Week in Review

---

Week in Review

05/08/2021

For the week 5/3-5/7

[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.

Edition 1,151

The Republican Divide

It’s a big week coming up for the GOP.  House Republicans are expected to vote on whether to remove Wyoming Rep. Liz Cheney from her leadership post, as powerful forces in the party are aiming to install New York Rep. Elise Stefanik in her place. The vote is expected by Wednesday and will take place behind closed doors with ballots cast anonymously by the House GOP’s 212 members.

Cheney’s ouster as GOP Conference Chair, No. 3 behind Kevin McCarthy and Steve Scalise, is a certainty at this point.

As noted below, Cheney sees it as a fight for the soul not just of the GOP but the country.

For many of us this is all very depressing.  It’s not about policy differences between, say, a Joe Biden and a George W. Bush (or Dick Cheney), but rather a cult of personality.  And that’s incredibly dangerous.

Donald Trump / May 5, 2021

“Warmonger Liz Cheney, who has virtually no support left in the Great State of Wyoming, continues to unknowingly and foolishly say that there was no Election Fraud in the 2020 Presidential Election when in fact, the evidence, including no Legislative approvals as demanded by the U.S. Constitution, shows the exact opposite.  Had Mike Pence referred the information on six states (only need two) back to State Legislatures, and had gutless and clueless MINORITY Leader Mitch McConnell (he blew two seats in Georgia that should have never been lost) fought to expose all of the corruption that was presented at the time, with more found since, we would have had a far different Presidential result, and our Country would not be turning into a socialist nightmare! Never give up!”

“Liz Cheney is a warmongering fool who has no business in Republican Party leadership. We want leaders who believe in the Make America Great Again movement, and prioritize the values of America First.  Elise Stefanik is a far superior choice, and she has my COMPLETE and TOTAL endorsement for GOP Conference Chair.  Elise is a tough and smart communicator!”

Earlier in the week, in a statement through his political action committee, Save America PAC, Trump incorrectly blasted his loss in November as “The Fraudulent Presidential Election of 2020” and said it “will be, from this day forth, known as THE BIG LIE!”

Cheney shot back on Twitter that the election “was not stolen,” adding, “Anyone who claims it was is spreading THE BIG LIE” and “poisoning our democratic system.”

Monday, Cheney told the New York Post that senators who led efforts to challenge the results of the election should be disqualified from seeking the GOP nomination in 2024, i.e., Ted Cruz and Josh Hawley, though Hawley has said he will not run.

Cheney, who is as conservative as they come, in the traditional sense, has urged the party to distance itself from the former president over his remarks and behavior related to his baseless claims that the election was stolen from him, while House Minority Leader Kevin McCarthy has emphasized unity, including with Trump.

Tuesday, in an appearance on Fox News, McCarthy said he had concerns about Cheney’s ability to serve as one of the party’s top leaders, signaling ebbing support.

“I have heard from members concerned about her ability to carry out the job as conference chair – to carry out the message,” McCarthy said.  “We all need to be working as one if we’re able to win the majority.”

Before the segment started on Fox, McCarthy was caught in a hot mic moment, saying of Cheney: “I think she’s got real problems.  I’ve had it with her.  You know, I’ve lost confidence.” 

Editorial / Wall Street Journal

“This should be a hopeful moment for House Republicans. While they’re playing defense in the minority for now, their prospects for picking up the five net seats they need to regain the majority in 2022 are excellent. That is, unless they devolve into internal brawling over the 2020 election.

“Yet that’s precisely what they seem to be doing as some Members try to oust Wyoming Rep. Liz Cheney from the GOP House leadership. Ms. Cheney easily survived an earlier effort to dump her, 145-61, after she was one of 10 House Republicans to vote to impeach Donald Trump after the events of Jan. 6.

“But she continues to rankle some in the GOP House conference by refusing to go along with Mr. Trump’s demand that Republicans agree that the 2020 election was stolen.  On Monday Mr. Trump issued a statement that ‘The Fraudulent Presidential Election of 2020 will be, from this day forth, known as THE BIG LIE!’

“Ms. Cheney responded on Twitter: ‘The 2020 presidential election was not stolen. Anyone who claims it was is spreading THE BIG LIE, turning their back on the rule of law, and poisoning our democratic system.’

“This has angered some in the House GOP, and on Tuesday Axios caught House Minority Leader Kevin McCarthy on a hot mic saying ‘I’ve had it with her.’  But Mr. McCarthy knows Ms. Cheney is right. The election wasn’t stolen, yet Mr. Trump wants an endorsement of his stolen claim to be a litmus test for every Republican candidate.  He’s the one who wants to refight his losing campaign.

“The better part of political prudence would be for Ms. Cheney to ignore Mr. Trump.  But Mr. Trump won’t ignore her.  He issued four statements on Monday and three of the four were attacks on fellow Republicans, including one on Ms. Cheney. She may be ousted because she is daring to tell the truth to GOP voters – and at personal political risk.

“Even as President Biden proposes the largest expansion of government in decades, Mr. Trump  is spending his energy settling scores in his own party.  He’s thrown his loyal Vice President over the side because Mike Pence refused to pull an unconstitutional stunt to invalidate the pro forma Electoral College count on Jan. 6.  As ever with Mr. Trump, everything is always about him.

“Republicans will look foolish, or worse, to swing voters if they refight 2020 in 2022. They can truthfully say that Democrats used lawsuits to exploit the pandemic to change the election rules in some states.  They can also say Democratic judges on the Pennsylvania Supreme Court let Democrats get away with it.  Democrats did a better job of exploiting the pandemic election rules than did the GOP.

“But there’s no evidence any of this was decisive, as Mr. Trump lost the popular vote in a rout and the Electoral College by a similar margin to what he won in 2016.  Mr. Trump lost even as Republicans gained 12 seats in the House.  The election was close, but not as close as others in American history.

“Republicans should find a way to speak this truth to voters in 2022 – and quickly turn to running on an agenda for the future that will check Mr. Biden and his cradle-to-grave entitlement state.  Purging Liz Cheney for honesty would diminish the party.”

I don’t disagree with the following from CNN’s Jake Tapper:

“It’s remarkable that standing up for just basic facts is now controversial within the Republican Party,” he said.

“I happen to think the reason that the House Republican leader is so frustrated with Liz Cheney is not because of all the excuses he gives, but because her continued presence is a reminder of the fact that he (McCarthy) is exemplifying cowardice and lies…”

“The lie about the election on its own is anti-democracy and it is sowing seeds of ignorance in the populace and, obviously, it has the potential to incite violence,” Tapper later added.

Various polls the past month have showed 50% to 60% of Republicans accepting Trump’s claims of fraud and that the election was stolen, and the same proportion think he should run again in 2024.

Liz Cheney / Washington Post

“In public statements again this week, former president Donald Trump has repeated his claims that the 2020 election was a fraud and was stolen.  His message: I am still the rightful president, and President Biden is illegitimate.  Trump repeats these words now with full knowledge that exactly this type of language provoked violence on Jan. 6.  And, as the Justice Department and multiple federal judges have suggested, there is good reason to believe that Trump’s language can provoke violence again.  Trump is seeking to unravel critical elements of our constitutional structure that make democracy work – confidence in the result of elections and the rule of law.  No other American president has ever done this.

“The Republican Party is at a turning point, and Republicans must decide whether we are going to choose truth and fidelity to the Constitution.  In the immediate wake of the violence of Jan. 6, almost all of us knew the gravity and the cause of what had just happened – we had witnessed it firsthand.

“House Republican leader Kevin McCarthy (Calif.) left no doubt in his public remarks.  On the floor of the House on Jan. 13, McCarthy said: ‘The president bears responsibility for Wednesday’s attack on Congress by mob rioters.  He should have immediately denounced the mob when he saw what was unfolding.’  Now, McCarthy has changed his story.

“I am a conservative Republican, and the most conservative of conservative values is reverence for the rule of law.  Each of us swears an oath before God to uphold our Constitution.  The electoral college has spoken.  More than 60 state and federal courts, including multiple Trump-appointed judges, have rejected the former president’s arguments, and refused to overturn election results. That is the rule of law; that is our constitutional system for resolving claims of election fraud.

“The question before us now is whether we will join Trump’s crusade to delegitimize and undo the legal outcome of the 2020 election, with all the consequences that might have.  I have worked overseas in nations where changes in leadership come only with violence, where democracy takes hold only until the next violent upheaval.  America is exceptional because our constitutional system guards against that.  At the heart of our republic is a commitment to the peaceful transfer of power among political rivals in accordance with law.  President Ronald Reagan described this as our American ‘miracle.’

“While embracing or ignoring Trump’s statements might seem attractive to some for fundraising and political purposes, that approach will do profound long-term damage to our party and our country.  Trump has never expressed remorse or regret for the attack of Jan. 6 and now suggests that our elections, and our legal and constitutional system, cannot be trusted to do the will of the people.  This is immensely harmful, especially as we now compete on the world stage against Communist China and its claims that democracy is a failed system.

