Week in Review

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Week in Review

08/14/2021

For the week 8/9-8/13

[Posted 9:00 PM ET, Friday]

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Edition 1,165

Three weeks ago (7/24), I wrote some of the following:

“(With) the new urgency to reach out to the anti-vaxxers and get them to take the shot…it will be an ironic tragedy if the hospitality industry suffers anew, just as it complains they can’t find workers.  Suddenly, folks may be hesitant to eat indoors again.  Or to hop on an airplane.

“The airlines, for example, totally miscalculated how quickly their sector would recover this spring, but will they now be surprised when activity stagnates in the coming months?”

So what did we see this week?  Anecdotal evidence around the country that many Americans are hesitant to eat indoors, and you have Southwest Airlines announcing they saw a big pick up in cancellations, just three weeks after issuing a rosy forecast!

And a key reading on consumer confidence plunged today.

As for Covid, we are at each other’s throats over mask mandates, which is insane.  That video of the town hall in Franklin, Tenn., where a school board official was followed to his car, venom spewed at him, amazingly ugly Americans shouting things like “you’ll never be allowed in public again,” and “we know who you are…you better watch out…” was sickening.

How did we get this way?  Well, I know.  It started five years ago and is only getting worse.

And then there is Afghanistan.  This disaster was so predictable and you know where I’ve stood.  It started with Donald Trump’s incessant talk about “endless wars” that were not…wars.

And Joe Biden then picked up the ball and made it ten times worse with his idiotic, chaotic, totally unprofessional withdrawal from the country…in essence telling the Taliban to just walk right in, and take a few Humvees, attack helicopters and artillery pieces while you’re at it.

So it was ten days ago I spoke to the high school kids in Newark, and I told you last week how I treated them like I would any reader…how we talked about Afghanistan, and I focused on the girls in my audience and asked them how they’d feel if they could no longer go to school because their government forbid it, simply because they were female.

I also told them how we were abandoning those Afghans who supported us and aided the U.S. military, let alone the little girls, and young women, who for the last 20 years could finally feel as if they had a future.  I had every head in the room shaking their heads with me in disgust.

And what a tragic irony that the 20th anniversary of 9/11 is coming up.  The optics will be devastating for Joe Biden and his legacy, let alone, potentially, for Democrats in 2022 and 2024.

Biden’s Agenda

--The central pieces of President Biden’s $4.1 trillion economic agenda cleared the Senate this week, but it’s a precarious two-track path that’s complicated over a looming September showdown over the debt ceiling.

Yes, the president got a big victory, with bipartisan approval on his $550 billion infrastructure package ($550bn in new spending), but his $3.5 trillion budget resolution victory was strictly along party lines, with the massive amount spent on social programs paid for in part by taxes on the wealthy and corporations.

We need the infrastructure package, and to Trump supporters, and the Wall Street Journal editorial board, nothing is perfect.  There is far more good than bad in it, or it wouldn’t have cleared the Senate 69-30!

President Trump’s attempts to rally Republicans around his effort to defeat it, just because it hands Joe Biden a victory (albeit only on paper thus far) are beyond pathetic.

Trump is the one who for four years told us, “No one knows infrastructure like I do”…and… “No one knows construction like I do,” and he did nothing! 

But there isn’t a single GOP vote in the House or Senate for the $3.5 trillion budget resolution.

That said, a budget needs to be approved, at some point, so we have months of highly contentious negotiations in our future and a victim of the progressives’ actions could be the bipartisan infrastructure package.  And that would be a disaster, for all of us, including the president.

But for now, the House is supposedly returning from its summer recess on Aug. 23 to vote on the Senate’s budget resolution.  Speaker Nancy Pelosi needs near-unanimous Democratic support to adopt it against the unified GOP opposition.

The resolution is just an outline setting the parameters for an eventual budget bill.  It doesn’t require Biden’s signature.

By Sept. 30, lawmakers must reach bipartisan deals on unfinished regular government spending bills or on a stop gap bill to keep agencies running that would maintain current spending levels through at least October or more likely into November.

And in terms of the budget resolution, aside from Pelosi only being able to afford three defectors in a party-line vote, Democrats in the Senate need to be totally onboard and at least two, Kyrsten Sinema of Arizona and Joe Manchin of West Virginia, as of today are not.  They voted for the framework just to keep the process going, but are against the price tag or the size of the tax hikes Biden has proposed to pay for it.

Manchin has also said he disagrees with Democrats who want to target fossil fuels.

Senate Majority Leader Chuck Schumer admitted Wednesday it will not be easy to keep all 50 Democrats in line.

