

Total return swaps are contracts brokered by Wall Street banks that allow a user to take on the profits and losses of a portfolio of stocks or other assets in exchange for a fee.  Swaps allow investors to take huge positions while posting limited funds up front, in essence borrowing from the bank.

The use of swaps allowed Bill Hwang to maintain his anonymity, even as Archegos was estimated to have had exposure to the economics of more than 10% of multiple companies’ shares.  Investors holding more than 10% of a company’s securities are deemed to be company insiders and subject to additional regulations around disclosures.

The wider market fallout from the liquidation of Archegos’ positions has, for now, been contained compared with the 1998 implosion of hedge fund Long-Term Capital Management in 1998, which prompted the Federal Reserve to cut rates and coordinate a bailout of the firm by its creditors.

So you can imagine that after the GameStop short-squeeze saga and now the Archegos margin call meltdown, regulators and some senators, like Sen. Elizabeth Warren (D-Mass.), are calling for more oversight of the financial system.  I can’t blame them.  If you don’t disclose your positions, and there is no transparency, this kind of thing is going to happen.

--Boeing Co. said on Monday it sold 100 new 737 MAX-7 jets to long-time customer Southwest Airlines, in its biggest order since the aircraft’s safety ban was lifted in the U.S. last year.

The order signals Southwest’s show of confidence in the 737 MAX, ending speculation of a shift to jets made by Airbus SE as Southwest looks for a recovery in the aviation sector.  It would have been a major disaster for Boeing had the budget carrier not given the order.

Southwest, which has been flying older versions of the 737 planes for nearly 50 years, said its order book now has a total of 349 orders and 270 options for the 737 MAX for 2021 through 2031.

Southwest previously had 249 orders and 115 options for the MAX for 2021 through 2026.

Each 737 MAX-7 carries a list price of roughly $100 million, though Southwest will be receiving a substantial discount.

--American Airlines Group said Monday it will return “most” of its aircraft to service in the second quarter starting this week after a recent upturn in bookings and domestic travel.

The Fort Worth, Texas-based carrier now expects first-quarter capacity to be down 40% to 45% from the same period in 2019 versus a prior outlook for a 45% decline, it also said in a filing with the SEC.

“As infection and hospitalization rates have materially declined and vaccine distribution has increased during the quarter, the company has experienced recent strength in domestic and short-haul international bookings,” American said.

Net bookings in the week ended March 26 were at approximately 90% of the level in 2019, with a domestic load factor of 80% for the same period.

--Delta Air Lines, the last U.S. airline still blocking middle seats, will end that policy May 1 as air travel recovers and more people become vaccinated against Covid.  The decision Wednesday reversed a policy that had been in place since last April, and which Delta’s CEO had repeatedly cited as raising trust in the airline.

Delta said that nearly 65 percent of people who flew on Delta last year expect to have at least one dose of the new vaccines by May 1. 

Delta is also bringing back snacks April 14!

--TSA checkpoint travel numbers vs. 2019

4/1…65 percent of 2019 level
3/31…59
3/30…56
3/29…60
3/28…63…new post-pandemic high…1,574,228 travelers
3/27…65
3/26…60
3/25…64
3/24…54

--On a different topic involving Georgia-based Delta Air Lines, CEO Ed Bastian, under pressure, said Wednesday that the state’s new election law overhaul is “unacceptable” and “based on a lie,” after the company faced criticism that it didn’t speak out forcefully enough in opposition to the bill when it was being considered by the state’s Republican leaders.

Bastian offered his assessment of the new Georgia law in a memo sent to employees less than a week after Delta officials joined other corporate lobbyists to shape the final version of a sweeping measure that could make it harder for some Georgia citizens to cast ballots.

Coca-Cola also stepped forward to criticize the election law, while Georgia-based Home Depot and UPS have been largely silent.  The Major League Baseball players union has raised the possibility of moving the summer All-Star Game from Atlanta, and then this afternoon, MLB said it was doing so, a new site not named as yet.

Delta initially issued a statement touting some parts of the law, such as expanded weekend voting, but said “we understand concerns remain over other provisions in the legislation and there continues to be work ahead in this important effort.”

But Bastian spoke more forcefully in Wednesday’s memo to employees.

“The entire rationale for this bill was based on a lie: that there was widespread voter fraud in Georgia in the 2020 elections.  This is simply not true,” Bastian wrote.  “Unfortunately, that excuse is being used in states across the nation that are attempting to pass similar legislation to restrict voting rights.”

Bastian repeated that Delta “joined other major Atlanta corporations to work closely with elected officials from both parties, to try and remove some of the most egregious measures from the bill. We had some success in eliminating the most suppressive tactics that some had proposed.”

But, he emphasized, “I need to make it crystal clear that the final bill is unacceptable and does not match Delta’s values.”

American Airlines said Thursday that it strongly opposes legislation passed by the Texas state Senate to limit voting access.

“We must stand up for the rights of our team members and customers who call Texas home, and honor the sacrifices made by generations of Americans to protect and expand the right to vote,” the Texas-based airline said in a statement.

The legislation, which the state Senate passed early on Thursday and is now set to come before the state House of Representatives, would eliminate drive-through voting, limit polling site hours and give partisan poll watchers more autonomy.

--Ford Motor Co. is scheduling more downtime at several U.S. factories, including its two major truck plants, as a global shortage of semiconductors upends vehicle manufacturing for car makers in North America.

The company said Wednesday that it would halt production for two weeks in April at its truck plant in Dearborn, Mich., and take a week of downtime on the truck side of its Kansas City, Mo., assembly plant.  It also plans to suspend work temporarily and cancel planned overtime at several other factories in North America, attributing these moves to tight chip supplies as well.

Ford in February said it planned to reduce production of its F-150 pickup truck – the nation’s top-selling vehicle and the company’s biggest moneymaker – because of the shortage.  The company also said back then that global production losses from the chip shortfall would hit the pretax bottom line to the tune of $1 billion to $2.5 billion in the first two quarters of the year.

Last Friday, Stellantis NV, the maker of Ram, Jeep and Chrysler, said it would halt production at five North American plants through mid-April because of the lack of semiconductors.  Honda Motor and Toyota idled some U.S. factories in March, citing the same reason.

General Motors closed some North American plants for several weeks as well.

GM and Ford until now had been able to sustain pickup-truck production by in essence cannibalizing (diverting chips from) other, less-profitable vehicles.

Because of the global semiconductor shortfall which is draining dealer lots of cars and trucks, with new-model inventory at U.S. dealerships falling 36% in March, average transaction prices rose 5% to an estimated $40,563, according to automotive researcher Edmunds.

--Meanwhile, we had some March and/or first-quarter sales numbers from the automakers. 

Ford Motor’s sales rose 1% year-over-year to 521,334 units in Q1, powered by a surge of more than 14% in purchases of the automaker’s SUVs.

While truck sales rose 5.1% to 277,233, car sales slumped by almost 57% to 27,002.

Electrified vehicle sales rose more than 74% to 25,980.

“Electrified vehicles hit a new record sales start, trucks reported best retail start in 13 years, and SUVs posted best first-quarter retail sales since 2001,” the company said in a regulatory filling Thursday.

General Motors said its sales in the U.S. gained 4% year-over-year, selling 642,250 vehicles, with a 19% increase in retail sales and a 35% reduction in fleet sales.

Retail sales of Cadillac and Buick both grew 43% in the quarter.  GMC Sierra delivered its “best first-quarter retail sales ever” at an 18% hike, while Chevrolet rose 13% as Bolt EV and Traverse achieved their best first quarter with 60% and 39% increases, respectively.

GM’s fleet sales decline was attributable to a 15% decrease in sales to commercial and government customers and a 55% drop in rental sales.

Toyota Motor Corp. reported U.S. vehicle sales of 253,783 vehicles for March, an 87% increase on a volume basis.  The automaker also reported first-quarter sales of 603,066 vehicles, a rise of 21.6% on a volume basis, compared with Q1 of 2020.

The company’s Lexus division’s March sales jumped 112.9% year-over-year.

Honda Motor said sales in the U.S. increased 16%, while Nissan reported a nearly 11% increase for the first quarter.

Overall, analysts forecast U.S. auto sales will rise roughly 8% for the quarter and the industry’s annualized selling pace in March could hit 16.5 million vehicles, a sign that the level of demand is about on par with what it was before the pandemic, when business collapsed at end of March 2020, as the economy was shutting down.

Separately, Tesla on Friday reported record deliveries for the January to March quarter, beating Wall Street estimates, as solid demand offset the impact of a global shortage of parts.

“We are encouraged by the strong reception of the Model Y in China and are quickly progressing to full production capacity,” Tesla said in a statement.  “The new Model S and Model X have also been exceptionally well received, with the new equipment installed and tested in Q1 and we are in the early stages of ramping production,” it added.

The electric-car maker “delivered” 184,800 vehicles during the first quarter, above estimates of 177,822 vehicles, according to Refinitiv data.  This also beats its previous record of 180,570 achieved last quarter.

Tesla’s total “production” in the first quarter rose marginally to 180,338 vehicles compared with fourth-quarter production of 179,757 vehicles.

--Related to the above on the auto industry, Taiwan Semiconductor Manufacturing Co., a major chip supplier to Apple Inc. and other major consumers of chips, said it would invest $100 billion over the next three years to increase production capacity as demand surges.

CEO C.C. Wei said in a letter to clients that the company hadn’t been able to keep up with demand over the past year despite running its fabrication plants at over 100% utilization.  Mr. Wei wrote that TSMC had started hiring thousands of new employees.

TSMC’s shares rose over 5% on the news.

--China’s Huawei Technologies reported modest annual profit growth for 2020 as overseas revenues declined due to disruption caused by the pandemic and the company’s placement on a U.S. export blacklist.

Net profit for 2020 came in at $9.83 billion, up 3.2%, compared to growth of 5.6% a year earlier.

Huawei was put on an export blacklist by former President Trump in 2019 and barred from accessing critical technology of U.S. origin, affecting its ability to design its own chips and source components from outside vendors.

The ban put Huawei’s handset business under immense pressure, with the company selling off its budget smartphone unit to a consortium of agents and dealers in November 2020 to keep it alive.

Yet Huawei reported that its consumer business, which includes smartphones, was up 3.3% year on year, and accounted for over half of the company’s revenue.

The rise in part was thanks to growth in devices such as smartwatches and laptops, a Huawei spokesman said.

The company carrier business, which include 5G network equipment, rose just 0.2% from a year earlier.

Huawei’s growth was driven by its home market, with revenue in China up 15.4%. But its business declined everywhere else, with revenues down 12.2% in Europe, Middle East and Africa, down 8.7% in the rest of Asia, and 24.5% in the Americas.

--Meanwhile, Swedish-based retail clothing giants H&M and other foreign companies such as Nike face a backlash in China after raising concerns about forced labor in Xinjiang.  Chinese officials said the companies should not politicize their economic behavior.

H&M, Burberry, Nike and Adidas and other western brands have been hit by consumer boycotts in China since last week over comments about their sourcing of cotton in Xinjiang.  The growing rift comes as the United States and other Western governments increase their pressure on China over suspected human rights abuses in the western region.

Chinese social media users last week began circulating a 2020 statement by H&M announcing it would no longer source cotton from Xinjiang.  H&M said at the time the decision was due to difficulties conducting credible due diligence in the region and after media and human rights’ groups reported the use of forced labor in Xinjiang – a charge that Beijing has repeatedly denied.

The wave of consumer boycotts has coincided with a coordinated set of sanctions imposed by Britain, Canada, the European Union and the United States last week.

--China released 2 million tons of rice from state reserves for sale to feed producers this week to bolster supplies of feed grains amid elevated corn prices, according to Reuters. Corn prices hit record highs in China earlier this year as dwindling stocks and reduced output raised concerns over supplies.

China will reportedly keep releasing rice and wheat stocks until corn prices are tamed.  Imports from the U.S. and elsewhere have helped to reduce prices some after January’s record highs.

--Ireland’s Central Bank is warning that up to 100,000 people will permanently lose their jobs on the island as a result of the pandemic.

Nonetheless, the regulator upgraded its growth forecast for the economy to nearly 6 percent, citing improved economic conditions globally and the $1.9 trillion stimulus plan in the United States that is expected to boost exports.  [The Biden infrastructure proposal with its incumbent corporate tax hike would hurt Ireland’s economy, but that’s a story for down the road as we don’t know if such hikes will even occur.]

Ireland’s job losses would occur in certain consumer-facing sectors, where the nation faces long-term unemployment.  The tourism sector continues to be hammered.  Golf courses are still closed, for example, let alone overseas visitors, critical to GDP, wouldn’t be returning in droves due to quarantine rules.

--It’s still an evolving situation but the likes of JPMorgan Chase, Salesforce.com and PricewaterhouseCoopers are among the major firms looking to scale back on their office space, not a good sign for commercial real estate.  At the end of 2020, 137 million square feet of office space was available for sublease across the U.S., according to CBRE Group Inc. That is up 40% from a year earlier and the highest figure since 2003.

For its part, JPMorgan has been marketing 700,000 square feet of office space in lower Manhattan since earlier in the yar, the largest block of space available for sublease in Manhattan.

Salesforce has listed space for rent in one of its San Francisco office building.  Uber Technologies and Wells Fargo are also adding to sublease availability in that city.

--An uncrewed SpaceX Starship prototype rocket failed to land safely on Tuesday after a test launch from Boca Chica, Texas, and engineers were investigating, SpaceX said.  “We do appear to have lost all the data from the vehicle,” a SpaceX spokesman said of the rockets’ test flight.

The webcast of the landing was obscured by fog.  But debris from the spacecraft was found scattered five miles away from its landing spot, which is kind of disconcerting.  The Starship was one in a series of prototypes for the heavy-lift rocket being developed by billionaire Elon Musk’s private space company to carry humans and 100 tons of cargo on future missions to the moon and Mars.

The Starship rocket, which will stand 394 feet tall with its super-heavy first-stage booster included, is SpaceX’s next-generation fully reusable launch vehicle – the center of Musk’s ambitions to make human space travel more affordable and routine.  A first orbital Starship flight is planned for year’s end.

Starships SN8 and SN9 previously exploded upon landing during their test runs as well.  SN10 achieved an upright landing, but then went up in flames about eight minutes after touchdown.  And then you have Tuesday’s SN11.  Musk tweeted after: “Something significant happened shortly after landing burn start.”

Yup, this stuff ain’t easy.

--According to Nielsen data, U.S. cable-news viewership fell for all major networks in the first three months of the year, following the presidential election and the chaos thereafter.

Fox News lost 32% of its total prime-time audience compared with the quarter ended Dec. 31, while CNN and MSNBC had smaller declines of 16% and 7.8%, respectively, though each fell more substantially from highs they hit in January.

The ratings gap between the three is tighter than it was a quarter ago, as all networks try to establish their approach at the outset of the Biden administration.

Fox News remained No. 1 among prime-time viewers for the quarter, averaging 2.58 million, though its lead has narrowed.  MSNBC is second in that category with 2.29 million, and CNN, which was No. 1 in the weeks after November’s election, is now No. 3 with 1.99 million.

But CNN is first among prime-time viewers aged 25 to 54, the key demographic for advertisers.

--Warner Bros.’ monster film “Godzilla vs. Kong” amassed $121.8 million in 38 overseas territories during its weekend debut. China was the film’s biggest international market, with a cumulative gross of $70.3 million.

The picture then was released on Wednesday simultaneously in North American theaters and streamed on HBO Max.

“Godzilla vs. Kong,” in just an hour and 53-minutes, wreaks untold structural damage with insurance claims running in the $10s of trillions.

Foreign Affairs

Iran: Representatives of Iran and world powers decided at a virtual meeting on Iran’s nuclear accord on Friday to convene in Vienna on Tuesday, Iran’s foreign ministry spokesman was quoted by state media as saying.  European officials confirmed that the meeting would be held next week.

