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Week in Review

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06/05/2021

For the week 5/31-6/4

[Posted 9:00 PM ET, Friday]

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

Edition 1,155

My family is facing the imminent loss of a beloved figure and when the inevitable occurs, I’ll have an extensive tribute to the man.  It hasn’t been easy for your editor.  Little sleep, for one, waiting for a call in the middle of the night.

But I had to smile today, when a social worker from the facility where he is, called to talk about what it will be like for me, as I’ve been the one most responsible for his well-being these last few years.  She said, ‘You’re going to find you have a lot more free time, and that will be time for thinking of the loss, and you might suffer through bouts of depression.  I just hope you have a support system.’

I said, ‘Ligia, you don’t know me.  I work seven days a week.  It’s the only way I know how to cope.’

And so for now we move on….

FBI Director Christopher Wray, in an interview with the Wall Street Journal, said the agency was investigating about 100 different types of ransomware, many tracing back to hackers in Russia, and compared the spate of cyberattacks with the challenge posed by the Sept. 11, 2001, terrorist attacks.

“There are a lot of parallels, there’s a lot of importance, and a lot of focus by us on disruption and prevention,” Mr. Wray said.  “There’s a shared responsibility, not just across government agencies but across the private sector and even the average American.”

Wray’s comments come as senior Biden administration officials have characterized ransomware as an urgent national-security threat and said they are looking at ways to disrupt the criminal ecosystem that supports the booming industry.

This week, hackers held hostage the world’s largest meat processor, weeks after the operator of an essential pipeline bringing gasoline to parts of the East Coast paid $4.4 million to regain control of its operations and restore service.

“The scale of this problem is one that I think the country has to come to terms with,” Wray said.

In the interview, Wray singled out Russia as harboring many of the known users of ransomware.

“If the Russian government wants to show that it’s serious about this issue, there’s a lot of room for them to demonstrate some real progress that we’re not seeing right now,” Wray said.

An oil pipeline and a meat processor are one thing.  Taking out an entire electrical grid would be of an entirely different magnitude.  But to think that the Russians may have already installed malware into some of our operators’ systems, to be activated at a time of their choosing, would keep any government leader up at night.

Biden Agenda

--President Biden continued to talk with West Virginia Republican Sen. Shelley Moore Capito today on an infrastructure package, but late word has the president not satisfied as the Republicans nudge up their offer, but to nowhere near where Biden wants it, including the essential elements of the plan, even as he’s slashed about a $1 trillion from his original proposal.

Supposedly the two will speak again Monday, but now attention is beginning to focus on a bipartisan Senate plan (4 Republicans, 4 Democrats) that has been sitting on the shelf as Biden negotiates first with Capito. Whether the president will then turn to them, or just go it alone, is the big question.

--A restrictive voting bill in Texas that was on the verge of Republican Gov. Greg Abbott’s desk failed to pass Sunday night after Democrats walked out of the House chamber before a midnight deadline.  Abbott then swiftly said he would call a special session to try passing a voting bill again but did not say when.

Democrats criticized the bill’s restrictions, particularly a ban on 24-hour voting and drive-thru voting that was popular with nonwhite voters last year in Harris County, for disproportionately affecting people of color.

Many Texas Democrats argue that there has been next to zero fraud, thus rewriting the Election Code is totally unnecessary.

Opinion….

Editorial / Wall Street Journal

“As the Texas legislative session drew near its end Sunday, lawmakers appeared set to pass a bill overhauling the state’s elections, until Democrats did one final maneuver: They snuck out of the building.  ‘Members, take your key and leave the chamber discreetly,’ a Democratic leader in the state House told his caucus in a 10:35 p.m. text message.

“The extraordinary move deprived the House of a quorum, killing the bill for now, at the cost of undermining the legislative process.  But what do you expect after months of Democratic alarms about ‘voter suppression’?    President Biden on Saturday called the Texas plan ‘un-American,’ and ‘part of an assault on democracy.’  At least this time he didn’t say it’s worse than Jim Crow, which was the political bomb he lobbed at Georgia’s bill.

“The reality is more prosaic.  To start with the controversial, the 67-page bill would roll back Covid-19 innovations like Harris County’s drive-through voting and 24-hour voting. Those options were used disproportionately last year by black and Hispanic residents.  But when did emergency procedures amid a 100-year pandemic suddenly become the new baseline?  It’s hardly crazy to think polling-place shenanigans might be more likely at 3 a.m.

“The bill says that on the last Sunday of early voting, polling places may not open until 1 p.m.*  This is a political mistake, at minimum, in that it’s being spun as an attack on black churches that have a ‘souls to the polls’ tradition.  One lawmaker supporting the bill argued: ‘Those election workers want to go to church, too.’ But some people take care of their religious obligations on Saturday, and in any event Texas repealed most of its blue laws in 1985.  Lawmakers would be wise to drop this provision.

*Republicans said this was a typo in the bill and it will be earlier.  Laughable.

“Under the bill, Texas would still offer some two weeks of early voting. Mr. Biden’s beloved Delaware won’t have any early voting until 2022, when it will get 10 days. The Texas bill would also raise minimum hours.  In the final week, counties with 100,000 people must currently open their ‘main’ polling place 12 hours on weekdays and five hours on Sunday. That population threshold would drop to 30,000, and six hours would be mandated on Sunday.

“Mail ballots and applications would ask for a state ID number or the last four digits of a Social Security number. Georgia and Florida have passed similar measures, and the goal is to verify identity without having to do subjective signature analysis.  In Georgia’s 2018 elections, black voters accounted for 54% of the ballots rejected for signature or oath issues. The Texas bill says if ID numbers match, the voter’s signature would be ‘presumed’ valid.

“The bill would change the legal standard for proving fraud to ‘a preponderance of the evidence’ from ‘clear and convincing evidence.’  If the number of illegal votes matched the margin, courts could throw out a race, without showing that fraud changed the result.  Critics say this is a pander to Donald Trump, but Mr. Trump lost in 2020 under either standard.

“Whether the new rules are too lax is a judgment call: Imagine a race decided by 50 votes, with 51 illegal ballots detected. Did more slip through? Perhaps the best thing for public confidence would be to redo the election….

“The Texas bill isn’t perfect, but no election law is since the exercise involves balancing ballot access, election security, ease of administration, and so forth.  The point is that it’s hard to take seriously Mr. Biden’s narrative about an assault on democracy in a state that gives voters two weeks to cast a vote. Texas Gov. Greg Abbott said Sunday that the election bill will be added to the Legislature’s agenda for a coming special session.

“Look forward, then, to more overheated rhetoric from partisans like Mr. Biden.  But remember that his histrionics are intended to give political cover to Democrats in Congress who want to override 50 state election laws by jamming through H.R.1 on a partisan vote. That’s the real voting-law outrage.”

Editorial / Washington Post

“In seeking to ram through a big anti-voting bill in the middle of the night at the very end of their legislative session, Texas Republicans attempted what would have been the most odious anti-democratic act by a legislature this year.  Only a walkout by state Democrats late Sunday, as the legislature faced a midnight deadline to wrap up its session, prevented the bill’s passage in the state House.  And the threat is not yet ended….

“Texas Republicans should instead abandon a bill for which ignorance or malice is the only plausible explanation.  The legislation would make it a felony for an election official to offer a voter an unsolicited absentee ballot application. It would further restrict which people qualify to vote absentee, even though Texas already has irrationally restrictive standards.  It would eliminate safeguards meant to prevent election officials from mistakenly tossing absentee ballots based on dubious signature-matching issues.  It would crimp Sunday voting in a way that would make it difficult for Black churches to run ‘Souls to the Polls’ events.  It would crack down on anyone transporting more than two non-relatives to a polling place.  It would ban drive-through voting, temporary voting sites and 24-hour early voting.  It would make it dangerously easy for state judges to overturn election results.  And it would empower partisan poll watchers, encouraging them to hassle election officials and voters.

“It is obvious at whom these provisions are aimed: Houston’s Harris County, a populous, diverse metropolis trending increasingly Democratic.  Harris last year used many of the turnout-encouraging strategies that the bill would ban.  The new restrictions on absentee voting, on top of the severe limits the state already has, are a direct result of former president Donald Trump’s lie that the voting method is fatally fraud-prone – and the related fact that Democrats embraced mail-in balloting during the pandemic.

“There is no good argument for any of it.  Texas saw no major irregularities in the absentee or the in-person vote last year. The biggest problem was that state leaders refused to accommodate voters seeking to avoid close contact with strangers at polling places during the pandemic, fighting hard, for example, to deny them the opportunity to vote by mail.  In fact, no state saw substantial fraud, and there is no legitimate doubt about the results.  After a high-turnout, secure, fraud-free and smooth election, no reasonable person could conclude that voting needs to be harder to ensure election integrity.  High turnout should be celebrated – and expanded upon.  It is still too hard to vote, especially in Texas.

“Republicans are instead adding all sorts of needless restrictions, because they calculate that they will discourage more Democrats than Republicans from voting, and because they have cultivated among their base the poisonous lie that Democrats stole the 2020 vote, to the point that they must now legislate as though this fiction is real.

“Texas Republicans should not escape the opprobrium they are due.  Between now and the legislature’s special session, Texas leaders, businesses and ordinary citizens should demand that Republicans drop their anti-American bill.”

Ron Brownstein / The Atlantic

“Anxiety is growing among a broad range of civil-rights, democracy-reform, and liberal groups over whether Democrats are responding with enough urgency to the accelerating Republican efforts to both suppress voting and potentially overturn future Democratic election victories….

“White House officials dismiss the idea that Biden is insufficiently concerned about red states’ maneuvers, which have included reducing access to mail balloting and early voting, imposing new voter-identification requirements, purging voters from registration lists, limiting the use of ballot drop boxes, blocking state-court oversight of voting laws, and increasing Republican state officials’ authority to override the decisions of local election officials, many of whom are Democrats.  ‘I can assure people there is no one that worries more about the effect of these things on the 2024 election than the president, who will be running and who went through 2020,’ the senior White House official, who requested anonymity to discuss internal deliberations, told me….

“Still, it’s clear that the White House is operating at a more tempered level of concern than other Democrats about the threats to small-d democracy emerging in the aftermath of Donald Trump’s attacks on the 2020 election….

“The White House does see a risk in the possibility that Republicans – whether local election officials, GOP-controlled state legislatures, or a potential Republican majority in the U.S. House or Senate – will refuse to certify clear Democratic wins in the 2022 and 2024 elections.  The senior Democrat told me, ‘Given how things have developed since January 6, if the situation is not brought under some control and this isn’t countered effectively, then I think there is a significant risk’ that ‘Republican officials, unlike the ones we saw standing up to pressure in 2020, are going to decline to certify Democratic victories.’  If Republicans hold the House, Senate, or both after the 2024 election, that could allow Congress to try to install a GOP president even if clear evidence exists that the Democrat won.”

It's the increasing ability of state judges and officials to override the decisions of local election officials, not actual restrictions on voting, that has scared the hell out of me since the Georgia law was adopted, the principle of which is now being legislated in other states.  That will be our ruination as a democracy.

Remember, Donald Trump didn’t want the election certified and he needed to prevent that, thus Jan. 6.

--In an address at Arlington National Cemetery on Monday, President Biden honored American military service members who died in the line of duty.

“Democracy must be defended at all costs.  For democracy makes this all possible.  Democray.  That’s the soul of America.  And I believe it’s a soul worth fighting for, and so do you, a soul worth dying for.”

Biden said the nation’s soul was “animated by the perennial battle between our worst instinct, which we’ve seen of late, and our better angels. Between ‘me first’ and ‘We the people.’”

“The mission falls to each of us, each and every day. Democracy itself is in peril here at home and around the world,” Biden said.  “What we do now, how we honor the memory of the fallen, we determine whether democracy will endure.”

Which bring us to….

Trump Bytes

The other day, Donald Trump called into conservative commentator Dan Bongino’s radio show when he was asked whether he’s planning a comeback bid for the White House.  “We need you,” Bongino said.

“Well, I’ll you what,” Trump responded.  “We are going to make you very happy, and we’re going to do what’s right.”

It was a classic noncommittal answer from Trump, who for decades toyed with running for the presidency, but multiple reports this week said talk of a Trump run in 2024 has picked up steam.  Insiders report a shift in his tone, as Trump increasingly acts and talks like he plans to mount a run as he embarks on a summer of public appearances, beginning with a speech Saturday in North Carolina.

The interest in another run comes as a number of investigations close in on him, including the convening of the special grand jury to consider evidence in New York’s criminal investigation into his business dealings, including scrutiny of hush-money payments, property valuations and employee compensation.

Trump has slammed the probe as “purely political,” and those around him insist he isn’t concerned about potential legal exposure even as he suggests his political posture is evolving.  Just another classic Trump attempt at distraction.

Speaking of which, Trump has been consumed by efforts to undo last year’s election, advancing baseless falsehoods that it was stolen and obsessing over recounts and audits that he is convinced could overturn the results.

Trump, who would be 78 years old on Inauguration Day in 2025 – the same age as Joe Biden on his own Inauguration Day this year – and multiple Republicans are already making moves for runs of their own.  Former vice president Mike Pence visited New Hampshire on Thursday.

Trump craves attention and he’s receiving it again.  A recent Quinnipiac University national poll found that 66% of Republicans would like to see him run for reelection, even though there is no evidence that he has grown any more popular since losing the election by more than 7 million votes.

But as Trump advances his baseless conspiracy theories, Republican state legislators are pushing what experts say is an unprecedented number of bills aimed at restricting access to the ballot box that could affect future elections.  Republicans say the goal is to prevent voter fraud, Democrats contend the measures are aimed at undermining minority voting rights.

And this week, the New York Times’ Maggie Haberman tweeted that Trump has been telling confidants that he expects to be reinstated as president by August as a result of the ongoing election audits in states like Arizona and Georgia.

There is no constitutional or legal remedy to overturn the results of an election once the Electoral College votes have been certified by Congress, but Trump is betting that the findings from highly partisan audits might somehow convince enough people of his bogus claim that fraud cost him the election.

A Yahoo News/YouGov poll released last week found that 64 percent of Republicans believe that the 2020 election was “rigged and stolen from Trump,” but the courts have not been as kind to the former president, almost unanimously turning back his legal challenges to the results (Trump’s lawyers won a single case in Pennsylvania that did not affect the final results).  Recounts and official audits of the votes in several states have also failed to overturn President Biden’s victory in both the popular vote and the Electoral College.

But now you’ve seen the conspiracists such as retired Army lieutenant general and former national security adviser Michael Flynn, and Trump attorney Sidney Powell, openly speak of reinstating Trump through a coup.

Powell said at a conference of QAnon believers in Dallas, “He can simply be reinstated.”

Flynn, when asked at the same confab why a Myanmar-style coup “can’t happen here,” replied: “No reason. I mean, it should happen here. No reason. That’s right,” causing the audience to erupt in applause.

[In a post later in the day on Parler, Flynn claimed the media had misrepresented the meaning of his comments.]

Rep. Liz Cheney (R-Wyo.) on Flynn’s call to action: “No American should advocate or support the violent overthrow of the United States.”

Rep. Peter Meijer (R-MI), Memorial Day, on the likes of Flynn, “waxing patriotic while salivating for civil war. Claiming they need to destroy the Republic in order to save it in the ultimate betrayal of oaths sworn.  Those treacherous snakes can go straight to hell.

“Today & always, remember the fallen and those who loved them.  Remember what it was they sacrificed for.  And remember the need to protect it from the greedy delusions of craven demagogues who’d burn it all down if it meant more power or profit for them.”

Rep. Adam Kinzinger (R-Ill.), responding to the Trump talk of a 2024 run, repeatedly jabbed him with the one word Trump reportedly hates… “loser.”

Trump uses the “L” word to describe Kinzinger and other critics in his own party, but the Illinois lawmaker has been unfazed, instead offering Trump a blunt reminder of the record.

“I’ve never lost an election. He has,” Kinzinger said.  “He’s the only loser in that mix, and we’re trying to grab onto him as if he’s somehow the ticket to the future, and he is instead obsessed with the fact that he lost again at something.”

“I’m sorry you’re a loser. But you lost.”

Jack O’Donnell, who ran a casino for Trump in the 1980s, told the New York Times last year: “The first thing he calls someone who has wronged him is a loser.  That’s his main attack word. The worst thing in his world would be to be a loser. To avoid being called a loser, he will do or say anything.”

George T. Conway III / Washington Post…on the GOP and Trump…

“(If) Republicans are worried about what would happen if the public learned more of the truth about Jan. 6, they have only themselves to blame.

“After all, they were the ones who acquitted Trump in the first impeachment trial and let him remain in office. They were the ones who stood mute before Jan. 6 as Trump propagated the ‘big lie’ after the election. They were the ones who left open the horrifying prospect of letting Trump hold office again.  They were the ones who continue to wish his wrongs away.

“They quiver in fear of the man who cost them the presidency and both houses of Congress.  As they continue to quake, the ‘big lies’ cancer upon democracy grows, with spurious election audits in pursuit of fantasies of fraud, and with some insanely claiming – reportedly including Trump himself – that he’ll be ‘reinstated’ in due course.

“Four years of Trump have led to the Republican Party becoming a threat to democracy, a declining sect dominated by crackpots, charlatans and cowards.  Of these, it’s the cowards, including the senators who killed last week’s legislation [Ed. on investigating Jan. 6], who bear the most blame.”

Trump will be back on stage Saturday at the North Carolina Republican Party’s convention, and one thing will be on his mind – trashing Republican incumbents who turned on him by backing their challengers in 2022 primaries.

One of his other initial rallies will be held in Ohio for Max Miller, a former White House aide who’s challenging Republican Anthony Gonzalez, one of 10 House incumbents who voted to impeach Trump.

Lastly, former Vice President Mike Pence on Thursday said he’s spoken “many times” with Donald Trump since they left office and that they don’t “see eye to eye” on the events of Jan. 6. But he said Republicans “must move forward united” and focus on opposing President Biden’s agenda.

“As I said that day, Jan. 6 was a dark day in the history of the United States Capitol.  But thanks to the swift action of the Capitol Police and federal law enforcement, violence was quelled, the Capitol was secured and that same day we reconvened the Congress and did our duty under the Constitution and the laws of the United States,” Pence said in a speech to the Hillsborough County Republicans in Manchester, NH.

“You know, President Trump and I have spoken many times since we left office, and I don’t know if we’ll ever see eye to eye on that day. But I will always be proud of what we accomplished for the American people over the last four years,” Pence said.

But wait…there’s more!