“For Republicans, the path forward is clear.

“First, support the ongoing Justice Department criminal investigations of the Jan. 6 attack. Those investigations must be comprehensive and objective; neither the White House nor any member of Congress should interfere.

“Second, we must support a parallel bipartisan review by a commission with subpoena power to seek and find facts; it will describe for all Americans what happened. This is critical to defeat the misinformation and nonsense circulating in the press and on social media.  No currently serving member of Congress – with an eye to the upcoming election cycle – should participate.  We should appoint former officials, members of the judiciary and other prominent Americans who can be objective, just as we did after the attacks of Sept. 11, 2001.  The commission should be focused on the Jan. 6 attacks.  The Black Lives Matter and antifa violence of last summer was illegal and reprehensible, but it is a different problem with a different solution.

“Finally, we Republicans need to stand for genuinely conservative principles, and steer away from the dangerous and anti-democratic Trump cult of personality.  In our hearts, we are devoted to the American miracle.  We believe in the rule of law, in limited government, in a strong national defense, and in prosperity and opportunity brought by low taxes and fiscally conservative policies.

“There is much at stake now, including the ridiculous wokeness of our political rivals, the irrational policies at the border and runaway spending that threatens a return to the catastrophic inflation of the 1970s.  Reagan formed a broad coalition from across the political spectrum to return America to sanity, and we need to do the same now.  We know how.  But this will not happen if Republicans choose to abandon the rule of law and join Trump’s crusade to undermine the foundation of our democracy and reverse the legal outcome of the last election.

“History is watching.  Our children are watching.  We must be brave enough to defend the basic principles that underpin and protect our freedom and our democratic process.  I am committed to doing that, no matter what the short-term political consequences might be.”

Utah Senator Mitt Romney, in defense of Liz Cheney, tweeted Tuesday: “Every person of conscience draws a line beyond which they will not go: Liz Cheney refuses to lie.

“As one of my Republican Senate colleagues said to me following my impeachment vote: ‘I wouldn’t want to be a member of a group that punished someone for following their conscience.’”

Saturday, before a crowd of over 2,000 GOP delegates, Romney was booed and called a “traitor” as he addressed the Utah Republican Party convention, where a censure over his two impeachment votes narrowly failed to pass.

“Aren’t you embarrassed?” Romney said as he was greeted with a chorus of catcalls.

“I’m a man who says what he means, and you know I was not a fan of our last president’s character issues,” said Romney, who was loudly reminded that he was the only Republican senator to vote to convict Trump in his first impeachment, and one of seven to vote to convict in the second impeachment following Jan. 6.

Romney, 74, stood his ground. “You can boo all you like,” the former governor of Massachusetts said.  “I’ve been a Republican all of my life. My dad was the governor of Michigan and I was the Republican nominee for president in 2012.”

Perhaps the most absurd bit of the Republican battle with Rep. Cheney is that she came under fire for her friendly greeting of President Biden at his address to Congress.  Her egregious mistake?  She exchanged a fist bump in the House chamber with him a week ago Wednesday.

“I disagree strongly w/ @JoeBiden policies, but when the President reaches out to greet me in the chamber of the US House of Representatives, I will always respond in a civil, respectful & dignified way,” Cheney tweeted Thursday evening.  “We’re different political parties.  We’re not sworn enemies.  We’re Americans.”

Lastly, on Wednesday, in a highly anticipated decision, Facebook’s oversight board upheld the company’s suspension of Donald Trump but said the company was wrong to make the suspension indefinite and gave it six months to determine a “proportionate response.”  Trump  called the decision and his banning across tech platforms “a total disgrace” and said the companies would “pay a political price.”

“Free Speech has been taken away from the President of the United States because the Radical Left Lunatics are afraid of the truth, but the truth will come out anyway, bigger and stronger than ever before.”

Former federal judge Michael McConnell, co-chair of the Oversight Board, said Facebook inappropriately imposed a suspension without clear standards and that the company should determine a response consistent with rules applied to other users of the platform.  “Indefinite penalties of this sort do not pass the international or American smell test for clarity, consistency, and transparency.”

Biden Agenda

--Senate Minority Leader Mitch McConnell said Republicans are united behind stopping President Biden’s agenda, putting a damper on already slim hopes for bipartisan cooperation in Congress ahead of more talks with the White House on a possible infrastructure deal.

“One hundred percent of my focus is standing up to this administration,” the Kentucky Republican said at a news conference in his home state Wednesday, in response to questions about infighting among House Republicans.  “What we have in the United States Senate is total unity from Susan Collins to Ted Cruz in opposition to what the new Biden administration is trying to do to this country,” he said.

Democrats may have been able to pass the $1.9 trillion Covid-19 relief bill without any Republican support, but the next $4 trillion in proposed additional spending on infrastructure, antipoverty and education proposals is a no-go, save for a skinny infrastructure bill, with some GOP lawmakers proposing a $568 billion plan.

Biden’s latest proposals can get through the House, barely, but not through the Senate.  Period. The president, however, continues to say he is confident he can work with McConnell, who is scheduled to meet with Biden and other top congressional leaders from both parties on May 12.

--Talk about flip-flopping, such is the president with his refugee policy, the cap for which he is formally lifting back to 62,500, weeks after facing bipartisan blowback for his delay in lifting former President Trump’s limit of 15,000.

Biden last month moved to expand the eligibility criteria for resettlements, removing one roadblock to refugees entering the U.S. put in place by Trump, but he had initially stopped short of lifting the annual cap.  But after facing sharp pushback for not at least taking the symbolic step of authorizing more refugees to enter the U.S. this year, Biden reversed course.

In a statement, the president said the new limit “erases the historically low number set by the previous administration,” adding that Trump’s cap “did not reflect America’s values as a nation that welcomes and supports refugees.”

Biden admitted it was a “sad truth” that the U.S. would not meet the 62,500 cap by the end of the fiscal year in September, given the pandemic and limitations on the country’s resettlement capabilities – some of which his administration has attributed to the Trump administration’s policies to restrict immigration.  The president is committed to setting the cap at 125,000 for the 2022 fiscal year that starts in October

The Pandemic

More than 1.4 million Covid-19 deaths have been reported globally this year as the virus has torn through Latin America and parts of Asia, according to official tallies compiled at the University of Oxford.

Global recorded deaths are rising by about 13,000 daily, and within weeks the toll will surpass the 1.8 million deaths recorded for the whole of 2020.  And all the figures are underestimates, such as in India, Russia, you name it. 

Health systems worldwide are buckling.  Even Nepal has a serious problem, including at the Mount Everest base camp.

Just look at worldometers.info and the global trends in daily cases and deaths.  This is hardly a pandemic on the wane, even if the United States is seeing solid improvement.  Aside from getting shots in arms, it’s about the variants and all the mutations beginning to emerge from the likes of India, a seething pit of disease.

This nation’s main opposition leader Rahul Gandhi warned today that unless the second wave sweeping his country was brought under control it would devastate India as well as threaten the rest of the world. In a letter, Gandhi implored Prime Minister Narendra Modi to prepare for another national lockdown, accelerate a countrywide vaccination program and scientifically track the virus and its mutations.  Gandhi said the world’s second-most populous nation had a responsibility in “a globalized and interconnected world” to stop the “explosive” growth of Covid-19 within its borders.

“India is home to one out of every six human beings on the planet. The pandemic has demonstrated that our size, genetic diversity and complexity make India fertile ground for the virus to rapidly mutate, transforming itself into a more contagious and more dangerous form,” wrote Gandhi.  “Allowing the uncontrollable spread of the virus in our country will be devastating not only for our people but also for the rest of the world.”

At least now tons of medical equipment from abroad has started arriving in Delhi hospitals, but a huge issue is lack of doctors and healthcare professionals as so many of them are sick themselves.

The Modi government has been reluctant to impose a second national lockdown for fear of the damage to the economy, but now some states are acting on their own. Goa, a tourism hotspot on the west coast where up to one in two people tested in recent weeks for coronavirus have been positive, today announced strict curbs from Sunday.

Wednesday, India had a record 412,000 new cases with 3,982 deaths.
Thursday, the case number rose to 414,000 with 3,920 deaths.
Friday, 401,000 cases and a record 4,194 deaths.

But to end with some good news…cases and deaths in much of Europe are coming down, in the case of the UK precipitously so, as vaccine deliveries are finally picking up to EU member states, while restrictions implemented in March and April also helped push down case counts.

Covid-19 death tolls, as of tonight….

World…3,283,219
USA…594,911
Brazil…419,393
India…238,265
Mexico…218,173
UK…127,598
Italy…122,470
Russia…112,622
France…106,101
Germany…85,056
Spain…78,792
Colombia…76,867
Iran…74,241
Poland…69,445
Argentina…66,872
Peru…63,519
South Africa…54,687
Indonesia…46,663
Ukraine…45,830
Turkey…42,465
Czechia…29,608
Romania…28,799
Hungary…28,403
Chile…27,004
Canada…24,529
Belgium…24,444

Source: worldometers.info

U.S. daily death tolls…Sun. 312; Mon. 445; Tues. 853; Wed. 743; Thurs. 860; Fri. 777.