And today both Iran and the United States said they would hold indirect talks Tuesday as well, as part of broader negotiations to revive the 2015 nuclear deal. Tehran has ruled out face-to-face bilateral discussions, but the presence of both Iran and the U.S. – welcomed by Washington as a “healthy step forward” – will help to focus efforts to bring all sides back into compliance with the accord.

Tonight, Iran’s state-run Press TV, quoting an unnamed informed source, said: “In line with the unchangeable guideline of Iran’s (Supreme) Leader, any result of the (nuclear accord commission) which would be based on the idea of a step-by-step removal of the sanctions or indirect negotiations with the U.S. will not be acceptable.”

The aim is to reach an agreement within two months, said a senior official with the European Union, the coordinator of the deal.  Iran holds elections in June which no doubt will be a factor, whether a positive or negative one to be determined.

Meanwhile, China agreed to invest $400 billion in Iran over 25 years in exchange for a steady supply of oil to fuel its growing economy under a sweeping economic and security agreement signed last Saturday in Tehran by the foreign ministers of the two countries.

“China firmly supports Iran in safeguarding its state sovereignty and national dignity,” Chinese Foreign Minister Wang Yi said in his meeting with Iranian President Hassan Rouhani.  The United States, Wang said, should immediately rescind its sanctions on Iran and “remove its long arm of jurisdictional measures that have been aimed at China, among others.”

The deal could deepen China’s influence in the Middle East and undercut American efforts to keep Iran isolated. But it was not immediately clear how much of the agreement can be implemented while the U.S. dispute with Iran over its nuclear program remains unresolved.

But inside Iran, some are criticizing the government for giving too much away to China.

China: The number of Legislative Council (Legco) seats directly elected by Hong Kong residents was slashed dramatically on Tuesday after a vote in Beijing.  The National People’s Congress Standing Committee voted 167-0 to endorse a proposal that limits the number of directly elected seats to 20, down from 35. The Election Committee will enjoy the biggest share of Legco seats with 40, while 30 seats go to the trade-based functional constituencies and 20 to the geographical constituencies.

Legco hopefuls must now secure nominations from each of the five sectors of the Election Committee, making it extremely difficult for opposition candidates to run.

All 117 district council seats in the Election Committee have been scrapped.

And get this, the new vetting committee will pick candidates based on information provided by police’s national security unit, and no judicial review or appeal of the decision will be allowed.

Bottom line, the number of directly elected seats in Legco has been cut from half to about one-fifth while entrusting the Election Committee with vast new powers.  And for the first time, the Election Committee responsible for picking the city’s leader will have a chief convenor, a member who “holds an office of state leadership,” according to an official announcement by state media Xinhua.

Separately, Hong Kong media tycoon Jimmy Lai and six former lawmakers, including veteran opposition campaigner Marin Lee, have been convicted of organizing and taking part in an unauthorized anti-government protest in 2019.

Leung Kwok-hung, one of the former lawmakers, was defiant in court, shouting: “Shame on political prosecution!  Peaceful demonstration is not a crime!”

Meanwhile, last Sunday, U.S. Secretary of State Antony Blinken said he sees “increasingly adversarial” aspects to the United States’ relationship with China.  “There are clearly increasingly adversarial aspects to the relationship, and there are certainly competitive ones,” Blinken told CNN, adding that there were, however, areas of cooperation between the two countries. 

Gerald F. Seib / Wall Street Journal

“U.S. relations with China are a minefield of potentially explosive problems, yet the biggest risk is a subtle one: the danger that China overestimates the decline of U.S. power and acts accordingly.

“If China is convinced, as its representatives and media organizations proclaim, that the U.S. and the entire Western liberal order are in the early stages of a long-term decline, an emboldened Chinese leadership may overstep, become overly provocative and compel America to respond forcefully.  The risk arises in many areas, including in the South China Sea, in commerce and, above all, in Hong Kong and Taiwan.

“This risk, in fact, helps explain many of the Biden administration’s opening steps toward China.  Its strategy is to counteract the Chinese narrative of a politically divided and declining America by trying to establish a picture of enduring U.S. economic, diplomatic and military strength before fully engaging with Beijing.  The message is a simple one: Don’t underestimate American power.

“Thus, the administration has delayed either jumping into new trade talks with China or lifting the tariffs the Trump administration imposed on Chinese goods.  The president hopes to show first that the U.S. has conquered the coronavirus pandemic, is fully recovered economically, and has begun working with Congress to pass a plan for investing in America’s economic infrastructure.

“Those steps, it’s hoped, would allow the administration to begin negotiating from a position of enhanced strength. Thus did newly installed U.S. Trade Representative Katherine Tai just declare, in an interview with the Wall Street Journal, that the administration isn’t ready to lift those tariffs: ‘No negotiator walks away from leverage, right?’ she said.

“At the same time, the Biden administration has continued the Trump team’s practice of sending U.S. Navy ships through the South China Sea in so-called freedom of navigation exercises, designed both to show that the U.S. doesn’t accept China’s territorial claims in the area and to reassure allies that America will maintain a military presence in the area.

“Perhaps most important, the effort to demonstrate continued American clout is seen in the unprecedented importance the Biden administration has placed on the Quad – the informal coalition of the U.S., Australia, Japan and India.

“The Quad was born in 2004 as an effort to provide help after a tidal wave devastated the Indo-Pacific region. The grouping hasn’t had a clear mission since.  It isn’t a formal alliance, and certainly isn’t a military one, and isn’t explicitly designed to counter China. Yet it brings together the four most powerful democracies China has to take into account in its region.

“So it was no accident that one of Mr. Biden’s first big diplomatic initiatives was to convene an unprecedented virtual summit of the Quad’s leaders two weeks ago.  Afterward, the leaders co-signed an opinion column proclaiming their intention to work together to fight climate change and to produce and distribute coronavirus vaccines to Indo-Pacific nations.

“Their op-ed didn’t even mention China, but the vaccine initiative was, among other things, a clear move to counter China’s own efforts to use vaccine donations to expand its influence in the region.  Perhaps more pointedly, the four leaders signaled their intention to counter China’s territorial claims in the South China Sea: ‘We are striving to ensure that the Indo-Pacific is accessible and dynamic, governed by international law and bedrock principles such as freedom of navigation and peaceful resolutions of disputes, and that all countries are able to make their own political choices, free from coercion.’

“China certainly has noticed.  It has vacillated between calling the Quad a meaningless talking society and a menacing anti-China alliance with Cold War overtones.

“There are distinct limits to the Quad’s potential to counter Chinese strength.  Its four nations all have economic ties to China that they want to preserve, and all are wary of allowing it to be seen as a provocative military alliance.  Yet America’s ability to convene the Quad, and to help it produce coordinated action in vaccine distribution, was perhaps the most meaningful way the Biden administration could signal to China that it shouldn’t go too far in discounting America’s international clout.

“Countering the perception of American weakness may be most important on the crucial question of Taiwan, which China continues to consider nothing but a breakaway province.  U.S. officials fear Chinese President Xi Jinping may be starting down a path toward forcing Taiwan to accept reunification with the Chinese mainland, using military force if necessary.  Its efforts to quash democracy in Hong Kong may be a trial run.

“If that’s the case, the best way to deter Mr. Xi may be to convince him now that if he makes such a move he would have to worry about the reaction of a strong and internationally influential America, not a weak and retreating one.”

On a different note, Taiwan is dealing with a national tragedy today as a high-speed train carrying almost 500 passengers derailed in a tunnel when it apparently hit a truck that slid off a road leading to a nearby construction site.  At least 50 were killed, including the train’s driver, with over 160 injured.  It’s the island’s worst rail disaster in at least seven decades.

North Korea:  The United States said it will brief South Korea and Japan on President Biden’s long-awaited review of North Korea policy in talks that were to occur today.  Biden’s national security adviser, Jake Sullivan, is holding a full day of talks with his Japanese and South Korean counterparts at the U.S. Naval Academy in Annapolis, Maryland.

Biden said last week the United States remained open to diplomacy with North Korea despite its ballistic missile tests but warned there would be responses if North Korea escalates matters.

This week, Kim Yo Jong, the sister of leader Kim Jong Un, slammed South Korea’s president for calling the North’s recent missile test “concerning” and suggesting Seoul, Pyongyang and Washington should not create hurdles for talks, state media KCNA reported on Tuesday.

Following North Korea’s ballistic missile tests last week, South Korean President Jae-in Moon said the South, the North and the United States should make efforts to continue dialogue.

Kim Yo Jong called Moon’s remarks disgraceful for agreeing with the United States, which condemned the missile test and said the North’s nuclear and ballistic missile programs constituted serious threats to international peace and security.

“Such illogical and brazen-faced behavior of South Korea is exactly the same as the gangster-like logic of the U.S.,” Kim Yo Jong said.

Russia: The war in eastern Ukraine escalated this week, with the deadliest engagement so far this year on Tuesday, as four Ukrainian soldiers were killed and another seriously wounded in a battle against Russian-backed separatists in the Donetsk Region of eastern Ukraine, the country’s military said.

NATO then voiced concern on Thursday over what it said was a big Russia military build-up near eastern Ukraine after Russia warned that a serious escalation in the conflict in Ukraine’s Donbas region could “destroy” the country.

The Kremlin said on Friday that any deployment of NATO troops to Ukraine would lead to further tensions near Russia’s borders and force Moscow to take extra measures to ensure its own security.

Kremlin spokesman Dmitry Peskov told reporters on Friday that the situation at the contact line in eastern Ukraine between Ukrainian government forces and Russian-backed separatist forces was quite frightening and that multiple “provocations” were taking place there.  U.S. Defense Secretary Lloyd Austin on Thursday spoke with his Ukrainian counterpart and “condemned recent escalations of Russian aggression and provocative actions in eastern Ukraine.”

David Ignatius / Washington Post

“The Biden administration, facing what could be its first serious test with Russia, is warning Moscow against any aggressive use of the military force that it’s assembling along Ukraine’s eastern border for a supposed exercise.

“ ‘We are quite concerned by recent escalation by Russia’ along the border, ‘including violations of the July 2020 ceasefire’ in a March 26 incident that killed four Ukrainian soldiers and wounded two, a senior administration official told me Wednesday night.

“Russia has announced military exercises in the region, and Russian social media posts show tanks, howitzers and other heavy military equipment moving into the area.  ‘Maybe these are exercises, maybe more,’ the official said during the interview.

“ ‘We are signaling American awareness, resolve and concern,’ he continued. The National Security Council’s deputies committee met Tuesday and Wednesday to review the situation, he said, and national security adviser Jake Sullivan has called his Ukrainian, German and British counterparts.  [Ed. NATO’s North Atlantic Council then met yesterday, Thursday.]

“Russia has accused Ukraine of provoking the confrontation.  ‘We express concern…that one way or another the Ukrainian side could take provocative actions that would lead to war.  We really don’t want to see that,’ Kremlin spokesman Dmitry Peskov said Wednesday….

“ ‘We are not looking to reset our relations with Russia nor to escalate.  Our goal is to impose costs for actions we consider unacceptable, while seeking stability, predictability, turning down the temperature,’ the senior Biden administration official said, adding: ‘If they’re inclined to turn the temperature up, we’re ready for that.’  U.S. options include expedited assistance to Ukraine and sanctions.

“The Ukraine border tension comes as Russian President Vladimir Putin faces his most substantial domestic criticism in several years. Much of it centers on opposition leader Alexei Navalny, whose arrest in January sparked protests in at least 109 cities across Russia.  Navalny had bravely returned to Moscow after being treated abroad following an assassination attempt last August.  Navalny began a hunger strike Wednesday to protest his treatment in prison.  Putin probably had hoped that jailing Navalny would make that political problem disappear, but it continues.  A petition calling for further demonstrations has been signed by 360,000 Navalny supporters, and organizers hope to gather 500,000 signatures before taking to the streets again.

“ ‘Elements of this are reminiscent of the run-up to Russia’s previous intervention in Ukraine’ in 2014, when Putin was facing domestic criticism, the senior official said.  In addition to the Navalny controversy, Russians have blamed Putin for corruption and a sluggish response to the coronavirus pandemic….

“The Biden administration’s stern messaging about Russia this week is the latest example of how the White House and State Department are trying to bolster U.S. foreign policy after the disruption and disorganization of the Trump years.  The centerpiece of that strategy has been rebuilding alliances – with NATO countries when it comes to confronting Russia, and with key Asian allies such as Japan, India and Australia in competing with China.

“Biden has tried to signal a firmer stance toward Russia since taking office….

“There is often jockeying and positioning during the initial months of new U.S. administrations, as potential adversaries probe each other’s limits.  China’s top diplomat delivered a public tongue-lashing to Secretary of State Antony Blinken at their first meeting, in Anchorage last month, for example. Diplomacy, in other words, is a contact sport.

“What makes the Ukrainian situation different is that it potentially involves force. Russia has augmented its troops, at least temporarily, near the border of a country to which the United States provides military assistance.  Perhaps the best thing about this week’s signaling is that it reduces the likelihood that either side will miscalculate its actions.”

Today, Friday, President Biden had a call with Ukrainian President Volodymyr Zelensky, with Biden expressing the United States’ strong support for Ukraine, the White House said in a statement:

“President Biden affirmed the United States’ unwavering support for Ukraine’s sovereignty and territorial integrity in the face of Russia’s ongoing aggression in the Donbas and Crimea.”

President Zelensky tweeted:

“We stand shoulder to shoulder when it comes to preservation of our democracies.  The American partnership is crucial for Ukrainians.”

Regarding Alexei Navalny, he posted on Instagram Wednesday, published by his lawyers, showing a handwritten note in which he writes: “I have the right to invite a doctor and receive medication.  But they are simply not allowing me to do either.  The back pain has spread to my leg. I’ve lost sensation in parts of my right leg and now the left leg too.  Jokes aside, this is getting worrying,” he wrote.

Navalny has also complained of being woken up every hour by a guard during the night which he argues amounts to torture.

Lebanon: Germany will make a multi-billion-dollar proposal to Lebanese authorities next week to rebuild the Port of Beirut as part of efforts to entice the country’s politicians to form a government capable of warding off financial collapse.

A chemical explosion at the port last August killed 200 people, injured thousands and destroyed entire neighborhoods in the Lebanese capital, plunging the country deeper into its worst political and economic crisis since the 1975-1990 civil war.

Germany and France are vying to lead reconstruction efforts, with principle support from the European Investment Bank to help fund the clearing of the area and reconstruction facilities.  EIB support, however, is not guaranteed and would require extensive due diligence.  The project would be in the 2-3 billion euro range.

Eight months after the port disaster, Lebanese who lost family, homes and businesses are still waiting for the results of an investigation into the causes of the blast.  Lebanon is on the verge of collapse, with shoppers brawling over goods, protesters blocking roads, and businesses shuttered.  Foreign donors have said the new government must have a firm mandate to implement economic reforms, including a central bank audit and an overhaul of the wasteful power sector.

But Prime Minister-designate Saad al-Hariri and President Michel Aoun have been unable to agree on a ministerial lineup.

Speaker of Parliament Nabih Berri said this week: “The whole country is in danger, the whole country is the Titanic.  If the ship sinks, there’ll be no one left.”

Lebanon’s state-run electric company needed $200 million this week to keep Lebanon’s lights on for at least two months, the funds required to pay for fuel for power plants.  Last Sunday, one of the country’s four main plants had to shut down because of a lack of oil.  Electricity of Lebanon blamed problems with the unloading of a tanker and the blockage of the Suez Canal.

Germany’s proposal would look to develop a large area surrounding the port in a project along the lines of Beirut’s post-war reconstruction in the central part of the city.

Myanmar: Protests continued against military rule today, and all week, as now opponents have to find alternative ways to communicate after most users were cut off from the internet on Friday, undaunted by the bloody suppression of protests during the past two months that has seen over 540 people killed in the uprising, including a reported 114 last Sunday, the bloodiest day since the coup.