Facebook Inc. suspended Trump from its platform until at least January 2023.  The social media giant’s independent oversight board in May upheld its block on Trump, which was enforced in the wake of the Jan. 6 riot at the Capitol over concerns that his posts were inciting violence.

However, the board ruled it was wrong to make the ban indefinite and gave it six months to determine a “proportionate response.”  Trump’s suspension was effective from the initial date in January and will only be reinstated if conditions permit, Facebook said in a blog post.

“Given the gravity of the circumstances that led to Mr. Trump’s suspension, we believe his actions constituted a severe violation of our rules which merit the highest penalty available under the new enforcement protocols,” Facebook said.

Also today, Europe and Britain launched formal antitrust investigations into whether Facebook misuses its vast trove of customer data.

The Pandemic

Two rival teams of exotic bat disease specialists in the Chinese city of Wuhan, where the coronavirus outbreak began, face renewed scrutiny as the theory that the virus may have leaked form a laboratory receives more serious consideration. The Wuhan Center for Disease Control and Prevention and the Wuhan Institute of Virology have been criticized for compromising safety as they pursue scientific discovery, though there remains no direct evidence linking either team to the outbreak.  Chinese officials continue to block the world’s ability to get answers about Covid-19’s origin as the subject remains both murky and politically explosive.

Dr. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, called on China to release the medical records of three people whose ailments might provide vital clues into whether Covid-19 first emerged as the result of a lab leak.

“I would like to see the medical records of the three people who are reported to have got sick in 2019.  Did they really get sick, and if so, what did they get sick with?”

Chinese scientists and officials have consistently rejected the lab leak hypothesis, saying the virus could have been circulating in other regions before it hit Wuhan and might have even entered China through imported frozen food shipments or wildlife trading.

Fauci continues to believe the virus was first transmitted to humans through animals, pointing out that even if the lab researchers did have Covid-19, they could have contracted the disease from the wider population.

But there is an extensive history of lab leaks, worldwide, and Fauci’s life has been made miserable by the release of scads of emails through the Freedom of Information Act.  The emails have raised questions on whether he backed Chinese denials of the lab theory.

In one email sent last April, an executive at a health charity thanked Dr. Fauci for publicly stating that scientific evidence does not support the lab-leak theory.

In an interview with CNN, Fauci said the email had been taken out of context by critics and he had an “open mind” about the origin of the virus.

Republican Senators such as Rand Paul and Tom Cotton have pounced, ditto right-wing media.

Editorial / Wall Street Journal

“Anthony Fauci’s email correspondence from the early days of the pandemic have ignited a spate of recriminations over masks and the doctor’s celebrity.  But what really matters is that some of the emails raise more questions about the origin of Covid-19.

“As director of the National Institute of Allergy and Infectious Diseases, Dr. Fauci cast doubt on the theory that Covid-19 came from a laboratory like the Wuhan institute of Virology (WIV). After ruling it out several times, he publicly said last month it is possible, as the hypothesis was getting a second look in media and academia.

“The emails…show that Dr. Fauci followed debates about Covid-19’s origin from the beginning. In early 2020, the immunologist Kristian G. Andersen wrote to him that the virus had some ‘unusual features’ hinting at manipulation in a lab setting.

“Mr. Andersen later published a paper rejecting the lab-theory for lack of evidence.  And Dr. Fauci began sharing articles arguing in favor of a natural origin while giving advice to scientists writing about the issue.  But conclusive proof of a zoonotic origin hasn’t emerged, and it’s reasonable to ask why Dr. Fauci was slow to accept the possibility of a lab leak.

“Of particular interest: From 2014-19, the National Institutes of Health sent $3.4 million to the WIV through the nonprofit EcoHealth Alliance.  ‘I just wanted to say a personal thankyou on behalf of our staff and collaborators, for publicly standing up and stating that the scientific evidence supports a natural origin,’ EcoHealth Alliance chief Peter Daszak gushed to Dr. Fauci in a partly redacted April 2020 email.  ‘Your comments are brave, and coming from your trusted voice, will help dispel the myths being spun around the virus’ origins.’

“The NIH money was spent on researching bat coronaviruses, and it’s likely the WIV conducted gain-of-function research to make them more deadly or infectious.  In a February 2020 email, Dr. Fauci sent his deputy Hugh Auchincloss a paper about gain-of-function research on coronaviruses.  ‘Read this paper,’ he ordered.  ‘You will have tasks today that must be done.’  His deputy commented on the paper and said they would ‘try to determine if we have any distant ties to this work abroad.’

“Dr. Fauci has since said his outfit didn’t fund gain-of-function research; the EcoHealth Alliance funding was meant to go to collecting samples.  But ‘I can’t guarantee everything that’s going on in the Wuhan lab, we can’t do that,’ Dr. Fauci said Wednesday, in an interview with NewsNation Now.

“Dr. Fauci also said this week that the emails ‘are really ripe to be taken out of context’ and that ‘you don’t really have the full context.’ That may be true.  But it’s all the more reason to investigate the U.S. links to WIV and gain-of-function research.  The issue relates to Covid’s origins but also to the future risks and benefits of such research.

“The current Congress doesn’t seem interested, but President Biden could help by establishing a fact-finding commission like the Robb-Silberman effort on intelligence failures before the Iraq war. This shouldn’t be a ‘Fire Fauci’ partisan exercise.  Understanding where the pandemic came from – and what officials knew and when they knew it – can teach valuable lessons and perhaps save lives.”

Remember, I’m the ‘wait 24 hours’ guy.  We have no hard evidence on the origin of the coronavirus, period.  No hard evidence on the ‘wet market’ theory, or the lab-leak hypothesis.

And China isn’t going to cooperate, period.

The only hope is for a whistleblower to come forward, with hard evidence, lab reports, documents.  If we were talking the United States, the odds of this occurring would be strong.

But, again, we’re talking China.  I have my own history with the place.  Enough said.

In the meantime, I’m not going to join the chorus ranting and raving over the lab-leak theory when nothing as yet can be proven.

Covid-19 death tolls, as of tonight….

World…3,727,128
USA…612,204
Brazil…470,968
India…344,101
Mexico…228,362
Peru…185,813
UK…127,823
Italy…126,415
Russia…123,037…Reuters says the real total is over 400,000! 425K.
France…109,916
Colombia…90,890
Germany…89,733
Iran…80,813
Argentina…80,411
Spain…80,196
Poland…74,101
South Africa…56,832
Indonesia…51,296
Ukraine…51,054
Turkey…47,976
Romania…30,612
Czechia…30,142
Hungary…29,818
Chile…29,696
Canada…25,679
Belgium…24,995
Philippines…21,537
Pakistan…21,105

Source: worldometers.info

U.S. daily death tolls…Sun. 124; Mon. 154; Tues. 300; Wed. 514; Thurs. 574; Fri. 513.

Covid Bytes

--The seven-day average for newly reported deaths fell to 432 on Thursday, according to data from Johns Hopkins.  The figure hasn’t been this low since late March 2020, in the early days of the pandemic.

--President Biden plans to allocate 75% of unused Covid-19 vaccines through the UN-backed COVAX global vaccine sharing program, the White House announced Thursday.

The White House unveiled the allocation for sharing the first 25 million doses with the world. The U.S. has said it plans to share 80 million vaccine doses globally by the end of June.  The administration says 25% will be kept in reserve for emergencies and for the U.S. to share directly with allies and partners.

“As long as this pandemic is raging anywhere in the world, the American people will still be vulnerable,” Biden said in a statement.  “And the United States is committed to bringing the same urgency to international vaccination efforts that we have demonstrated at home.”

Of the first tranche of 25 million doses, the White House says about 19 million will go to COVAX, with approximately 6 million for South and Central America, 7 million for Asia, and 5 million for Africa.

The remaining 6 million will be directed by the White House to U.S. allies and partners, including Mexico, Canada, and South Korea, as well as for United Nations frontline workers.

This effort is a pittance.  We should be doing far more, and I agree with Republicans who say we are missing a golden opportunity to show off our status as the world leader, not China, which has been far more aggressive on this front (albeit with their inferior product).

--South America continues to suffer mightily from the coronavirus.  Uruguay, Argentina, Colombia and Paraguay have all ranked in the top 10 in cases per 100,000 residents over the past week.

The Copa America football tournament, slated to be held in Argentina, is now going to take place in Brazil this month, which would mean relocating the competition from one South American coronavirus hotspot to another.

The tournament features many of the greatest players in the soccer world, with Argentines Lionel Messi and Sergio Aguero, Brazilian Neymar and Uruguay’s Luis Suarez among those expected to participate.

According to a Reuters tally from a few days ago, Brazil has reported 204 coronavirus infections per 100,000 people in the last seven days, compared to 484 per 100,000 in Argentina.

Last weekend, Brazilians staged protests against President Jair Bolsonaro’s handling of the pandemic in at least 16 cities across the country, carrying signs such as “Out with Bolsonaro” and “Impeachment Now.” 

--Peru has more than doubled its Covid death toll following a review, making it the country with the world’s highest death rate per capita, according to Johns Hopkins University data.

The official death toll is now more than 180,000, up from 69,342, in a country of about 33 million people.

Prime Minister Violeta Bermudez told reporters that the number was increased on the advice of Peruvian and international experts.  This was in line with so-called excess deaths figures.

Excess deaths are a measure of how many more people are dying than would be expected based on the previous few years.

“We think it is our duty to make public this updated information,” Ms. Bermudez said.

This weekend, Peru is holding a presidential run-off election between leftist Pedro Castillo and right-wing candidate Keiko Fujimori.

--Authorities in Vietnam have detected a new coronavirus variant that is a combination of the Indian and UK Covid-19 variants and spreads quickly by air, the health minister said last weekend.  The country has been dealing with a spike in cases to new highs.  Health Minister Nguyen Thanh Long said in a statement that the new variant “is very dangerous.”

--Bahrain is the latest country to see a surge of infections coincide with its rollout of the Chinese-made Sinopharm vaccine, damaging hopes for the product’s efficacy.  Weeks after the World Health Organization granted the vaccine emergency-use approval, Bahrain decided to offer Pfizer/BioNTech doses to certain people who had already been fully vaccinated with Sinopharm.  Although nearly 50 percent of the country is vaccinated, the nation is experiencing its worst surge of cases yet.

--Anheuser-Busch says that if the White House reaches its goal of getting 70% of American adults at least partially vaccinated by July 4, it will give away a complimentary brew to adults over 21.

People can enter to receive a free beer on the website MyCooler.com/Beer by uploading a picture of themselves at their favorite place to grab a beer.

Participants will receive a $5 virtual debit card they can use to purchase one Anheuser-Busch product.

But I drink Coors Light.

Wall Street and the Economy

The Organization for Economic Cooperation and Development said on Monday that the global economy is expected to recover from the coronavirus pandemic faster than expected this year, as vaccinations in advanced economies and an enormous fiscal stimulus package in the United States unleash pent-up business activity and job creation.

The OECD sharply raised its forecast for global growth to 5.8 percent in 2021, up from a 4.2 percent projection in December.  It said the pace of expansion would cool to 4.5 percent in 2022, as government support programs unwind.

The OECD estimates growth in the U.S. this year to be 6.9 percent; in China, 8.5 percent; in Japan, 2.6 percent; in the euro area, 4.3 percent; and in Britain, 7.2 percent.

Separately, the OECD said consumer prices in its 36 members, which are mostly rich countries, were 3.3% higher than in April 2020. That was the largest increase since October 2008.

But much of the inflation recorded by the organization in April came from what are known as base effects.  The prices of many commodities fell sharply as large parts of the global economy were placed in suspended animation in April 2020, so prices a year later seem higher than they are relative to the average over recent years.

Wednesday, the Federal Reserve issued its “Beige Book” report on regional activity and the economy continues to pick up speed, but businesses told the Fed that ongoing supply-chain disruptions and an acute labor shortage have made it difficult for them to meet demand and have caused them to raise prices.

And this week’s data backed up the OECD and the Fed’s outlooks.

The May ISM reading on manufacturing was a robust 61.2 (50 the dividing line between growth and contraction), with the service sector at 64.0, an all-time high for this data series going back to 1997.

April factory orders were a disappointing -0.6%.

And then we had today’s nonfarm payroll report for May, with the economy generating 559,000 new jobs, less than forecast, but still robust, the unemployment rate falling to 5.8%.  U6, the underemployment rate, came in at 10.2%, down from a prior 10.4%.

Average hourly earnings were up a solid 0.5% over April, but just 2.0% year-over-year.

April’s jobs number was revised up to 278,000 from 266,000.

292,000 of the new jobs in May were in the leisure and hospitality sectors.

Earlier, weekly jobless claims came in at 385,000, the lowest figure of the pandemic.  They averaged 220,000 weekly prior to Covid.

But the economy is still 7.6 million jobs shy overall vs. pre-pandemic levels, even as job postings in late May were nearly 26% above last year’s levels before the economy shutdown.

Despite May’s increase, as noted below, many in the hospitality and leisure sector have either not been rehired, have found work in other industries, are home taking care of their child, or content with still significant enhanced unemployment benefits, though if your state hasn’t already curtailed these benefits, they go away nationally in September, which is why some economists believe the jobs crisis in the service sector will take care of itself.  Plus, most schools and daycare centers will fully reopen by the fall, allowing parents to return to work, and with vaccines widely available, more Americans could feel comfortable working outside their homes.

The Atlanta Fed’s GDPNow barometer for second-quarter growth sits at 10.3%. The Street consensus is somewhere around 9%.

On the China front, President Biden signed an executive order on Thursday that bans U.S. entities from investing in dozens of Chinese companies with alleged ties to defense or surveillance technology sectors, a move his administration says expands the scope of a legally flawed Trump-era order.

The Treasury Department will enforce and update on a “rolling basis” the new list of about 59 companies, which bars buying or selling publicly traded securities in target companies, and replaces an earlier list from the Department of Defense, senior administration officials told reporters.

The order prevents U.S. investment from supporting the Chinese military-industrial complex, as well as military intelligence, and security research and development programs, Biden said in the order.

“In addition, I find that the use of Chinese surveillance technology outside the PRC and the development or use of Chinese surveillance technology to facilitate repression or serious human rights abuse constitute unusual and extraordinary threats,” Biden said, using the acronym for the People’s Republic of China.

Major Chinese firms included on the previous Defense Department list were also placed on the updated list, including Aviation Industry Corp. of China, China Mobile Communications Group, China National Offshore Oil Corp., Huawei Technologies Ltd. and Semiconductor Manufacturing International Corp.  SMIC is key to China’s national drive to boost its domestic chip sector.

Biden’s Indo-Pacific policy coordinator, Kurt Campbell, said last month that a period of engagement with China had come to an end and that the dominant paradigm in bilateral ties going forward would be one of competition.

Earlier, China’s economic tsar, Liu He, held a virtual meeting with Treasury Secretary Janet Yellen on Wednesday, days after Liu’s first conversation on trade issues with U.S. Trade Representative Katherine Tai, in a sign observers said indicated the need for economic policy coordination between the world’s two largest economies.

Both sides agreed China-U.S. economic relations were “very important,” and discussions included the macro-economic situation, as well as bilateral and multilateral cooperation “in an attitude of equality and mutual respect,” according to a brief statement by Xinhua.

The Treasury Department said in a brief statement that Yellen had discussed U.S. plans to “support a continued strong economic recovery and the importance of cooperation on areas that are in the U.S. interests,” while at the same time “frankly” talking about issues of concern.

Europe and Asia

We had May’s PMI figures for the eurozone this week, courtesy of IHS Markit, and the region is crushing it, a la the U.S.

The final eurozone composite index was 57.1, with manufacturing at 63.1 and the service sector at 55.2.

Germany: 64.4 mfg., 52.8 services
France: 59.4 mfg. (248-month high), 56.6 services
Italy: 62.3 mfg. (record high), 53.1 services
Spain: 59.4 mfg. (276-mo. high), 59.4 services
Ireland: 64.1 mfg. (record high), 62.1 services
Netherlands: 69.4 mfg. (record high)
Greece: 58.0 mfg. (253-mo. high)

UK: 65.6 mfg. (record high), 62.9 services

Chris Williamson / IHS Markit…from two commentaries of his…

“Eurozone manufacturing continues to grow at a rate unprecedented in almost 24 years of survey history, the PMI breaking new records for a third month in a row.  Surging output growth adds to signs that the economy is rebounding strongly in the second quarter….

“The eurozone’s vast service sector sprang back into life in May, commencing a solid recovery that looks likely to be sustained throughout the summer.

“Businesses reported the strongest surge in demand since the start of 2018 as Covid restrictions were eased and vaccine progress boosted confidence.

“After Covid fighting measures were tightened to the harshest for a year in April, restrictions eased considerably in May on average.  These measures are on course to moderate further at least until the autumn, assuming further significant Covid waves are avoided.  This should facilitate the further return to more normal business conditions as the summer proceeds.  Business optimism for the year ahead has consequently hit the highest for over 17 years.

“The service sector revival accompanies a booming manufacturing sector, meaning GDP should rise strongly in the second quarter.  With a survey record build-up of work-in-hand to be followed by the further loosening of Covid restrictions in the coming months, growth is likely to be even more impressive in the third quarter.

“A growing area of concern is capacity constraints, both in terms of supplier shortages and difficulties taking on new staff to meet the recent surge in demand. This is leading to a spike in price pressures, which should ease as supply conditions improve, but may remain an area of concern for some months, especially if labor shortages feed through to higher wages.”

Separately, the volume of retail trade in the eurozone for April fell 3.1% compared with March, though was up by 23.9% year-over-year.

The Euro area unemployment rate for April was 8.0%, down from March’s 8.1%, and up from 7.3% in April 2020.

Germany 4.4%, France 7.3%, Italy 10.7% (up from 7.4% a year earlier), Spain 15.4%, Ireland 5.8%, Netherlands 3.4%.

A flash estimate for May inflation in the eurozone was up to 2.0% vs. 1.3% in March, 1.6% in April.

Ex-food and energy, however, the inflation rate was 0.9%.

Brexit: Fed up with what it sees as the U.K.’s unwillingness to meet its obligations in Northern Ireland, the EU has set its sights on a meeting next week to settle differences.  European Commission Vice President Maros Sefcovic told the Financial Times he wants a “road map” to resolve trade issues. If the two sides can’t work out a solution, the dispute could end up at the European Court of Justice.

Relations are “really, really bad” between Northern Ireland’s Democratic Unionists Party and the Irish government due to the Northern Ireland Protocol contained within the Brexit agreement.  That’s according to the party’s newly elected leader Edwin Poots, who told RTE radio that people in Northern Ireland could be “starved” of medicines and food as a result.