Covid Bytes

--Shares in Moderna and other makers of the Covid-19 vaccines plummeted after the U.S. backed a plan to waive intellectual property protections for the life-saving products. 

U.S. Trade Representative Katherine Tai announced Wednesday that the U.S. will advocate for the “extraordinary measures,” which would potentially enable companies in developing countries to manufacture their own versions of the vaccines, increasing the supply globally.

However, the proposal has to work its way through the World Trade Organization, and there is no certainty it will become policy, so shares of Moderna rallied Friday.

The European Union – whose approval would be needed – said on Thursday it would consider the Biden administration’s plan to support a waiver of patents, but in a speech, European Commission president, Ursula von der Leyen, did not endorse it, raising questions about whether the bloc would agree to a waiver, something she has said previously she was staunchly against.  That position underscored a statement from Germany that the U.S. proposal could have “significant implications” for the production of vaccines.

“The limiting factor in vaccine manufacturing is production capacity and high quality standards, not patents,” a spokeswoman for Chancellor Angela Merkel said in a statement.

Von der Leyen suggested that the focus should be on getting more vaccines to countries that needed them by following the bloc’s example in permitting the ample export of doses.  The U.S. has balked at that approach, keeping most doses produced domestically for use at home.

Some say the waivers are needed to step up the manufacturing of vaccines and get them to poorer parts of the world. The European Union, though, is a significant force within the World Trade Organization, where unanimous approval by member countries would be required for any proposal to waive patents.

Pharmaceutical companies around the world have opposed patent waivers, which could cut into profits after large investments on developing vaccines. They say that waiving patents could be dangerous for the public, raising the risks of a wave of counterfeit doses.

Editorial / Wall Street Journal

“(Suspending) IP isn’t necessary to expand supply and will impede safe vaccine production.  The global vaccine supply is already increasing rapidly thanks to licensing agreements the vaccine makers have made with manufacturers around the world.

“Pfizer and BioNTech this week said they aimed to deliver three billion doses this year, up from last summer’s 1.2 billion estimate.  Moderna increased its supply forecast for this year to between 800 million and a billion from 600 million.  AstraZeneca says it has built a supply network with 25 manufacturing organizations in 15 countries to produce three billion doses this year.

“AstraZeneca and Novavax have leaned heavily on manufacturers in India to produce billions of doses reserved for lower-income countries.  But India has restricted vaccine exports to supply its own population.  IP simply isn’t restraining vaccine production.

“Busting patents also won’t speed up production, since it would take months for these countries to set up new facilities. Competition will increase for scarce ingredients, and less efficient manufacturers with little expertise would make it harder for licensed partners to produce vaccines.

“There’s also the problem of safety.  Johnson & Johnson has experienced quality problems at an Emergent plant making its vaccines, and that’s in Baltimore.  Imagine the potential problems with unlicensed producers in, say, Malaysia or Brazil.  If vaccines made there have complications, confidence in licensed vaccines could plummet too.  And who would Pfizer and Moderna sue to get their reputations back?

“The economic self-damage is also hard to fathom.  The U.S. currently has a competitive advantage in biotech and biologics manufacturing, which could be a growing export industry. Waiving IP protections for Covid vaccines and medicines will give away America’s crown pharmaceutical jewels and make the U.S. and world more reliant on India and China for pharmaceuticals….

“Mr. Biden ought to listen to Angela Merkel.  Pfizer’s partner BioNTech is a German firm, and the German chancellor said Thursday that she opposes the WTO heist: ‘The protection of intellectual property is a source of innovation and it must remain so in the future.’

“At least IP is safe in Germany.  Mr. Biden has sent a signal around the world that nobody’s intellectual property is safe in America.”

And then late today, the European Commission called on the U.S. and other major Covid-19 vaccine producers to export what they make as the European Union does, rather than talk about waiving intellectual property rights to the shots.  Ursula von der Leyen told a news conference on the sidelines of a summit of EU leaders that discussions on the waiver would not produce a single dose of Covid-19 vaccine in the short- to medium-term.

“We should be open to lead this discussion. But when we lead this discussion, there needs to be a 360-degree view on it because we need vaccines now for the whole world,” she said.  “The European Union is the only continental or democratic region of this world that is exporting at large scale.”

--On the issue of masks and new CDC guidance that vaccinated people don’t need masks outdoors, President Biden says he’s doing his “patriotic” duty by masking anyway.  Last week he told NBC News, “It’s a small precaution to take that has a profound impact.  It’s a patriotic responsibility for God’s sake.”

But as the New York Post editorializes:

“Getting past any need to mask up is actually one of the many reasons to get jabbed, and America needs its president sending that message.

“Indeed, it’s his real patriotic duty.  The sad fact is, a whole lot of Americans are vax-reluctant, enough to threaten the overriding goal of herd immunity.  It’s keeping us from getting back to normal, a theme Biden should be hammering home….

“Kudos to Biden for boosting supply and improving distribution once he took over, but that’s the least the public would expect. The challenge that falls to him is persuading the hesitant to do their part to get us over the finish line.

“Think outside the box: We’re dubious about suggestions to offer cash rewards for getting jabbed, but a guy who wants to spend $6 trillion could at least think gift certificates, special events, something to up vaccination rates.

“But mostly he needs to lead by example.  So no more mask theater, wearing them outside or among other people who have already been jabbed, or even on video calls.  You’re vaccinated, Mr. President – show the nation that means freedom.”

By the way, if you’re traveling on a plane, train or bus, you still have to deal with the Transportation Security Administration’s mask requirement, which also applies to airports and train stations, through Sept. 13.

--Our Dr. Bortrum has been in a rehabilitation facility the past two weeks and Monday marks three weeks since he first went into the hospital.  So he was scheduled to go to another facility Monday, one both of us would have been happy with, but they turned him down because of his ‘false positive’ Covid test.  Remember when I told you how when he first got to the ER, they gave him a rapid test and it was positive, even though he had zero symptoms, and then every other test he’s taken since was negative?

Well this particular facility told me today that they won’t take anyone unless they have been negative (after a positive test) for 90 days!  That’s freakin’ nuts.  I’m livid and management there is going to hear about it.  We did find another place that will take him.  As for his condition, he’s hanging in there. 

Wall Street and the Economy

The Street was shocked today with the April jobs report, the biggest miss off estimates ever…the economy adding just 266,000 jobs when the consensus forecast was for 1 million.  Last month was also revised downward, from 916,000 to 770,000, and the unemployment rate actually ticked up to 6.1% when 5.8% was the prediction.  Average hourly earnings rose a stronger-than-expected 0.7%.

It all was just confirmation of a theme that has been sweeping the nation…employers are having a tough time finding enough workers, especially in the leisure and hospitality sectors, as the economic recovery strengthens.

At the same time, many Americans are flush with cash, including from their federal relief checks, along with savings they have built up after cutting back on travel, entertainment and dining out over the past year.

But in areas like hospitality, enhanced unemployment benefits, combined with hesitancy on the part of some to return to work because they fear catching the virus, has led to worker shortages.  Others have entered new occupations rather than return to their old jobs.  And many women, especially working mothers, have had to leave the workforce to care for children.

In other economic news, the weekly jobless claims figure hit a post-pandemic low, 498,000.

The ISM manufacturing number for April was a strong 60.7 (50 the dividing line between growth and contraction), but this was well off the 65.0 forecast.  Ditto the non-manufacturing figure, 62.7, but less than consensus of 64.6.

March construction spending was up 0.2%, while factory orders in the month rose 1.1%.

After today’s jobs report, the Atlanta Fed’s GDPNow early barometer on second quarter growth is at 11.0%.

Meanwhile, the Federal Reserve, in its semi-annual financial stability report, said a rising appetite for risk across a variety of asset markets is stretching valuations and creating vulnerabilities in the U.S. financial system.

“Vulnerabilities associated with elevated risk appetite are rising,” Fed Governor Lael Brainard, the head of the Board’s financial stability committee, said in a statement accompanying the report released Thursday.  “The combination of stretched valuations with very high levels of corporate indebtedness bear watching because of the potential to amplify the effects of a re-pricing event.”

In this environment, prices may be vulnerable to “significant declines” should risk appetite fall, the Fed report noted.

Brainard and the report mentioned losses at banks stemming from dealings with Archegos Capital Management, and the governor called for “more granular, higher-frequency disclosures.”

Near-zero interest rates and massive bond purchases, with the Fed buying $40 billion in mortgage-backed securities and $80 billion in Treasuries every month, have fueled a search for returns and helped buoy asset prices including those of risky investments such as speculative stocks, cryptocurrencies and high-yield debt.

Tuesday, Treasury Secretary Janet Yellen briefly spooked the markets when she said rate hikes may be needed to stop the economy from overheating; comments she walked back, reiterating she sees no inflation problem brewing.