Many have been using social media to publicize the security forces’ excesses and to organize against the military. But authorities, who had already shut down mobile data, ordered internet providers from Friday to cut wireless broadband, depriving most customers of access.  In response, anti-coup groups have shared radio frequencies, mobile apps such as Maps that work without a data connection, and tips for using SMS messages as an alternative to data services to communicate.

Adding to the chaos, hostilities between the armed forces and ethnic minority insurgents have broken out in at least two regions.  The United Nations is warning of all-out civil war.

Mozambique: Dozens of people were killed in an attack launched by ISIS on the northern Mozambique town of Palma this week.  Hundreds of others were rescued from the town, which is located near major gas projects worth $60 billion, the single biggest investment in all of Africa.  The projects were said at week’s end to be secure.

Netherlands: Dutch Prime Minister Mark Rutte’s chances of forming a new government were dealt a serious blow early today, as parliament passed a formal motion of disapproval, saying he had not told the truth about remarks made during government formation talks.

However, lawmakers narrowly failed to pass a no-confidence motion which would have forced Rutte to resign.

“Parliament has given me a serious message and I will try my very best to win back confidence,” Rutte told reporters after the debate.  It was not clear when and in what form government formation talks would resume.

Rutte was the clear winner of March 17 parliamentary elections that were seen as a referendum on his handling of the coronavirus pandemic crisis.

Sigrid Kaag, the leader of the second largest party in parliament, said she was not sure whether she would now be willing to join a new government with Rutte.

“If I were him, I would not continue,” she said when asked about Rutte’s position.

The crisis arose on Thursday after Rutte acknowledged having privately discussed what job should go to a prominent member of parliament who had been critical of his previous Cabinet. Rutte had previously said he did not do so.

Rutte is a 54-year-old conservative who has been in office for more than 10 years.

Random Musings

--Presidential approval ratings….

Rasmussen: 48% approve of President Biden’s job performance, 50% disapprove (April 2).  Last week’s split was 48-51.

--According to a Pew Research Center survey of 12,000+ U.S. adults, in assessing former President Trump’s presidency two months after leaving office, 38% say he made progress solving major problems facing the country during his administration – while a nearly identical share (37%) say he made these problems worse.  Another 15% say Trump tried but failed to solve the nation’s problems, while 10% say he did not address them.

Looking back at Trump’s term, just over half of Americans (53%) rate Trump’s presidency as below average – including 41% who say he was a “terrible” president.  About a third (35%) rate his presidency as above average, including 17% who say he was a “great” president.

About three-quarters of Republicans and Republican-leaning independents (77%) say Trump made progress in addressing the nation’s major problems, compared with just 7% of Democrats and Democratic leaners.  Nearly two-thirds of Democrats (64%) say Trump made the country’s major problems worse over the course of his presidency – a view held by only 5% of Republicans.

--It’s interesting seeing the grades of some of the governors for their handling of the pandemic.  Massachusetts’ Republican Gov. Charlie Baker has a 71% approval rating for his handling of Covid according to a new Suffolk University/Boston Globe poll.  But it falls to 58% regarding his handling of the vaccine rollout.

Baker’s approval rating on Covid is down from a high of 81% in June 2020, but still highly favorable.

--A majority of likely California voters would keep Gov. Gavin Newsom in office if a recall election were held today, according to a new poll conducted as vaccinations in the state increase and the Democratic governor ramps up his campaign to fight the effort to remove him.

Among the 1,174 likely voters surveyed by the Public Policy Institute of California, 56% said they oppose the recall and 40% support it, with the remaining undecided.  More than three-quarters of likely voters said the worst of the pandemic is over.

Mark Baldassare, president of the institute, said, “The support for keeping Gov. Newsom has become much more optimistic about where things are headed with Covid than they were in January. All of these things work to the benefit of keeping the status quo.”

2.1 million voter signatures were submitted for the recall before the mid-March deadline.  It’s likely enough signatures will be validated to trigger a recall election in the fall.  Final tallies will be available by April 29.

--Ironically, hours before we learned about a federal investigation into Florida Republican Congressman Matt Gaetz, I was reading a piece talking about Gaetz leaving Congress to take an on-air job with Newsmax (as first reported by Axios), the conservative cable channel owned by Chris Ruddy, a longtime ally of former President Trump, Gaetz being an ardent supporter of the president, including post-Jan. 6.

As Chris Cillizza wrote in the Washington Post:

“In the before times in the Republican Party, getting elected to Congress was a massive accomplishment – a sign that you had made it. Spending a decade or two accruing the seniority and know-how to get things done and put your imprint on the nation’s laws was seen as the highest of callings.

“Those days are gone. Now, many newly elected Republican House members see a seat in Congress as a means to a more lucrative end – a chance to build their, uh, brand, widen their fundraising base and raise their profile in order to get the real prize: A well-paying gig on a conservative media network….

“Since his arrival in Congress in 2017, Gaetz has shown far more interest and passion in appearing on Fox News to dunk on Democrats than in actually trying to, you know, legislate.”

So we learned via a report from the New York Times, citing multiple sources, that Gaetz was under federal investigation over allegations that he maintained a sexual relationship with a 17-year-old girl and paid for her to travel with him. 

The alleged sexual encounters reportedly took place about two years ago, when the girl is believed to have been 17.

The Justice Department often seeks sex trafficking charges in cases where an offender has crossed state lines for sex with an underage individual in exchange for cash or something else of value.  Convictions in such cases usually result in lengthy prison sentences.

Gaetz vehemently denied having sex with any underage girls, but also acknowledged in a wide-ranging phone interview with Axios on Tuesday night that he “definitely, in my single days, provided for women I’ve dated.”

“You know, I’ve paid for flights, for hotel rooms.  I’ve been, you know, generous as a partner,” Gaetz said.  “I think someone is trying to make that look criminal when it is not.”

In a statement issued by his office later Tuesday, Gaetz claimed the allegations are part of a convoluted extortion scheme against his family orchestrated by a former Justice Department official.

Gaetz also claimed he has been cooperating in the probe into that alleged scheme.

The alleged extortion plot against Rep. Gaetz apparently involved two men blackmailing him with details about an alleged orgy with prostitutes in an effort to get his father to cough up $25 million to help rescue American hostage Robert Levinson from Iran, according to reports.

The men, former federal prosecutor David McGee and ex-Air Force intelligence officer Bob Kent, allegedly claimed that the FBI had photos of Gaetz in a “sexual orgy with underage prostitutes,” the Washington Examiner reported.

They asked his dad, Don Gaetz, for money to be used to free Levinson, a former FBI agent and CIA contractor who vanished in Iran in 2007 and was declared dead by his family last year.

The men who approached Gaetz’s dad had no apparent connection to the sex-crimes investigation but somehow learned about it before it was made public, the Washington Post reported.

But this has nothing to do with the serious charges leveled against Gaetz, and the New York Times reported last night that the FBI has questioned several women who claim they were paid to sleep with him and his friends in drug-fueled trysts.

Receipts from CashApp and Apple Pay that the Times reviewed reportedly showed payments from Gaetz to one of the women, who told pals the money was in exchange for sex.

Joel Greenberg, a former Florida county tax collector, allegedly introduced Gaetz to the women, who he had met on websites offering dates in exchange for gifts, money and travel, the report said.

Sources told the Times that both Greenberg and Gaetz had sex with the women during encounters in 2019 and 2020.

There are other reports circulating about an investigation into Gaetz being part of a fake ID ring.

Here’s the bottom line.  No one, including many of his fellow Republicans, will support this amazing POS.  I always despised the fraud, but when he traveled to Wyoming to taunt fellow Republican Rep. Liz Cheney, he crossed a line with many in his party. 

--Speaking of those who yearn to be cable pundits, Fox News hired Lara Trump as a paid on-air contributor.  She is the second member of Donald Trump’s inner circle to join the Fox News payroll in recent weeks.  Kayleigh “I’ll never lie to you” McEnany, the former White House press secretary, signed on this month as a contributor.

--It’s been heartbreaking watching some of the witnesses to George Floyd’s death at the trial of former police officer Derek Chauvin; the feelings of guilt and helplessness, as they described the scene on May 25, 2020, watching Floyd go unconscious and die over nine minutes.

Darnella Frazier, 18, told the jury she saw “a man terrified, scared, begging for his life,” and then pulled out her cellphone. Frazier’s voice quavered when prosecutors brought up a still from her video, showing the moment when Officer Chauvin, his knee on Floyd’s neck, appears to look directly into Frazier’s camera lens. She said Chauvin had “this cold look, heartless.”

Later, Frazier was asked by both sides how producing the most famous record of Floyd’s death had changed her life, and she spoke through tears.  “When I look at George Floyd, I look at my dad, I look at my brothers, I look at my cousins, my uncles, because they are all Black,” she said.  “It could have been one of them.”

Frazier said she would sometimes stay up late at night thinking of Floyd, apologizing to him for “not saving his life.”

“It’s not what I should have done.  It’s what he should have done,” she said, referring to Chauvin.

Donald Williams, a mixed martial arts fighter who was also a witness, told jurors he believed that Chauvin was using his knee in a “blood choke” on Floyd, a wrestling move to knock an opponent unconscious, and a “shimmy” move to tighten pressure on Floyd’s neck.  “You can see that he’s trying to gasp for air,” Williams, 33, said of Floyd.  A 911 call Williams made after the arrest was played.  Williams told the jury, “I believe I witnessed a murder. So I felt I needed to call the police on the police.”

At the start of the trial, Jerry Blackwell, a special assistant attorney general, said of the widely seen video depicting the 9 minutes and 29 seconds that prosecutors say former officer Chauvin held his knee on Floyd’s neck, “You can believe your eyes.  It’s homicide, it’s a murder.”

One of Chauvin’s defense attorneys, Eric Nelson, said, “Derek Chauvin did exactly what he was trained to do in his 19-year career.  The use of force is not attractive,” but it can be necessary.

A retired Minneapolis police sergeant on duty during Floyd’s fatal arrest said cops should have let him get up after he “was no longer offering resistance.”

Former Police Sgt. David Pleoger, the supervising officer on May 25, testified that Chauvin and three other cops kept Floyd pinned down longer than allowed under department rules or training.

“Sir, based on your review of the body-worn camera footage, do you have an opinion on when the restraint of Mr. Floyd should have ended in this encounter?” asked Steven Schleicher, a member of the prosecution team.

“Yes, sir,” Pleoger answered.

“What is it?’ Schleicher asked.

“When Mr. Floyd was no longer offering up any resistance to the officers, they could have ended their restraint,” the former sergeant said.

“And that’s after he was handcuffed and on the ground and no longer resisting?”

“Correct,” Pleoger answered.

I have watched a ton of the proceedings and pray Chauvin is found guilty, but you never know what a jury is thinking.

--G. Gordon Liddy died.  He was 90.  Liddy was the brash former FBI agent who helped orchestrate the 1972 Watergate break-in, a crime that began the unraveling of the presidency of Richard Nixon.

Liddy parlayed his Watergate infamy into a 20-year career as a conservative talk-radio host.

He was one of the notorious White House “plumbers” whose job it was to plug leaks to the media in the Nixon administration.  His portfolio at Nixon’s Committee to Re-elect the President was “dirty tricks” – a job he approached with gusto.  He and colleague E. Howard Hunt, a former CIA agent, came up with outlandish schemes that were so illegal their superiors often squelched them.  Among them was a plot to kill investigative columnist Jack Anderson, an ardent Nixon critic.  Another was a plot to have anti-war protesters at the Republican National Committee in San Diego in 1972 kidnapped and taken across the border into Mexico.  And there was another where Democratic Party officials would be lured to a party with prostitutes.

But one plan was accepted, prior to the Watergate burglary, and that was a break-in at the offices of a psychiatrist who was seeing Daniel Ellsberg, a former U.S. military analyst who leaked the top-secret Pentagon Papers about the war in Vietnam.  Then came the break-in that would undo Nixon.

After Liddy and his team were caught at the Watergate, Liddy was convicted of conspiracy, burglary and wiretapping for both the Watergate and Ellsberg break-ins.  He was sentenced to up to 20 years in prison and served nearly five before being released – thanks to a commutation in 1977 from Democratic President Jimmy Carter, who felt his sentence was out of proportion to those meted out to other Watergate criminals.

Liddy remained unapologetic about his crime and told the New York Times he would do it again if asked.  He was also proud of not cooperating with the grand jury, while others had.

Liddy was known for his bravado.  He bragged about being able to hold his hand over a flame without flinching and spoke of being able to kill a man with a pencil.  When callers to his Washington-based radio show asked how he was doing, he barked, “Virile, vigorous and potent!”

--Finally, some of us were looking forward to 2029 and a close call with an asteroid as initially predicted…kind of like in the movie “On the Beach”…go out singing “Waltzing Matilda”…

But Nooo!  NASA confirmed the planet was “safe” from a once-feared asteroid for the next 100 years at least.

The doomsday rock, Apophis, is estimated at about four football fields in length, but now even a slight threat in 2068 is being ruled out.

So to paraphrase Mary Richards (of “Mary Tyler Moore Show” fame), I guess we’re gonna make it after all….

---

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

We thank our healthcare workers and first responders.

God bless America.

---

Gold $1730
Oil $61.24

Returns for the week 3/29-4/2

Dow Jones  +0.2%  [33153]
S&P 500  +1.1%  [4019]
S&P MidCap  +0.8%
Russell 2000  +1.4%
Nasdaq  +2.6%  [13480]

Returns for the period 1/1/21-4/2/21

Dow Jones  +8.3%
S&P 500  +7.0%
S&P MidCap  +14.8%
Russell 2000  +14.1%
Nasdaq  +4.6%

Bulls 54.4
Bears
17.5…prior two weeks, 57.4/18.8; 55.9/19.6

Happy Easter!

Hang in there.  Mask up where appropriate, wash your hands.

Brian Trumbore

 



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Week in Review

04/03/2021

For the week 3/29-4/2

[Posted 9:30 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 Bobby C. for his ongoing support.

Edition 1,146

Another depressing day in our nation’s capital as a motorist rammed his vehicle into U.S. Capitol police on Friday, killing one officer and injuring another and forcing the Capitol complex to lock down in an attack that police said did not appear to be terrorism-related.

Officer William “Billy” Evans, an 18-year veteran of the force, was killed by the impact of the vehicle, traveling at a high rate of speed.

The suspect died after he exited his car, brandishing a knife, and was shot and killed by responding officers. [At least this is what is being reported as I go to post.]  The suspect, from his social media posts, talked of the U.S. government being his enemy and “mind control.”

Our prayers go out to Officer Evans’ family.

Biden’s Agenda

President Joe Biden unveiled his $2.25 trillion infrastructure program this week, loaded with road repairs, internet upgrades and other initiatives that are normally popular on their own, according to a Reuters/Ipsos poll, but public support declines when the initiatives are packed into a Democratic bill and sold as a Biden-backed plan.

The poll, taken March 31-April 1, highlights the challenges facing Biden and fellow Democrats in Congress as they roll out the “American Jobs Plan” in front of Republican opposition and a hyper-partisan American public.

While most Americans, including many Republicans, like the ideas in the plan in general, they are less likely to support legislation written by Democrats to make those ideas a reality, the poll shows.

The poll found: 79% of Americans supported a government overhaul of American roadways, railroads, bridges, and ports.  71% support a plan to extend high-speed internet to all Americans.  68% support an initiative to replace every lead pipe in the country.  66% supported tax credits for renewable energy.  64% in the survey of 1,005 American adults (including 398 who identified as Republicans or Republican-leaning independents and 445 Democrats or Democratic-leaning independents) support a tax hike on corporations and large businesses, and 56% supported ending tax breaks for the fossil fuel industry.

However, only 45% of Americans said they would support a jobs and infrastructure plan that was “recently released by the Biden administration.” Another 27% said they were opposed and the remaining 28% said they were not sure.  The decline in support appears to be mostly a partisan reaction: only about two in 10 Republicans and three in 10 independents said they supported a Biden infrastructure plan, compared with seven out of 10 Democrats.