Ireland’s Minister for Foreign Affairs Simon Coveney has warned that Britain’s lack of cooperation in implementing the Northern Ireland protocol is driving European capitals to push for a tougher response from the EC.

Turning to AsiaChina’s official government manufacturing PMI for May was 51.0, 55.2 for non-manufacturing, while the private Caixin manufacturing figure was 52.0, services 55.1.

In Japan, we had a slew of data.  The manufacturing PMI for May came in at 53.0, but the service sector reading was a poor 46.5 owing to renewed lockdowns in some parts.

April industrial production was up 15.4% year-on-year, but this is versus the pandemic lows of 2020, while retail sales rose in April, 12.0% Y/Y.

April household spending, a key measure, rose 0.1% month-over-month, 13% Y/Y.

South Korea’s manufacturing PMI was 53.7 for May, Taiwan’s was 62.0 vs. April’s 11-year high of 62.4. Still rapid improvement.

But back to Japan, the International Olympic Committee is adamant the Tokyo Olympics will begin as scheduled on July 23, followed by the Paralympic Games on August 24.  Polls continue to show the Japanese public is equally adamant that neither event should go ahead.

Public sentiment against the games has recently been accompanied by disquiet from local sponsors.  A research institute has also argued that while cancelling the games would cost Japan about $17.5 billion, the economic loss would still be smaller than the costs associated with a nationwide post-Olympics state of emergency.

To that end, the head of the Japan Doctors Union has suggested the Olympics might prompt the mutation of a new Covid variant.

A number of prefectures in Japan, including those in which Olympics events will take place, remain in a state of emergency, extended now to June 20.  And Japan’s vaccination rate remains one of the lowest in the developed world, at around five percent.

So the public has good reason to be concerned, though cases do seem to be ticking down amid renewed restrictions in major areas. 

Prime Minister Yoshihide Suga has said the decision to cancel the games lies ultimately and unilaterally with the IOC, which is comprised of immensely corrupt individuals looking to make a personal fortune, both monetarily and through lavish perks (my opinion, not necessarily Suga’s).

Street Bytes

--Stocks rose a second week in a row, third for Nasdaq, with the Dow and S&P 500 just shy of their all-time highs.  With the nonfarm payroll report disappointing for a second straight month, there’s no immediate pressure for the Fed to begin tightening its loose-money policies.  At the same time, more vaccines in arms means the reopening is intensifying.  My state of New Jersey today, for example, removed all indoor capacity restrictions.

On the week, the Dow added 0.7% to 34756, a mere 21 points from its closing high of 34777, while the S&P gained 0.6% to 4229, 3 points from its all-time mark.  Nasdaq, up 0.5%, still has a ways to go to set a record.

--U.S. Treasury Yields

6-mo. 0.03%  2-yr. 0.15%  10-yr. 1.56%  30-yr. 2.23%

With the less-than-expected labor report, the bond market was once again sanguine and the yield on the 10-year has now spent nine weeks in a narrow 1.56% to 1.66% trading range.

The Federal Reserve did say it would start to gradually offload its portfolio of exchange-traded funds that invest in corporate bonds on June 7, the first step in unwinding corporate bond holdings acquired during the pandemic, the New York Fed said on Thursday.  The Fed will start selling its corporate bond holdings later this summer and will provide additional details before those sales begin.

The central bank announced on Wednesday that it would begin to sell the modest corporate bond portfolio it built up last year through an emergency lending program launched to backstop credit markets at the height of the pandemic.

The Secondary Market Corporate Credit Facility ultimately saw little use, but Fed officials said establishing it helped to restore market confidence and keep credit flowing to households and businesses.

As of April 30, the facility only had about $13.8 billion of loans outstanding, including $8.6 billion of corporate bond ETF holdings and $5.2 billion of corporate bonds, according to Fed data.

--OPEC+ producers agreed on Tuesday to stick to the existing pace of gradually easing supply curbs through July, as they sought to balance expectations of a recovery in demand against a possible increase in Iranian supply.  The group decided in April to return 2.1 million barrels per day of supply to the market during May through July as it anticipated demand would rise despite high numbers of coronavirus cases in India.

Since that decision, oil prices have extended their rally and have now gained more than 40% this year, although the prospect of more crude from Iran, as talks on reviving its nuclear deal make some progress, has limited the upside.

West Texas Intermediate finished the week at $69.41 this week, the highest level since October 2018.

Saudi Energy Minister Prince Abdulaziz bin Salman said he saw a good recovery in demand in the United States and China.

“The vaccine rollout has gathered pace with around 1.8 billion vaccines administered around the world… This can only lead to further rebalancing of the global oil market,” he told an online news conference.

OPEC Secretary General Mohammad Barkindo said he did not expect higher Iranian oil supply to cause problems if and when Tehran reaches a nuclear deal with Western powers in return for an easing of oil sanctions.

Iran could boost production and exports by between 1.0 and 1.5 million bpd if sanctions are fully removed.  OPEC+ still forecasts a 6 million bpd jump in oil demand in 2021 as the world recovers from the pandemic.  OPEC+ had cut output by a record 9.7 million BPD last year as demand collapsed.

Meanwhile, non-OPEC+ output will grow 620,000 barrels a day, less than half the 1.3 million bpd it fell in 2020.  The supply growth forecast through the rest of this year “comes nowhere close to matching” the expected increase in demand, according to the International Energy Agency.

Beyond 2021, oil output is likely to rise in a handful of nations, including the U.S., Brazil, Canada and new oil-producer Guyana. But production will decline elsewhere, from the U.K. to Colombia, Malaysia and Argentina.

As non-OPEC+ production increases less than global oil demand, the cartel will be in control of the market, executives and traders said.  It’s a major break with the past, when oil companies responded to higher prices by rushing to invest again, boosting non-OPEC output and leaving the ministers led by Saudi Arabia’s bin Salman with a much more difficult balancing act.

--Separately, the Biden administration is set to suspend oil and gas leases in Alaska’s Arctic National Wildlife Refuge pending an environmental review.  The move reverses former President Trump’s decision to sell oil leases in the refuge to expand fossil fuel and mineral development.

Arctic tribal leaders have welcomed the move but Republicans are opposed.

In January, Trump pushed ahead with the sale for the rights to drill for oil on around 5% of the refuge, just days before his presidential term ended.

During his campaign, Biden pledged to protect the habitat.

“President Biden believes America’s national treasures are cultural and economic cornerstones of our country,” White House National Climate Advisor Gina McCarthy said in a statement.

“He is grateful for the prompt action by the Department of the Interior to suspend all leasing pending a review of decisions made in the last administration’s final days that could have changed the character of this special place forever,” she added.

--A Russian cyber-criminal group was behind a ransomware attack that has targeted the world’s largest meat processing company, the FBI has said.

The FBI said it was working to bring the REvil group to justice for the hack on JBS, after the cyber-breach over the weekend shut some JBS operations in the U.S., Canada and Australia.

REvil is one of the most prolific and profitable cyber-criminal groups in the world.

But JBS was resuming operations by Wednesday after the company said it had made “significant progress in resolving the cyberattack.”  The “vast majority” of the company’s beef, pork, poultry and prepared foods plants were reopening, after halting the cattle slaughter at all its U.S. plants on Tuesday. 

JBS sells beef and pork under the Swift brand, with retailers like Costco Wholesale Corp. carrying the pork loins and tenderloins.  JBS also owns most of chicken processor Pilgrim’s Pride Co.

One of the issues, like at the ports, as described below, is a dearth of workers at the slaughterhouses, many of which were hit hard by Covid-19, let alone coronavirus-related measures providing social distancing in the plants.

Last year, cattle and hogs backed up on U.S. farms and some animals were euthanized when meat plants were shut during Covid outbreaks among workers.

--Ocean freight fees are three to five times higher than the same period last year.  The cost of moving a 40-foot sea container from China to Dubai is normally less than $1,000, but it now costs about $5,000, as reported by the South China Morning Post.

It’s about the pandemic.  For shipping costs to return to pre-pandemic levels, global production will have to resume its normal patterns, with North America and Europe producing more of their own products and relying less on those made in Asia, especially China.

The sharp rise in export volumes from Asia and decline in shipments from the rest of the world has skewed global trade flows, causing bottlenecks at ports and throwing the flow of containers into disarray, driving up shipping prices in the process. 

Estimates for a return to normalcy have extended in recent weeks from later this year to early 2022.

Since the middle of last year, most shipping containers sent from Asia to North America and Europe have not been returned because of logistical disruptions and a lack of goods to stock them.  The container shortage in Asia was made worse by the Suez Canal blockage in March.

In the United States, greater spending on personal protection equipment and home electronics because of the pandemic caused containerized imports from Asia to jump by 31 percent in April from a year earlier, and 27.4 percent from April 2019, according to PIERS, a U.S. trade reporting service.

The thing is, vessel space in Asia will get even tighter now that American retailers are building up their inventories ahead of the peak Christmas holiday shopping season.

According to a German study, many of the containers are being returned to Asia empty because carriers are trying to maximize yields on shipments from the region, rather than wait for less lucrative loads going the other way.

In normal circumstances, the world’s current supply of containers is sufficient, but the uneven distribution brought on by the pandemic is creating the pricing volatility.

Get this, Chinese factories make more than 96 percent of the world’s dry cargo containers and 100 percent of temperature controlled containers, according to Drewry, a British maritime consulting company.

--Fresh signs are emerging that business travelers won’t be grounded much longer.

Some companies that learned to do without travel during the coronavirus pandemic said they are ready to get back on the road instead of defaulting to virtual meetings and conferences, but others are trying to determine which business trips are still needed.

An executive at American Airlines Group Inc. said 47 of the airline’s 50 largest corporate accounts have said they plan to resume traveling this year.

“They’re getting their offices opened, feeling comfortable with that as the first steps, and then travel comes after that,” chief customer officer Alison Taylor of American said.

Corporate trips remain 70% of more below pre-pandemic levels, according to airlines, which rely heavily on business travel for a huge share of their revenue.

United Airlines Holdings Inc. said the pace of business travel bookings had been picking up in recent weeks.

Investment bankers said they have raced to be first to visit clients in person again.  Industry trade shows are coming back to the Las Vegas Convention Center this month.  In a survey by the U.S. Census Bureau conducted in May, 35% of small-business owners said they expect to have travel expenses in the next six months, up from 31.5% in April and 26.5% in mid-February.

--Delta Air Lines said it now expects a pre-tax loss between $1 billion and $1.2 billion for the June quarter, versus a pre-tax loss in the range of $1 billion to $1.5 billion guided previously, according to a regulatory filing Thursday.

For Q2, Delta forecast adjusted total revenue between $6 billion and $6.2 billion, down 50% to 52% from the same quarter in 2019.

Additionally, the company said it is positioned to achieve 2019 revenue by 2023 on a “more cost-efficient cost structure.”

--After an increase in incidents involving unruly passengers, Southwest Airlines is delaying resumption of in-flight alcohol service.

The airline, which stopped serving beverages early in the pandemic and has been phasing them back in, was planning to resume selling alcohol this month on Hawaii flights and in July on other routes.

--TSA checkpoint travel numbers vs. 2019

6/3…69 percent of 2019
6/2…67
6/1…75
5/31…76
5/30…65
5/29…76
5/28…76…1,959,593…pandemic high
5/27…75

--General Motors Company is increasing deliveries in the U.S. and Canada due to strong consumer demand for Chevrolet, Buick, GMC and Cadillac automobiles, while also eyeing stronger first-half 2021 financials, it said Thursday.

The automaker said production of the Chevrolet Silverado HD and GMC Sierra HD full-size pickups will increase by about 1,000 per month beginning in mid-July, thanks to production line efficiencies at the Flint Assembly facility in Michigan.  It also said shipments of Chevrolet Colorado and GMC Canyon mid-size pickups made at the Wentzville Assembly in Missouri will increase by about 30,000 units from mid-May through the week of July 5.

Thanks to engineering that maximizes the use of chips, in addition to pulling ahead some projected semiconductor deliveries into the second quarter, GM now expects its first-half financial results to be “significantly better” than its previous guidance.  The company said in early May that it expected net income of about $3.5 billion for the six months ending June 30.

One of the prime reasons for the automotive chip shortage was a March 19 fire at a key Japanese factory that made such chips. Renesas, the company hit by the fire, said production is now back to 88% of what it was before the blaze.  With new equipment being installed, the company expects to resume full production by mid-June.

--Ford Motor Company said it sold 161,725 vehicles in May, up 4.1% from 155,327 vehicles sold in the same month last year.

Sales of sport utility vehicles rose 48.6% year on year while car and truck sales dropped 62.4% and 11.6%, respectively, according to the automaker.

Ford also said it sold 10,364 electric vehicles in May, a 184% increase from last year, buoyed by demand for the Mustang Mach-E, the F-150 PowerBoost, and electrified Escape.

“We have been receiving a massive number of reservations for our all-electric F-150 Lightning over the last two weeks – totaling over 70,000 trucks,” said Andrew Frick, vice president, Ford Sales for U.S. and Canada.

--Securities regulators told Tesla Inc. last year that CEO Elon Musk’s use of Twitter had violated a court-ordered policy requiring his tweets to be preapproved by company lawyers, according to records obtained by the Wall Street Journal.

Tesla and the SEC settled an enforcement action in 2018 alleging that Musk had committed fraud by tweeting about a potential buyout of his company.  Musk paid $20 million to settle that case – Tesla also paid $20 million – and agreed to have his public statements on social media overseen by Tesla lawyers.

In correspondence sent to Tesla in 2019 and 2020, the SEC said tweets Musk wrote about Tesla’s solar roof production volumes and its stock price hadn’t undergone the required preapproval by Tesla’s lawyers.

--The U.S. Supreme Court on Tuesday declined to hear Johnson & Johnson’s bid to overturn a $2.1 billion verdict against it in favor of women who said the company’s talc products, like baby powder, contain asbestos and can cause ovarian cancer.

Without comment, the justices turned away J&J’s appeal, leaving in place a Missouri state court ruling.

The lawsuit is one of many filed on behalf of thousands of women.  Other suits have claimed that the products caused mesothelioma.

“This was a victory not just for the amazing women and their families who we were privileged to represent, but a victory for justice,” Mark Lanier, the women’s lawyer, told the New York Post.  “This result is exactly what separates America from the rest of the world. This decision sends a clear message to the rich and powerful: You will be held to account when you cause grievous harm under our system of equal justice under law.”

I can’t help but add, Mr. Lanier is rather rich and powerful himself.

J&J appealed the jury verdict, and last year a Missouri appeals court rejected the company’s request to throw out the ruling but did reduce the verdict to about $2.1 billion because some of the women were from out of state.

A J&J spokesperson said in part: “The Supreme Court has many times said that its decision to deny hearing a case expresses no view on the merits whatsoever, and we continue to believe that our view of the law and the facts will ultimately prevail.”

--Amazon said Thursday it is planning to hire 1,000 professionals over the coming years as part of its so-called Amazon Returnship program

The program is aimed at helping people who have lost their jobs due to the pandemic or have been underemployed for at least a year to rejoin the workforce by restarting their careers at Amazon.  Positions that will be opened include those in operations finance, consumer payments, and search, the company said.

Under the program, individuals will have an initial 16-week paid working opportunity and focus on a specific project. After four months, they may move into full-time positions within the company, Amazon said.

--The tight labor market is impacting the plans to open new restaurants and supermarkets.  As the Journal reported, “Many food sellers are adding stores to capitalize on high consumer spending as Americans emerge from a year spent largely at home.  But grocers and restaurants say they are struggling to hire all the workers they want for these stores.  They are adding perks and bonuses to entice job seekers and in some cases delaying openings.”

Shake Shack Inc. said it is going to be difficult to open as many as 40 burger restaurants this year as planned.

--Related to the above, global food prices have jumped at their fastest monthly rate in over a decade, according to the United Nations.

The UN uses a broad index of global food costs, which have also climbed for 12 months in a row.

The UN Food and Agriculture Organization’s (FAO) food price index tracks prices around the world of a range of food including cereals, oilseeds, dairy products, meat and sugar.

On an annual basis food prices were up 39.7% in May – the biggest month-on-month gain since October 2010 – according to the index.

--The dry-cleaning business continues to face devastation after Covid-19 stalled demand for work and formal attire.

Dry cleaners lost about 80% of their revenue immediately after the pandemic began, according to the Drycleaning & Laundry Institute, a trade association.  With states reopening, dry cleaners have returned to anywhere from 40% to 60% of their pre-pandemic revenue.

Of the roughly 25,000 to 30,000 U.S. storefronts in the dry-cleaning industry, the institute estimates that up to 30% won’t survive.

--AMC Entertainment Holdings Inc. took advantage of a skyrocketing stock price last week to sell shares to a hedge fund for $230.5 million, the company disclosed Tuesday, which drove the stock higher still.

The hedge fund, New York-based Mudrick Capital Management LP, was a winner too.  It had paid a premium to Friday’s closing price but promptly turned around and sold for a profit, unloading all 8.5 million shares it received in the deal.

Last week, the company’s share climbed 116%.

AMC has been a favorite among individual investors on social-media platforms such as Reddit, and the stock was one of the original meme stocks that soared during a frenzied rally in January.

Mudrick Capital sold the shares it bought – its entire equity position in AMC – on the belief that the stock is overvalued, a source told the Wall Street Journal.  The fund never intended to hold a long-term position in the shares and has similarly sold positions in AMC before.  Mudrick does own AMC debt.

Well, Thursday, AMC said in a filing it had agreed to sell up to 11.55 million of its shares (the second share issue in three days) from time to time in an at-the-market program.

“Our current market prices reflect market and trading dynamics unrelated to our underlying business, or macro or industry fundamentals, and we do not know how long these dynamics will last,” AMC said in a statement.

A number of Wall Street analysts have said AMC is already heavily overvalued and many institutional traders have said they were steering clear of the stock.

“Under the circumstances, we caution you against investing in our Class A common stock, unless you are prepared to incur the risk of losing all or a substantial portion of your investment,” AMC added.

Operating over 1,500 theaters across the world and with a market capitalization of over $30 billion, each AMC theater could be worth nearly $20 million.

But with the stock price so high, the company is taking advantage of the opportunity to significantly shore up its balance sheet and raise some cash. In fact, $587 million by midday Thursday, and any concern among investors that their holdings would be watered down faded after AMC said it completed the program, the shares ending the day at $51.30.

The number of AMC shares in issue has hit 500 million+ from just 100 million at the end of last year.

While theater operators are bullish on the reopening, the fact is streaming is going to continue to rise.