--July was the busiest month for illegal border crossings along the southern border in 21 years, exceeding 200,000 (212,672).  Among those taken into custody by Customs and Border Protection were 82,966 family members and 18,962 unaccompanied teenagers and children – an all-time high.

Biden officials predicted earlier this year that the volume of people crossing the border would decline in the summer heat and, instead, U.S. border facilities are jammed with migrants shoulder-to-shoulder in detention facilities.

More than 15,000 minors who arrived without parents are in government custody, including a quarantine camp setup for more than 1,000 parents and children who have tested positive for the coronavirus or been exposed to infection.

This is a killer for Democrats come the mid-term elections.

--The first race and ethnicity breakdowns from the 2020 Census, released Thursday, show a more diverse nation than ever before in the nation’s history.

The report marks the first time the absolute number of people who identify as White alone has shrunk since a census started being taken in 1790.  The White population fell from 223.6 million in 2010 to 204.3 million in 2020, a decrease of 8.6 percent.

The country also passed another milestone on its way to becoming a majority-minority society in the coming decades: For the first time, the portion of White people dipped below 60 percent, slipping from 63.7 percent in 2010 to 57.8 percent in 2020.

The opioid epidemic and lower-than-anticipated birth rates among millennials after the Great Recession accelerated the White population’s decline, said William Frey, a demographer at the Brookings Institution.

“Twenty years ago if you told people this was going to be the case, they wouldn’t have believed you,” he said of the White decline.  “The country is changing dramatically.”

The largest and most steady gains were among Hispanics, who doubled their population share over the past three decades to 62.1 million people, or 18.7 percent, in 2020 and who are believed to account for half of the nation’s growth since 2010.  This obviously has huge political implications.

The Pandemic

Not for nothing but Japan hit an all-time high in cases today, a week after the Tokyo Games ended.

Covid-19 death tolls, as of tonight….

World…4,357,282
USA…637,132
Brazil…567,914
India…430,759
Mexico…246,811
Peru…197,209
Russia…168,864
UK…130,801
Italy…128,379
Colombia…123,221
Indonesia…115,096
France…112,561
Argentina…108,815
Iran…96,742
Germany…92,367
Spain…82,470
Poland…75,297
South Africa…76,631
Ukraine…53,217
Turkey…52,860
Chile…36,287
Romania…34,337
Ecuador…31,870
Czechia…30,372
Hungary…30,038
Philippines…29,838
Canada…26,698
Belgium…25,285
Pakistan…24,266
Bangladesh…23,810
Tunisia…21,600

U.S. daily death tolls…Sun. 330; Mon. 341; Tues. 657; Wed. 672; Thurs. 660; Fri. 740.

Covid Bytes

--The Food and Drug Administration authorized giving an extra dose from either the Pfizer or Moderna vaccines for those with weakened immune systems.  The action expands the use for organ transplant recipients and patients with other conditions like cancer that hobble the body’s natural infection-fighting response.  The decision doesn’t apply to other fully vaccinated individuals, the agency said in a statement.

--Ongoing research from the Kaiser Family Foundation and its Covid-19 Vaccine Monitor shows that nearly half of parents of children ages 12-17, the age group currently eligible to receive a Covid vaccine, say their child has largely been vaccinated (41%) or they will get the vaccine right away (6%).  The vaccination status of children closely mirrors that of parents, with larger shares of older parents, Democrats, those with higher incomes and college degrees, saying their child is vaccinated compared with their counterparts.  Nearly four in ten Republican parents (37%) and half of parents who are unvaccinated themselves say they will “definitely not” get their 12- to 17-year-old vaccinated.

--Vaccine mandates have gone from a rarity to a priority across corporate America, with companies as large as Google, McDonald’s, Microsoft and Walt Disney demanding that some or all employees be vaccinated before coming to work, with certain medical and religious exemptions.

In the private sector, 15 percent of U.S. companies last week were planning or considering vaccination mandates, up from 4 percent in May.  The share has no doubt increased since the poll by law firm Fisher Phillips was conducted.

Walmart CEO Doug McMillon described a requirement that staff in its Arkansas headquarters must be vaccinated as “key to driving toward an end to this pandemic” and “setting the example” for others.

United Airlines CEO Scott Kirby, in being the first major airline to mandate vaccinations for his employees, said he did not want to write any more condolence letters to the families of colleagues who had died of Covid.

But many companies have been hoping their staff would opt to be vaccinated without needing to be forced to do so.

--California became the first state to require all schoolteachers and staff to show proof of vaccination or submit to regular coronavirus testing, Gov. Gavin Newsom announced Wednesday. 