So therein lies President Biden’s problem with his “American Jobs Plan,” which he formally unveiled in Pittsburgh on Wednesday.

The eight-year stimulus program allocates $620 billion to transportation and $650 billion to quality-of-life improvements such as clean water and high-speed broadband.  About $580 billion is earmarked for manufacturing and $400 billion targets improved care for the elderly and people with disabilities.  Under the program, the corporate income tax would increase to 28% from 21%.

“It is not a plan that tinkers around the edges,” President Biden said on Wednesday.  “It is a once-in-a-generation investment in America.”

While many local and state Republican officials love some of the components, particularly the new infrastructure spending, generating sustained support for the proposal is a daunting challenge to the White House.  Influential groups like the Business Roundtable and the U.S. Chamber of Commerce warn lawmakers against raising taxes as the United States emerges from a deep economic crisis caused by the pandemic.

Senate Minority Leader Mitch McConnell called the plan “another Trojan horse for far-left demands.”

“I’m going to fight them every step of the way, because I think this is the wrong prescription for America,” McConnell told a news conference in Owensboro, Kentucky.  “That package that they’re putting together now, as much as we would like to address infrastructure, is not going to get support from our side,” McConnell added.

McConnell is pointing at the ‘other half’ of the bill, the half not addressing traditional infrastructure.  It’s the half that makes investments to reduce climate change and modernize schools, manufacturing hubs and eldercare facilities.  The White House argues these should also be viewed as critical infrastructure, but others see them as partisan Democratic priorities.  This second $1 trillion in spending is where most of the debate is going to center.

Meanwhile, a key House of Representatives Democrat said lawmakers could significantly change the tax proposals.  “We will accept some of what (Biden) is proposing,” said Democratic Representative Richard Neal, who chairs the tax-writing House Ways and Means Committee.  “If we can improve upon the president’s proposal, we want to do that,” Neal added. 

House Democrats have a goal of passing the package by July 4.  But without Republican support, Democrats would have to resort to a parliamentary procedure (budget reconciliation) that would enable them to pass the bill with a simple majority vote rather than the 60 votes needed to advance most legislation.  But that would require them to drop elements that do not affect taxes and spending, such as provisions that would make it easier for workers to organize labor unions.

President Biden understands he has laid out a marker.  He will have to negotiate with Republicans on this one, and they will insist on breaking up the proposal into individual pieces.

Biden Bits….

--Fox News host Chris Wallace ripped White House press secretary Jen Psaki on Sunday over media access at border facilities – saying the Biden Administration is being “less transparent than the Trump administration.”

It was part of a tense exchange between the two during an interview on “Fox News Sunday.”

Wallace said “the only way we know how bad conditions are” at the border is because of photographs taken and released by Republican and Democratic members of Congress.

“These kids are living in these conditions now. They’re not living in these conditions some indeterminate time from now when the president says everything will be fixed,” Wallace said.

He also pushed back on Psaki’s insistence during White House news briefings that the visits must be conducted safely because of the coronavirus pandemic.

Psaki said the president is “absolutely committed” to allowing media access.

“When?” Wallace asked.

“We want to provide access into the border patrol facilities.  We are mindful of the fact that we are in the middle of a pandemic,” she said.  “We want to keep these kids safe, keep the staff safe, but we are absolutely committed to transparency and providing access to media to the border patrol facilities.”

But Wallace pressed about the lack of access and how the length of time minors are being held violates the law, saying the Biden White House is “being less transparent than the Trump administration.”

Rep. Alexandria Ocasio-Cortez (D-N.Y.) on Wednesday night slammed the overcrowded conditions for immigrants at the U.S.-Mexican border under President Biden as “inhumane,” “horrifying,” “unacceptable” and “barbaric.”

She also blamed decades of U.S. foreign policy with countries in neighboring Central America as contributing to the perpetual crisis of desperate residents from poor, violence-torn countries flooding the border.

AOC unloaded on the border crisis during a virtual town hall meeting Wednesday night.

“The fact that this keeps happening is a political failure of both parties,” Ocasio-Cortez said.

The administration finally allowed journalists inside its main border detention facility for migrant children, revealing a severely overcrowded tent structure where more than 4,000 people, including children and families, were crammed into a space intended for 250 and the youngest were kept in a large play pen with mats on the floor for sleeping.

Two journalists from the Associated Press and a crew from CBS were allowed to tour the facility in Donna, Texas, in the Rio Grande Valley, the nation’s busiest corridor for illegal crossings.  But that’s been it in terms of the promised transparency.

So an ABC News/Ipsos poll shows 75% of Americans approve of how President Biden is handling the distribution of coronavirus vaccines (even 53% of Republicans approve) and the response to the virus itself (72%), but on the issues of gun violence and the situation at the border, 57% disapprove of the president’s actions, or lack of same, on each.

54% of Americans believe the situation with migrants and unaccompanied children showing up at the border is currently a crisis.

--The controversial Georgia election ‘reform’ legislation adds a photo ID requirement for voting absentee by mail, cuts the amount of time people have to request an absentee ballot and limits where drop boxes can be placed and when they can be accessed. It also bans people from handing out food or water to voters waiting in line and allows the Republican-controlled State Election Board to remove and replace county election officials while curtailing the power of the secretary of state as Georgia’s chief elections officer.

It’s this last bit, the ability to remove and replace county election officials, and more, that is not getting the press it deserves, as it’s too easy to go after perceived restrictions on mail-in voting, limited voting sites and denial of food and water.

Down below I simply report the ‘pressured’ reactions of the likes of Delta and American Airlines, without comment, but the likes of the Wall Street Journal editorial board in criticizing the CEOs, or Major League Baseball, does not bring up the Election Board shenanigans which states like Georgia, Arizona and Texas are putting in place, and it’s these moves that threaten the democratic process.  It’s the very card that then-President Trump was attempting to play, post-election.  To get state legislatures and/or election boards to overturn the certified votes in the key battleground states he had lost.

For example, the Georgia law replaces the elected secretary of state as the chair of the state election board with a new appointee of the legislature after Republican Secretary of State Brad Raffensperger rebuffed Trump’s attempts to overturn the state’s election results.  It also allows the board to remove and replace county election officials deemed to be underperforming.  How is that defined?

Republican Rep. Barry Fleming, a driving force in crafting the law, said the provision to replace county election officials would only be a “temporary fix, so to speak, that ends and the control is turned back over to the locals after the problems are resolved.”

What?!  You kidding me?!  If you don’t find this scary, look down below at what just happened with Hong Kong’s election commission and legislative council, which once had a democratic component and no longer does.

As in, once we fix the 2022 or 2024 election in our favor, Georgia district X voters (or Texas, or Arizona), you’ll get your control back.

Again, this is codifying Trump’s grievances against Republican officials in Georgia who resisted his efforts to overturn the vote there.  Trump is even being investigated today for pressuring current Secretary of State Raffensperger to “find” enough votes to reverse his loss in the state.  Yet the new law strips the sec. of state, the state’s top elections official, of his seat and his role as chair of the elections board and endows the state legislature with the power to fill three of that board’s five seats – essentially giving the legislature control over the certification of elections and voting rules.  The new law also empowers the state election board to suspend or replace local election officials and delay certification, making it potentially easier for them to meddle with results.

This is what should piss off most Americans.  Not mail-in ballot limitations, or denial of food and water, or lack of poll locations in some traditionally Democratic areas.  As I said the other week, once you know the rules, you have to deal with it…and plan way ahead.

But you can’t plan for what the Georgia (fill in the state) legislature is preparing to do to upend your vote.

The Pandemic

This week, Dr. Rochelle Walensky of the Centers for Disease Control bluntly admitted she is gripped by a “feeling of impending doom” over a looming so-called fourth wave of the pandemic driven by more-contagious variants of Covid-19.

“Right now, I’m scared,” Walensky said during a briefing.  “I’m asking you to hold on just a little bit longer…so all those people will still be here when the pandemic ends.”

She said if Americans do not change course immediately and return to stricter public health precautions, the nation is facing a huge spike of illnesses even as the end of the pandemic appears to be in sight.

“We do not have the luxury of inaction.  For the good of our country we must work together to prevent a fourth surge,” Walensky said.

In my little town of Summit, I just saw that infections rose 50% in March over February, with over 60 schoolkids becoming infected in the month, a lot.  Hospitalizations among the young are also increasing in my state of New Jersey.

Meanwhile, death and case levels continue to spike ferociously in eastern Europe, particularly Poland, Ukraine and Hungary, with global cases at their highest levels since mid-January.  Turkey saw its highest number of cases yet on Thursday, and its highest death toll since mid-January.

Thursday saw 76,000 cases in the U.S., when we should be well below 40,000, preferably 20,000.  This weekend’s numbers will be skewed by the holiday and lack of reporting, though today’s case figure was disconcerting, 70,000.

Covid-19 death tolls, as of tonight….

World…2,850,149
USA…567,610
Brazil…328,366
Mexico…203,664 (see below)
India…164,141
UK…126,816
Italy…110,328
Russia…99,633
France…96,280
Germany…77,421
Spain…75,541
Colombia…63,777
Iran…62,876
Argentina…56,023
Poland…54,165
South Africa…52,946
Peru…52,331
Indonesia…41,151
Ukraine…33,679
Turkey…31,892
Czechia…26,765
Romania…23,819
Chile…23,421
Belgium…23,045
Canada…23,008

Source: worldometers.info

U.S. daily death tolls…Sun. 510; Mon. 639; Tues. 873; Wed. 1,115; Thurs. 952; Fri. 1,001.

Covid Bytes

--On Monday, President Biden said that 90% of American adults will be eligible for Covid-19 vaccines by April 19, and vaccination sites would be within five miles of an individual’s home.

Biden’s new timeline beats his previous May 1 goal for nationwide eligibility by nearly two weeks.  The remaining 10% of the population would be eligible by that time, he said.

--Pfizer/BioNTech and Moderna vaccines have been found to be 90% effective after two doses in a study of real-life conditions, the CDC confirmed on Monday.

In a study of about 4,000 health-care personnel, police, firefighters and other essential workers, the CDC found that the vaccines reduced the risk of infection by 80 percent after one shot.  Protection increased to 90 percent following the second dose.

Pfizer then announced Wednesday that its Covid-19 vaccine is safe and strongly protective in kids as young as 12, a step toward possibly beginning shots in this age group before they head back to school in the fall.

Most of the vaccines have been rolled out worldwide for adults, who are at higher risk from the coronavirus, while Pfizer’s is authorized for ages 16 and older. 

Pfizer reported that in a study of 2,260 volunteers ages 12 to 15, preliminary data showed there were no cases of Covid-19 among fully vaccinated adolescents compared to 18 among those given dummy shots.

The study hasn’t been published as yet, but researchers reported high levels of virus-fighting antibodies, somewhat higher than were seen in studies of young adults.

The kids had the same side effects as young adults, Pfizer said, particularly after the second dose.

Pfizer and its German partner BioNTech in the coming weeks plan to ask the U.S. Food and Drug Administration and European regulators to allow emergency use of the shots starting at age 12.

Moderna is also in the process of testing its vaccine on 12- to 17-year-olds.  AstraZeneca recently began a study of its vaccine among 6- to 17-year-olds in Britain.  And in China, Sinovac recently announced it has submitted preliminary data to Chinese regulators showing its vaccine is safe in children as young as 3.

As for Pfizer, it needs to make sure all eligible adults get the vaccines first, so it would be awhile before children start receiving doses.

Separately, Pfizer/BioNTech reported their vaccine was 91% effective up to six months following a second dose, per updated data from a trial started last year that led to the first U.S.-authorized preventative against the coronavirus.  There were no serious safety concerns seen in more than 12,000 people who have at least six months of follow-up after their second doses, the companies said.

Among 800 study participants in South Africa, all nine Covid-19 cases in the country, where the B.1.351 variant is common, were in the placebo group. That gives the Pfizer/BioNTech vaccine 100% effectiveness against the variant.

--Speaking of AstraZeneca, German health authorities have decided to restrict the use of their vaccine to people over 60 years of age amid concerns about the small number of younger people who have experienced blood clotting after getting the shot, media reports said Wednesday.

The Netherlands then halted use of the AstraZeneca vaccine for people under 60 today as well following the death of a woman who had received a shot, national news agency ANP said, citing the Health Ministry.

And then the UK government said there have been 25 new reports of rare types of blood clots linked to the AstraZeneca vaccine, bringing the total there to 30.  There were no reports of the same reactions to the Pfizer/BioNTech vaccine, Britain’s health agency said today.

Now the 30 were out of 18.1 million doses of the vaccine given by March 24, so the UK agency said, “On the basis of this ongoing review, the benefits of the vaccines against Covid-19 continue to outweigh any risks and you should continue to get your vaccine when invited to do so.”

--The Food and Drug administration is investigating what caused a batch of the active ingredient for Johnson & Johnson’s Covid vaccine to be scrapped for failing to meet quality standards at a contract manufacturing plant operated by Emergent BioSolutions Inc., which has had issues before.

15 million doses were impacted as J&J disclosed Wednesday that a batch didn’t meet standards and didn’t reach the vial-filling and finishing stage, and no doses from it were distributed. 

The White House said Thursday it didn’t expect the issue to affect the promised U.S. supply of J&J’s vaccine.  J&J still expects to deliver about 100 million doses for use in the U.S. by midyear, under the terms of a $1 billion purchase agreement with the federal government.

J&J downplayed the situation and said it met its most recent vaccine delivery target.  None of the doses produced and shipped so far in the U.S. have come from that plant.  Those doses used in the U.S. have been manufactured at J&J’s plant in the Netherlands.

--Countries in the Americas could see a worse surge in coronavirus cases than the previous surge last year, with Brazil, Uruguay and Cuba already suffering more, the Pan American Health Organization (PAHO) said on Wednesday.  Director Carissa Etienne said the end of the Southern Hemisphere summer, following holidays where people grouped together and spread cases, had prompted spikes. She urged citizens to stay at home and governments to think hard before lowering movement restrictions.

PAHO said at least one of the three Covid “variants in concern” have been identified in 32 regional countries, with Brazil’s P1 in Argentina, Chile, Uruguay, Colombia, Venezuela, Peru, the United States, Canada and Mexico.

--French President Emmanuel Macron on Wednesday ordered France into its third national lockdown and said schools would close for three weeks as he sought to push back a third wave of infections that threatens to overwhelm hospitals.

With the death toll nearing 100,000, intensive care units in the hardest-hit regions at breaking point and a slower-than-planned vaccine rollout, Macron was forced to abandon his goal of keeping the country open to protect the economy.

“We will lose control if we do not move now,” the president said in a televised address to the nation.  The announcement means that movement restrictions already in place for more than a week in Paris, and some northern and southern regions, will now apply to the whole country for at least a month, from Saturday.

Daily new infections in France have doubled since February to nearly 40,000. The number of Covid patients in intensive care has breached 5,000, exceeding the peak hit during a six-week-long lockdown late last year.

--Brazilian President Jair Bolsonaro on Monday lost two ministers when his combative Foreign Minister Ernesto Araujo stepped down over struggles to get coronavirus vaccines, and Defense Minister Fernando Azevedo e Silva unexpectedly quit.  The departure of the two key ministers in one day underlines the mounting pressure on Bolsonaro, as he faces ever-louder calls to improve management of the pandemic and slow a wave of new cases pushing hospitals to the brink.

--Mexico published revised figures indicating that the number of deaths caused by coronavirus is 60% higher than previously reported.

More than 321,000 people are now believed to have died from Covid-19 in the country, which would place Mexico with the second highest number of Covid-related deaths in the world, after the U.S.

The revised report issued by Mexico’s health ministry showed that by the end of the sixth week of 2021, there had been 294,287 deaths “associated with Covid-19” – up from the 182,301 confirmed figure given previously.  You see worldometers’ updated figure through April 2 up above, which doesn’t reflect the health ministry’s update.