--Billionaire investor William Ackman’s blank-check firm Pershing Square Tontine Holdings is nearing a deal with Universal Music Group that would value the world’s biggest music label at nearly $40 billion.  A deal of that size, if completed successfully, would mark the biggest-ever merger involving a so-called special purpose acquisition company (SPAC), similar in size to the $40-billion deal that ride-hailing giant Grab Holdings clinched in April.

There is no guarantee Universal and Pershing Square will finalize the deal and the talks can still fall apart.

--Zoom Video Communications reported better-than-expected results for its fiscal third quarter ended April 30.

Zoom has consistently produced huge, forecast-beating quarters throughout the pandemic – and did it again this time, although the report marks the videoconference company’s first quarter of slowing sequential growth in a year.

For the quarter, Zoom posted revenue of $956.2 million, up 191% from a year ago, and ahead of both the company’s guidance range of $900 million to $905 million, and the Street consensus.  Growth in each of the last three quarters was above 355%; so for this company, growth of nearly 200% represents a considerable slowdown, as Eric Savitz of Barron’s points out.

--Republican West Virginia Gov. Jim Justice confirmed he is personally liable for debt arranged by now-collapsed Greensill Capital, highlighting the pressure his family faces in turning around their sprawling coal-mining operations.

The outstanding loans are “a burden on our family beyond belief, and we’ll have to deal with it,” he said.  “It’s tough, it is really tough.”

The Wall Street Journal first reported on Monday that the loans total $700 million.

“We didn’t have one earthly clue,” Justice said of the troubles that would come from borrowing money from Greensill, the SoftBank Group Corp.-backed financial firm that filed for bankruptcy in March.

Justice said the loans “have always been personally guaranteed” and that he and his companies hadn’t done anything wrong.  Borrowers make personal guarantees on business loans to give lenders additional comfort in the case of default.

Greensill packaged the loans and sold them to investment funds managed by Credit Suisse Group AG.  The Swiss bank froze the funds in March and is in talks with the governor’s Bluestone Resources Inc. and other borrowers to recoup money to make investors whole.

Bluestone hadn’t expected to begin repaying the Greensill loans until 2023 at the earliest.  Justice and his family had been using the loans to rebuild Bluestone, after buying it back from a Russian company in 2015.

The governor’s wealth stems from dozens of coal companies, farms and other businesses he and his family oversee, including the famed Greenbrier resort in White Sulphur Springs, W.Va.

Foreign Affairs

Israel: As one Israeli reporter put it, “It seems like an eternity instead of only a month since Yair Lapid received the mandate from President Reuven Rivlin to form a coalition after Prime Minister Benjamin Netanyahu failed to do so.”

The country is no longer as it was on May 5.  Since then, the country experienced a traumatic 11-day war with Hamas that saw some 4,500 rockets launched from Gaza, with direct hits on population centers that resulted in fatalities and injuries, both physical and emotional.

But an 11th-hour announcement Wednesday of the formation of a “change” government brokered by Lapid, which will see Naftali Bennett become Israel’s first prime minister with only seven MKs, is the first tentative step at restoring a sense of equilibrium to a nation in turmoil.

Few in Israel wanted to see a fifth election, let alone another term for Bibi, but until this agreement there was a real possibility that’s where the country was headed.

At the same time, there is no guarantee the new government will last.  The agreement still needs to be approved by the Knesset, or parliament, in a vote that is expected to take place early next week.  Assuming it goes through, Lapid and a diverse array of partners that span the Israeli political spectrum will end Netanyahu’s record-setting but divisive 12-year rule.

Lapid said Wednesday night, “This government will work for all the citizens of Israel, those that voted for it and those that didn’t. It will do everything to unite Israeli society.”

Bennett is a self-made tech millionaire who dreams of annexing most of the occupied West Bank.  He has said that the creation of a Palestinian state would be suicide for Israel, citing security reasons.

But the standard-bearer of Israel’s religious right and staunch supporter of Jewish settlements says he is joining forces with his political opponents to save the country from political disaster.

The son of American immigrants, Bennett, 49, is a generation younger than his one-time mentor, Netanyahu, 71, and Israel’s longest-serving leader.

Bennett has had a long and often rocky relationship with Netanyahu, working between 2006 and 2008 as a senor aide before leaving on reported bad terms.

As for his settlement policy and annexation, as head of a so-called unity government that will include left-wing and centrist parties, while relying on support in parliament from Arab legislators, a first for Israel, following through on annexation will be politically unfeasible.

For his part, Netanyahu, desperate to remain in office while he fights corruption charges, is expected to do everything possible in the coming days to prevent the new coalition from taking power. If he fails, he will be pushed into the opposition.

Netanyahu has said the ‘unity’ government was a weak government that would harm Israel’s deterrence.

Iran: The largest warship in the Iranian navy caught fire and later sank Wednesday in the Gulf of Oman under unclear circumstances, various Iranian news agencies reported.

The Kharg serves as one of a few vessels in the Iranian navy capable of providing replenishment at sea for its other ships.  It also can lift heavy cargo and serve as a launch point for helicopters.

Iran’s navy typically handles patrols in the Gulf of Oman and the wider seas, while the country’s paramilitary Revolutionary Guard operates in the shallower waters of the Strait of Hormuz and the Persian Gulf.

The fire aboard the Kharg comes after a series of mysterious explosions that began in 2019 targeting ships in the Gulf of Oman.  The U.S. Navy later accused Iran of targeting the ships with limpet mines, timed explosives typically attached by divers to a vessel’s hull.

The sinking of the Kharg also marks the latest naval disaster for Iran.  In 2020 during an Iranian military training exercise, a missile mistakenly struck a naval vessel near the port of Jask, killing 19 sailors and wounding 15.  Also in 2018, an Iranian navy destroyer sank in the Caspian Sea.

Meanwhile, on the nuclear talks front, Iran’s Foreign Ministry said on Monday that Tehran and six world powers have made significant progress in reviving the 2015 accord but important issues still need to be resolved.

Iran and the P5+1 have been negotiating in Vienna since April to work out steps that Tehran and Washington must take on sanctions and nuclear activities to return to full compliance with the pact.

President Joe Biden has said Washington will return to the accord if Tehran first resumes compliance with its strict limits on uranium enrichment.  Only then could sanctions be lifted.

But Iran has been significantly breaching the 2015 agreement and the Iranians have failed to explain traces of uranium found at several undeclared sites, a report by the UN nuclear watchdog showed on Monday, possibly setting up a fresh diplomatic clash that could derail the talks.

International Atomic Energy Agency chief Rafael Grossi said this week: “After many months, Iran has not provided the necessary explanation for the presence of the nuclear material particles at any of the three locations where the Agency has conducted complementary accesses (inspections),” a report by Grossi to member states said.  It will now be up to Britain, France and Germany to decide whether to revive their push for a resolution criticizing Iran, which could undermine the wider negotiations.

China: The commander of the U.S. Pacific Air Forces has accused China of seeking to return to the era of vassal states, likening the Communist Party to Chinese emperors that demanded fealty from their neighbors.

During a conference call with Asia-based media, General Kenneth S. Wilsbach said on Friday it was “clear” Beijing aimed to be the sole superpower and expected other countries to “kowtow” to it.

“They don’t believe there can be multiple superpowers, they believe that there can only be one, and they want to return back to the glory days of [imperial] China where everybody else was a vassal state and everybody [kowtowed] to the emperor,” Wilsbach said.

“And the emperor now is the Chinese Communist Party.”

Wilsback, who was promoted to the rank of four-star general last year, said Beijing’s militarization of the South China Sea and other aggressive actions had fueled distrust of its intentions across the world, pointing to recent moves by Britain, France and Germany to deploy warships to the region.

Beijing lays claim to about 90 percent of the South China Sea, which carries about one-third of global maritime trade and is the subject of overlapping disputes involving Southeast Asian counter-claimants and Taiwan.

Wilsbach said the region is looking at China’s activities and trust in them “is extremely low.”

“All of this combined mistrust between us and the allies and partners is driving us to know what China is up to militarily because we don’t want any surprises.”

Separately, today, June 4, is the anniversary of the 1989 Tiananmen Square massacre and normally there would be a large vigil in Hong Kong.  But this is the second straight year Chinese authorities, now firmly in control, are prohibiting gatherings and thousands of police are patrolling the city’s streets to prevent any kind of commemoration.  So much for Hong Kong’s long-cherished freedoms of speech and assembly, as Beijing brings down its iron fist on society.

June 4 commemorations are banned in mainland China.

Finally, China’s ruling Communist Party will ease birth limits to allow all couples to have three children instead of two to cope with the rapid rise in the average age of its population, a state news agency said Monday.

The ruling party has enforced birth limits since 1980 to restrain population growth but worries the number of working-age people is falling too fast while the share over age 65 is rising, adding to strains on the economy and society.

A meeting Monday of the party’s Politburo decided “China will introduce major policies and measures to actively deal with the aging population,” the Xinhua News Agency said.

Party leaders “pointed out that further optimizing the fertility policy, implementing the policy of one couple can have three children and supporting measures are conducive to improving China’s population structure,” the report said.

China’s population of 1.4 billion already was expected to peak later this decade and start to decline.  Census data released May 11 suggest that is happening faster than expected, straining underfunded pension and health systems and cutting the number of future workers available to support a growing retiree group.

Restrictions that limited most couples to one child were eased in 2015 to allow all to have two. But after a brief rise the next year, births declined.  Couples say they are put off by the cost of having children, disruption to jobs and the need to look after their own parents.

The share of working-age people 15 to 59 in the population fell to 63.3% last year from 70.1% a decade earlier, according to the census data.  The group aged 65 and older grew to 13.5% from 8.9%.

Russia:  A senior Russian security official said on Monday Moscow would be ready to use force to stop what he described as “unfriendly” actions by other countries, the Interfax news agency reported. The comments by Nikolai Patrushev, the secretary of Russia’s Security Council, came ahead of a summit between Presidents Vladimir Putin and Joe Biden in Geneva.

Needless to say, Putin and Biden have a lot to discuss, leading off with the cyberattacks on U.S. interests.

Meanwhile, Air France canceled flights to Moscow after Russian authorities failed to approve flight plans that avoid Belarus airspace, amid outrage over the forced landing of a Ryanair jet enroute to Lithuania from Greece on May 23 and the arrest of a dissident journalist on board.

That dissident, Roman Protasevich, 26, was shown in a tearful appearance on state TV today, praising Belarusian President Alexander Lukashenko and admitted attempting to topple him.

It was a hostage video, pure and simple, and when Protasevich held up his wrists to hide his tears, marks were visible on them.  He’s clearly been tortured.  It’s sickening. 

Lukashenko has but one supporter left among the world’s leaders, but it’s a key one, Vladimir Putin.   

Canada: The remains of 215 children, some as young as 3 years old, have been found buried on the site of what was once Canada’s largest indigenous residential school – one of the institutions that held children taken from families across the nation.

The remains were confirmed last weekend with the help of ground-penetrating radar.  More bodies may be found because there are more areas to search on the school grounds.

From the 19th century until the 1970s, more than 150,000 First Nations children were required to attend state-funded Christian schools as part of a program to assimilate them into Canadian society. They were forced to convert to Christianity and not allowed to speak their native languages.  Many were beaten and verbally abused, and up to 6,000 are said to have died.

The Canadian government apologized in Parliament in 2008 and admitted that physical and sexual abuse in the schools was rampant.  Many students recall being beaten for speaking their native languages; they also lost touch with their parents and customs.

Indigenous leaders have cited that legacy of abuse and isolation as the root cause of epidemic rates of alcoholism and drug addiction on reservations.

Random Musings

--Presidential approval ratings…

Rasmussen: 49% approve of President Biden’s job performance, 49% disapprove (June 4).
Gallup: 54% approve, 40% disapprove; 54% of independents approve (May 3-18).

--The Justice Department revealed Wednesday that it had, during the Trump administration, secretly obtained the phone records of four New York Times reporters, marking the third time in recent weeks that federal law enforcement has disclosed using the aggressive and controversial tactic to sift through journalists’ data.

The Times reported Wednesday night that the Justice Department had informed the newspaper that it had seized the phone records of four of its reporters: Matt Apuzzo, Adam Goldman, Eric Lichtblau and Michael S. Schmidt.

Last month, the Justice Department made similar disclosures to the Washington Post and CNN that it had secretly obtained the records of those organizations’ journalists.

--Defense Secretary Lloyd Austin ripped Sen. Ted Cruz for accusing the Army of making a recruitment ad that paints soldiers as ‘pansies,’ saying America’s foes would seize on those comments.

China and Russia “would like to capitalize on talking points like that,” Austin said in an interview with CNN published on Memorial Day, adding that the U.S. military will never be “soft.”

“I will not lose one minute of sleep about what the Chinese leadership is saying or what Vladimir Putin is saying. What I will focus on, and what I am focused on is the defense of this nation, and making sure that we have what’s needed to be successful,” the defense secretary said.

Cruz earlier this month retweeted a video that compared a Russian military recruitment ad that showed musclebound men shooting rifles and jumping out of airplanes with an Army video focusing on a female soldier with “two sons.”

“Holy crap.  Perhaps a woke, emasculated military is not the best idea…,” the Texas Republican wrote on Twitter, saying the video makes soldiers look like “pansies.”

The animated Army ad told the story of Cpl. Emma Malonelord, who was raised by a lesbian couple, and said she joined the service because the U.S. defends gay rights.

It’s part of an ad campaign that tries to “shatter” military stereotypes by telling the true stories of soldiers.

--U.S. traffic deaths soared after coronavirus lockdowns ended in 2020, hitting the highest yearly total since 2007 as more Americans engaged in unsafe behavior on U.S. roads, the National Highway Traffic Safety Administration (NHTSA) said Thursday. For all of 2020, 38,680 people died on U.S. roads – up 7.2% or nearly 2,600 more than in 2019, even though Americans drove 13% fewer miles, preliminary data showed.

The fatality rate hit 1.37 deaths per 100 million miles, the highest figure since 2006.  In the second half of 2020, the number of traffic deaths was up more than 13%.

NHTSA said the main behaviors that drove this increase involved impaired driving, speeding and failure to wear seat belts.

Deaths involving motorists not wearing seat belts were up 15%, speeding related deaths jumped by 10% and fatal crashes involving alcohol rose 9%.

--This would freak you out.  An Air India flight bound for the United States was forced to return to New Delhi after a bat flew through the cabin, it was reported on Saturday.

Videos that went viral on Indian social sites showed crew and passengers reacting with shock and panic at finding the creature flying around in the Boeing 737.

The bat was spotted on board after about an hour in mid-air, the ANI news agency reported. The flight captain then decided to take the plane back to base.

Air India in its preliminary report said possibilities of “unwanted mammals” came from third party vehicles like those used for catering.

The passengers were eventually moved to another plane which landed in Newark with some delays.

--Eastern Australia is dealing with the worst mouse plague in living memory, with far-reaching consequences both in the fields and in rural communities.

As the New York Times’ Yan Zhuang reported:

“For what has been half a year but felt to many like an eternity, the rodents have chewed a swath through southern Queensland, New South Wales and northern Victoria, the flip side to the good fortune of the break in a once-a-century drought.

“But the mice are not just devouring crops, they’ve bitten people in their beds, dropped out of air-conditioning units and gnawed through appliances.  They’ve eaten the toes off chickens in their pens. They’ve been blamed as whole towns have lost phone reception and a house has burned down."

--F. Lee Bailey, who brought drama, swagger and cunning to the courtroom in representing O.J. Simpson, heiress Patty Hearst and the Boston Strangler suspect before his career ended in disbarment, died on Thursday at the age of 87.

Bailey was a giant in his profession, becoming famous with courtroom victories that included an acquittal for a figure in the My Lai massacre of the Vietnam War and a successful appeal for Sam Sheppard, a Cleveland doctor convicted of murdering his wife.  In his later years, however, he was living above a hair salon in Yarmouth, Maine, banned from practicing law and his fortune gone.

A former Marine Corps pilot, Bailey built a reputation for being an incisive, fast-thinking cross-examiner with a sharp memory, a flair for showmanship, deep knowledge of polygraph examinations and a hate-to-lose mentality.

“I can’t say no to a case if it has one of three qualities – professional challenge, notoriety or a big fee,” Bailey told the New York Times during his heyday.

But his cutthroat style and love of publicity made Bailey enemies among judges and fellow lawyers.

Bailey could not acquit himself of contempt of court in 1996 and spent 44 days in jail for failing to turn over stock and $700,000 that a Florida marijuana dealer had given him.  Prosecutors said the stock and money should have been forfeited.  Bailey said they were his payment from the drug dealer.  An agreement was reached in the case but Florida disbarred Bailey in 2001, saying he had engaged in “multiple counts of egregious misconduct, including offering false testimony.”  Massachusetts also disbarred him.

Bailey’s other notable loss was in his defense of Patty Heart.  He started her defense saying it was “not a difficult case” and tried to convince jurors that she had been brainwashed by her captors and coerced into wielding a gun during a San Francisco bank robbery two months later.  Hearst was convicted of bank robbery in 1976, spent two years in prison and accused Bailey of bungling the trial. 

Bailey was part of the legal “Dream Team” that cleared O.J. Simpson in the fatal stabbings of his former wife and her friend in a tumultuous trial, but he clashed with Robert Shapiro, who accused Bailey of undermining him, including planting unflattering stories in the media.  Bailey’s most dramatic moment in the Simpson trial came when he questioned Los Angeles police detective Mark Fuhrman, suggesting he was a racist and had planted a bloody glove to frame Simpson.  Neither was fully substantiated in court but served to weaken Fuhrman’s credibility.

--A soon-to-be-released government report on unexplained aerial phenomena finds no proof of extraterrestrial activity, but cannot provide a definitive explanation for scores of incidents in which strange objects have been spotted in the sky, officials said on Thursday.

The findings of the report, due to be provided to Congress by the director of national intelligence as soon as this month, will offer no firm conclusions about what the objects might be.

But the report, whose conclusions were first described by the New York Times, also does not rule out extraterrestrial activity.  There is no conclusive proof, either, that the objects are not the result of some Chinese or Russian secret program.  Bottom line, there should be real cause for concern.

---

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 $1894
Oil $69.41

Returns for the week 5/31-6/4

Dow Jones  +0.7%  [34756]
S&P 500  +0.6%  [4229]
S&P MidCap  +0.1%
Russell 2000  +0.8%
Nasdaq  +0.5%  [13814]

Returns for the period 1/1/21-6/4/21

Dow Jones  +13.6%
S&P 500  +12.6%
S&P MidCap  +18.3%
Russell 2000  +15.8%
Nasdaq  +7.2%

Bulls 51.5
Bears 16.8

Have a good week.  Get vaccinated if you haven’t as yet. 

Dr. Bortrum is still with us, but not for long.