“It may be that interest rates will have to rise somewhat to make sure that our economy doesn’t overheat, even though the additional spending is relatively small relative to the size of the economy,” Yellen said in taped remarks to a virtual event put on by The Atlantic.

“It could cause some very modest increases in interest rates to get that reallocation, but these are investments our economy needs to be competitive and to be productive (and) I think that our economy will grow faster because of them.”

Later that day, Yellen told a Wall Street Journal CEO Council event that she does not anticipate that inflation would be a problem and that any price increases would be transitory because of supply chain shortages and the rebound in oil prices to pre-pandemic levels.

Asked directly about her remarks on rates, Yellen said she was neither predicting nor recommending a rate rise.

“I don’t think there’s going to be an inflationary problem.  But if there is the Fed will be counted on to address them,” she said.

Fed Chair Jerome Powell and Yellen are on the same page in their views on inflation, believing the supply bottlenecks will work themselves out as companies find alternative suppliers or raw material producers increase output.  Powell said recently, “An episode of one-time price increases as the economy reopens, is not likely to lead to persistently higher year-over-year inflation into the future.”

Europe and Asia

We had the final April PMIs for the eurozone (courtesy of IHS Markit).  The composite reading was 53.8 vs. March’s 53.2.  Manufacturing was a record 62.9 (the survey going back to June 1997), while services was 50.5.

Germany: 66.2 manufacturing / 49.9 services
France: 58.9 mfg. / 50.3 services
Italy: 60.7 mfg. (record high) / 47.3 services
Spain: 57.7 mfg. / 54.6 services
Ireland: 60.8 mfg. (record high) / 57.7 services
Netherlands: 67.2 mfg. (record high)
Greece: 54.4 mfg.

UK: 60.9 mfg. (highest since 1994) / 61.0 services

Chris Williamson / IHS Markit

“April’s survey data provide encouraging evidence that the eurozone will pull out of its double-dip recession in the second quarter.  A manufacturing boom, fueled by surging demand both in domestic and export markets as many economies emerge from lockdowns, is being accompanied by signs that the service sector has now also returned to growth.

“Barring any further wave of infections from new variants, Covid restrictions should ease further in the coming months, driving a strengthening of service sector business activity which should gain momentum as we go through the summer.

“The intensity of the rebound will naturally depend on the extent to which Covid restrictions can be removed – and some measures relating to international travel are likely to remain in place for some time to come – but experience in other countries hints that the bounce in domestic activity could be strong as pent-up demand and savings power a surge in spending.

“While the revival in the economy is bringing a rise in inflationary pressures, these so far seem largely confined to the manufacturing sector, with service sector costs – which form a major component of the core inflation measures tracked by the ECB – remaining only modest.”

Separately, retail trade in the euro area rose by 2.7% in March, according to Eurostat.  Compared with March 2020, sales increased by 12.0% (owing to last spring’s lockdown).

Germany: The last time Germany went to the polls in a national election was in 2017, when the Green party finished sixth.  Today, six out of 10 polls published over the last two weeks show it with an advantage over Angela Merkel’s ruling Christian Democratic Union (CDU) only five months before the next big vote.

The polling suggests the conservatives, who have governed Germany for the last 16 years, could be ousted as the strongest party in the Bundestag on Sept. 26.

The Greens have a lead of 2-3 points over the CDU.  The Social Democratic party (SPD) is third.

Turning to Asia…China’s services sector expanded at the sharpest pace in four months in April, driven by fast growing new businesses, according to the private Caixin/Markit services PMI, which rose to 56.3, up from 54.3 in March.  However, inflationary pressures worsened, with input costs rising at a sharper rate in April, driven by higher labor costs and raw material prices.

On the trade front, exports surged 32.3% in April over a year ago, in line with March but down from the explosive 60.6% rise in the first two months of 2021, customs data showed Friday.  Imports increased 43.1%, accelerating from March’s 38.1% expansion.

The gains look dramatic due to comparisons with a year ago, when global economies shut down to fight the coronavirus.  Forecasters say growth is flattening out once that distortion and seasonal fluctuations are taken into account.  And domestically, GDP in China for the first quarter grew only 0.6% from the previous quarter, showing China’s explosive rebound was abruptly slowing.  That suggests growth in Chinese demand for iron ore, consumer goods and other imports will cool.

Chinese manufacturers of smartphones, cars, consumer electronics and other goods also are hampered by global shortages of processor chips.

April exports to the United States rose 30.8% over a year ago to $42 billion despite tariff hikes that stayed in place after Beijing and Washington agreed to a truce in their trade war last year.  Imports of American goods rose 23.5% to $13.9 billion.

Exports to the European Union rose 23.9% over a year ago, while imports gained 43.3%.

In the four months through April, Chinese exports jumped 44% over a year earlier.

Japan reported its PMIs for April, with manufacturing coming in at 53.6, its best pace since April 2018, while services contracted, albeit slightly, for a 15th consecutive month, 49.5.

But the government is seeking to extend a state of emergency in Tokyo and three other areas until the end of May, in an effort to curb a surge in coronavirus cases with fewer than three months before the start of the Tokyo Olympics.  Japan had hoped a “short and powerful” state of emergency would contain a fourth wave of infections, but new cases in Tokyo and Osaka are still at a high level.  The nation’s vaccination program continues to lag badly.

South Korea’s April manufacturing PMI was 54.6; Taiwan’s 62.4, highest since March 2010.

Street Bytes

--The Dow Jones and S&P 500 finished the week at new all-time highs, the Dow up 2.7% to 34777 and the S&P adding 1.2% to 4232.  But Nasdaq fell 1.5%, its third straight weekly decline, though it rallied today on the weak jobs number and the thought the Fed has no reason to change its easy money policy, rising rates a threat to growth stocks’ valuations.

--U.S. Treasury Yields

6-mo. 0.03%  2-yr.  0.14%  10-yr. 1.58%  30-yr. 2.28%

The bond market is still a fret-free zone in terms of inflation, with the yield on the 10-year well below the March 30 high of 1.77%.

--Jeep maker Stellantis NV (created from the merger of PSA and Fiat Chrysler) slashed planned production by 11% in the first three months of the year due to the global chip shortage and warned of additional cuts in the weeks ahead as the crisis lingers.

A lack of semiconductors resulted in a cut to planned first-quarter production of about 190,000 vehicles, the car maker said.  The problem will force it to cut second-quarter production even more, but it expects the situation to improve after June.

Eight of the company’s 44 plants were affected to some degree by the shortage as of Tuesday, with the company’s CFO, Richard Palmer, saying he expects the issue to continue into next year, adding, “It would be naïve to expect it to just disappear.”

The warning came as growth in South America and Europe fueled a 14% rise in sales at Stellantis to $44.5 billion, compared with the first three months of last year, when lockdowns took their toll on sales and factory output around the world.

Like its competitors, Stellantis has been scrambling to secure semiconductors needed for onboard electronics, safety systems such as automatic braking and infotainment consoles in the face of strong demand from the consumer-electronics industry.  In one factory in France, the company reverted to analog speedometers to replace digital board instruments that require semiconductors.

Many of the auto companies have been pointing to both the severe weather in Texas and a fire at Japan’s Renesas Semiconductor Manufacturing Co. in March that halted production.

--General Motors Co. on Wednesday posted far stronger-than-expected first-quarter profit despite the global semiconductor shortage as it held down costs and focused on high-margin pickup trucks and SUVs.  The Detroit automaker, whose shares rose on the news, also said its full-year pre-tax profit would come in at the high end of its initial forecast.

“The speed and agility of our team are front and center as we move from managing through a pandemic to managing the global semiconductor shortage,” CEO Mary Barra said in a letter to shareholders.  “This remains a challenging period.”

Barra added the No. 1 U.S. automaker was focused on “maximizing production of high-demand and capacity-constrained vehicles” like the full-sized Chevrolet Silverado pickup, and GMC Yukon, Chevy Suburban and Cadillac Escalade SUVs.  Barra told reporters the chip shortage will worsen in the second quarter before improving in the second half of the year.

“Every region in the world has been dealing with the supply and demand imbalance for semiconductors, and we have been working through some significant disruptions to production,” she said.

GM reiterated its full-year 2021 earnings guidance and said “based on what we know today,” its results will be at the upper end of the $10 billion to $11 billion adjusted pre-tax profit it has previously forecast.

GM stuck to earlier forecasts the chip shortage could shave $1.5 billion to $2 billion from this year’s profits.

Compared with Ford, which reported last week, GM appears to have done a better job in hoarding for its high-margin models by idling other factories.

--TSA checkpoint travel data vs. 2019

5/6…64 percent vs. 2019*
5/5…56
5/4…54
5/3…59
5/2…65
5/1…68
4/30…61
4/29…61

*New post-pandemic passenger high of 1,644,050.

--Pfizer said its Covid vaccine brought in $3.5 billion in revenue in the first three months of this year, nearly a quarter of its total revenue and far and away Pfizer’s biggest source of sales.