Since mid-February, more than 26,770 Covid-19-related deaths have been reported across Mexico which would take the total to more than 321,000.

--New research published earlier this month in the American Journal of Public Health argues that Florida is undercounting the number of people who died from Covid by thousands of cases, casting new doubt on claims that Gov. Ron DeSantis navigated the coronavirus successfully.

--In interviews with CNN’s Sanjay Gupta, Deborah Birx, the former White House coronavirus response coordinator, said that U.S. deaths from the virus could have been sharply reduced if mitigation efforts to slow the spread had come more quickly last spring.

“The first time, we have an excuse. There were about 100,000 deaths that came from that original surge,” Birx said.  “All of the rest of them, in my mind, could have been mitigated or decreased substantially.”

Dr. Robert Redfield, the former director of the CDC, accused President Trump’s health secretary, Alex Azar, and the secretary’s leadership team of pressuring him to revise scientific reports.  “Now he may deny that, but it’s true,” Redfield told Sanjay Gupta.  Azar, in a statement, denied it.

Dr. Stephen Hahn, the former commissioner of the Food and Drug Administration, said his relationship with Azar grew “strained” after the health secretary revoked the agency’s power to regulate coronavirus tests.  “That was a line in the sand for me,” Dr. Hahn said.  When Gupta asked him if Azar had screamed at him, Dr. Hahn replied; “You should ask him that question.”

Admiral Brett Giroir, who served as the nation’s coronavirus testing czar, told CNN, “When we said there were millions of tests available, there weren’t, right?” referencing the administration’s repeated claims in March 2020 that anyone who sought a coronavirus test could get one.  “There were components of the test available, but not the full meal deal.”

The finger-pointing prompted critics to say that former Trump administration officials who managed the pandemic response have turned to a new project: managing their legacies.

“It’s ridiculous,” said Ashish Jha, dean of Brown University’s public health school and a prominent pandemic commentator.  “Brett Giroir knew we had a problem with testing. With PPE. With vaccine distribution. He told me as much. But he felt he needed to say what the administration wanted to hear publicly.”

But back to Birx, she’s the one who once praised Trump as being “so attentive to the scientific literature” and she’s been pilloried for not publicly correcting the president as he made outlandish claims about unproven theories.

Birx argues she was personally rebuked by Trump after warning in an August interview that Americans needed to take strict safety precautions because the virus was “extraordinarily widespread.”

“He felt very strongly that I misrepresented the pandemic in the United States, that I made it out to be much worse than it is,” she said.  “I feel like I didn’t even make it out as bad as it was.”

--Finally, on the topic of the origins of the virus….

A 124-page report of a joint inquiry by the World Health Organization and China contained a glut of new detail but offered no profound new insights.  And the report does little to allay Western concerns about the role of the Chinese Communist Party, which has been resistant to outside scrutiny and has at times sought to hinder any investigation by the WHO.  It’s unclear whether China will permit further outside experts to keep digging.

“The investigation runs the risk of going nowhere, and we may never find the true origins of the virus,” said Yanzhong Huang, senior fellow for global health at the Council on Foreign Relations.

Editorial / Washington Post

“The World Health Organization joint investigation with China into the origins of the coronavirus looked into a dark chasm and saw darkness. The report offer theories about pathways of a zoonotic spillover from animals to people, but not a single animal source among thousands has tested positive with SARS-CoV-2.  The investigators did not conduct a forensic probe into the possibility of a laboratory leak. The origins of the pandemic remain obscure.  Finding the answer is as important and elusive as ever.

“Overshadowing the whole exercise is the unspoken power of the Chinese party-state to determine the outcome.  China has strenuously denied that the virus may have leaked from the Wuhan Institute of Virology, which was carrying out risky gain-of-function experiments on bat coronaviruses.  This involves modifying viral genomes to give them new properties, including the ability to infect lung cells of laboratory mice that had been genetically changed to respond as human respiratory cells would.  According to the WHO-China report, during the team’s visit to the institute on Feb. 3, ‘rumors of a leak from the laboratory were refuted categorically by the laboratory director.’  The director said the laboratory handled some 13,000 samples over three years.  ‘No infection was ever reported.’  All staff are tested and the results all negative, he said.  A member of the WHO team, Dr. Dominic Dwyer of Australia, told reporters Tuesday, ‘I think we were satisfied that there was no obvious evidence of a problem.’  But he conceded the team had not conducted a forensic investigation of a possible laboratory leak.  Will China now permit one?  China’s reluctance only fuels suspicion.

“The joint investigation – 17 Chinese and 17 international scientists working over 28 days in January and February – ran into many frustrating unknowns.  In search of clues from early cases in Wuhan, 233 health institutions checked 76,253 health records of respiratory conditions in October and November 2019 and identified 92 that might be SARS-CoV-2.  Upon testing, none were.  The Huanan food market in Wuhan sold seafood and wild animals, but ‘no firm conclusion’ can be drawn about its role because there were also virus cases with no connection to the market, the report says.  Viral genomes and epidemiological data showed ‘no obvious clustering’ by ‘exposure to raw meat or furry animals.’  The report adds, ‘Through extensive testing of animal products in the Huanan market, no evidence of animal infections was found.’  More than 80,000 wildlife, livestock and poultry samples were collected from 31 provinces in China and none tested positive for the virus before or after the outbreak.

“The Chinese and WHO scientists insisted the most likely pathway of the virus was a zoonotic spillover, either directly or indirectly from an animal species to humans.  They called a laboratory leak ‘an extremely unlikely pathway.’  But the WHO director-general, Dr. Tedros Adhanom Ghebreyesus, disagreed with the team, saying the laboratory leak ‘requires further investigation.’  He declared that all hypotheses remain on the table, and he is ready to deploy specialists to probe further.

“China has a responsibility to open its doors.  This is not a blame game, but an essential investigation into the cause of this pandemic to make another one less likely.”

Editorial / Wall Street Journal

“The WHO’s tissue-thin analysis isn’t surprising.  Chinese government scientists provided most of the data and worked with the international team to craft the report. Beijing has limited independent access to information on Covid-19’s origin, much as it silenced scientists and journalists who raised doubts about the official story last year. The report’s publication was repeatedly delayed, as both sides negotiated a report that is more political than scientific.

“The WHO team is also compromised by conflicts of interest. Zoologist Peter Daszak, the American on the team, has collaborated with the WIV (Wuhan Institute of Virology) for years and supported gain-of-function research.  As early as February 2020 he helped coordinate a statement in the Lancet condemning ‘conspiracy theories suggesting that Covid-19 does not have a natural origin.’  Another team member, virologist Marion Koopmans, oversees an outfit in the Netherlands that has conducted gain-of-function research and could face serious repercussions if the pandemic started in a lab.

“The Biden Administration hasn’t taken a definitive position on the lab-leak theory, but Covid-19 spokesman Anthony Fauci played down the idea last week.  Dr. Fauci’s institute financed work at the WIV and has backed gain-of-function research.  He’s the wrong man to reassure the public about lab research on coronaviruses.

“Dr. Fauci was trying to rebut Robert Redfield, the former chief of the Centers for Disease Control and Prevention, who said last week that ‘I still think the most likely etiology of this pathogen in Wuhan was from a laboratory.’  Dr. Redfield added that virus transfer to a lab worker is not unusual in such research.

“Even the WHO recognizes the implausibility of the report.  ‘I do not believe that this assessment was extensive enough.  Further data and studies will be needed to reach more robust conclusions,’ WHO director-general Tedros Ghebreyesus said Tuesday.  ‘Although the team has concluded that a laboratory leak is the least likely hypothesis, this requires further investigation.’  He’s ready to deploy more specialists, but don’t expect Beijing to welcome them.

“The U.S. and 13 other governments released a statement Tuesday expressing ‘shared concerns’ that the WHO study ‘was significantly delayed and lacked access to complete, original data and samples.’ That’s nice, but it sounds like they’re prepared to conclude that Covid’s origin story is unknowable and move on.

“That shouldn’t be the end of it. The Biden Administration knows the underlying intelligence and should release it to the public.  Unless it does, China’s propaganda backed by the WHO’s failure will prevail in much of world opinion.  The Biden Administration says it wants to revitalize multilateral institutions, and that should start with refusing to accept the WHO’s Wuhan whitewash.”

---

Wall Street and the Economy

Monday, tugs pulled the 400-meter-long Ever Given container carrier free from the Suez Canal, helped by a high tide, and traffic resumed, with about 140 ships passing through the Canal on Tuesday after it had been reopened.  It was estimated the traffic jam at the mouth of the Canal would be clear in about four or five days.

But it will take weeks, and months, to clear the cargo backlog, especially at the ports, the blockage having exacerbated an already severe global supply chain crisis.

The ripple effects will include higher shipping rates.  The ships run on schedules, with only a finite number of boxes to go around, so the ships aren’t easily repositioned to areas with high demand.

Meanwhile, today we saw the release of the March nonfarm payroll report and the economy added a whopping 916,000 jobs for the month, well above consensus of 650,000, with the unemployment rate dropping to 6.0% from 6.2% in February.  February’s jobs number was revised upward to 468,000.

Leisure and hospitality added 280,000 amid the nation’s reopening, while construction gained 110,000 and manufacturing 53,000.

780,000 jobs were added in the private sector, 136,000 in government.

Average hourly earnings fell -0.1% for a 4.2% year-over-year increase, down from the prior month’s 5.2% pace.

The Black unemployment rate fell to 9.6%, while the Hispanic jobless rate is 7.9%.

We had a slew of other economic data this week.

The S&P CoreLogic Case-Shiller National Home Price Index, which measures average home prices in major metropolitan areas across the nation, rose 11.2% in the year that ended in January, the highest annual rate of price growth since February 2006, during the bubble.

The Case-Shiller 20-city index rose 11.1% from a year earlier, and price growth accelerated in all 20 cities.  Phoenix had the fastest home-price growth in the country for the 20th straight month, at 15.8%, followed by Seattle at 14.3%.

The ISM manufacturing reading for March was 64.7 (50 the dividing line between growth and contraction), the best reading in 11 years and the highest sector optimism level since 1983.  The Chicago PMI reading for manufacturing in the region was a robust 66.3, best since 2018. 

February construction spending was down 0.8%, as expected.

The initial weekly jobless claims figure was 719,000, up 61,000 from a revised 658,000 the week before, which thus becomes the first time we’ve been below the 665,000 peak set during the Great Recession, prior to the pandemic.

The Atlanta Fed’s GDPNow barometer for the first quarter rose to 6.0% this week.

Lastly, President Trump liked to tout his stock market performance since Election Day, while during the campaign, he continually said that if Joe Biden was elected, the market would crash.

Well, since Election Day, Nov. 3, the S&P 500 is up 19.3%, hardly a crash.  And Biden’s first 50 trading days performance from the Jan. 19 close to the close on March 31 was 4.6%. 

Europe and Asia

The euro region (EA19) released its final manufacturing PMIs for March (courtesy of IHS Markit) and the eurozone figure was 62.5 vs. February’s 57.9, with record increases in output, new orders, exports and purchasing activity.  Unprecedented supply-side delays, however, drove the sharpest rise in input costs for a decade.

Germany’s manufacturing PMI for March was an all-time high of 66.6.
France 59.3…246-month high
Italy 59.8…252-month high
Spain 56.9…171-month high
Ireland 57.1
Greece 51.8
Netherlands 64.7…record high

Chris Williamson / IHS Markit

“Eurozone manufacturing is booming, with production and order books growing at rates unprecedented in nearly 24 years of PMI survey history during March.

“Although centered on Germany, which saw a particularly strong record expansion during the month, the improving trend is broad based across the region as factories benefit from rising domestic demand and resurgent export growth.

“Driving the upturn has been a marked improvement in business confidence in recent months, with expectations of growth in the year ahead running at record highs in February and March. This has not only boosted spending but has also led to rising investment and restocking, as firms prepare for even stronger demand following the vaccine roll-out.

“The picture is blighted, however, by record supply chain disruptions, which will likely be exacerbated further by delays arising from the Suez Canal blockage.  Prices are already rising at the fastest rate for a decade as demand outstrips supply, resulting in a sellers’ market for many goods.

“While the forces driving prices higher appear to be temporary, linked to the initial rebound from Covid-19 lockdowns, any further upward pressure on firms’ costs and selling prices is unwelcome.

“Encouragingly, the recent expansion of output means production in the eurozone is likely to have surpassed its pre-Covid peak, and hiring has already accelerated markedly as producers seek to build additional capacity to meet higher demand.”

But next week we get the readings on the service sector, and that’s where the new lockdowns will be reflected in the data.

Separately, we had a flash reading on March inflation for the euro area, up 1.3% annualized, compared with February’s 0.9% pace.  Ex-food and energy, the rate was 1.0%.

Brexit: Ten EU member states, including Germany, France and Poland, have said they will no longer extradite their nationals to the UK following Brexit, the British Home Office said. 

Two more – Austria and the Czech Republic – will only hand over suspects to the UK with their consent.

The European Arrest Warrant was introduced in 2004 and obliged member states to arrest and transfer suspects to countries where they were wanted.

Separately, taking their first step to repair the rupture to banking and trade, the UK and the European Union agreed on a new forum on cross-border financial market regulation.  Some Brussels officials said securing a common framework could help unlock equivalence talks.

Turning to AsiaChina’s National Bureau of Statistics reported the official government manufacturing PMI in March rose to 51.9 from February’s 50.6, the 13th straight month above 50. The service sector reading surged to 56.3 from 51.4.

The private Caixin manufacturing reading for last month was 50.6, down from 50.9.  Caixin’s service sector reading comes next week.

Japan’s manufacturing PMI for March was 52.7 vs. February’s 51.4. 

Separate readings on retail sales for February, -1.5% year-over-year, and February industrial production, -2.6% Y/Y, were not as good.  February’s figures, however, owed to the semiconductor shortage, as well as a large earthquake off the eastern coast of Japan that impacted business in the northern region.

Taiwan’s manufacturing PMI for March was 60.8, an 11-year high, but supply chain delays worsened, with the worst such delays in 17 years of data.

South Korea’s manufacturing PMI for March was a solid 55.3.

Street Bytes

--Stocks finished up this holiday-shortened week, with the Dow Jones up 0.2% to 33153, having hit a new closing high Monday of 33171.  The S&P 500 ended the week at its new high, up 1.1% to 4019, the first time over 4000, and Nasdaq rebounded 2.6%. Much of the good feeling is over the expanding vaccine rollout, despite ongoing Covid concerns, both here and abroad, and the market hasn’t had a chance to respond to Friday’s terrific jobs report with no trading in stocks today.

For the first quarter, the Dow gained 7.8%, the S&P 5.8% and Nasdaq 2.8%. The S&P is now up 80% since the March 2020 low.

--U.S. Treasury Yields

6-mo. 0.03%  2-yr. 0.19%  10-yr. 1.72%  30-yr. 2.36%

The bond market was open briefly following the jobs report and the yield on the 10-year rose 5 basis points from Thursday’s close.

--The immediate crisis of the Suez Canal blockage is over, but the battle over damages will go on for months.

The long-term cost of the canal’s estimated $10-billion-a-day closure will likely be small, given that global merchandise trade amounts to $18 trillion a year.  But with cargoes delayed for weeks, if not months, the blockage will unleash a flood of claims by everyone affected, from the shipping lines to manufacturers and oil producers.

Everything was impacted, from oil, to grain, perishable commodities, consumer goods…but on the issue of perishables, that’s where the enormity of the claims may not be known for some time.

--Credit Suisse and Japanese bank Nomura Holdings Inc. told shareholders on Monday that they faced “significant losses” as a number of international investment banks were caught up in the collapse of previously little-known Archegos Capital Management, a U.S. hedge fund.