Brian Trumbore

 



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Week in Review

06/05/2021

For the week 5/31-6/4

[Posted 9:00 PM ET, Friday]

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

Edition 1,155

My family is facing the imminent loss of a beloved figure and when the inevitable occurs, I’ll have an extensive tribute to the man.  It hasn’t been easy for your editor.  Little sleep, for one, waiting for a call in the middle of the night.

But I had to smile today, when a social worker from the facility where he is, called to talk about what it will be like for me, as I’ve been the one most responsible for his well-being these last few years.  She said, ‘You’re going to find you have a lot more free time, and that will be time for thinking of the loss, and you might suffer through bouts of depression.  I just hope you have a support system.’

I said, ‘Ligia, you don’t know me.  I work seven days a week.  It’s the only way I know how to cope.’

And so for now we move on….

FBI Director Christopher Wray, in an interview with the Wall Street Journal, said the agency was investigating about 100 different types of ransomware, many tracing back to hackers in Russia, and compared the spate of cyberattacks with the challenge posed by the Sept. 11, 2001, terrorist attacks.

“There are a lot of parallels, there’s a lot of importance, and a lot of focus by us on disruption and prevention,” Mr. Wray said.  “There’s a shared responsibility, not just across government agencies but across the private sector and even the average American.”

Wray’s comments come as senior Biden administration officials have characterized ransomware as an urgent national-security threat and said they are looking at ways to disrupt the criminal ecosystem that supports the booming industry.

This week, hackers held hostage the world’s largest meat processor, weeks after the operator of an essential pipeline bringing gasoline to parts of the East Coast paid $4.4 million to regain control of its operations and restore service.

“The scale of this problem is one that I think the country has to come to terms with,” Wray said.

In the interview, Wray singled out Russia as harboring many of the known users of ransomware.

“If the Russian government wants to show that it’s serious about this issue, there’s a lot of room for them to demonstrate some real progress that we’re not seeing right now,” Wray said.

An oil pipeline and a meat processor are one thing.  Taking out an entire electrical grid would be of an entirely different magnitude.  But to think that the Russians may have already installed malware into some of our operators’ systems, to be activated at a time of their choosing, would keep any government leader up at night.

Biden Agenda

--President Biden continued to talk with West Virginia Republican Sen. Shelley Moore Capito today on an infrastructure package, but late word has the president not satisfied as the Republicans nudge up their offer, but to nowhere near where Biden wants it, including the essential elements of the plan, even as he’s slashed about a $1 trillion from his original proposal.

Supposedly the two will speak again Monday, but now attention is beginning to focus on a bipartisan Senate plan (4 Republicans, 4 Democrats) that has been sitting on the shelf as Biden negotiates first with Capito. Whether the president will then turn to them, or just go it alone, is the big question.

--A restrictive voting bill in Texas that was on the verge of Republican Gov. Greg Abbott’s desk failed to pass Sunday night after Democrats walked out of the House chamber before a midnight deadline.  Abbott then swiftly said he would call a special session to try passing a voting bill again but did not say when.

Democrats criticized the bill’s restrictions, particularly a ban on 24-hour voting and drive-thru voting that was popular with nonwhite voters last year in Harris County, for disproportionately affecting people of color.

Many Texas Democrats argue that there has been next to zero fraud, thus rewriting the Election Code is totally unnecessary.

Opinion….

Editorial / Wall Street Journal

“As the Texas legislative session drew near its end Sunday, lawmakers appeared set to pass a bill overhauling the state’s elections, until Democrats did one final maneuver: They snuck out of the building.  ‘Members, take your key and leave the chamber discreetly,’ a Democratic leader in the state House told his caucus in a 10:35 p.m. text message.

“The extraordinary move deprived the House of a quorum, killing the bill for now, at the cost of undermining the legislative process.  But what do you expect after months of Democratic alarms about ‘voter suppression’?    President Biden on Saturday called the Texas plan ‘un-American,’ and ‘part of an assault on democracy.’  At least this time he didn’t say it’s worse than Jim Crow, which was the political bomb he lobbed at Georgia’s bill.

“The reality is more prosaic.  To start with the controversial, the 67-page bill would roll back Covid-19 innovations like Harris County’s drive-through voting and 24-hour voting. Those options were used disproportionately last year by black and Hispanic residents.  But when did emergency procedures amid a 100-year pandemic suddenly become the new baseline?  It’s hardly crazy to think polling-place shenanigans might be more likely at 3 a.m.

“The bill says that on the last Sunday of early voting, polling places may not open until 1 p.m.*  This is a political mistake, at minimum, in that it’s being spun as an attack on black churches that have a ‘souls to the polls’ tradition.  One lawmaker supporting the bill argued: ‘Those election workers want to go to church, too.’ But some people take care of their religious obligations on Saturday, and in any event Texas repealed most of its blue laws in 1985.  Lawmakers would be wise to drop this provision.

*Republicans said this was a typo in the bill and it will be earlier.  Laughable.

“Under the bill, Texas would still offer some two weeks of early voting. Mr. Biden’s beloved Delaware won’t have any early voting until 2022, when it will get 10 days. The Texas bill would also raise minimum hours.  In the final week, counties with 100,000 people must currently open their ‘main’ polling place 12 hours on weekdays and five hours on Sunday. That population threshold would drop to 30,000, and six hours would be mandated on Sunday.

“Mail ballots and applications would ask for a state ID number or the last four digits of a Social Security number. Georgia and Florida have passed similar measures, and the goal is to verify identity without having to do subjective signature analysis.  In Georgia’s 2018 elections, black voters accounted for 54% of the ballots rejected for signature or oath issues. The Texas bill says if ID numbers match, the voter’s signature would be ‘presumed’ valid.

“The bill would change the legal standard for proving fraud to ‘a preponderance of the evidence’ from ‘clear and convincing evidence.’  If the number of illegal votes matched the margin, courts could throw out a race, without showing that fraud changed the result.  Critics say this is a pander to Donald Trump, but Mr. Trump lost in 2020 under either standard.

“Whether the new rules are too lax is a judgment call: Imagine a race decided by 50 votes, with 51 illegal ballots detected. Did more slip through? Perhaps the best thing for public confidence would be to redo the election….

“The Texas bill isn’t perfect, but no election law is since the exercise involves balancing ballot access, election security, ease of administration, and so forth.  The point is that it’s hard to take seriously Mr. Biden’s narrative about an assault on democracy in a state that gives voters two weeks to cast a vote. Texas Gov. Greg Abbott said Sunday that the election bill will be added to the Legislature’s agenda for a coming special session.

“Look forward, then, to more overheated rhetoric from partisans like Mr. Biden.  But remember that his histrionics are intended to give political cover to Democrats in Congress who want to override 50 state election laws by jamming through H.R.1 on a partisan vote. That’s the real voting-law outrage.”

Editorial / Washington Post

“In seeking to ram through a big anti-voting bill in the middle of the night at the very end of their legislative session, Texas Republicans attempted what would have been the most odious anti-democratic act by a legislature this year.  Only a walkout by state Democrats late Sunday, as the legislature faced a midnight deadline to wrap up its session, prevented the bill’s passage in the state House.  And the threat is not yet ended….

“Texas Republicans should instead abandon a bill for which ignorance or malice is the only plausible explanation.  The legislation would make it a felony for an election official to offer a voter an unsolicited absentee ballot application. It would further restrict which people qualify to vote absentee, even though Texas already has irrationally restrictive standards.  It would eliminate safeguards meant to prevent election officials from mistakenly tossing absentee ballots based on dubious signature-matching issues.  It would crimp Sunday voting in a way that would make it difficult for Black churches to run ‘Souls to the Polls’ events.  It would crack down on anyone transporting more than two non-relatives to a polling place.  It would ban drive-through voting, temporary voting sites and 24-hour early voting.  It would make it dangerously easy for state judges to overturn election results.  And it would empower partisan poll watchers, encouraging them to hassle election officials and voters.

“It is obvious at whom these provisions are aimed: Houston’s Harris County, a populous, diverse metropolis trending increasingly Democratic.  Harris last year used many of the turnout-encouraging strategies that the bill would ban.  The new restrictions on absentee voting, on top of the severe limits the state already has, are a direct result of former president Donald Trump’s lie that the voting method is fatally fraud-prone – and the related fact that Democrats embraced mail-in balloting during the pandemic.

“There is no good argument for any of it.  Texas saw no major irregularities in the absentee or the in-person vote last year. The biggest problem was that state leaders refused to accommodate voters seeking to avoid close contact with strangers at polling places during the pandemic, fighting hard, for example, to deny them the opportunity to vote by mail.  In fact, no state saw substantial fraud, and there is no legitimate doubt about the results.  After a high-turnout, secure, fraud-free and smooth election, no reasonable person could conclude that voting needs to be harder to ensure election integrity.  High turnout should be celebrated – and expanded upon.  It is still too hard to vote, especially in Texas.

“Republicans are instead adding all sorts of needless restrictions, because they calculate that they will discourage more Democrats than Republicans from voting, and because they have cultivated among their base the poisonous lie that Democrats stole the 2020 vote, to the point that they must now legislate as though this fiction is real.

“Texas Republicans should not escape the opprobrium they are due.  Between now and the legislature’s special session, Texas leaders, businesses and ordinary citizens should demand that Republicans drop their anti-American bill.”

Ron Brownstein / The Atlantic

“Anxiety is growing among a broad range of civil-rights, democracy-reform, and liberal groups over whether Democrats are responding with enough urgency to the accelerating Republican efforts to both suppress voting and potentially overturn future Democratic election victories….

“White House officials dismiss the idea that Biden is insufficiently concerned about red states’ maneuvers, which have included reducing access to mail balloting and early voting, imposing new voter-identification requirements, purging voters from registration lists, limiting the use of ballot drop boxes, blocking state-court oversight of voting laws, and increasing Republican state officials’ authority to override the decisions of local election officials, many of whom are Democrats.  ‘I can assure people there is no one that worries more about the effect of these things on the 2024 election than the president, who will be running and who went through 2020,’ the senior White House official, who requested anonymity to discuss internal deliberations, told me….

“Still, it’s clear that the White House is operating at a more tempered level of concern than other Democrats about the threats to small-d democracy emerging in the aftermath of Donald Trump’s attacks on the 2020 election….

“The White House does see a risk in the possibility that Republicans – whether local election officials, GOP-controlled state legislatures, or a potential Republican majority in the U.S. House or Senate – will refuse to certify clear Democratic wins in the 2022 and 2024 elections.  The senior Democrat told me, ‘Given how things have developed since January 6, if the situation is not brought under some control and this isn’t countered effectively, then I think there is a significant risk’ that ‘Republican officials, unlike the ones we saw standing up to pressure in 2020, are going to decline to certify Democratic victories.’  If Republicans hold the House, Senate, or both after the 2024 election, that could allow Congress to try to install a GOP president even if clear evidence exists that the Democrat won.”

It's the increasing ability of state judges and officials to override the decisions of local election officials, not actual restrictions on voting, that has scared the hell out of me since the Georgia law was adopted, the principle of which is now being legislated in other states.  That will be our ruination as a democracy.

Remember, Donald Trump didn’t want the election certified and he needed to prevent that, thus Jan. 6.

--In an address at Arlington National Cemetery on Monday, President Biden honored American military service members who died in the line of duty.

“Democracy must be defended at all costs.  For democracy makes this all possible.  Democray.  That’s the soul of America.  And I believe it’s a soul worth fighting for, and so do you, a soul worth dying for.”

Biden said the nation’s soul was “animated by the perennial battle between our worst instinct, which we’ve seen of late, and our better angels. Between ‘me first’ and ‘We the people.’”

“The mission falls to each of us, each and every day. Democracy itself is in peril here at home and around the world,” Biden said.  “What we do now, how we honor the memory of the fallen, we determine whether democracy will endure.”

Which bring us to….

Trump Bytes

The other day, Donald Trump called into conservative commentator Dan Bongino’s radio show when he was asked whether he’s planning a comeback bid for the White House.  “We need you,” Bongino said.

“Well, I’ll you what,” Trump responded.  “We are going to make you very happy, and we’re going to do what’s right.”

It was a classic noncommittal answer from Trump, who for decades toyed with running for the presidency, but multiple reports this week said talk of a Trump run in 2024 has picked up steam.  Insiders report a shift in his tone, as Trump increasingly acts and talks like he plans to mount a run as he embarks on a summer of public appearances, beginning with a speech Saturday in North Carolina.

The interest in another run comes as a number of investigations close in on him, including the convening of the special grand jury to consider evidence in New York’s criminal investigation into his business dealings, including scrutiny of hush-money payments, property valuations and employee compensation.

Trump has slammed the probe as “purely political,” and those around him insist he isn’t concerned about potential legal exposure even as he suggests his political posture is evolving.  Just another classic Trump attempt at distraction.

Speaking of which, Trump has been consumed by efforts to undo last year’s election, advancing baseless falsehoods that it was stolen and obsessing over recounts and audits that he is convinced could overturn the results.

Trump, who would be 78 years old on Inauguration Day in 2025 – the same age as Joe Biden on his own Inauguration Day this year – and multiple Republicans are already making moves for runs of their own.  Former vice president Mike Pence visited New Hampshire on Thursday.

Trump craves attention and he’s receiving it again.  A recent Quinnipiac University national poll found that 66% of Republicans would like to see him run for reelection, even though there is no evidence that he has grown any more popular since losing the election by more than 7 million votes.

But as Trump advances his baseless conspiracy theories, Republican state legislators are pushing what experts say is an unprecedented number of bills aimed at restricting access to the ballot box that could affect future elections.  Republicans say the goal is to prevent voter fraud, Democrats contend the measures are aimed at undermining minority voting rights.

And this week, the New York Times’ Maggie Haberman tweeted that Trump has been telling confidants that he expects to be reinstated as president by August as a result of the ongoing election audits in states like Arizona and Georgia.

There is no constitutional or legal remedy to overturn the results of an election once the Electoral College votes have been certified by Congress, but Trump is betting that the findings from highly partisan audits might somehow convince enough people of his bogus claim that fraud cost him the election.

A Yahoo News/YouGov poll released last week found that 64 percent of Republicans believe that the 2020 election was “rigged and stolen from Trump,” but the courts have not been as kind to the former president, almost unanimously turning back his legal challenges to the results (Trump’s lawyers won a single case in Pennsylvania that did not affect the final results).  Recounts and official audits of the votes in several states have also failed to overturn President Biden’s victory in both the popular vote and the Electoral College.

But now you’ve seen the conspiracists such as retired Army lieutenant general and former national security adviser Michael Flynn, and Trump attorney Sidney Powell, openly speak of reinstating Trump through a coup.

Powell said at a conference of QAnon believers in Dallas, “He can simply be reinstated.”

Flynn, when asked at the same confab why a Myanmar-style coup “can’t happen here,” replied: “No reason. I mean, it should happen here. No reason. That’s right,” causing the audience to erupt in applause.

[In a post later in the day on Parler, Flynn claimed the media had misrepresented the meaning of his comments.]

Rep. Liz Cheney (R-Wyo.) on Flynn’s call to action: “No American should advocate or support the violent overthrow of the United States.”

Rep. Peter Meijer (R-MI), Memorial Day, on the likes of Flynn, “waxing patriotic while salivating for civil war. Claiming they need to destroy the Republic in order to save it in the ultimate betrayal of oaths sworn.  Those treacherous snakes can go straight to hell.

“Today & always, remember the fallen and those who loved them.  Remember what it was they sacrificed for.  And remember the need to protect it from the greedy delusions of craven demagogues who’d burn it all down if it meant more power or profit for them.”

Rep. Adam Kinzinger (R-Ill.), responding to the Trump talk of a 2024 run, repeatedly jabbed him with the one word Trump reportedly hates… “loser.”

Trump uses the “L” word to describe Kinzinger and other critics in his own party, but the Illinois lawmaker has been unfazed, instead offering Trump a blunt reminder of the record.

“I’ve never lost an election. He has,” Kinzinger said.  “He’s the only loser in that mix, and we’re trying to grab onto him as if he’s somehow the ticket to the future, and he is instead obsessed with the fact that he lost again at something.”

“I’m sorry you’re a loser. But you lost.”

Jack O’Donnell, who ran a casino for Trump in the 1980s, told the New York Times last year: “The first thing he calls someone who has wronged him is a loser.  That’s his main attack word. The worst thing in his world would be to be a loser. To avoid being called a loser, he will do or say anything.”

George T. Conway III / Washington Post…on the GOP and Trump…

“(If) Republicans are worried about what would happen if the public learned more of the truth about Jan. 6, they have only themselves to blame.

“After all, they were the ones who acquitted Trump in the first impeachment trial and let him remain in office. They were the ones who stood mute before Jan. 6 as Trump propagated the ‘big lie’ after the election. They were the ones who left open the horrifying prospect of letting Trump hold office again.  They were the ones who continue to wish his wrongs away.

“They quiver in fear of the man who cost them the presidency and both houses of Congress.  As they continue to quake, the ‘big lies’ cancer upon democracy grows, with spurious election audits in pursuit of fantasies of fraud, and with some insanely claiming – reportedly including Trump himself – that he’ll be ‘reinstated’ in due course.

“Four years of Trump have led to the Republican Party becoming a threat to democracy, a declining sect dominated by crackpots, charlatans and cowards.  Of these, it’s the cowards, including the senators who killed last week’s legislation [Ed. on investigating Jan. 6], who bear the most blame.”

Trump will be back on stage Saturday at the North Carolina Republican Party’s convention, and one thing will be on his mind – trashing Republican incumbents who turned on him by backing their challengers in 2022 primaries.

One of his other initial rallies will be held in Ohio for Max Miller, a former White House aide who’s challenging Republican Anthony Gonzalez, one of 10 House incumbents who voted to impeach Trump.

Lastly, former Vice President Mike Pence on Thursday said he’s spoken “many times” with Donald Trump since they left office and that they don’t “see eye to eye” on the events of Jan. 6. But he said Republicans “must move forward united” and focus on opposing President Biden’s agenda.

“As I said that day, Jan. 6 was a dark day in the history of the United States Capitol.  But thanks to the swift action of the Capitol Police and federal law enforcement, violence was quelled, the Capitol was secured and that same day we reconvened the Congress and did our duty under the Constitution and the laws of the United States,” Pence said in a speech to the Hillsborough County Republicans in Manchester, NH.

“You know, President Trump and I have spoken many times since we left office, and I don’t know if we’ll ever see eye to eye on that day. But I will always be proud of what we accomplished for the American people over the last four years,” Pence said.

But wait…there’s more!