The company did not disclose the profits it derived from the vaccine, but it reiterated its previous prediction that its profit margins on the vaccine would be in the high 20 percent range.  That would translate into roughly $900 million in pretax vaccine profits in the first quarter.

But the company’s vaccine is disproportionately reaching the world’s rich – an outcome, so far at least, at odds with its chief executive’s pledge to ensure that poorer countries “have the same access as the rest of the world” to a vaccine that is highly effective at preventing Covid-19.

As of mid-April, wealthy countries had secured more than 87 percent of the more than 700 million doses of Covid-19 vaccines dispensed worldwide, while poor countries had received only 0.2 percent, according to the World Health Organization.  In wealthy countries, roughly one in four people has received a vaccine.  In poor countries, the figure is one in 500.

The company pledged to contribute up to 40 million doses to Covax, a multilateral partnership aimed at supplying vaccines to poor countries.

Johnson & Johnson and AstraZeneca both vowed to sell their vaccines on a nonprofit basis.  Moderna, which has no other products on the market, decided to sell its vaccine at a profit.

Pre-vaccine, Pfizer earned $9.6 billion in profits last year.

The United States is paying $19.50 for each Pfizer dose.  Israel is paying about $30 per dose, according to media reports.

Separately, Pfizer and its partner BioNTech have agreed to donate Covid vaccine doses to the International Olympic Committee to be used on athletes and delegates taking part in the Summer Olympic Games and Paralympic Games in Tokyo.

Delivery of initial doses to National Olympic Committees is expected to begin at the end of May where possible with the goal to ensure participating delegations receive second doses ahead of arrivals in July.

And today Pfizer initiated its application to the Food and Drug Administration for full FDA approval of its vaccine for people ages 16 and older.

--Moderna Inc. raised its 2021 sales forecast for its Covid-19 shot by 4.3% to $19.2 billion on Thursday, reflecting demand from countries looking to return to normalcy through rapid vaccine rollouts.  Revenue rose to $1.94 billion from a year ago, slightly shy of expectations.

Deals for “booster” doses, nations looking to stock up supplies for 2022 and beyond and a likely authorization for use of the vaccines in kids have led Moderna and its larger rival Pfizer to ramp up their supplies.  Moderna said an initial analysis of a study in adolescents aged 12-17 years showed an efficacy rate of 96% for its vaccine. 

The company also has been working on a new version that could extend the time the vaccine can be stored in refrigerator temperatures, making it easier to distribute, especially in lower-income countries.

--CVS reported higher first-quarter earnings and revenue on Tuesday that topped Wall Street estimates, helped by growth in testing and vaccinations, with the company boosting its 2021 financial outlook.

The healthcare group posted an adjusted profit of $2.04 a share, compared with $1.91 a share for the same period in 2020.  Revenue for the quarter rose to $69.1 billion, up from $66.76 billion for the prior year.

The company’s health care benefits division saw revenue increase 6.7% to $20.48 billion from last year’s quarter, boosted by growth in its government services business.

Pharmacy services rose 3.8% to $36.32 billion, helped by growth in its specialty pharmaceuticals business that was partially offset by lower prices and a weak cold and flu season. Revenue for the company’s retail and long-term care business grew 2.3% to $23.27 billion, due largely to increased Covid-19 testing and vaccinations.

The company said it has performed approximately 23 million tests and administered 17 million vaccinations for Covid through April, with around 9 million tests conducted during the first quarter alone.

Same-store sales at the company’s pharmacies, which also sell over-the-counter health products, rose 0.4% in the quarter, while front-store sales fell about 11%, partly due to a weak cough, cold and flu season.

CVS raised its earnings and revenue guidance for 2021, with the latter now expected to be between $279.2 billion to $283.7 billion, up from its prior outlook of $276.1bn to $280.6bn.

--Peloton has agreed to recall all of its treadmills and apologized for having fought the federal government’s request to do so as the equipment came under scrutiny in the death of a 6-year-old child.

The exercise services company and the U.S. Consumer Product Safety Commission (CPSC) on Wednesday jointly announced voluntary recalls of Peloton Tread+ and Tread treadmills, covering about 125,000 and 1,050 units, respectively, in the U.S.

Regarding the Tread+, the CPSC said it had received 72 reports of people, pets or objects “being pulled under the rear of the treadmill, including 29 reports of injuries to children such as second- and third-degree abrasions, broken bones, and lacerations.”

“Consumers who have purchased either treadmill should immediately stop using it and contact Peloton for a full refund or other qualified remedy,” the company and agency said in their joint statement.

Have you seen some of the videos?  Not good.

Peloton said it had immediately stopped selling and distributing the Tread+ while it worked on a fix.

The Tread defect involves a loose touchscreen that can become detached from the device and fall.

In April, the CPSC warned consumers with small children or pets to stop using the Tread+ after the fitness company reported a child’s death linked to the product.

At the time, Peloton refused to issue a recall.  But on Wednesday the company reversed course and said it regretted its actions.

“I want to be clear, Peloton made a mistake in our initial response to the Consumer Product Safety Commission’s request that we recall the Tread+,” Peloton CEO John Foley said in a statement.  “We should have engaged more productively with them from the outset. For that, I apologize.”

Shares in Peloton cratered 10% and at week’s end were $84, down from its April pre-initial announcement high of $123 and off its 52-week high of $171.

--Uber Technologies Inc.’s first-quarter bookings rose despite weak demand for its ride-sharing service, as sustained growth in its food-delivery business offset the slump in its core operations.

Uber’s bookings grew 24% year-over-year to $19.5 billion in the three months ended March, of which $12.5 billion came from its food-delivery arm.  Uber Eats’ bookings more than doubled from a year earlier, while Uber’s ride business declined 38% over the same period.  Uber earns revenue by taking a cut from the bookings.

Despite the growth in bookings overall, total revenue declined because of an adjustment tied to new driver benefits in the UK.  The company reported revenue at $2.9 billion after setting aside $600 million for the UK changes.  That compares with revenue of $3.2 billion in the same period last year.

Uber reported its adjusted loss before interest, taxes, depreciation and amortization was $359 million, beating Wall Street’s projections.  By this measure, Uber has said it expects to be profitable before the year ends.

--Hilton Worldwide reported lower first-quarter earnings and revenue on Wednesday as the hotel operator continued to feel the impact of the pandemic, with outbreaks that weighed on travel demand in the period.

Adjusted earnings slowed to $0.02 a share from $0.74 a share in the same period of 2020, missing the consensus on Capital IQ for $0.10 a share. Revenue fell to $874 million from $1.92 billion previously, beneath the Street’s view for $1.01 billion.

While the pandemic began affecting the Asia Pacific region in early 2020, restrictions put in place to stem the spread hit the Americas, Europe, the Middle East and Africa in mid-March last year, making the periods not comparable, according to Hilton.

Operations in 275 properties were suspended for some part of the 2021 quarter, while about 730 were affected a year earlier.  By the end of April, Hilton had 97% of its hotels open.

Lower occupancy and declines in the average daily rate pushed system-wide comparable revenue per available room down 38% in the quarter.  Occupancy rates were at almost 44% in the first quarter, down 11% from a year earlier, while the average daily rate dropped 23% to $105.38.

Still, Hilton continued to add rooms in the quarter, opening 105 new hotels with 16,500 rooms and net unit growth of 13,100 rooms, the company said.

--Kellogg Co. enjoyed solid growth in first-quarter sales and earnings and raised its guidance for the 2021 fiscal year, the shares rallying on the news.

Net income was $368 million, up 6% from a year ago, while net sales were $3.58 billion, up 5%.

Kellogg is projecting flat net sales for the full year, with profit expected to fall just 1% or 2%, which when weighed against the pandemic year of 2020, this is good.

Asked about whether the company would be able to pass along cost increases through higher prices, CEO Steven Cahillane said such pricing action is not a given in the marketplace.

“We have to earn that price in the marketplace,” by investing in the brands and through innovation. 

Amit Banati, chief financial officer, said the company expects input inflation “in the high end of the mid-single digits,” which is a useful tidbit.

“We’re seeing it across our cost basket from exchange-traded commodities to diesel and energy, ocean freight,” he said.  Banati said they’ve hedged about 76% of the commodity exposure.

--Warren Buffett, 90, is to be succeeded as CEO at Berkshire Hathaway Inc. by vice chairman Greg Abel, putting to rest one of the biggest succession questions in corporate America.

Mr. Abel will oversee the sprawling conglomerate that owns such well-known firms as auto insurer Geico and fast-food chain Dairy Queen.

Abel, 59, isn’t expected to take the role immediately.  He currently heads all non-insurance operations at Berkshire.  He rose through the ranks in Berkshire’s energy operations and has handled several large company acquisitions.

Separately, speaking at Berkshire’s annual meeting Saturday, Buffett said the economy has been “resurrected in an extraordinarily effective way” by monetary stimulus from the Federal Reserve and fiscal stimulus from Congress.  “It did the job,” and 85% of the economy is running in “super high gear,” Buffett said.