Nomura warned of a $2 billion loss, while Credit Suisse’s losses are estimated at $3 billion.  Another, Mitsubishi UFJ Financial, said it may have suffered losses of about $300 million at its European subsidiary.  It was reported the likes of Goldman Sachs Group and Morgan Stanley were quick to move large blocks of assets before other large banks that traded with Archegos, thus limiting their own losses.

Archegos ran into trouble last week when ViacomCBS, the media giant in which the hedge fund had built a large secret position, saw its stock plunge 29 percent over two days (27% Friday) after it accounted for a $3 billion share sale.  This forced prime brokers to make so-called margin calls for Archegos to place additional cash or collateral with them to make up for the losses in its leveraged bets.

When Archegos failed to meet the margin calls, investment banks started offloading about $20 billion of stocks on Friday that they held, linked to loans in the hedge fund. The forced selling prompted further share price pressure in ViacomCBS, and also saw another media company, Discovery, as well as the U.S.-listed shares of China-based Baidu and Tencent Music plunge.  Discovery, like Viacom, crashed 27% last Friday as well.

Archegos was a more than $10 billion fund led by investor Bill Hwang, a 57-year-old who cut his teeth at the hedge fund Tiger Management, run by the legendary Julian Robertson, Hwang becoming one of the firm’s famous alumni, or “Tiger Cubs,” when he started his own fund, Tiger Asia.  But in 2012, he faced an insider-trading investigation; securities regulators said Tiger Asia had used confidential information to bet against the shares of Chinese stocks and had manipulated other shares.

Hwang then rebuilt his fortune to about $10 billion and turned his firm into a family office, renaming it Archegos Capital Management.  Little regulated, family offices are created to manage the wealth of private individuals and their families, as opposed to hedge funds, which traditionally manage money for outside clients.

But after building large holdings in a small number of stocks, including ViacomCBS and Discovery, which also operated the cable channels TLC and the Food Network, Archegos rattled markets in the past week after the firm and its banks began liquidating huge positions in Hwang’s holdings. Archegos’ total positions that were unwound approached $30 billion thanks to the leverage it obtained from the banks.

Archegos’ investments were partly concentrated in a common Wall Street derivative, a total return swap, that has long faced scrutiny. 

Total return swaps are contracts brokered by Wall Street banks that allow a user to take on the profits and losses of a portfolio of stocks or other assets in exchange for a fee.  Swaps allow investors to take huge positions while posting limited funds up front, in essence borrowing from the bank.

The use of swaps allowed Bill Hwang to maintain his anonymity, even as Archegos was estimated to have had exposure to the economics of more than 10% of multiple companies’ shares.  Investors holding more than 10% of a company’s securities are deemed to be company insiders and subject to additional regulations around disclosures.

The wider market fallout from the liquidation of Archegos’ positions has, for now, been contained compared with the 1998 implosion of hedge fund Long-Term Capital Management in 1998, which prompted the Federal Reserve to cut rates and coordinate a bailout of the firm by its creditors.

So you can imagine that after the GameStop short-squeeze saga and now the Archegos margin call meltdown, regulators and some senators, like Sen. Elizabeth Warren (D-Mass.), are calling for more oversight of the financial system.  I can’t blame them.  If you don’t disclose your positions, and there is no transparency, this kind of thing is going to happen.

--Boeing Co. said on Monday it sold 100 new 737 MAX-7 jets to long-time customer Southwest Airlines, in its biggest order since the aircraft’s safety ban was lifted in the U.S. last year.

The order signals Southwest’s show of confidence in the 737 MAX, ending speculation of a shift to jets made by Airbus SE as Southwest looks for a recovery in the aviation sector.  It would have been a major disaster for Boeing had the budget carrier not given the order.

Southwest, which has been flying older versions of the 737 planes for nearly 50 years, said its order book now has a total of 349 orders and 270 options for the 737 MAX for 2021 through 2031.

Southwest previously had 249 orders and 115 options for the MAX for 2021 through 2026.

Each 737 MAX-7 carries a list price of roughly $100 million, though Southwest will be receiving a substantial discount.

--American Airlines Group said Monday it will return “most” of its aircraft to service in the second quarter starting this week after a recent upturn in bookings and domestic travel.

The Fort Worth, Texas-based carrier now expects first-quarter capacity to be down 40% to 45% from the same period in 2019 versus a prior outlook for a 45% decline, it also said in a filing with the SEC.

“As infection and hospitalization rates have materially declined and vaccine distribution has increased during the quarter, the company has experienced recent strength in domestic and short-haul international bookings,” American said.

Net bookings in the week ended March 26 were at approximately 90% of the level in 2019, with a domestic load factor of 80% for the same period.

--Delta Air Lines, the last U.S. airline still blocking middle seats, will end that policy May 1 as air travel recovers and more people become vaccinated against Covid.  The decision Wednesday reversed a policy that had been in place since last April, and which Delta’s CEO had repeatedly cited as raising trust in the airline.

Delta said that nearly 65 percent of people who flew on Delta last year expect to have at least one dose of the new vaccines by May 1. 

Delta is also bringing back snacks April 14!

--TSA checkpoint travel numbers vs. 2019

4/1…65 percent of 2019 level
3/31…59
3/30…56
3/29…60
3/28…63…new post-pandemic high…1,574,228 travelers
3/27…65
3/26…60
3/25…64
3/24…54

--On a different topic involving Georgia-based Delta Air Lines, CEO Ed Bastian, under pressure, said Wednesday that the state’s new election law overhaul is “unacceptable” and “based on a lie,” after the company faced criticism that it didn’t speak out forcefully enough in opposition to the bill when it was being considered by the state’s Republican leaders.

Bastian offered his assessment of the new Georgia law in a memo sent to employees less than a week after Delta officials joined other corporate lobbyists to shape the final version of a sweeping measure that could make it harder for some Georgia citizens to cast ballots.

Coca-Cola also stepped forward to criticize the election law, while Georgia-based Home Depot and UPS have been largely silent.  The Major League Baseball players union has raised the possibility of moving the summer All-Star Game from Atlanta, and then this afternoon, MLB said it was doing so, a new site not named as yet.

Delta initially issued a statement touting some parts of the law, such as expanded weekend voting, but said “we understand concerns remain over other provisions in the legislation and there continues to be work ahead in this important effort.”

But Bastian spoke more forcefully in Wednesday’s memo to employees.

“The entire rationale for this bill was based on a lie: that there was widespread voter fraud in Georgia in the 2020 elections.  This is simply not true,” Bastian wrote.  “Unfortunately, that excuse is being used in states across the nation that are attempting to pass similar legislation to restrict voting rights.”

Bastian repeated that Delta “joined other major Atlanta corporations to work closely with elected officials from both parties, to try and remove some of the most egregious measures from the bill. We had some success in eliminating the most suppressive tactics that some had proposed.”

But, he emphasized, “I need to make it crystal clear that the final bill is unacceptable and does not match Delta’s values.”

American Airlines said Thursday that it strongly opposes legislation passed by the Texas state Senate to limit voting access.

“We must stand up for the rights of our team members and customers who call Texas home, and honor the sacrifices made by generations of Americans to protect and expand the right to vote,” the Texas-based airline said in a statement.

The legislation, which the state Senate passed early on Thursday and is now set to come before the state House of Representatives, would eliminate drive-through voting, limit polling site hours and give partisan poll watchers more autonomy.

--Ford Motor Co. is scheduling more downtime at several U.S. factories, including its two major truck plants, as a global shortage of semiconductors upends vehicle manufacturing for car makers in North America.

The company said Wednesday that it would halt production for two weeks in April at its truck plant in Dearborn, Mich., and take a week of downtime on the truck side of its Kansas City, Mo., assembly plant.  It also plans to suspend work temporarily and cancel planned overtime at several other factories in North America, attributing these moves to tight chip supplies as well.

Ford in February said it planned to reduce production of its F-150 pickup truck – the nation’s top-selling vehicle and the company’s biggest moneymaker – because of the shortage.  The company also said back then that global production losses from the chip shortfall would hit the pretax bottom line to the tune of $1 billion to $2.5 billion in the first two quarters of the year.

Last Friday, Stellantis NV, the maker of Ram, Jeep and Chrysler, said it would halt production at five North American plants through mid-April because of the lack of semiconductors.  Honda Motor and Toyota idled some U.S. factories in March, citing the same reason.

General Motors closed some North American plants for several weeks as well.

GM and Ford until now had been able to sustain pickup-truck production by in essence cannibalizing (diverting chips from) other, less-profitable vehicles.

Because of the global semiconductor shortfall which is draining dealer lots of cars and trucks, with new-model inventory at U.S. dealerships falling 36% in March, average transaction prices rose 5% to an estimated $40,563, according to automotive researcher Edmunds.

--Meanwhile, we had some March and/or first-quarter sales numbers from the automakers. 

Ford Motor’s sales rose 1% year-over-year to 521,334 units in Q1, powered by a surge of more than 14% in purchases of the automaker’s SUVs.

While truck sales rose 5.1% to 277,233, car sales slumped by almost 57% to 27,002.

Electrified vehicle sales rose more than 74% to 25,980.

“Electrified vehicles hit a new record sales start, trucks reported best retail start in 13 years, and SUVs posted best first-quarter retail sales since 2001,” the company said in a regulatory filling Thursday.

General Motors said its sales in the U.S. gained 4% year-over-year, selling 642,250 vehicles, with a 19% increase in retail sales and a 35% reduction in fleet sales.

Retail sales of Cadillac and Buick both grew 43% in the quarter.  GMC Sierra delivered its “best first-quarter retail sales ever” at an 18% hike, while Chevrolet rose 13% as Bolt EV and Traverse achieved their best first quarter with 60% and 39% increases, respectively.

GM’s fleet sales decline was attributable to a 15% decrease in sales to commercial and government customers and a 55% drop in rental sales.

Toyota Motor Corp. reported U.S. vehicle sales of 253,783 vehicles for March, an 87% increase on a volume basis.  The automaker also reported first-quarter sales of 603,066 vehicles, a rise of 21.6% on a volume basis, compared with Q1 of 2020.

The company’s Lexus division’s March sales jumped 112.9% year-over-year.

Honda Motor said sales in the U.S. increased 16%, while Nissan reported a nearly 11% increase for the first quarter.

Overall, analysts forecast U.S. auto sales will rise roughly 8% for the quarter and the industry’s annualized selling pace in March could hit 16.5 million vehicles, a sign that the level of demand is about on par with what it was before the pandemic, when business collapsed at end of March 2020, as the economy was shutting down.

Separately, Tesla on Friday reported record deliveries for the January to March quarter, beating Wall Street estimates, as solid demand offset the impact of a global shortage of parts.

“We are encouraged by the strong reception of the Model Y in China and are quickly progressing to full production capacity,” Tesla said in a statement.  “The new Model S and Model X have also been exceptionally well received, with the new equipment installed and tested in Q1 and we are in the early stages of ramping production,” it added.

The electric-car maker “delivered” 184,800 vehicles during the first quarter, above estimates of 177,822 vehicles, according to Refinitiv data.  This also beats its previous record of 180,570 achieved last quarter.

Tesla’s total “production” in the first quarter rose marginally to 180,338 vehicles compared with fourth-quarter production of 179,757 vehicles.

--Related to the above on the auto industry, Taiwan Semiconductor Manufacturing Co., a major chip supplier to Apple Inc. and other major consumers of chips, said it would invest $100 billion over the next three years to increase production capacity as demand surges.

CEO C.C. Wei said in a letter to clients that the company hadn’t been able to keep up with demand over the past year despite running its fabrication plants at over 100% utilization.  Mr. Wei wrote that TSMC had started hiring thousands of new employees.

TSMC’s shares rose over 5% on the news.

--China’s Huawei Technologies reported modest annual profit growth for 2020 as overseas revenues declined due to disruption caused by the pandemic and the company’s placement on a U.S. export blacklist.

Net profit for 2020 came in at $9.83 billion, up 3.2%, compared to growth of 5.6% a year earlier.

Huawei was put on an export blacklist by former President Trump in 2019 and barred from accessing critical technology of U.S. origin, affecting its ability to design its own chips and source components from outside vendors.

The ban put Huawei’s handset business under immense pressure, with the company selling off its budget smartphone unit to a consortium of agents and dealers in November 2020 to keep it alive.

Yet Huawei reported that its consumer business, which includes smartphones, was up 3.3% year on year, and accounted for over half of the company’s revenue.

The rise in part was thanks to growth in devices such as smartwatches and laptops, a Huawei spokesman said.

The company carrier business, which include 5G network equipment, rose just 0.2% from a year earlier.

Huawei’s growth was driven by its home market, with revenue in China up 15.4%. But its business declined everywhere else, with revenues down 12.2% in Europe, Middle East and Africa, down 8.7% in the rest of Asia, and 24.5% in the Americas.

--Meanwhile, Swedish-based retail clothing giants H&M and other foreign companies such as Nike face a backlash in China after raising concerns about forced labor in Xinjiang.  Chinese officials said the companies should not politicize their economic behavior.

H&M, Burberry, Nike and Adidas and other western brands have been hit by consumer boycotts in China since last week over comments about their sourcing of cotton in Xinjiang.  The growing rift comes as the United States and other Western governments increase their pressure on China over suspected human rights abuses in the western region.

Chinese social media users last week began circulating a 2020 statement by H&M announcing it would no longer source cotton from Xinjiang.  H&M said at the time the decision was due to difficulties conducting credible due diligence in the region and after media and human rights’ groups reported the use of forced labor in Xinjiang – a charge that Beijing has repeatedly denied.

The wave of consumer boycotts has coincided with a coordinated set of sanctions imposed by Britain, Canada, the European Union and the United States last week.

--China released 2 million tons of rice from state reserves for sale to feed producers this week to bolster supplies of feed grains amid elevated corn prices, according to Reuters. Corn prices hit record highs in China earlier this year as dwindling stocks and reduced output raised concerns over supplies.

China will reportedly keep releasing rice and wheat stocks until corn prices are tamed.  Imports from the U.S. and elsewhere have helped to reduce prices some after January’s record highs.

--Ireland’s Central Bank is warning that up to 100,000 people will permanently lose their jobs on the island as a result of the pandemic.

Nonetheless, the regulator upgraded its growth forecast for the economy to nearly 6 percent, citing improved economic conditions globally and the $1.9 trillion stimulus plan in the United States that is expected to boost exports.  [The Biden infrastructure proposal with its incumbent corporate tax hike would hurt Ireland’s economy, but that’s a story for down the road as we don’t know if such hikes will even occur.]

Ireland’s job losses would occur in certain consumer-facing sectors, where the nation faces long-term unemployment.  The tourism sector continues to be hammered.  Golf courses are still closed, for example, let alone overseas visitors, critical to GDP, wouldn’t be returning in droves due to quarantine rules.

--It’s still an evolving situation but the likes of JPMorgan Chase, Salesforce.com and PricewaterhouseCoopers are among the major firms looking to scale back on their office space, not a good sign for commercial real estate.  At the end of 2020, 137 million square feet of office space was available for sublease across the U.S., according to CBRE Group Inc. That is up 40% from a year earlier and the highest figure since 2003.

For its part, JPMorgan has been marketing 700,000 square feet of office space in lower Manhattan since earlier in the yar, the largest block of space available for sublease in Manhattan.

Salesforce has listed space for rent in one of its San Francisco office building.  Uber Technologies and Wells Fargo are also adding to sublease availability in that city.

--An uncrewed SpaceX Starship prototype rocket failed to land safely on Tuesday after a test launch from Boca Chica, Texas, and engineers were investigating, SpaceX said.  “We do appear to have lost all the data from the vehicle,” a SpaceX spokesman said of the rockets’ test flight.

The webcast of the landing was obscured by fog.  But debris from the spacecraft was found scattered five miles away from its landing spot, which is kind of disconcerting.  The Starship was one in a series of prototypes for the heavy-lift rocket being developed by billionaire Elon Musk’s private space company to carry humans and 100 tons of cargo on future missions to the moon and Mars.