Facebook Inc. suspended Trump from its platform until at least January 2023.  The social media giant’s independent oversight board in May upheld its block on Trump, which was enforced in the wake of the Jan. 6 riot at the Capitol over concerns that his posts were inciting violence.

However, the board ruled it was wrong to make the ban indefinite and gave it six months to determine a “proportionate response.”  Trump’s suspension was effective from the initial date in January and will only be reinstated if conditions permit, Facebook said in a blog post.

“Given the gravity of the circumstances that led to Mr. Trump’s suspension, we believe his actions constituted a severe violation of our rules which merit the highest penalty available under the new enforcement protocols,” Facebook said.

Also today, Europe and Britain launched formal antitrust investigations into whether Facebook misuses its vast trove of customer data.

The Pandemic

Two rival teams of exotic bat disease specialists in the Chinese city of Wuhan, where the coronavirus outbreak began, face renewed scrutiny as the theory that the virus may have leaked form a laboratory receives more serious consideration. The Wuhan Center for Disease Control and Prevention and the Wuhan Institute of Virology have been criticized for compromising safety as they pursue scientific discovery, though there remains no direct evidence linking either team to the outbreak.  Chinese officials continue to block the world’s ability to get answers about Covid-19’s origin as the subject remains both murky and politically explosive.

Dr. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, called on China to release the medical records of three people whose ailments might provide vital clues into whether Covid-19 first emerged as the result of a lab leak.

“I would like to see the medical records of the three people who are reported to have got sick in 2019.  Did they really get sick, and if so, what did they get sick with?”

Chinese scientists and officials have consistently rejected the lab leak hypothesis, saying the virus could have been circulating in other regions before it hit Wuhan and might have even entered China through imported frozen food shipments or wildlife trading.

Fauci continues to believe the virus was first transmitted to humans through animals, pointing out that even if the lab researchers did have Covid-19, they could have contracted the disease from the wider population.

But there is an extensive history of lab leaks, worldwide, and Fauci’s life has been made miserable by the release of scads of emails through the Freedom of Information Act.  The emails have raised questions on whether he backed Chinese denials of the lab theory.

In one email sent last April, an executive at a health charity thanked Dr. Fauci for publicly stating that scientific evidence does not support the lab-leak theory.

In an interview with CNN, Fauci said the email had been taken out of context by critics and he had an “open mind” about the origin of the virus.

Republican Senators such as Rand Paul and Tom Cotton have pounced, ditto right-wing media.

Editorial / Wall Street Journal

“Anthony Fauci’s email correspondence from the early days of the pandemic have ignited a spate of recriminations over masks and the doctor’s celebrity.  But what really matters is that some of the emails raise more questions about the origin of Covid-19.

“As director of the National Institute of Allergy and Infectious Diseases, Dr. Fauci cast doubt on the theory that Covid-19 came from a laboratory like the Wuhan institute of Virology (WIV). After ruling it out several times, he publicly said last month it is possible, as the hypothesis was getting a second look in media and academia.

“The emails…show that Dr. Fauci followed debates about Covid-19’s origin from the beginning. In early 2020, the immunologist Kristian G. Andersen wrote to him that the virus had some ‘unusual features’ hinting at manipulation in a lab setting.

“Mr. Andersen later published a paper rejecting the lab-theory for lack of evidence.  And Dr. Fauci began sharing articles arguing in favor of a natural origin while giving advice to scientists writing about the issue.  But conclusive proof of a zoonotic origin hasn’t emerged, and it’s reasonable to ask why Dr. Fauci was slow to accept the possibility of a lab leak.

“Of particular interest: From 2014-19, the National Institutes of Health sent $3.4 million to the WIV through the nonprofit EcoHealth Alliance.  ‘I just wanted to say a personal thankyou on behalf of our staff and collaborators, for publicly standing up and stating that the scientific evidence supports a natural origin,’ EcoHealth Alliance chief Peter Daszak gushed to Dr. Fauci in a partly redacted April 2020 email.  ‘Your comments are brave, and coming from your trusted voice, will help dispel the myths being spun around the virus’ origins.’

“The NIH money was spent on researching bat coronaviruses, and it’s likely the WIV conducted gain-of-function research to make them more deadly or infectious.  In a February 2020 email, Dr. Fauci sent his deputy Hugh Auchincloss a paper about gain-of-function research on coronaviruses.  ‘Read this paper,’ he ordered.  ‘You will have tasks today that must be done.’  His deputy commented on the paper and said they would ‘try to determine if we have any distant ties to this work abroad.’

“Dr. Fauci has since said his outfit didn’t fund gain-of-function research; the EcoHealth Alliance funding was meant to go to collecting samples.  But ‘I can’t guarantee everything that’s going on in the Wuhan lab, we can’t do that,’ Dr. Fauci said Wednesday, in an interview with NewsNation Now.

“Dr. Fauci also said this week that the emails ‘are really ripe to be taken out of context’ and that ‘you don’t really have the full context.’ That may be true.  But it’s all the more reason to investigate the U.S. links to WIV and gain-of-function research.  The issue relates to Covid’s origins but also to the future risks and benefits of such research.

“The current Congress doesn’t seem interested, but President Biden could help by establishing a fact-finding commission like the Robb-Silberman effort on intelligence failures before the Iraq war. This shouldn’t be a ‘Fire Fauci’ partisan exercise.  Understanding where the pandemic came from – and what officials knew and when they knew it – can teach valuable lessons and perhaps save lives.”

Remember, I’m the ‘wait 24 hours’ guy.  We have no hard evidence on the origin of the coronavirus, period.  No hard evidence on the ‘wet market’ theory, or the lab-leak hypothesis.

And China isn’t going to cooperate, period.

The only hope is for a whistleblower to come forward, with hard evidence, lab reports, documents.  If we were talking the United States, the odds of this occurring would be strong.

But, again, we’re talking China.  I have my own history with the place.  Enough said.

In the meantime, I’m not going to join the chorus ranting and raving over the lab-leak theory when nothing as yet can be proven.

Covid-19 death tolls, as of tonight….

World…3,727,128
USA…612,204
Brazil…470,968
India…344,101
Mexico…228,362
Peru…185,813
UK…127,823
Italy…126,415
Russia…123,037…Reuters says the real total is over 400,000! 425K.
France…109,916
Colombia…90,890
Germany…89,733
Iran…80,813
Argentina…80,411
Spain…80,196
Poland…74,101
South Africa…56,832
Indonesia…51,296
Ukraine…51,054
Turkey…47,976
Romania…30,612
Czechia…30,142
Hungary…29,818
Chile…29,696
Canada…25,679
Belgium…24,995
Philippines…21,537
Pakistan…21,105

Source: worldometers.info

U.S. daily death tolls…Sun. 124; Mon. 154; Tues. 300; Wed. 514; Thurs. 574; Fri. 513.

Covid Bytes

--The seven-day average for newly reported deaths fell to 432 on Thursday, according to data from Johns Hopkins.  The figure hasn’t been this low since late March 2020, in the early days of the pandemic.

--President Biden plans to allocate 75% of unused Covid-19 vaccines through the UN-backed COVAX global vaccine sharing program, the White House announced Thursday.

The White House unveiled the allocation for sharing the first 25 million doses with the world. The U.S. has said it plans to share 80 million vaccine doses globally by the end of June.  The administration says 25% will be kept in reserve for emergencies and for the U.S. to share directly with allies and partners.

“As long as this pandemic is raging anywhere in the world, the American people will still be vulnerable,” Biden said in a statement.  “And the United States is committed to bringing the same urgency to international vaccination efforts that we have demonstrated at home.”

Of the first tranche of 25 million doses, the White House says about 19 million will go to COVAX, with approximately 6 million for South and Central America, 7 million for Asia, and 5 million for Africa.

The remaining 6 million will be directed by the White House to U.S. allies and partners, including Mexico, Canada, and South Korea, as well as for United Nations frontline workers.

This effort is a pittance.  We should be doing far more, and I agree with Republicans who say we are missing a golden opportunity to show off our status as the world leader, not China, which has been far more aggressive on this front (albeit with their inferior product).

--South America continues to suffer mightily from the coronavirus.  Uruguay, Argentina, Colombia and Paraguay have all ranked in the top 10 in cases per 100,000 residents over the past week.

The Copa America football tournament, slated to be held in Argentina, is now going to take place in Brazil this month, which would mean relocating the competition from one South American coronavirus hotspot to another.

The tournament features many of the greatest players in the soccer world, with Argentines Lionel Messi and Sergio Aguero, Brazilian Neymar and Uruguay’s Luis Suarez among those expected to participate.

According to a Reuters tally from a few days ago, Brazil has reported 204 coronavirus infections per 100,000 people in the last seven days, compared to 484 per 100,000 in Argentina.

Last weekend, Brazilians staged protests against President Jair Bolsonaro’s handling of the pandemic in at least 16 cities across the country, carrying signs such as “Out with Bolsonaro” and “Impeachment Now.” 

--Peru has more than doubled its Covid death toll following a review, making it the country with the world’s highest death rate per capita, according to Johns Hopkins University data.

The official death toll is now more than 180,000, up from 69,342, in a country of about 33 million people.

Prime Minister Violeta Bermudez told reporters that the number was increased on the advice of Peruvian and international experts.  This was in line with so-called excess deaths figures.

Excess deaths are a measure of how many more people are dying than would be expected based on the previous few years.

“We think it is our duty to make public this updated information,” Ms. Bermudez said.

This weekend, Peru is holding a presidential run-off election between leftist Pedro Castillo and right-wing candidate Keiko Fujimori.

--Authorities in Vietnam have detected a new coronavirus variant that is a combination of the Indian and UK Covid-19 variants and spreads quickly by air, the health minister said last weekend.  The country has been dealing with a spike in cases to new highs.  Health Minister Nguyen Thanh Long said in a statement that the new variant “is very dangerous.”

--Bahrain is the latest country to see a surge of infections coincide with its rollout of the Chinese-made Sinopharm vaccine, damaging hopes for the product’s efficacy.  Weeks after the World Health Organization granted the vaccine emergency-use approval, Bahrain decided to offer Pfizer/BioNTech doses to certain people who had already been fully vaccinated with Sinopharm.  Although nearly 50 percent of the country is vaccinated, the nation is experiencing its worst surge of cases yet.

--Anheuser-Busch says that if the White House reaches its goal of getting 70% of American adults at least partially vaccinated by July 4, it will give away a complimentary brew to adults over 21.

People can enter to receive a free beer on the website MyCooler.com/Beer by uploading a picture of themselves at their favorite place to grab a beer.

Participants will receive a $5 virtual debit card they can use to purchase one Anheuser-Busch product.

But I drink Coors Light.

Wall Street and the Economy

The Organization for Economic Cooperation and Development said on Monday that the global economy is expected to recover from the coronavirus pandemic faster than expected this year, as vaccinations in advanced economies and an enormous fiscal stimulus package in the United States unleash pent-up business activity and job creation.

The OECD sharply raised its forecast for global growth to 5.8 percent in 2021, up from a 4.2 percent projection in December.  It said the pace of expansion would cool to 4.5 percent in 2022, as government support programs unwind.

The OECD estimates growth in the U.S. this year to be 6.9 percent; in China, 8.5 percent; in Japan, 2.6 percent; in the euro area, 4.3 percent; and in Britain, 7.2 percent.

Separately, the OECD said consumer prices in its 36 members, which are mostly rich countries, were 3.3% higher than in April 2020. That was the largest increase since October 2008.

But much of the inflation recorded by the organization in April came from what are known as base effects.  The prices of many commodities fell sharply as large parts of the global economy were placed in suspended animation in April 2020, so prices a year later seem higher than they are relative to the average over recent years.

Wednesday, the Federal Reserve issued its “Beige Book” report on regional activity and the economy continues to pick up speed, but businesses told the Fed that ongoing supply-chain disruptions and an acute labor shortage have made it difficult for them to meet demand and have caused them to raise prices.

And this week’s data backed up the OECD and the Fed’s outlooks.

The May ISM reading on manufacturing was a robust 61.2 (50 the dividing line between growth and contraction), with the service sector at 64.0, an all-time high for this data series going back to 1997.

April factory orders were a disappointing -0.6%.

And then we had today’s nonfarm payroll report for May, with the economy generating 559,000 new jobs, less than forecast, but still robust, the unemployment rate falling to 5.8%.  U6, the underemployment rate, came in at 10.2%, down from a prior 10.4%.

Average hourly earnings were up a solid 0.5% over April, but just 2.0% year-over-year.

April’s jobs number was revised up to 278,000 from 266,000.

292,000 of the new jobs in May were in the leisure and hospitality sectors.

Earlier, weekly jobless claims came in at 385,000, the lowest figure of the pandemic.  They averaged 220,000 weekly prior to Covid.

But the economy is still 7.6 million jobs shy overall vs. pre-pandemic levels, even as job postings in late May were nearly 26% above last year’s levels before the economy shutdown.

Despite May’s increase, as noted below, many in the hospitality and leisure sector have either not been rehired, have found work in other industries, are home taking care of their child, or content with still significant enhanced unemployment benefits, though if your state hasn’t already curtailed these benefits, they go away nationally in September, which is why some economists believe the jobs crisis in the service sector will take care of itself.  Plus, most schools and daycare centers will fully reopen by the fall, allowing parents to return to work, and with vaccines widely available, more Americans could feel comfortable working outside their homes.

The Atlanta Fed’s GDPNow barometer for second-quarter growth sits at 10.3%. The Street consensus is somewhere around 9%.

On the China front, President Biden signed an executive order on Thursday that bans U.S. entities from investing in dozens of Chinese companies with alleged ties to defense or surveillance technology sectors, a move his administration says expands the scope of a legally flawed Trump-era order.

The Treasury Department will enforce and update on a “rolling basis” the new list of about 59 companies, which bars buying or selling publicly traded securities in target companies, and replaces an earlier list from the Department of Defense, senior administration officials told reporters.

The order prevents U.S. investment from supporting the Chinese military-industrial complex, as well as military intelligence, and security research and development programs, Biden said in the order.

“In addition, I find that the use of Chinese surveillance technology outside the PRC and the development or use of Chinese surveillance technology to facilitate repression or serious human rights abuse constitute unusual and extraordinary threats,” Biden said, using the acronym for the People’s Republic of China.

Major Chinese firms included on the previous Defense Department list were also placed on the updated list, including Aviation Industry Corp. of China, China Mobile Communications Group, China National Offshore Oil Corp., Huawei Technologies Ltd. and Semiconductor Manufacturing International Corp.  SMIC is key to China’s national drive to boost its domestic chip sector.

Biden’s Indo-Pacific policy coordinator, Kurt Campbell, said last month that a period of engagement with China had come to an end and that the dominant paradigm in bilateral ties going forward would be one of competition.

Earlier, China’s economic tsar, Liu He, held a virtual meeting with Treasury Secretary Janet Yellen on Wednesday, days after Liu’s first conversation on trade issues with U.S. Trade Representative Katherine Tai, in a sign observers said indicated the need for economic policy coordination between the world’s two largest economies.

Both sides agreed China-U.S. economic relations were “very important,” and discussions included the macro-economic situation, as well as bilateral and multilateral cooperation “in an attitude of equality and mutual respect,” according to a brief statement by Xinhua.

The Treasury Department said in a brief statement that Yellen had discussed U.S. plans to “support a continued strong economic recovery and the importance of cooperation on areas that are in the U.S. interests,” while at the same time “frankly” talking about issues of concern.

Europe and Asia

We had May’s PMI figures for the eurozone this week, courtesy of IHS Markit, and the region is crushing it, a la the U.S.

The final eurozone composite index was 57.1, with manufacturing at 63.1 and the service sector at 55.2.

Germany: 64.4 mfg., 52.8 services
France: 59.4 mfg. (248-month high), 56.6 services
Italy: 62.3 mfg. (record high), 53.1 services
Spain: 59.4 mfg. (276-mo. high), 59.4 services
Ireland: 64.1 mfg. (record high), 62.1 services
Netherlands: 69.4 mfg. (record high)
Greece: 58.0 mfg. (253-mo. high)

UK: 65.6 mfg. (record high), 62.9 services

Chris Williamson / IHS Markit…from two commentaries of his…

“Eurozone manufacturing continues to grow at a rate unprecedented in almost 24 years of survey history, the PMI breaking new records for a third month in a row.  Surging output growth adds to signs that the economy is rebounding strongly in the second quarter….

“The eurozone’s vast service sector sprang back into life in May, commencing a solid recovery that looks likely to be sustained throughout the summer.

“Businesses reported the strongest surge in demand since the start of 2018 as Covid restrictions were eased and vaccine progress boosted confidence.

“After Covid fighting measures were tightened to the harshest for a year in April, restrictions eased considerably in May on average.  These measures are on course to moderate further at least until the autumn, assuming further significant Covid waves are avoided.  This should facilitate the further return to more normal business conditions as the summer proceeds.  Business optimism for the year ahead has consequently hit the highest for over 17 years.

“The service sector revival accompanies a booming manufacturing sector, meaning GDP should rise strongly in the second quarter.  With a survey record build-up of work-in-hand to be followed by the further loosening of Covid restrictions in the coming months, growth is likely to be even more impressive in the third quarter.

“A growing area of concern is capacity constraints, both in terms of supplier shortages and difficulties taking on new staff to meet the recent surge in demand. This is leading to a spike in price pressures, which should ease as supply conditions improve, but may remain an area of concern for some months, especially if labor shortages feed through to higher wages.”

Separately, the volume of retail trade in the eurozone for April fell 3.1% compared with March, though was up by 23.9% year-over-year.

The Euro area unemployment rate for April was 8.0%, down from March’s 8.1%, and up from 7.3% in April 2020.

Germany 4.4%, France 7.3%, Italy 10.7% (up from 7.4% a year earlier), Spain 15.4%, Ireland 5.8%, Netherlands 3.4%.

A flash estimate for May inflation in the eurozone was up to 2.0% vs. 1.3% in March, 1.6% in April.

Ex-food and energy, however, the inflation rate was 0.9%.

Brexit: Fed up with what it sees as the U.K.’s unwillingness to meet its obligations in Northern Ireland, the EU has set its sights on a meeting next week to settle differences.  European Commission Vice President Maros Sefcovic told the Financial Times he wants a “road map” to resolve trade issues. If the two sides can’t work out a solution, the dispute could end up at the European Court of Justice.

Relations are “really, really bad” between Northern Ireland’s Democratic Unionists Party and the Irish government due to the Northern Ireland Protocol contained within the Brexit agreement.  That’s according to the party’s newly elected leader Edwin Poots, who told RTE radio that people in Northern Ireland could be “starved” of medicines and food as a result.