But Buffett lamented how an influx of so-called special purpose acquisition companies and inexperienced investors hoping for quick riches have made markets feel more like a “casino,” making it hard for Berkshire to deploy more of its $145.4 billion cash hoard.

The annual meeting was held in Los Angeles, where 90-year-old Buffett joined Berkshire’s 97-year-old vice chairman Charlie Munger, to answer more than three hours of shareholder questions.  It was the second year due to the pandemic that Berkshire scrapped its annual shareholder weekend in its Omaha, Nebraska, hometown.

--Apollo Global Management Inc. agreed to pay about $5 billion to acquire Yahoo and AOL from Verizon Communications Inc. as the wireless company exits its ill-fated foray into the media business.

The private-equity firm is paying $4.25 billion in cash for a 90% share of the media assets.  Verizon will keep a 10% stake and $750 million of additional preferred stock in the new company, called Yahoo, that will be formed to operate the business.

Verizon Media, which mostly struggled to grow against Alphabet Inc.’s Google and Facebook, generated $7 billion in revenue last year.

Apollo’s strategy for the business revolves around getting more revenue from each of its 900 million active monthly users.  Verizon’s positioning of the media business as a complement to its core mobile business – aimed at helping it add subscribers and reduce the number of people who quit – meant it hasn’t pursued some opportunities to maximize the value of each asset, executives at Apollo said.

For example, Yahoo has been a popular platform for sports betting, but isn’t formally licensed to host gambling.  Apollo, however, is licensed in more than 200 jurisdictions for gambling.

--Canada lost 207,100 jobs in April and the unemployment rate rose to 8.1% amid fresh restrictions imposed to curb a harsh third wave of Covid-19.

--Hong Kong’s economy rebounded with stronger than expected growth of 7.8 percent (annualized) in the first quarter of 2021, posting an 11-year high after a historic low a year ago amid the coronavirus pandemic.  For the same period last year, GDP contracted 9.1 percent.

--Under Armour Inc. agreed to pay $9 million to settle regulatory claims that it failed to disclose that it was pulling forward orders from future quarters, a practice that allowed it to meet Wall Street’s revenue estimates.

The Baltimore-based apparel company resolved the Securities and Exchange Commission investigation without admitting or denying wrongdoing, the SEC said Monday. The Wall Street Journal reported in 2019 that federal officials were examining whether the sportswear maker shifted sales from quarter to quarter to appear healthier.

The SEC doesn’t plan to take any enforcement action against Kevin Plank, the company’s co-founder and executive chairman, or CFO David Bergman, Under Armour said in a press release.  Previously, the two men had been told they could be sued by the SEC.

The practice of pulling forward about $408 million in orders happened over six consecutive quarters beginning in the third quarter of 2015, the SEC said.  The sales involved orders that customers had requested be shipped in future periods, the SEC said.

--Fox News, the cable news giant controlled by Rupert Murdoch, kept is parent company flush in the first quarter, with a slight gain in profit and sales despite a drop in viewers.

Altogether, Fox Corporation beat estimates with a sevenfold increase in profit to $567 million and a 6.5 percent drop in revenue to $3.2 billion compared with the same period a year ago.  A change in how the company valued some of its assets was the key reason for the profit surge.

But revenue at most of its businesses dropped as fewer viewers tuned into the company’s cable channels and the Fox broadcast network, in part because Fox did not host the Super Bowl this year. Total advertising sales fell 24 percent to $1.2 billion, with the cable segment, primarily Fox News, seeing ad revenue drop 7 percent to $283 million.

Fox News still makes up the vast majority of Fox Corporation’s profits.  The cable division that houses the news network generated $899 million in pretax income, accounting for 95 percent of the company’s total pretax profit.

--Eli Broad, the billionaire philanthropist, contemporary art collector and entrepreneur who co-founded homebuilding pioneer Kaufman and Broad Inc. and launched financial services giant SunAmerica Inc., died last weekend in Los Angeles.  He was 87.

Broad provided much of the money and willpower used to reshape Los Angeles’ once moribund downtown into a burgeoning area of expensive lofts, fancy dining establishments and civic structures like the landmark Walt Disney Concert Hall.  He opened his own eponymous museum and art lending library, the Broad, in 2015 in the city’s downtown.

An avid art hound since the 1960s, Broad had a collection estimated to be worth $500 million, but that was back in 2003.  No telling what it is worth today.  He lent many of his works for public viewing.

I had a lot of personal dealings with SunAmerica back in the day.  Good company, good people.

Eli Broad was a financial genius and tenacious dealmaker.  RIP.

--A lot of us will be watching SNL tomorrow to see how Elon Musk does…or rather what he does.  Cast members are split on his hosting the show, with some like Aidy Bryant and Bowen Yang hating the move.  But Michael Che called it “exciting” and Pete Davidson told Seth Meyers, “I don’t know why people are freaking out.”

--And last but not least, after 27 years of marriage, Bill and Melinda Gates are splitting.

In a joint statement:

“After a great deal of thought and a lot of work on our relationship, we have made the decision to end our marriage.  Over the last 27 years, we have raised three incredible children and built a foundation that works all over the world to enable all people to lead healthy, productive lives. We continue to share a belief in that mission and will continue our work together at the foundation, but we no longer believe we can grow together as a couple in this next phase of our lives. We ask for space and privacy for our family as we begin to navigate this new life.”

Gates is listed by Forbes as the world’s fourth wealthiest person – with a net worth of $130.5 billion – after Amazon.com’s Jeff Bezos, French luxury-goods tycoon Bernard Arnault and his family, and Elon Musk.

Most of the Gates family’s wealth is held by a personal investment firm called Cascade Investment LLC.

Bezos and his wife, MacKenzie Scott, divorced in 2019 after a 25-year marriage during which Bezos built one of the world’s most valuable companies.  Ms. Scott recently remarried.

Ms. Gates, 56, worked on developing multimedia products at Microsoft.  Four months after starting at the company, she met the then-CEO at a dinner during a business trip to New York.  He asked her on a date when they ran into each other again in the Microsoft parking lot.

She could be in line for half of the couple’s wealth, if they divorce in a so-called community-property state such as Washington, where Microsoft is based, or California, where they own property.  The couple last year paid $43 million for an oceanfront home near San Diego in one of the largest such deals recorded in the area.

As was the case with MacKenzie Scott, my people are in touch with Melinda’s people and I’ll let you know what materializes.

Foreign Affairs

Iran: The White House clearly wants to get Iran back to the negotiating table but denied there was an agreement with Tehran on an exchange of prisoners, though the attempts to gain freedom for four Americans held by Tehran are ongoing.

Iran’ state television had said on Sunday that Tehran would free four Americans accused of spying in exchange for four Iranians held in the United States and the release of $7 billion in frozen Iranian funds.

Talks in Vienna between the signatories to the 2015 nuclear accord, with the United States on the sidelines, but in the loop, have been halting but continue.  U.S. national security adviser Jake Sullivan, speaking on ABC’s “This Week” on Sunday, said no deal had been reached.

“There is still a fair distance to travel to close the remaining gaps. And those gaps are over what sanctions the United States and other countries will roll back. They are over what nuclear restrictions Iran will accept on its program to ensure that they can never get a nuclear weapon.”

After a break this week, talks were to resume today.

Israel: President Reuven Rivlin began the process of facilitating the formation of a new government on Wednesday by meeting with Yesh Atid leader Yair Lapid and Yamina chairman Naftali Bennett. 

Prime Minister Benjamin Netanyahu’s mandate to form a government ended Tuesday night without a coalition being formed.

By law, Rivlin, a figurehead, had until Friday to present a second mandate and today he asked Lapid to try to form a government, getting 28 days to do so after 56 lawmakers out of 120 in the Knesset expressed their support for his candidacy.

While Bennett’s Yamina party has just seven seats, he has emerged as kingmaker and has not ruled out forming a coalition.

So Netanyahu’s Likud could be pushed into the opposition for the first time in 12 years.  But it does not mean he will be immediately forced out as prime minister.  It is nonetheless a serious threat to his lengthy rule (five governments since 1996) just as his corruption trial is kicking into high gear.

If Lapid can not form a government, Israel could be headed towards its fifth election in two years.

Afghanistan: Saturday marked the 10-year anniversary of the killing of Osama bin Laden, May 2, 2011.

Leon E. Panetta and Jeremy Bash / Defense One

“CIA had converted the director’s Seventh Floor conference room into a command center where we watched the raid unfold. When the initial helicopter lost lift and crash landed into the compound, our hearts were in our throats. The conference room fell dead silent.  But the professionals of the teams working for Joint Special Operations Command’s Adm. Bill McRaven didn’t hesitate, carrying out the mission as if nothing had gone wrong. A backup helicopter was called in and the mission was carried out successfully….