The Starship rocket, which will stand 394 feet tall with its super-heavy first-stage booster included, is SpaceX’s next-generation fully reusable launch vehicle – the center of Musk’s ambitions to make human space travel more affordable and routine.  A first orbital Starship flight is planned for year’s end.

Starships SN8 and SN9 previously exploded upon landing during their test runs as well.  SN10 achieved an upright landing, but then went up in flames about eight minutes after touchdown.  And then you have Tuesday’s SN11.  Musk tweeted after: “Something significant happened shortly after landing burn start.”

Yup, this stuff ain’t easy.

--According to Nielsen data, U.S. cable-news viewership fell for all major networks in the first three months of the year, following the presidential election and the chaos thereafter.

Fox News lost 32% of its total prime-time audience compared with the quarter ended Dec. 31, while CNN and MSNBC had smaller declines of 16% and 7.8%, respectively, though each fell more substantially from highs they hit in January.

The ratings gap between the three is tighter than it was a quarter ago, as all networks try to establish their approach at the outset of the Biden administration.

Fox News remained No. 1 among prime-time viewers for the quarter, averaging 2.58 million, though its lead has narrowed.  MSNBC is second in that category with 2.29 million, and CNN, which was No. 1 in the weeks after November’s election, is now No. 3 with 1.99 million.

But CNN is first among prime-time viewers aged 25 to 54, the key demographic for advertisers.

--Warner Bros.’ monster film “Godzilla vs. Kong” amassed $121.8 million in 38 overseas territories during its weekend debut. China was the film’s biggest international market, with a cumulative gross of $70.3 million.

The picture then was released on Wednesday simultaneously in North American theaters and streamed on HBO Max.

“Godzilla vs. Kong,” in just an hour and 53-minutes, wreaks untold structural damage with insurance claims running in the $10s of trillions.

Foreign Affairs

Iran: Representatives of Iran and world powers decided at a virtual meeting on Iran’s nuclear accord on Friday to convene in Vienna on Tuesday, Iran’s foreign ministry spokesman was quoted by state media as saying.  European officials confirmed that the meeting would be held next week.

And today both Iran and the United States said they would hold indirect talks Tuesday as well, as part of broader negotiations to revive the 2015 nuclear deal. Tehran has ruled out face-to-face bilateral discussions, but the presence of both Iran and the U.S. – welcomed by Washington as a “healthy step forward” – will help to focus efforts to bring all sides back into compliance with the accord.

Tonight, Iran’s state-run Press TV, quoting an unnamed informed source, said: “In line with the unchangeable guideline of Iran’s (Supreme) Leader, any result of the (nuclear accord commission) which would be based on the idea of a step-by-step removal of the sanctions or indirect negotiations with the U.S. will not be acceptable.”

The aim is to reach an agreement within two months, said a senior official with the European Union, the coordinator of the deal.  Iran holds elections in June which no doubt will be a factor, whether a positive or negative one to be determined.

Meanwhile, China agreed to invest $400 billion in Iran over 25 years in exchange for a steady supply of oil to fuel its growing economy under a sweeping economic and security agreement signed last Saturday in Tehran by the foreign ministers of the two countries.

“China firmly supports Iran in safeguarding its state sovereignty and national dignity,” Chinese Foreign Minister Wang Yi said in his meeting with Iranian President Hassan Rouhani.  The United States, Wang said, should immediately rescind its sanctions on Iran and “remove its long arm of jurisdictional measures that have been aimed at China, among others.”

The deal could deepen China’s influence in the Middle East and undercut American efforts to keep Iran isolated. But it was not immediately clear how much of the agreement can be implemented while the U.S. dispute with Iran over its nuclear program remains unresolved.

But inside Iran, some are criticizing the government for giving too much away to China.

China: The number of Legislative Council (Legco) seats directly elected by Hong Kong residents was slashed dramatically on Tuesday after a vote in Beijing.  The National People’s Congress Standing Committee voted 167-0 to endorse a proposal that limits the number of directly elected seats to 20, down from 35. The Election Committee will enjoy the biggest share of Legco seats with 40, while 30 seats go to the trade-based functional constituencies and 20 to the geographical constituencies.

Legco hopefuls must now secure nominations from each of the five sectors of the Election Committee, making it extremely difficult for opposition candidates to run.

All 117 district council seats in the Election Committee have been scrapped.

And get this, the new vetting committee will pick candidates based on information provided by police’s national security unit, and no judicial review or appeal of the decision will be allowed.

Bottom line, the number of directly elected seats in Legco has been cut from half to about one-fifth while entrusting the Election Committee with vast new powers.  And for the first time, the Election Committee responsible for picking the city’s leader will have a chief convenor, a member who “holds an office of state leadership,” according to an official announcement by state media Xinhua.

Separately, Hong Kong media tycoon Jimmy Lai and six former lawmakers, including veteran opposition campaigner Marin Lee, have been convicted of organizing and taking part in an unauthorized anti-government protest in 2019.

Leung Kwok-hung, one of the former lawmakers, was defiant in court, shouting: “Shame on political prosecution!  Peaceful demonstration is not a crime!”

Meanwhile, last Sunday, U.S. Secretary of State Antony Blinken said he sees “increasingly adversarial” aspects to the United States’ relationship with China.  “There are clearly increasingly adversarial aspects to the relationship, and there are certainly competitive ones,” Blinken told CNN, adding that there were, however, areas of cooperation between the two countries. 

Gerald F. Seib / Wall Street Journal

“U.S. relations with China are a minefield of potentially explosive problems, yet the biggest risk is a subtle one: the danger that China overestimates the decline of U.S. power and acts accordingly.

“If China is convinced, as its representatives and media organizations proclaim, that the U.S. and the entire Western liberal order are in the early stages of a long-term decline, an emboldened Chinese leadership may overstep, become overly provocative and compel America to respond forcefully.  The risk arises in many areas, including in the South China Sea, in commerce and, above all, in Hong Kong and Taiwan.

“This risk, in fact, helps explain many of the Biden administration’s opening steps toward China.  Its strategy is to counteract the Chinese narrative of a politically divided and declining America by trying to establish a picture of enduring U.S. economic, diplomatic and military strength before fully engaging with Beijing.  The message is a simple one: Don’t underestimate American power.

“Thus, the administration has delayed either jumping into new trade talks with China or lifting the tariffs the Trump administration imposed on Chinese goods.  The president hopes to show first that the U.S. has conquered the coronavirus pandemic, is fully recovered economically, and has begun working with Congress to pass a plan for investing in America’s economic infrastructure.

“Those steps, it’s hoped, would allow the administration to begin negotiating from a position of enhanced strength. Thus did newly installed U.S. Trade Representative Katherine Tai just declare, in an interview with the Wall Street Journal, that the administration isn’t ready to lift those tariffs: ‘No negotiator walks away from leverage, right?’ she said.

“At the same time, the Biden administration has continued the Trump team’s practice of sending U.S. Navy ships through the South China Sea in so-called freedom of navigation exercises, designed both to show that the U.S. doesn’t accept China’s territorial claims in the area and to reassure allies that America will maintain a military presence in the area.

“Perhaps most important, the effort to demonstrate continued American clout is seen in the unprecedented importance the Biden administration has placed on the Quad – the informal coalition of the U.S., Australia, Japan and India.

“The Quad was born in 2004 as an effort to provide help after a tidal wave devastated the Indo-Pacific region. The grouping hasn’t had a clear mission since.  It isn’t a formal alliance, and certainly isn’t a military one, and isn’t explicitly designed to counter China. Yet it brings together the four most powerful democracies China has to take into account in its region.

“So it was no accident that one of Mr. Biden’s first big diplomatic initiatives was to convene an unprecedented virtual summit of the Quad’s leaders two weeks ago.  Afterward, the leaders co-signed an opinion column proclaiming their intention to work together to fight climate change and to produce and distribute coronavirus vaccines to Indo-Pacific nations.

“Their op-ed didn’t even mention China, but the vaccine initiative was, among other things, a clear move to counter China’s own efforts to use vaccine donations to expand its influence in the region.  Perhaps more pointedly, the four leaders signaled their intention to counter China’s territorial claims in the South China Sea: ‘We are striving to ensure that the Indo-Pacific is accessible and dynamic, governed by international law and bedrock principles such as freedom of navigation and peaceful resolutions of disputes, and that all countries are able to make their own political choices, free from coercion.’

“China certainly has noticed.  It has vacillated between calling the Quad a meaningless talking society and a menacing anti-China alliance with Cold War overtones.

“There are distinct limits to the Quad’s potential to counter Chinese strength.  Its four nations all have economic ties to China that they want to preserve, and all are wary of allowing it to be seen as a provocative military alliance.  Yet America’s ability to convene the Quad, and to help it produce coordinated action in vaccine distribution, was perhaps the most meaningful way the Biden administration could signal to China that it shouldn’t go too far in discounting America’s international clout.

“Countering the perception of American weakness may be most important on the crucial question of Taiwan, which China continues to consider nothing but a breakaway province.  U.S. officials fear Chinese President Xi Jinping may be starting down a path toward forcing Taiwan to accept reunification with the Chinese mainland, using military force if necessary.  Its efforts to quash democracy in Hong Kong may be a trial run.

“If that’s the case, the best way to deter Mr. Xi may be to convince him now that if he makes such a move he would have to worry about the reaction of a strong and internationally influential America, not a weak and retreating one.”

On a different note, Taiwan is dealing with a national tragedy today as a high-speed train carrying almost 500 passengers derailed in a tunnel when it apparently hit a truck that slid off a road leading to a nearby construction site.  At least 50 were killed, including the train’s driver, with over 160 injured.  It’s the island’s worst rail disaster in at least seven decades.

North Korea:  The United States said it will brief South Korea and Japan on President Biden’s long-awaited review of North Korea policy in talks that were to occur today.  Biden’s national security adviser, Jake Sullivan, is holding a full day of talks with his Japanese and South Korean counterparts at the U.S. Naval Academy in Annapolis, Maryland.

Biden said last week the United States remained open to diplomacy with North Korea despite its ballistic missile tests but warned there would be responses if North Korea escalates matters.

This week, Kim Yo Jong, the sister of leader Kim Jong Un, slammed South Korea’s president for calling the North’s recent missile test “concerning” and suggesting Seoul, Pyongyang and Washington should not create hurdles for talks, state media KCNA reported on Tuesday.

Following North Korea’s ballistic missile tests last week, South Korean President Jae-in Moon said the South, the North and the United States should make efforts to continue dialogue.

Kim Yo Jong called Moon’s remarks disgraceful for agreeing with the United States, which condemned the missile test and said the North’s nuclear and ballistic missile programs constituted serious threats to international peace and security.

“Such illogical and brazen-faced behavior of South Korea is exactly the same as the gangster-like logic of the U.S.,” Kim Yo Jong said.

Russia: The war in eastern Ukraine escalated this week, with the deadliest engagement so far this year on Tuesday, as four Ukrainian soldiers were killed and another seriously wounded in a battle against Russian-backed separatists in the Donetsk Region of eastern Ukraine, the country’s military said.

NATO then voiced concern on Thursday over what it said was a big Russia military build-up near eastern Ukraine after Russia warned that a serious escalation in the conflict in Ukraine’s Donbas region could “destroy” the country.

The Kremlin said on Friday that any deployment of NATO troops to Ukraine would lead to further tensions near Russia’s borders and force Moscow to take extra measures to ensure its own security.

Kremlin spokesman Dmitry Peskov told reporters on Friday that the situation at the contact line in eastern Ukraine between Ukrainian government forces and Russian-backed separatist forces was quite frightening and that multiple “provocations” were taking place there.  U.S. Defense Secretary Lloyd Austin on Thursday spoke with his Ukrainian counterpart and “condemned recent escalations of Russian aggression and provocative actions in eastern Ukraine.”

David Ignatius / Washington Post

“The Biden administration, facing what could be its first serious test with Russia, is warning Moscow against any aggressive use of the military force that it’s assembling along Ukraine’s eastern border for a supposed exercise.

“ ‘We are quite concerned by recent escalation by Russia’ along the border, ‘including violations of the July 2020 ceasefire’ in a March 26 incident that killed four Ukrainian soldiers and wounded two, a senior administration official told me Wednesday night.

“Russia has announced military exercises in the region, and Russian social media posts show tanks, howitzers and other heavy military equipment moving into the area.  ‘Maybe these are exercises, maybe more,’ the official said during the interview.

“ ‘We are signaling American awareness, resolve and concern,’ he continued. The National Security Council’s deputies committee met Tuesday and Wednesday to review the situation, he said, and national security adviser Jake Sullivan has called his Ukrainian, German and British counterparts.  [Ed. NATO’s North Atlantic Council then met yesterday, Thursday.]

“Russia has accused Ukraine of provoking the confrontation.  ‘We express concern…that one way or another the Ukrainian side could take provocative actions that would lead to war.  We really don’t want to see that,’ Kremlin spokesman Dmitry Peskov said Wednesday….

“ ‘We are not looking to reset our relations with Russia nor to escalate.  Our goal is to impose costs for actions we consider unacceptable, while seeking stability, predictability, turning down the temperature,’ the senior Biden administration official said, adding: ‘If they’re inclined to turn the temperature up, we’re ready for that.’  U.S. options include expedited assistance to Ukraine and sanctions.

“The Ukraine border tension comes as Russian President Vladimir Putin faces his most substantial domestic criticism in several years. Much of it centers on opposition leader Alexei Navalny, whose arrest in January sparked protests in at least 109 cities across Russia.  Navalny had bravely returned to Moscow after being treated abroad following an assassination attempt last August.  Navalny began a hunger strike Wednesday to protest his treatment in prison.  Putin probably had hoped that jailing Navalny would make that political problem disappear, but it continues.  A petition calling for further demonstrations has been signed by 360,000 Navalny supporters, and organizers hope to gather 500,000 signatures before taking to the streets again.

“ ‘Elements of this are reminiscent of the run-up to Russia’s previous intervention in Ukraine’ in 2014, when Putin was facing domestic criticism, the senior official said.  In addition to the Navalny controversy, Russians have blamed Putin for corruption and a sluggish response to the coronavirus pandemic….

“The Biden administration’s stern messaging about Russia this week is the latest example of how the White House and State Department are trying to bolster U.S. foreign policy after the disruption and disorganization of the Trump years.  The centerpiece of that strategy has been rebuilding alliances – with NATO countries when it comes to confronting Russia, and with key Asian allies such as Japan, India and Australia in competing with China.

“Biden has tried to signal a firmer stance toward Russia since taking office….

“There is often jockeying and positioning during the initial months of new U.S. administrations, as potential adversaries probe each other’s limits.  China’s top diplomat delivered a public tongue-lashing to Secretary of State Antony Blinken at their first meeting, in Anchorage last month, for example. Diplomacy, in other words, is a contact sport.

“What makes the Ukrainian situation different is that it potentially involves force. Russia has augmented its troops, at least temporarily, near the border of a country to which the United States provides military assistance.  Perhaps the best thing about this week’s signaling is that it reduces the likelihood that either side will miscalculate its actions.”

Today, Friday, President Biden had a call with Ukrainian President Volodymyr Zelensky, with Biden expressing the United States’ strong support for Ukraine, the White House said in a statement:

“President Biden affirmed the United States’ unwavering support for Ukraine’s sovereignty and territorial integrity in the face of Russia’s ongoing aggression in the Donbas and Crimea.”

President Zelensky tweeted:

“We stand shoulder to shoulder when it comes to preservation of our democracies.  The American partnership is crucial for Ukrainians.”

Regarding Alexei Navalny, he posted on Instagram Wednesday, published by his lawyers, showing a handwritten note in which he writes: “I have the right to invite a doctor and receive medication.  But they are simply not allowing me to do either.  The back pain has spread to my leg. I’ve lost sensation in parts of my right leg and now the left leg too.  Jokes aside, this is getting worrying,” he wrote.