Ireland’s Minister for Foreign Affairs Simon Coveney has warned that Britain’s lack of cooperation in implementing the Northern Ireland protocol is driving European capitals to push for a tougher response from the EC.

Turning to AsiaChina’s official government manufacturing PMI for May was 51.0, 55.2 for non-manufacturing, while the private Caixin manufacturing figure was 52.0, services 55.1.

In Japan, we had a slew of data.  The manufacturing PMI for May came in at 53.0, but the service sector reading was a poor 46.5 owing to renewed lockdowns in some parts.

April industrial production was up 15.4% year-on-year, but this is versus the pandemic lows of 2020, while retail sales rose in April, 12.0% Y/Y.

April household spending, a key measure, rose 0.1% month-over-month, 13% Y/Y.

South Korea’s manufacturing PMI was 53.7 for May, Taiwan’s was 62.0 vs. April’s 11-year high of 62.4. Still rapid improvement.

But back to Japan, the International Olympic Committee is adamant the Tokyo Olympics will begin as scheduled on July 23, followed by the Paralympic Games on August 24.  Polls continue to show the Japanese public is equally adamant that neither event should go ahead.

Public sentiment against the games has recently been accompanied by disquiet from local sponsors.  A research institute has also argued that while cancelling the games would cost Japan about $17.5 billion, the economic loss would still be smaller than the costs associated with a nationwide post-Olympics state of emergency.

To that end, the head of the Japan Doctors Union has suggested the Olympics might prompt the mutation of a new Covid variant.

A number of prefectures in Japan, including those in which Olympics events will take place, remain in a state of emergency, extended now to June 20.  And Japan’s vaccination rate remains one of the lowest in the developed world, at around five percent.

So the public has good reason to be concerned, though cases do seem to be ticking down amid renewed restrictions in major areas. 

Prime Minister Yoshihide Suga has said the decision to cancel the games lies ultimately and unilaterally with the IOC, which is comprised of immensely corrupt individuals looking to make a personal fortune, both monetarily and through lavish perks (my opinion, not necessarily Suga’s).

Street Bytes

--Stocks rose a second week in a row, third for Nasdaq, with the Dow and S&P 500 just shy of their all-time highs.  With the nonfarm payroll report disappointing for a second straight month, there’s no immediate pressure for the Fed to begin tightening its loose-money policies.  At the same time, more vaccines in arms means the reopening is intensifying.  My state of New Jersey today, for example, removed all indoor capacity restrictions.

On the week, the Dow added 0.7% to 34756, a mere 21 points from its closing high of 34777, while the S&P gained 0.6% to 4229, 3 points from its all-time mark.  Nasdaq, up 0.5%, still has a ways to go to set a record.

--U.S. Treasury Yields

6-mo. 0.03%  2-yr. 0.15%  10-yr. 1.56%  30-yr. 2.23%

With the less-than-expected labor report, the bond market was once again sanguine and the yield on the 10-year has now spent nine weeks in a narrow 1.56% to 1.66% trading range.

The Federal Reserve did say it would start to gradually offload its portfolio of exchange-traded funds that invest in corporate bonds on June 7, the first step in unwinding corporate bond holdings acquired during the pandemic, the New York Fed said on Thursday.  The Fed will start selling its corporate bond holdings later this summer and will provide additional details before those sales begin.

The central bank announced on Wednesday that it would begin to sell the modest corporate bond portfolio it built up last year through an emergency lending program launched to backstop credit markets at the height of the pandemic.

The Secondary Market Corporate Credit Facility ultimately saw little use, but Fed officials said establishing it helped to restore market confidence and keep credit flowing to households and businesses.

As of April 30, the facility only had about $13.8 billion of loans outstanding, including $8.6 billion of corporate bond ETF holdings and $5.2 billion of corporate bonds, according to Fed data.

--OPEC+ producers agreed on Tuesday to stick to the existing pace of gradually easing supply curbs through July, as they sought to balance expectations of a recovery in demand against a possible increase in Iranian supply.  The group decided in April to return 2.1 million barrels per day of supply to the market during May through July as it anticipated demand would rise despite high numbers of coronavirus cases in India.

Since that decision, oil prices have extended their rally and have now gained more than 40% this year, although the prospect of more crude from Iran, as talks on reviving its nuclear deal make some progress, has limited the upside.

West Texas Intermediate finished the week at $69.41 this week, the highest level since October 2018.

Saudi Energy Minister Prince Abdulaziz bin Salman said he saw a good recovery in demand in the United States and China.

“The vaccine rollout has gathered pace with around 1.8 billion vaccines administered around the world… This can only lead to further rebalancing of the global oil market,” he told an online news conference.

OPEC Secretary General Mohammad Barkindo said he did not expect higher Iranian oil supply to cause problems if and when Tehran reaches a nuclear deal with Western powers in return for an easing of oil sanctions.

Iran could boost production and exports by between 1.0 and 1.5 million bpd if sanctions are fully removed.  OPEC+ still forecasts a 6 million bpd jump in oil demand in 2021 as the world recovers from the pandemic.  OPEC+ had cut output by a record 9.7 million BPD last year as demand collapsed.

Meanwhile, non-OPEC+ output will grow 620,000 barrels a day, less than half the 1.3 million bpd it fell in 2020.  The supply growth forecast through the rest of this year “comes nowhere close to matching” the expected increase in demand, according to the International Energy Agency.

Beyond 2021, oil output is likely to rise in a handful of nations, including the U.S., Brazil, Canada and new oil-producer Guyana. But production will decline elsewhere, from the U.K. to Colombia, Malaysia and Argentina.

As non-OPEC+ production increases less than global oil demand, the cartel will be in control of the market, executives and traders said.  It’s a major break with the past, when oil companies responded to higher prices by rushing to invest again, boosting non-OPEC output and leaving the ministers led by Saudi Arabia’s bin Salman with a much more difficult balancing act.

--Separately, the Biden administration is set to suspend oil and gas leases in Alaska’s Arctic National Wildlife Refuge pending an environmental review.  The move reverses former President Trump’s decision to sell oil leases in the refuge to expand fossil fuel and mineral development.

Arctic tribal leaders have welcomed the move but Republicans are opposed.

In January, Trump pushed ahead with the sale for the rights to drill for oil on around 5% of the refuge, just days before his presidential term ended.

During his campaign, Biden pledged to protect the habitat.

“President Biden believes America’s national treasures are cultural and economic cornerstones of our country,” White House National Climate Advisor Gina McCarthy said in a statement.

“He is grateful for the prompt action by the Department of the Interior to suspend all leasing pending a review of decisions made in the last administration’s final days that could have changed the character of this special place forever,” she added.

--A Russian cyber-criminal group was behind a ransomware attack that has targeted the world’s largest meat processing company, the FBI has said.

The FBI said it was working to bring the REvil group to justice for the hack on JBS, after the cyber-breach over the weekend shut some JBS operations in the U.S., Canada and Australia.

REvil is one of the most prolific and profitable cyber-criminal groups in the world.

But JBS was resuming operations by Wednesday after the company said it had made “significant progress in resolving the cyberattack.”  The “vast majority” of the company’s beef, pork, poultry and prepared foods plants were reopening, after halting the cattle slaughter at all its U.S. plants on Tuesday. 

JBS sells beef and pork under the Swift brand, with retailers like Costco Wholesale Corp. carrying the pork loins and tenderloins.  JBS also owns most of chicken processor Pilgrim’s Pride Co.

One of the issues, like at the ports, as described below, is a dearth of workers at the slaughterhouses, many of which were hit hard by Covid-19, let alone coronavirus-related measures providing social distancing in the plants.

Last year, cattle and hogs backed up on U.S. farms and some animals were euthanized when meat plants were shut during Covid outbreaks among workers.

--Ocean freight fees are three to five times higher than the same period last year.  The cost of moving a 40-foot sea container from China to Dubai is normally less than $1,000, but it now costs about $5,000, as reported by the South China Morning Post.

It’s about the pandemic.  For shipping costs to return to pre-pandemic levels, global production will have to resume its normal patterns, with North America and Europe producing more of their own products and relying less on those made in Asia, especially China.

The sharp rise in export volumes from Asia and decline in shipments from the rest of the world has skewed global trade flows, causing bottlenecks at ports and throwing the flow of containers into disarray, driving up shipping prices in the process. 

Estimates for a return to normalcy have extended in recent weeks from later this year to early 2022.

Since the middle of last year, most shipping containers sent from Asia to North America and Europe have not been returned because of logistical disruptions and a lack of goods to stock them.  The container shortage in Asia was made worse by the Suez Canal blockage in March.

In the United States, greater spending on personal protection equipment and home electronics because of the pandemic caused containerized imports from Asia to jump by 31 percent in April from a year earlier, and 27.4 percent from April 2019, according to PIERS, a U.S. trade reporting service.

The thing is, vessel space in Asia will get even tighter now that American retailers are building up their inventories ahead of the peak Christmas holiday shopping season.

According to a German study, many of the containers are being returned to Asia empty because carriers are trying to maximize yields on shipments from the region, rather than wait for less lucrative loads going the other way.

In normal circumstances, the world’s current supply of containers is sufficient, but the uneven distribution brought on by the pandemic is creating the pricing volatility.

Get this, Chinese factories make more than 96 percent of the world’s dry cargo containers and 100 percent of temperature controlled containers, according to Drewry, a British maritime consulting company.

--Fresh signs are emerging that business travelers won’t be grounded much longer.

Some companies that learned to do without travel during the coronavirus pandemic said they are ready to get back on the road instead of defaulting to virtual meetings and conferences, but others are trying to determine which business trips are still needed.

An executive at American Airlines Group Inc. said 47 of the airline’s 50 largest corporate accounts have said they plan to resume traveling this year.

“They’re getting their offices opened, feeling comfortable with that as the first steps, and then travel comes after that,” chief customer officer Alison Taylor of American said.

Corporate trips remain 70% of more below pre-pandemic levels, according to airlines, which rely heavily on business travel for a huge share of their revenue.

United Airlines Holdings Inc. said the pace of business travel bookings had been picking up in recent weeks.

Investment bankers said they have raced to be first to visit clients in person again.  Industry trade shows are coming back to the Las Vegas Convention Center this month.  In a survey by the U.S. Census Bureau conducted in May, 35% of small-business owners said they expect to have travel expenses in the next six months, up from 31.5% in April and 26.5% in mid-February.

--Delta Air Lines said it now expects a pre-tax loss between $1 billion and $1.2 billion for the June quarter, versus a pre-tax loss in the range of $1 billion to $1.5 billion guided previously, according to a regulatory filing Thursday.

For Q2, Delta forecast adjusted total revenue between $6 billion and $6.2 billion, down 50% to 52% from the same quarter in 2019.

Additionally, the company said it is positioned to achieve 2019 revenue by 2023 on a “more cost-efficient cost structure.”

--After an increase in incidents involving unruly passengers, Southwest Airlines is delaying resumption of in-flight alcohol service.

The airline, which stopped serving beverages early in the pandemic and has been phasing them back in, was planning to resume selling alcohol this month on Hawaii flights and in July on other routes.

--TSA checkpoint travel numbers vs. 2019

6/3…69 percent of 2019
6/2…67
6/1…75
5/31…76
5/30…65
5/29…76
5/28…76…1,959,593…pandemic high
5/27…75

--General Motors Company is increasing deliveries in the U.S. and Canada due to strong consumer demand for Chevrolet, Buick, GMC and Cadillac automobiles, while also eyeing stronger first-half 2021 financials, it said Thursday.

The automaker said production of the Chevrolet Silverado HD and GMC Sierra HD full-size pickups will increase by about 1,000 per month beginning in mid-July, thanks to production line efficiencies at the Flint Assembly facility in Michigan.  It also said shipments of Chevrolet Colorado and GMC Canyon mid-size pickups made at the Wentzville Assembly in Missouri will increase by about 30,000 units from mid-May through the week of July 5.

Thanks to engineering that maximizes the use of chips, in addition to pulling ahead some projected semiconductor deliveries into the second quarter, GM now expects its first-half financial results to be “significantly better” than its previous guidance.  The company said in early May that it expected net income of about $3.5 billion for the six months ending June 30.

One of the prime reasons for the automotive chip shortage was a March 19 fire at a key Japanese factory that made such chips. Renesas, the company hit by the fire, said production is now back to 88% of what it was before the blaze.  With new equipment being installed, the company expects to resume full production by mid-June.

--Ford Motor Company said it sold 161,725 vehicles in May, up 4.1% from 155,327 vehicles sold in the same month last year.

Sales of sport utility vehicles rose 48.6% year on year while car and truck sales dropped 62.4% and 11.6%, respectively, according to the automaker.

Ford also said it sold 10,364 electric vehicles in May, a 184% increase from last year, buoyed by demand for the Mustang Mach-E, the F-150 PowerBoost, and electrified Escape.

“We have been receiving a massive number of reservations for our all-electric F-150 Lightning over the last two weeks – totaling over 70,000 trucks,” said Andrew Frick, vice president, Ford Sales for U.S. and Canada.

--Securities regulators told Tesla Inc. last year that CEO Elon Musk’s use of Twitter had violated a court-ordered policy requiring his tweets to be preapproved by company lawyers, according to records obtained by the Wall Street Journal.

Tesla and the SEC settled an enforcement action in 2018 alleging that Musk had committed fraud by tweeting about a potential buyout of his company.  Musk paid $20 million to settle that case – Tesla also paid $20 million – and agreed to have his public statements on social media overseen by Tesla lawyers.

In correspondence sent to Tesla in 2019 and 2020, the SEC said tweets Musk wrote about Tesla’s solar roof production volumes and its stock price hadn’t undergone the required preapproval by Tesla’s lawyers.

--The U.S. Supreme Court on Tuesday declined to hear Johnson & Johnson’s bid to overturn a $2.1 billion verdict against it in favor of women who said the company’s talc products, like baby powder, contain asbestos and can cause ovarian cancer.

Without comment, the justices turned away J&J’s appeal, leaving in place a Missouri state court ruling.

The lawsuit is one of many filed on behalf of thousands of women.  Other suits have claimed that the products caused mesothelioma.

“This was a victory not just for the amazing women and their families who we were privileged to represent, but a victory for justice,” Mark Lanier, the women’s lawyer, told the New York Post.  “This result is exactly what separates America from the rest of the world. This decision sends a clear message to the rich and powerful: You will be held to account when you cause grievous harm under our system of equal justice under law.”

I can’t help but add, Mr. Lanier is rather rich and powerful himself.

J&J appealed the jury verdict, and last year a Missouri appeals court rejected the company’s request to throw out the ruling but did reduce the verdict to about $2.1 billion because some of the women were from out of state.

A J&J spokesperson said in part: “The Supreme Court has many times said that its decision to deny hearing a case expresses no view on the merits whatsoever, and we continue to believe that our view of the law and the facts will ultimately prevail.”

--Amazon said Thursday it is planning to hire 1,000 professionals over the coming years as part of its so-called Amazon Returnship program

The program is aimed at helping people who have lost their jobs due to the pandemic or have been underemployed for at least a year to rejoin the workforce by restarting their careers at Amazon.  Positions that will be opened include those in operations finance, consumer payments, and search, the company said.

Under the program, individuals will have an initial 16-week paid working opportunity and focus on a specific project. After four months, they may move into full-time positions within the company, Amazon said.

--The tight labor market is impacting the plans to open new restaurants and supermarkets.  As the Journal reported, “Many food sellers are adding stores to capitalize on high consumer spending as Americans emerge from a year spent largely at home.  But grocers and restaurants say they are struggling to hire all the workers they want for these stores.  They are adding perks and bonuses to entice job seekers and in some cases delaying openings.”

Shake Shack Inc. said it is going to be difficult to open as many as 40 burger restaurants this year as planned.

--Related to the above, global food prices have jumped at their fastest monthly rate in over a decade, according to the United Nations.

The UN uses a broad index of global food costs, which have also climbed for 12 months in a row.

The UN Food and Agriculture Organization’s (FAO) food price index tracks prices around the world of a range of food including cereals, oilseeds, dairy products, meat and sugar.

On an annual basis food prices were up 39.7% in May – the biggest month-on-month gain since October 2010 – according to the index.

--The dry-cleaning business continues to face devastation after Covid-19 stalled demand for work and formal attire.

Dry cleaners lost about 80% of their revenue immediately after the pandemic began, according to the Drycleaning & Laundry Institute, a trade association.  With states reopening, dry cleaners have returned to anywhere from 40% to 60% of their pre-pandemic revenue.

Of the roughly 25,000 to 30,000 U.S. storefronts in the dry-cleaning industry, the institute estimates that up to 30% won’t survive.

--AMC Entertainment Holdings Inc. took advantage of a skyrocketing stock price last week to sell shares to a hedge fund for $230.5 million, the company disclosed Tuesday, which drove the stock higher still.

The hedge fund, New York-based Mudrick Capital Management LP, was a winner too.  It had paid a premium to Friday’s closing price but promptly turned around and sold for a profit, unloading all 8.5 million shares it received in the deal.

Last week, the company’s share climbed 116%.

AMC has been a favorite among individual investors on social-media platforms such as Reddit, and the stock was one of the original meme stocks that soared during a frenzied rally in January.

Mudrick Capital sold the shares it bought – its entire equity position in AMC – on the belief that the stock is overvalued, a source told the Wall Street Journal.  The fund never intended to hold a long-term position in the shares and has similarly sold positions in AMC before.  Mudrick does own AMC debt.

Well, Thursday, AMC said in a filing it had agreed to sell up to 11.55 million of its shares (the second share issue in three days) from time to time in an at-the-market program.

“Our current market prices reflect market and trading dynamics unrelated to our underlying business, or macro or industry fundamentals, and we do not know how long these dynamics will last,” AMC said in a statement.

A number of Wall Street analysts have said AMC is already heavily overvalued and many institutional traders have said they were steering clear of the stock.

“Under the circumstances, we caution you against investing in our Class A common stock, unless you are prepared to incur the risk of losing all or a substantial portion of your investment,” AMC added.

Operating over 1,500 theaters across the world and with a market capitalization of over $30 billion, each AMC theater could be worth nearly $20 million.

But with the stock price so high, the company is taking advantage of the opportunity to significantly shore up its balance sheet and raise some cash. In fact, $587 million by midday Thursday, and any concern among investors that their holdings would be watered down faded after AMC said it completed the program, the shares ending the day at $51.30.

The number of AMC shares in issue has hit 500 million+ from just 100 million at the end of last year.

While theater operators are bullish on the reopening, the fact is streaming is going to continue to rise.