“Though we were not sure at the time, bin Laden’s killing was the beginning of the end of al Qaeda’s status as America’s preeminent theat. The Abbottabad raid deprived al Qaeda of its inspirational leader, pierced the organization’s sense of invincibility, and sent other lieutenants into deeper hiding.  Within months, other senior al Qaeda leaders were killed, more plots were disrupted, and before long the stream of threats against U.S. homeland targets emanating from Afghanistan and Pakistan began to dry up as the group further splintered.

“Today, with most of its leaders captured or killed, most of its money gone, and most of its foot soldiers absorbed by other radical groups, al Qaeda is a shadow of its former self.  No longer is this terrorist organization considered the biggest threat to the United States. Though they remain dangerous, we have been able to focus resources elsewhere.  The recent Worldwide Threats briefing published by the office of the Director of National Intelligence and presented on Capitol Hill contained 23 pages of information about the global threat landscape but devoted just sentences to al Qaeda.

“The teamwork from 10 years ago has allowed America to pivot to the next threats – from China, Russia, nuclear proliferators, and cyber attackers.  The dual crises facing America today of the unprecedented pandemic and resulting economic downturn demand teamwork, bipartisanship, and professional leadership. The bin Laden mission from a decade ago should serve as a template on how to work together to keep America safe.”

In the here and now, high school students were among 30 killed in a car bombing in Afghanistan last weekend.  No group claimed responsibility.

China: Chinese President Xi Jinping told Communist Party officials at the start of the year the world was in “turmoil” and would be for some time, but regardless of the challenges it faced, Beijing was “invincible.”

His comments came in a speech made during a study session at the Central Party School on January 11 – just five days after a mob stormed the U.S. Capitol – and was published just today in full by party journal Qiushi.

“At present, the world is experiencing profound and unprecedented changes,” Xi said.  “The most conspicuous feature of the world today can be summarized in one word – ‘turmoil’ – and it looks like this situation will continue for some time.”

And:

“As long as we can stand on our own and be self-reliant, and maintain a vibrant flow of goods and services domestically, then we will be invincible no matter how the storm changes internationally.  We will survive and continue to develop, and nobody can beat us or choke us to death,” he said.

Secretary of State Antony Blinken said on CBS’ “60 Minutes” on Sunday that China had recently acted “more aggressively abroad” and was behaving “increasingly in adversarial ways.”

“It’s profoundly against the interests of both China and the United States to get to that point, or even to head in that direction.”  He added: “What we’ve witnessed over the last several years is China acting more repressively at home and more aggressively abroad. That is a fact.”

Asked about the reported theft of hundreds of billions of dollars or more in U.S. trade secrets and intellectual property by China, Blinken said the Biden administration had “real concerns” about the IP issue.  “This can’t stand and it won’t stand.”

Separately, China’s top economic planner said on Thursday that it had ‘indefinitely suspended’ its high-level economic dialogue with Australia, amid escalating tensions between the two nations.

David Ignatius / Washington Post

“Nuclear weapons are probably the last thing the Biden administration wants to worry about right now.  But given aggressive Chinese and Russian efforts to build new systems, and America’s aging strategic force, the wizards of Armageddon may be back.

“Chinese and Russian advances were highlighted in last month’s annual ‘Threat Assessment’ by the U.S. intelligence community.  It said China was planning to double its arsenal of nuclear weapons over the next decade in ‘the most rapid expansion…in its history.’  And it warned that Russia remains America’s closest strategic rival as it ‘expands and modernizes its nuclear weapons capabilities.’

“Unpack this bland language and you see some genuinely scary new threats.  China is deploying a truck-based mobile intercontinental ballistic missile, called the Dongfeng-41, that could strike targets in the United States. China also has an intermediate-range mobile missile, the Dongfeng-26, that’s ‘capable of rapidly swapping conventional and nuclear warheads,’ according to Austin Long, a Pentagon strategic planner, in a recent article in War on the Rocks.

“What this means for U.S. commanders is that in a crisis, China would have hundreds of hard-to-detect trucks roaming its highways, some carrying nukes and some not – and if the missiles were fired, the United States probably wouldn’t know which were which. That, as the Cold War strategists used to say, would be ‘destabilizing.’

“Russia is tweaking the nightmare scenarios, too.  President Vladimir Putin boasted in his April 21 address to the federal assembly that Russia now has a new Avangard hypersonic ICBM, a Tsirkon hypersonic anti-ship missile and a Poseidon nuclear torpedo capable of devastating coastal cities.  All these weapons have very short delivery times to defeat U.S. missile defenses.  They, too, would destabilize the balance of terror.

“Meanwhile, the Pentagon is deliberating how to replace its 50-year-old Minuteman missiles technology, one leg of the ‘triad’ of U.S. strategic forces. Sen. Angus King (I-Maine), who chairs the Senate subcommittee that oversees strategic forces, told me he came away from a visit to a missile silo in North Dakota last weekend wondering, ‘How would you feel if your survival depended on a car you bought in 1970?’ ….

“The Biden administration’s main interest in nuclear weapons so far has been limiting them.  After just six days in office, Biden agreed to extend for another five years the new START treaty with Russia, which limits each country’s warheads.  But the treaty doesn’t cover China, and that’s the problem.  Beijing doesn’t want to talk about curbing its nuclear forces until it reaches parity with the United States and Russia.

“ ‘The Chinese are modernizing their nuclear deterrent, and ours is aging.  That’s the big story,’ argues David Finkelstein in an interview.   He directs China and Indo-Pacific security studies at CNA, an independent research institute in Arlington.

“Why is China moving so quickly to jettison its old doctrine of a ‘limited deterrent’ and double its nuclear forces?  U.S. analysts aren’t sure, but some judge that the Chinese may want to make any U.S. effort to defend Taiwan militarily exceptionally costly. Beijing wants a low-cost walkover in Taipei, not a bloody assault.

“ ‘The last thing on China’s mind is a D-Day style invasion’ of Taiwan, contends Christopher Johnson in an interview.  He’s a former top CIA China analyst who’s now the chief executive of China Strategies Group, a political risk consulting firm.  He notes that China has halved its number of short-range missiles opposite Taiwan but boosted deployments of missiles for striking U.S. bases in Guam and Japan.

“China’s accelerating nuclear program vexes American analysts. During the Cold War, the United States and Russia developed a language for thinking about nuclear weapons and deterrence.  Leaders of both countries understood the horrors of nuclear war and sought predictability and stability in nuclear policy.  China lacks such a vocabulary for thinking about the unthinkable.

“Russia and America have some severe problems these days, but they know how to talk arms control.  Even as the Biden administration thinks about building a new generation of doomsday weapons, it needs to sit down and begin a conversation with China about strategic forces that’s becoming more urgent every day.”

North Korea: North Korea lashed out at the United States and its allies in South Korea on Sunday in a series of statements saying recent comments from Washington are proof of a hostile policy that requires a corresponding response from Pyongyang.

The statements, carried on state news agency KCNA, come after the White House said it had completed a months-long review of North Korean policy.

“Our policy towards North Korea is not aimed at hostility.  It’s aimed at solutions,” national security adviser Jake Sullivan said on ABC’s “This Week.”

In one statement, a Foreign Ministry spokesman accused Washington of insulting the dignity of the country’s supreme leadership by criticizing North Korea’s human rights situation. This criticism is a provocation that shows the Untied States is “girding itself up for an all-out showdown” with North Korea, and will be answered accordingly, the unnamed spokesman said.

In another statement, Kwon Jong Gun of the Foreign Ministry’s Department of U.S. Affairs, cited Biden’s speech to Congress in which the president said nuclear programs in North Korea and Iran pose threats that would be addressed through “diplomacy and stern deterrence.”  Kwon said it is illogical and an encroachment upon North Korea’s right to self-defense for the United States to call its defensive deterrence a threat.

“His statement clearly reflects his intent to keep enforcing the hostile policy toward the DPRK as it had been done by the U.S. for over a half century,” he said.  Kwon said U.S. talk of diplomacy is aimed at covering up its hostile acts, and its deterrence is a means for posing nuclear threats to North Korea.  Now that Biden’s policy has become clear, North Korea “will be compelled to press for corresponding measures, and with time the U.S. will find itself in a very grave situation,” he added.

The U.S. goal remains the denuclearization of the Korean Peninsula and Washington is willing to engage in diplomacy and work on practical measures toward that goal, Sullivan said.

In a third statement on Sunday, Kim Yo Jong, a senior official in the government and sister of Kim Jong Un, criticized South Korea for failing to stop defector activists from launching anti-North Korea leaflets.

“We regard the maneuvers committed by the human wastes in the south as a serious provocation against our state and will look into corresponding action,” Kim Yo Jong said.

Russia: The Group of Seven richest countries will look at a proposal to build a rapid response mechanism to counter Russian “propaganda” and disinformation.  British Foreign Secretary Dominic Raab, speaking ahead of a G7 foreign ministers’ meeting in London, the first such in-person meeting in two years, said the United Kingdom was “getting the G7 to come together with a rapid rebuttal mechanism” to counter Russian misinformation.