Navalny has also complained of being woken up every hour by a guard during the night which he argues amounts to torture.

Lebanon: Germany will make a multi-billion-dollar proposal to Lebanese authorities next week to rebuild the Port of Beirut as part of efforts to entice the country’s politicians to form a government capable of warding off financial collapse.

A chemical explosion at the port last August killed 200 people, injured thousands and destroyed entire neighborhoods in the Lebanese capital, plunging the country deeper into its worst political and economic crisis since the 1975-1990 civil war.

Germany and France are vying to lead reconstruction efforts, with principle support from the European Investment Bank to help fund the clearing of the area and reconstruction facilities.  EIB support, however, is not guaranteed and would require extensive due diligence.  The project would be in the 2-3 billion euro range.

Eight months after the port disaster, Lebanese who lost family, homes and businesses are still waiting for the results of an investigation into the causes of the blast.  Lebanon is on the verge of collapse, with shoppers brawling over goods, protesters blocking roads, and businesses shuttered.  Foreign donors have said the new government must have a firm mandate to implement economic reforms, including a central bank audit and an overhaul of the wasteful power sector.

But Prime Minister-designate Saad al-Hariri and President Michel Aoun have been unable to agree on a ministerial lineup.

Speaker of Parliament Nabih Berri said this week: “The whole country is in danger, the whole country is the Titanic.  If the ship sinks, there’ll be no one left.”

Lebanon’s state-run electric company needed $200 million this week to keep Lebanon’s lights on for at least two months, the funds required to pay for fuel for power plants.  Last Sunday, one of the country’s four main plants had to shut down because of a lack of oil.  Electricity of Lebanon blamed problems with the unloading of a tanker and the blockage of the Suez Canal.

Germany’s proposal would look to develop a large area surrounding the port in a project along the lines of Beirut’s post-war reconstruction in the central part of the city.

Myanmar: Protests continued against military rule today, and all week, as now opponents have to find alternative ways to communicate after most users were cut off from the internet on Friday, undaunted by the bloody suppression of protests during the past two months that has seen over 540 people killed in the uprising, including a reported 114 last Sunday, the bloodiest day since the coup.

Many have been using social media to publicize the security forces’ excesses and to organize against the military. But authorities, who had already shut down mobile data, ordered internet providers from Friday to cut wireless broadband, depriving most customers of access.  In response, anti-coup groups have shared radio frequencies, mobile apps such as Maps that work without a data connection, and tips for using SMS messages as an alternative to data services to communicate.

Adding to the chaos, hostilities between the armed forces and ethnic minority insurgents have broken out in at least two regions.  The United Nations is warning of all-out civil war.

Mozambique: Dozens of people were killed in an attack launched by ISIS on the northern Mozambique town of Palma this week.  Hundreds of others were rescued from the town, which is located near major gas projects worth $60 billion, the single biggest investment in all of Africa.  The projects were said at week’s end to be secure.

Netherlands: Dutch Prime Minister Mark Rutte’s chances of forming a new government were dealt a serious blow early today, as parliament passed a formal motion of disapproval, saying he had not told the truth about remarks made during government formation talks.

However, lawmakers narrowly failed to pass a no-confidence motion which would have forced Rutte to resign.

“Parliament has given me a serious message and I will try my very best to win back confidence,” Rutte told reporters after the debate.  It was not clear when and in what form government formation talks would resume.

Rutte was the clear winner of March 17 parliamentary elections that were seen as a referendum on his handling of the coronavirus pandemic crisis.

Sigrid Kaag, the leader of the second largest party in parliament, said she was not sure whether she would now be willing to join a new government with Rutte.

“If I were him, I would not continue,” she said when asked about Rutte’s position.

The crisis arose on Thursday after Rutte acknowledged having privately discussed what job should go to a prominent member of parliament who had been critical of his previous Cabinet. Rutte had previously said he did not do so.

Rutte is a 54-year-old conservative who has been in office for more than 10 years.

Random Musings

--Presidential approval ratings….

Rasmussen: 48% approve of President Biden’s job performance, 50% disapprove (April 2).  Last week’s split was 48-51.

--According to a Pew Research Center survey of 12,000+ U.S. adults, in assessing former President Trump’s presidency two months after leaving office, 38% say he made progress solving major problems facing the country during his administration – while a nearly identical share (37%) say he made these problems worse.  Another 15% say Trump tried but failed to solve the nation’s problems, while 10% say he did not address them.

Looking back at Trump’s term, just over half of Americans (53%) rate Trump’s presidency as below average – including 41% who say he was a “terrible” president.  About a third (35%) rate his presidency as above average, including 17% who say he was a “great” president.

About three-quarters of Republicans and Republican-leaning independents (77%) say Trump made progress in addressing the nation’s major problems, compared with just 7% of Democrats and Democratic leaners.  Nearly two-thirds of Democrats (64%) say Trump made the country’s major problems worse over the course of his presidency – a view held by only 5% of Republicans.

--It’s interesting seeing the grades of some of the governors for their handling of the pandemic.  Massachusetts’ Republican Gov. Charlie Baker has a 71% approval rating for his handling of Covid according to a new Suffolk University/Boston Globe poll.  But it falls to 58% regarding his handling of the vaccine rollout.

Baker’s approval rating on Covid is down from a high of 81% in June 2020, but still highly favorable.

--A majority of likely California voters would keep Gov. Gavin Newsom in office if a recall election were held today, according to a new poll conducted as vaccinations in the state increase and the Democratic governor ramps up his campaign to fight the effort to remove him.

Among the 1,174 likely voters surveyed by the Public Policy Institute of California, 56% said they oppose the recall and 40% support it, with the remaining undecided.  More than three-quarters of likely voters said the worst of the pandemic is over.

Mark Baldassare, president of the institute, said, “The support for keeping Gov. Newsom has become much more optimistic about where things are headed with Covid than they were in January. All of these things work to the benefit of keeping the status quo.”

2.1 million voter signatures were submitted for the recall before the mid-March deadline.  It’s likely enough signatures will be validated to trigger a recall election in the fall.  Final tallies will be available by April 29.

--Ironically, hours before we learned about a federal investigation into Florida Republican Congressman Matt Gaetz, I was reading a piece talking about Gaetz leaving Congress to take an on-air job with Newsmax (as first reported by Axios), the conservative cable channel owned by Chris Ruddy, a longtime ally of former President Trump, Gaetz being an ardent supporter of the president, including post-Jan. 6.

As Chris Cillizza wrote in the Washington Post:

“In the before times in the Republican Party, getting elected to Congress was a massive accomplishment – a sign that you had made it. Spending a decade or two accruing the seniority and know-how to get things done and put your imprint on the nation’s laws was seen as the highest of callings.

“Those days are gone. Now, many newly elected Republican House members see a seat in Congress as a means to a more lucrative end – a chance to build their, uh, brand, widen their fundraising base and raise their profile in order to get the real prize: A well-paying gig on a conservative media network….

“Since his arrival in Congress in 2017, Gaetz has shown far more interest and passion in appearing on Fox News to dunk on Democrats than in actually trying to, you know, legislate.”

So we learned via a report from the New York Times, citing multiple sources, that Gaetz was under federal investigation over allegations that he maintained a sexual relationship with a 17-year-old girl and paid for her to travel with him. 

The alleged sexual encounters reportedly took place about two years ago, when the girl is believed to have been 17.

The Justice Department often seeks sex trafficking charges in cases where an offender has crossed state lines for sex with an underage individual in exchange for cash or something else of value.  Convictions in such cases usually result in lengthy prison sentences.

Gaetz vehemently denied having sex with any underage girls, but also acknowledged in a wide-ranging phone interview with Axios on Tuesday night that he “definitely, in my single days, provided for women I’ve dated.”

“You know, I’ve paid for flights, for hotel rooms.  I’ve been, you know, generous as a partner,” Gaetz said.  “I think someone is trying to make that look criminal when it is not.”

In a statement issued by his office later Tuesday, Gaetz claimed the allegations are part of a convoluted extortion scheme against his family orchestrated by a former Justice Department official.

Gaetz also claimed he has been cooperating in the probe into that alleged scheme.

The alleged extortion plot against Rep. Gaetz apparently involved two men blackmailing him with details about an alleged orgy with prostitutes in an effort to get his father to cough up $25 million to help rescue American hostage Robert Levinson from Iran, according to reports.

The men, former federal prosecutor David McGee and ex-Air Force intelligence officer Bob Kent, allegedly claimed that the FBI had photos of Gaetz in a “sexual orgy with underage prostitutes,” the Washington Examiner reported.

They asked his dad, Don Gaetz, for money to be used to free Levinson, a former FBI agent and CIA contractor who vanished in Iran in 2007 and was declared dead by his family last year.

The men who approached Gaetz’s dad had no apparent connection to the sex-crimes investigation but somehow learned about it before it was made public, the Washington Post reported.

But this has nothing to do with the serious charges leveled against Gaetz, and the New York Times reported last night that the FBI has questioned several women who claim they were paid to sleep with him and his friends in drug-fueled trysts.

Receipts from CashApp and Apple Pay that the Times reviewed reportedly showed payments from Gaetz to one of the women, who told pals the money was in exchange for sex.

Joel Greenberg, a former Florida county tax collector, allegedly introduced Gaetz to the women, who he had met on websites offering dates in exchange for gifts, money and travel, the report said.

Sources told the Times that both Greenberg and Gaetz had sex with the women during encounters in 2019 and 2020.

There are other reports circulating about an investigation into Gaetz being part of a fake ID ring.

Here’s the bottom line.  No one, including many of his fellow Republicans, will support this amazing POS.  I always despised the fraud, but when he traveled to Wyoming to taunt fellow Republican Rep. Liz Cheney, he crossed a line with many in his party. 

--Speaking of those who yearn to be cable pundits, Fox News hired Lara Trump as a paid on-air contributor.  She is the second member of Donald Trump’s inner circle to join the Fox News payroll in recent weeks.  Kayleigh “I’ll never lie to you” McEnany, the former White House press secretary, signed on this month as a contributor.

--It’s been heartbreaking watching some of the witnesses to George Floyd’s death at the trial of former police officer Derek Chauvin; the feelings of guilt and helplessness, as they described the scene on May 25, 2020, watching Floyd go unconscious and die over nine minutes.

Darnella Frazier, 18, told the jury she saw “a man terrified, scared, begging for his life,” and then pulled out her cellphone. Frazier’s voice quavered when prosecutors brought up a still from her video, showing the moment when Officer Chauvin, his knee on Floyd’s neck, appears to look directly into Frazier’s camera lens. She said Chauvin had “this cold look, heartless.”

Later, Frazier was asked by both sides how producing the most famous record of Floyd’s death had changed her life, and she spoke through tears.  “When I look at George Floyd, I look at my dad, I look at my brothers, I look at my cousins, my uncles, because they are all Black,” she said.  “It could have been one of them.”

Frazier said she would sometimes stay up late at night thinking of Floyd, apologizing to him for “not saving his life.”

“It’s not what I should have done.  It’s what he should have done,” she said, referring to Chauvin.

Donald Williams, a mixed martial arts fighter who was also a witness, told jurors he believed that Chauvin was using his knee in a “blood choke” on Floyd, a wrestling move to knock an opponent unconscious, and a “shimmy” move to tighten pressure on Floyd’s neck.  “You can see that he’s trying to gasp for air,” Williams, 33, said of Floyd.  A 911 call Williams made after the arrest was played.  Williams told the jury, “I believe I witnessed a murder. So I felt I needed to call the police on the police.”

At the start of the trial, Jerry Blackwell, a special assistant attorney general, said of the widely seen video depicting the 9 minutes and 29 seconds that prosecutors say former officer Chauvin held his knee on Floyd’s neck, “You can believe your eyes.  It’s homicide, it’s a murder.”

One of Chauvin’s defense attorneys, Eric Nelson, said, “Derek Chauvin did exactly what he was trained to do in his 19-year career.  The use of force is not attractive,” but it can be necessary.

A retired Minneapolis police sergeant on duty during Floyd’s fatal arrest said cops should have let him get up after he “was no longer offering resistance.”

Former Police Sgt. David Pleoger, the supervising officer on May 25, testified that Chauvin and three other cops kept Floyd pinned down longer than allowed under department rules or training.

“Sir, based on your review of the body-worn camera footage, do you have an opinion on when the restraint of Mr. Floyd should have ended in this encounter?” asked Steven Schleicher, a member of the prosecution team.

“Yes, sir,” Pleoger answered.

“What is it?’ Schleicher asked.

“When Mr. Floyd was no longer offering up any resistance to the officers, they could have ended their restraint,” the former sergeant said.

“And that’s after he was handcuffed and on the ground and no longer resisting?”

“Correct,” Pleoger answered.

I have watched a ton of the proceedings and pray Chauvin is found guilty, but you never know what a jury is thinking.

--G. Gordon Liddy died.  He was 90.  Liddy was the brash former FBI agent who helped orchestrate the 1972 Watergate break-in, a crime that began the unraveling of the presidency of Richard Nixon.

Liddy parlayed his Watergate infamy into a 20-year career as a conservative talk-radio host.

He was one of the notorious White House “plumbers” whose job it was to plug leaks to the media in the Nixon administration.  His portfolio at Nixon’s Committee to Re-elect the President was “dirty tricks” – a job he approached with gusto.  He and colleague E. Howard Hunt, a former CIA agent, came up with outlandish schemes that were so illegal their superiors often squelched them.  Among them was a plot to kill investigative columnist Jack Anderson, an ardent Nixon critic.  Another was a plot to have anti-war protesters at the Republican National Committee in San Diego in 1972 kidnapped and taken across the border into Mexico.  And there was another where Democratic Party officials would be lured to a party with prostitutes.

But one plan was accepted, prior to the Watergate burglary, and that was a break-in at the offices of a psychiatrist who was seeing Daniel Ellsberg, a former U.S. military analyst who leaked the top-secret Pentagon Papers about the war in Vietnam.  Then came the break-in that would undo Nixon.

After Liddy and his team were caught at the Watergate, Liddy was convicted of conspiracy, burglary and wiretapping for both the Watergate and Ellsberg break-ins.  He was sentenced to up to 20 years in prison and served nearly five before being released – thanks to a commutation in 1977 from Democratic President Jimmy Carter, who felt his sentence was out of proportion to those meted out to other Watergate criminals.

Liddy remained unapologetic about his crime and told the New York Times he would do it again if asked.  He was also proud of not cooperating with the grand jury, while others had.

Liddy was known for his bravado.  He bragged about being able to hold his hand over a flame without flinching and spoke of being able to kill a man with a pencil.  When callers to his Washington-based radio show asked how he was doing, he barked, “Virile, vigorous and potent!”

--Finally, some of us were looking forward to 2029 and a close call with an asteroid as initially predicted…kind of like in the movie “On the Beach”…go out singing “Waltzing Matilda”…

But Nooo!  NASA confirmed the planet was “safe” from a once-feared asteroid for the next 100 years at least.

The doomsday rock, Apophis, is estimated at about four football fields in length, but now even a slight threat in 2068 is being ruled out.

So to paraphrase Mary Richards (of “Mary Tyler Moore Show” fame), I guess we’re gonna make it after all….

---

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

We thank our healthcare workers and first responders.

God bless America.

---

Gold $1730
Oil $61.24

Returns for the week 3/29-4/2

Dow Jones  +0.2%  [33153]
S&P 500  +1.1%  [4019]
S&P MidCap  +0.8%
Russell 2000  +1.4%
Nasdaq  +2.6%  [13480]

Returns for the period 1/1/21-4/2/21

Dow Jones  +8.3%
S&P 500  +7.0%
S&P MidCap  +14.8%
Russell 2000  +14.1%
Nasdaq  +4.6%

Bulls 54.4
Bears
17.5…prior two weeks, 57.4/18.8; 55.9/19.6

Happy Easter!

Hang in there.  Mask up where appropriate, wash your hands.

Brian Trumbore