--Billionaire investor William Ackman’s blank-check firm Pershing Square Tontine Holdings is nearing a deal with Universal Music Group that would value the world’s biggest music label at nearly $40 billion.  A deal of that size, if completed successfully, would mark the biggest-ever merger involving a so-called special purpose acquisition company (SPAC), similar in size to the $40-billion deal that ride-hailing giant Grab Holdings clinched in April.

There is no guarantee Universal and Pershing Square will finalize the deal and the talks can still fall apart.

--Zoom Video Communications reported better-than-expected results for its fiscal third quarter ended April 30.

Zoom has consistently produced huge, forecast-beating quarters throughout the pandemic – and did it again this time, although the report marks the videoconference company’s first quarter of slowing sequential growth in a year.

For the quarter, Zoom posted revenue of $956.2 million, up 191% from a year ago, and ahead of both the company’s guidance range of $900 million to $905 million, and the Street consensus.  Growth in each of the last three quarters was above 355%; so for this company, growth of nearly 200% represents a considerable slowdown, as Eric Savitz of Barron’s points out.

--Republican West Virginia Gov. Jim Justice confirmed he is personally liable for debt arranged by now-collapsed Greensill Capital, highlighting the pressure his family faces in turning around their sprawling coal-mining operations.

The outstanding loans are “a burden on our family beyond belief, and we’ll have to deal with it,” he said.  “It’s tough, it is really tough.”

The Wall Street Journal first reported on Monday that the loans total $700 million.

“We didn’t have one earthly clue,” Justice said of the troubles that would come from borrowing money from Greensill, the SoftBank Group Corp.-backed financial firm that filed for bankruptcy in March.

Justice said the loans “have always been personally guaranteed” and that he and his companies hadn’t done anything wrong.  Borrowers make personal guarantees on business loans to give lenders additional comfort in the case of default.

Greensill packaged the loans and sold them to investment funds managed by Credit Suisse Group AG.  The Swiss bank froze the funds in March and is in talks with the governor’s Bluestone Resources Inc. and other borrowers to recoup money to make investors whole.

Bluestone hadn’t expected to begin repaying the Greensill loans until 2023 at the earliest.  Justice and his family had been using the loans to rebuild Bluestone, after buying it back from a Russian company in 2015.

The governor’s wealth stems from dozens of coal companies, farms and other businesses he and his family oversee, including the famed Greenbrier resort in White Sulphur Springs, W.Va.

Foreign Affairs

Israel: As one Israeli reporter put it, “It seems like an eternity instead of only a month since Yair Lapid received the mandate from President Reuven Rivlin to form a coalition after Prime Minister Benjamin Netanyahu failed to do so.”

The country is no longer as it was on May 5.  Since then, the country experienced a traumatic 11-day war with Hamas that saw some 4,500 rockets launched from Gaza, with direct hits on population centers that resulted in fatalities and injuries, both physical and emotional.

But an 11th-hour announcement Wednesday of the formation of a “change” government brokered by Lapid, which will see Naftali Bennett become Israel’s first prime minister with only seven MKs, is the first tentative step at restoring a sense of equilibrium to a nation in turmoil.

Few in Israel wanted to see a fifth election, let alone another term for Bibi, but until this agreement there was a real possibility that’s where the country was headed.

At the same time, there is no guarantee the new government will last.  The agreement still needs to be approved by the Knesset, or parliament, in a vote that is expected to take place early next week.  Assuming it goes through, Lapid and a diverse array of partners that span the Israeli political spectrum will end Netanyahu’s record-setting but divisive 12-year rule.

Lapid said Wednesday night, “This government will work for all the citizens of Israel, those that voted for it and those that didn’t. It will do everything to unite Israeli society.”

Bennett is a self-made tech millionaire who dreams of annexing most of the occupied West Bank.  He has said that the creation of a Palestinian state would be suicide for Israel, citing security reasons.

But the standard-bearer of Israel’s religious right and staunch supporter of Jewish settlements says he is joining forces with his political opponents to save the country from political disaster.

The son of American immigrants, Bennett, 49, is a generation younger than his one-time mentor, Netanyahu, 71, and Israel’s longest-serving leader.

Bennett has had a long and often rocky relationship with Netanyahu, working between 2006 and 2008 as a senor aide before leaving on reported bad terms.

As for his settlement policy and annexation, as head of a so-called unity government that will include left-wing and centrist parties, while relying on support in parliament from Arab legislators, a first for Israel, following through on annexation will be politically unfeasible.

For his part, Netanyahu, desperate to remain in office while he fights corruption charges, is expected to do everything possible in the coming days to prevent the new coalition from taking power. If he fails, he will be pushed into the opposition.

Netanyahu has said the ‘unity’ government was a weak government that would harm Israel’s deterrence.

Iran: The largest warship in the Iranian navy caught fire and later sank Wednesday in the Gulf of Oman under unclear circumstances, various Iranian news agencies reported.

The Kharg serves as one of a few vessels in the Iranian navy capable of providing replenishment at sea for its other ships.  It also can lift heavy cargo and serve as a launch point for helicopters.

Iran’s navy typically handles patrols in the Gulf of Oman and the wider seas, while the country’s paramilitary Revolutionary Guard operates in the shallower waters of the Strait of Hormuz and the Persian Gulf.

The fire aboard the Kharg comes after a series of mysterious explosions that began in 2019 targeting ships in the Gulf of Oman.  The U.S. Navy later accused Iran of targeting the ships with limpet mines, timed explosives typically attached by divers to a vessel’s hull.

The sinking of the Kharg also marks the latest naval disaster for Iran.  In 2020 during an Iranian military training exercise, a missile mistakenly struck a naval vessel near the port of Jask, killing 19 sailors and wounding 15.  Also in 2018, an Iranian navy destroyer sank in the Caspian Sea.

Meanwhile, on the nuclear talks front, Iran’s Foreign Ministry said on Monday that Tehran and six world powers have made significant progress in reviving the 2015 accord but important issues still need to be resolved.

Iran and the P5+1 have been negotiating in Vienna since April to work out steps that Tehran and Washington must take on sanctions and nuclear activities to return to full compliance with the pact.

President Joe Biden has said Washington will return to the accord if Tehran first resumes compliance with its strict limits on uranium enrichment.  Only then could sanctions be lifted.

But Iran has been significantly breaching the 2015 agreement and the Iranians have failed to explain traces of uranium found at several undeclared sites, a report by the UN nuclear watchdog showed on Monday, possibly setting up a fresh diplomatic clash that could derail the talks.

International Atomic Energy Agency chief Rafael Grossi said this week: “After many months, Iran has not provided the necessary explanation for the presence of the nuclear material particles at any of the three locations where the Agency has conducted complementary accesses (inspections),” a report by Grossi to member states said.  It will now be up to Britain, France and Germany to decide whether to revive their push for a resolution criticizing Iran, which could undermine the wider negotiations.

China: The commander of the U.S. Pacific Air Forces has accused China of seeking to return to the era of vassal states, likening the Communist Party to Chinese emperors that demanded fealty from their neighbors.

During a conference call with Asia-based media, General Kenneth S. Wilsbach said on Friday it was “clear” Beijing aimed to be the sole superpower and expected other countries to “kowtow” to it.

“They don’t believe there can be multiple superpowers, they believe that there can only be one, and they want to return back to the glory days of [imperial] China where everybody else was a vassal state and everybody [kowtowed] to the emperor,” Wilsbach said.

“And the emperor now is the Chinese Communist Party.”

Wilsback, who was promoted to the rank of four-star general last year, said Beijing’s militarization of the South China Sea and other aggressive actions had fueled distrust of its intentions across the world, pointing to recent moves by Britain, France and Germany to deploy warships to the region.

Beijing lays claim to about 90 percent of the South China Sea, which carries about one-third of global maritime trade and is the subject of overlapping disputes involving Southeast Asian counter-claimants and Taiwan.

Wilsbach said the region is looking at China’s activities and trust in them “is extremely low.”

“All of this combined mistrust between us and the allies and partners is driving us to know what China is up to militarily because we don’t want any surprises.”

Separately, today, June 4, is the anniversary of the 1989 Tiananmen Square massacre and normally there would be a large vigil in Hong Kong.  But this is the second straight year Chinese authorities, now firmly in control, are prohibiting gatherings and thousands of police are patrolling the city’s streets to prevent any kind of commemoration.  So much for Hong Kong’s long-cherished freedoms of speech and assembly, as Beijing brings down its iron fist on society.

June 4 commemorations are banned in mainland China.

Finally, China’s ruling Communist Party will ease birth limits to allow all couples to have three children instead of two to cope with the rapid rise in the average age of its population, a state news agency said Monday.

The ruling party has enforced birth limits since 1980 to restrain population growth but worries the number of working-age people is falling too fast while the share over age 65 is rising, adding to strains on the economy and society.

A meeting Monday of the party’s Politburo decided “China will introduce major policies and measures to actively deal with the aging population,” the Xinhua News Agency said.

Party leaders “pointed out that further optimizing the fertility policy, implementing the policy of one couple can have three children and supporting measures are conducive to improving China’s population structure,” the report said.

China’s population of 1.4 billion already was expected to peak later this decade and start to decline.  Census data released May 11 suggest that is happening faster than expected, straining underfunded pension and health systems and cutting the number of future workers available to support a growing retiree group.

Restrictions that limited most couples to one child were eased in 2015 to allow all to have two. But after a brief rise the next year, births declined.  Couples say they are put off by the cost of having children, disruption to jobs and the need to look after their own parents.

The share of working-age people 15 to 59 in the population fell to 63.3% last year from 70.1% a decade earlier, according to the census data.  The group aged 65 and older grew to 13.5% from 8.9%.

Russia:  A senior Russian security official said on Monday Moscow would be ready to use force to stop what he described as “unfriendly” actions by other countries, the Interfax news agency reported. The comments by Nikolai Patrushev, the secretary of Russia’s Security Council, came ahead of a summit between Presidents Vladimir Putin and Joe Biden in Geneva.

Needless to say, Putin and Biden have a lot to discuss, leading off with the cyberattacks on U.S. interests.

Meanwhile, Air France canceled flights to Moscow after Russian authorities failed to approve flight plans that avoid Belarus airspace, amid outrage over the forced landing of a Ryanair jet enroute to Lithuania from Greece on May 23 and the arrest of a dissident journalist on board.

That dissident, Roman Protasevich, 26, was shown in a tearful appearance on state TV today, praising Belarusian President Alexander Lukashenko and admitted attempting to topple him.

It was a hostage video, pure and simple, and when Protasevich held up his wrists to hide his tears, marks were visible on them.  He’s clearly been tortured.  It’s sickening. 

Lukashenko has but one supporter left among the world’s leaders, but it’s a key one, Vladimir Putin.   

Canada: The remains of 215 children, some as young as 3 years old, have been found buried on the site of what was once Canada’s largest indigenous residential school – one of the institutions that held children taken from families across the nation.

The remains were confirmed last weekend with the help of ground-penetrating radar.  More bodies may be found because there are more areas to search on the school grounds.

From the 19th century until the 1970s, more than 150,000 First Nations children were required to attend state-funded Christian schools as part of a program to assimilate them into Canadian society. They were forced to convert to Christianity and not allowed to speak their native languages.  Many were beaten and verbally abused, and up to 6,000 are said to have died.

The Canadian government apologized in Parliament in 2008 and admitted that physical and sexual abuse in the schools was rampant.  Many students recall being beaten for speaking their native languages; they also lost touch with their parents and customs.

Indigenous leaders have cited that legacy of abuse and isolation as the root cause of epidemic rates of alcoholism and drug addiction on reservations.

Random Musings

--Presidential approval ratings…

Rasmussen: 49% approve of President Biden’s job performance, 49% disapprove (June 4).
Gallup: 54% approve, 40% disapprove; 54% of independents approve (May 3-18).

--The Justice Department revealed Wednesday that it had, during the Trump administration, secretly obtained the phone records of four New York Times reporters, marking the third time in recent weeks that federal law enforcement has disclosed using the aggressive and controversial tactic to sift through journalists’ data.

The Times reported Wednesday night that the Justice Department had informed the newspaper that it had seized the phone records of four of its reporters: Matt Apuzzo, Adam Goldman, Eric Lichtblau and Michael S. Schmidt.

Last month, the Justice Department made similar disclosures to the Washington Post and CNN that it had secretly obtained the records of those organizations’ journalists.

--Defense Secretary Lloyd Austin ripped Sen. Ted Cruz for accusing the Army of making a recruitment ad that paints soldiers as ‘pansies,’ saying America’s foes would seize on those comments.

China and Russia “would like to capitalize on talking points like that,” Austin said in an interview with CNN published on Memorial Day, adding that the U.S. military will never be “soft.”

“I will not lose one minute of sleep about what the Chinese leadership is saying or what Vladimir Putin is saying. What I will focus on, and what I am focused on is the defense of this nation, and making sure that we have what’s needed to be successful,” the defense secretary said.

Cruz earlier this month retweeted a video that compared a Russian military recruitment ad that showed musclebound men shooting rifles and jumping out of airplanes with an Army video focusing on a female soldier with “two sons.”

“Holy crap.  Perhaps a woke, emasculated military is not the best idea…,” the Texas Republican wrote on Twitter, saying the video makes soldiers look like “pansies.”

The animated Army ad told the story of Cpl. Emma Malonelord, who was raised by a lesbian couple, and said she joined the service because the U.S. defends gay rights.

It’s part of an ad campaign that tries to “shatter” military stereotypes by telling the true stories of soldiers.

--U.S. traffic deaths soared after coronavirus lockdowns ended in 2020, hitting the highest yearly total since 2007 as more Americans engaged in unsafe behavior on U.S. roads, the National Highway Traffic Safety Administration (NHTSA) said Thursday. For all of 2020, 38,680 people died on U.S. roads – up 7.2% or nearly 2,600 more than in 2019, even though Americans drove 13% fewer miles, preliminary data showed.

The fatality rate hit 1.37 deaths per 100 million miles, the highest figure since 2006.  In the second half of 2020, the number of traffic deaths was up more than 13%.

NHTSA said the main behaviors that drove this increase involved impaired driving, speeding and failure to wear seat belts.

Deaths involving motorists not wearing seat belts were up 15%, speeding related deaths jumped by 10% and fatal crashes involving alcohol rose 9%.

--This would freak you out.  An Air India flight bound for the United States was forced to return to New Delhi after a bat flew through the cabin, it was reported on Saturday.

Videos that went viral on Indian social sites showed crew and passengers reacting with shock and panic at finding the creature flying around in the Boeing 737.

The bat was spotted on board after about an hour in mid-air, the ANI news agency reported. The flight captain then decided to take the plane back to base.

Air India in its preliminary report said possibilities of “unwanted mammals” came from third party vehicles like those used for catering.

The passengers were eventually moved to another plane which landed in Newark with some delays.

--Eastern Australia is dealing with the worst mouse plague in living memory, with far-reaching consequences both in the fields and in rural communities.

As the New York Times’ Yan Zhuang reported:

“For what has been half a year but felt to many like an eternity, the rodents have chewed a swath through southern Queensland, New South Wales and northern Victoria, the flip side to the good fortune of the break in a once-a-century drought.

“But the mice are not just devouring crops, they’ve bitten people in their beds, dropped out of air-conditioning units and gnawed through appliances.  They’ve eaten the toes off chickens in their pens. They’ve been blamed as whole towns have lost phone reception and a house has burned down."

--F. Lee Bailey, who brought drama, swagger and cunning to the courtroom in representing O.J. Simpson, heiress Patty Hearst and the Boston Strangler suspect before his career ended in disbarment, died on Thursday at the age of 87.

Bailey was a giant in his profession, becoming famous with courtroom victories that included an acquittal for a figure in the My Lai massacre of the Vietnam War and a successful appeal for Sam Sheppard, a Cleveland doctor convicted of murdering his wife.  In his later years, however, he was living above a hair salon in Yarmouth, Maine, banned from practicing law and his fortune gone.

A former Marine Corps pilot, Bailey built a reputation for being an incisive, fast-thinking cross-examiner with a sharp memory, a flair for showmanship, deep knowledge of polygraph examinations and a hate-to-lose mentality.

“I can’t say no to a case if it has one of three qualities – professional challenge, notoriety or a big fee,” Bailey told the New York Times during his heyday.

But his cutthroat style and love of publicity made Bailey enemies among judges and fellow lawyers.

Bailey could not acquit himself of contempt of court in 1996 and spent 44 days in jail for failing to turn over stock and $700,000 that a Florida marijuana dealer had given him.  Prosecutors said the stock and money should have been forfeited.  Bailey said they were his payment from the drug dealer.  An agreement was reached in the case but Florida disbarred Bailey in 2001, saying he had engaged in “multiple counts of egregious misconduct, including offering false testimony.”  Massachusetts also disbarred him.

Bailey’s other notable loss was in his defense of Patty Heart.  He started her defense saying it was “not a difficult case” and tried to convince jurors that she had been brainwashed by her captors and coerced into wielding a gun during a San Francisco bank robbery two months later.  Hearst was convicted of bank robbery in 1976, spent two years in prison and accused Bailey of bungling the trial. 

Bailey was part of the legal “Dream Team” that cleared O.J. Simpson in the fatal stabbings of his former wife and her friend in a tumultuous trial, but he clashed with Robert Shapiro, who accused Bailey of undermining him, including planting unflattering stories in the media.  Bailey’s most dramatic moment in the Simpson trial came when he questioned Los Angeles police detective Mark Fuhrman, suggesting he was a racist and had planted a bloody glove to frame Simpson.  Neither was fully substantiated in court but served to weaken Fuhrman’s credibility.

--A soon-to-be-released government report on unexplained aerial phenomena finds no proof of extraterrestrial activity, but cannot provide a definitive explanation for scores of incidents in which strange objects have been spotted in the sky, officials said on Thursday.

The findings of the report, due to be provided to Congress by the director of national intelligence as soon as this month, will offer no firm conclusions about what the objects might be.

But the report, whose conclusions were first described by the New York Times, also does not rule out extraterrestrial activity.  There is no conclusive proof, either, that the objects are not the result of some Chinese or Russian secret program.  Bottom line, there should be real cause for concern.

---

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 $1894
Oil $69.41

Returns for the week 5/31-6/4

Dow Jones  +0.7%  [34756]
S&P 500  +0.6%  [4229]
S&P MidCap  +0.1%
Russell 2000  +0.8%
Nasdaq  +0.5%  [13814]

Returns for the period 1/1/21-6/4/21

Dow Jones  +13.6%
S&P 500  +12.6%
S&P MidCap  +18.3%
Russell 2000  +15.8%
Nasdaq  +7.2%

Bulls 51.5
Bears 16.8

Have a good week.  Get vaccinated if you haven’t as yet. 

Dr. Bortrum is still with us, but not for long.

Brian Trumbore