“So that when we see these lies and propaganda or fake news being put out there, we can – not just individually, but come together to provide a rebuttal and frankly to provide the truth, for the people of this country but also in Russia or China or around the world,” Raab said.

Russia and China are trying to sow mistrust across the West, whether by spreading disinformation in elections or by spreading lies about Covid-19 vaccines, according to British, U.S. and European security officials.  Russia denies it is meddling beyond its borders and says the West is gripped by anti-Russian hysteria.  China says the West is a bully and that its leaders have a post-imperial mindset that makes them feel they can act like global policemen.

Separately, the lead lawyer defending the Russian opposition leader Alexei Navalny in an extremism case that could outlaw Navalny’s opposition movement was arrested last Friday, as the Kremlin escalated its long-running campaign to stifle dissent. 

Ivan Pavlov was detained after Russia’s Federal Security Service, or F.S.B., raided his Moscow hotel room. He stood accused of disclosing details of law-enforcement investigations unconnected to Navalny and faced three months of prison time.  Just another trumped-up charge.  Pavlov is one of Russia’s best-known human rights lawyers.

Brazil: At least 25 people were killed in a police raid Thursday morning in Rio De Janeiro.  Shortly after dawn, police entered the sprawling favela called Jacarezinho, sending in bulletproof helicopters, armored vehicles and dozens of heavily armed police officers to do battle in one of the strongholds of the powerful criminal gang, the Red Command. Police said the group had been enticing children into their ranks.

The conflict dragged on for hours, as residents huddled inside their homes, unable to leave.  One police officer was among those killed.

Police forces kill thousands of Brazilians ever year, the overwhelming majority of whom are Black and poor.  In 2019 along, police killed some 5,800 people.

Random Musings

--Presidential approval ratings

Rasmussen: 51% approve of President Biden’s job performance, 47% disapprove (May 7). This has been flipping around.  47-51 last week.

--A Texas Republican backed by former President Donald Trump has advanced to a runoff election to fill a U.S. House of Representatives vacancy left by the death of her husband, while Democrats were shut out of the contest.

Susan Wright, whose husband Ron Wright in February became the first sitting member of Congress to die of Covid-19, was the top vote-getter on Saturday in a crowded field of 23 candidates vying to represent the state’s 6th Congressional District.  Wright was headed to a runoff against another Republican in the Dallas-Fort Worth suburbs, a longtime Republican-held district.  Democrats had hoped to pick up the seat to expand their slim House majority.

Wright received 19.2% of the vote, followed by another Republican, Jake Ellzey at 13.8%.  Democrat Jana Lynne Sanchez was in third with 13.4%.

--As noted above, nearly six months after Donald Trump lost to Joe Biden, rejection of the 2020 election results – the “Big Lie” to many – has increasingly become an unofficial litmus test for acceptance in the Republican Party.  In January, 147 GOP lawmakers – eight senators and 139 House members – voted in support of objections to the election results, and since then, Republicans from Congress to statehouses to local party organizations have been embracing the falsehood.

The Washington Post interviewed Debra Ell, a Republican organizer in Michigan and fervent supporter of former president Donald Trump, said she has good reason to believe the 2020 presidential election was stolen.

“I think I speak for many people in that Trump has never actually been wrong, and so we’ve learned to trust when he says something, that he’s not just going to spew something out there that’s wrong and not verified,” she said, referring to his baseless election claims.

And then you have this Arizona recount.  A hand recount of 2.1 million votes cast in November is underway by Republicans who dispute the results in the state’s largest county, in yet another effort to overturn the results.

Cindy McCain, widow of Arizona Republican Sen. John McCain, called the audit “ludicrous” on Sunday.  Appearing on CNN’s “State of the Union,” McCain said:

“The whole thing is ludicrous, quite frankly, it’s ludicrous. This also comes from a state party in Arizona that refused to be audited themselves on votes that were cast within their own party communications.”

The process is being overseen by Cyber Ninjas, a Florida-based technology company, and cost taxpayers $150,000.  Unknow donors are also helping fund the effort.

Company founder Doug Logan was part of a team that reportedly found errors designed to create fraud in voting machines used in Antrim County, Michigan.  Logan spread these unfounded allegations of fraud on Twitter using a now-deleted account.

In addition to recounting ballots by hand, auditors are also running them under an ultraviolet light, a practice some say is to prove a conspiracy theory about “real” ballots having been watermarked.

In Georgia, aside from Trump calling for Gov. Brian Kemp to resign, he has endorsed Rep. Jody Hice as a challenger to Georgia Secretary of State Brad Raffensperger, both Raffensperger and Kemp having resisted direct pressure from Trump to overturn their state’s election results in favor of a Trump victory.

Trump said in a statement shortly after Hice announced his challenge: “Jody will stop the Fraud and get honesty into our Elections!”

In North Carolina, former Republican governor Pat McCrory was initially highly critical of Trump, saying on his radio show that it was the former president’s own fault that he lost the election and that his false election claims were damaging to democracy.  But now, running in North Carolina for the U.S. Senate and facing a tough primary, McCrory is on board, casting himself “as a huge defender – of Trump policies.”

--I read everything, all sides, and then make a decision as to what goes in these columns.  I incorrectly chose to relay the story last week that Rudy Giuliani and One America News had been warned by the FBI about Russian disinformation.  One of the sources relied on by the New York Times, Washington Post and NBC News then said the briefing was only prepared for Giuliani and not delivered to him, in part over concerns it might complicate the criminal investigation of Giuliani.

As the Wall Street Journal editorialized, “the Post, Times and NBC ought to be furious for being misled, if that’s what happened, and should expose who did the misleading.”

I apologize for my inclusion of the story. 

--Proud Boys Canada, a far-right group that Ottawa named as a terrorist entity earlier this year, has dissolved itself, saying it has done nothing wrong, according to a statement by the organization on Sunday.  In February, Canada said the group posed an active security threat and played a “pivotal role” in the attack on the U.S. Capitol in January.  U.S. authorities have charged several members of the Proud Boys in connection with the assault.

“The truth is, we were never terrorists or a white supremacy group,” the statement posted by the administrator of the official Proud Boys channel on Telegram said.  “We are electricians, carpenters, financial advisors, mechanics, etc.  More than that, we are fathers, brothers, uncles and sons,” it added.

The group’s founder, Gavin McInness, is a Canadian who lives in the United States.

So there you go.

--What an awful story in Mexico City when an elevated section of the metro collapsed and sent a subway car plunging toward a busy boulevard late Monday, killing 24 and injuring about 70, city officials said.

The particular line was the most modern in the system but there had been serious questions about its safety and there was even a protest that very day on the topic.

--The U.S. birth rate fell 4% last year, the largest single-year decrease in nearly 50 years, according to a report from the Centers for Disease Control and Prevention.

The rate dropped for moms of every major race and ethnicity, and in nearly every age group, falling to the lowest point since federal health official started tracking it more than a century ago.

Births have been declining in younger women for years, as many postponed motherhood and had smaller families.

Birth rates for women in their late 30s and in their 40s have been pinching up.  But not last year.

The pandemic no doubt contributed to last year’s big decline, experts say. Anxiety about Covid-19 and its impact on the economy likely caused many couples to think that having a baby right then was a bad idea.

However, many of the pregnancies in 2020 began well before the epidemic.  CDC researchers are working on a follow-up report to better parse out how the decline unfolded.

Birth rates fell 8% for Asian American women; 3% for Hispanic women; and 4% for Black and white women.

The current generation is getting further away from having enough children to replace itself.

The U.S. once was among only a few developed countries with a fertility rate that ensured each generation had enough children to replace it.  About a dozen years ago, the estimated rate was 2.1 kids per U.S. woman.  But it’s been sliding, and last year dropped to about 1.6, the lowest rate on record.

The U.S. population on Dec. 31, 2020, was 330,034,257.

--Meanwhile, in response to the above, a Malian woman has given birth to nine babies at once – after expecting seven, according to Mali’s health minister and the Moroccan clinic where the nonuplets were born.

It appeared to be the first time on record that a woman had given birth to nine surviving babies at once.

The five girls and four boys, and their mother, “are all doing well,” the health minister said.

The mother gave birth to the babies in Morocco after being sent there for special care.

--Lastly, if you look up in the sky over the next 24 hours and see a large object about to crash down on you, that’s the Chinese rocket.

---

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

Thank you to all the first responders and healthcare workers.

God bless America.

---

Gold $1832
Oil $64.82

Returns for the week 5/3-5/7

Dow Jones  +2.7%  [34777]
S&P 500  +1.2%  [4232]
S&P MidCap  +1.7%
Russell 2000  +0.2%
Nasdaq  -1.5%  [13752]

Returns for the period 1/1/21-5/7/21

Dow Jones  +13.6%
S&P 500  +12.7%
S&P MidCap  +20.1%
Russell 2000  +15.0%
Nasdaq  +6.7%

Bulls 60.4
Bears 16.8

Hang in there.  Get vaccinated.

Brian Trumbore

---