Several cities, including New York City, Oakland, Calif., and San Francisco, have recently enacted similar rules.

--Texas Republican Governor Greg Abbott’s statewide ban on mask mandates has hit its second legal setback, as a judge in Dallas County temporarily blocked it from being enforced amid a rise in new Covid cases on Tuesday.

The Dallas Independent School District had already defied Abbott’s order saying on Monday that it would also require masks. Earlier on Tuesday, another Texas court granted an order at least until Monday that enables officials in San Antonio and Bexar Counties to require that masks be worn in public schools.

Gov. Abbott responded to Dallas County Judge Clay Jenkins by taking his order to the state’s Fifth Court of Appeals.

“No government entity can require or mandate the wearing of masks,” Abbott said in a statement.  “The path forward relies on personal responsibility – not government mandates.  The State of Texas will continue to vigorously fight the temporary restraining order to protect the rights and freedoms of all Texans.”

By week’s end, many more Texas school districts had filed suit against Abbott.

This is the same guy who on Monday asked his state’s hospitals to consider postponing all elective surgeries in order to combat a surge in hospitalizations due to Covid-19.

As of last Sunday, the seven-day average of Covid hospitalizations in Texas had reached 8,432, up nearly fivefold from the seven-day average of 1,475 at the end of June.

--Fellow Republican Governor Ron DeSantis of Florida also faced local uprisings over his ban on mask mandates, as he threatened to withhold funds from school officials’ salaries if they defy his orders.

--The head of the nation’s second-largest teachers’ union, Randi Weingarten, shifted course to back mandating vaccinations for teachers to protect students who are too young to be inoculated.

“The circumstances have changed,” Weingarten said on NBC News’ “Meet the Press.”  “It weighs really heavily on me that kids under 12 can’t get vaccinated…I felt the need to stand up and this is a matter of personal conscience.”

--Defense Secretary Lloyd Austin on Monday said he would make vaccination mandatory for U.S. service members by mid-September.

“Getting vaccinated against Covid-19 is a key force protection and readiness issue,” Army Gen. Mark Milley, the chairman of the Joint Chiefs of Staff, wrote in Austin’s memo announcing the new rules.

--Canada opened its border to fully vaccinated American tourists on Monday for the first time in 16 months, causing a rush of travelers during the busy summer season – and bottlenecks for a desperate tourism industry.

The result?  Seven-hour waits at some crossings.

--The latest surge of Covid-19 in the U.K. is giving rise to growing optimism among doctors and scientists that the Delta variant can be held at bay with high levels of vaccination and public caution.

Although caseloads are now ticking higher after Prime Minister Boris Johnson dropped almost all public-health restrictions in mid-July, hospital admissions have been falling and deaths are a fraction of the level seen in earlier phases of the pandemic.

Between 90% and 94% of British adults have some degree of immunity to Covid from full or partial vaccination, or prior infection, the U.K. statistics office estimates, based on statistical analysis of blood samples. That is almost certainly playing a big role in keeping a lid on cases and subduing hospital admissions and deaths, say scientists, though school holidays, warm weather and other factors are also pushing against transmission.

--Dr. Anthony Fauci, in an interview with USA TODAY. “There’s a very firm tenet that a virus cannot mutate, unless it is replicating, and, if you allow the virus to freely replicate chronically in society, it will mutate.  Now many mutations have no relevance functionally, but every once in a while you get a mutation like Delta, where the mutations cause a variant.  And the variant has a real functional consequence. With Delta, we have a virus that spreads much more rapidly than the original alpha variant. What happens if over months and months and months you allow the virus to replicate, it is conceivable, not guaranteed, but conceivable, that we could get a variant that eludes the protection of the vaccine.”

Wall Street and the Economy

A number of Federal Reserve officials said this week that it is time for the central bank to start reversing the easy money policies put in place to support the economy after the pandemic hit.

Kansas City Fed President Esther George was among those saying the central bank has made enough progress toward its objectives of boosting growth and employment to end its $120 billion in monthly purchases of Treasury and mortgage securities.

“With the recovery under way, a transition from extraordinary monetary policy accommodation to more neutral settings must follow,” Ms. George said in a speech on Wednesday.  “Today’s tight economy…certainly does not call for a tight monetary policy, but it does signal that the time has come to dial back the settings.”

While inflation has soared since April amid supply-chain bottlenecks and other obstacles related to reopening the economy, even if some of those factors reverse, strong demand, a recovering labor market and stable inflation expectations mean the central bank no longer needs to buy assets to provide stimulus, Ms. George said.

Dallas Fed President Robert Kaplan argued the central bank should begin reducing the pace of asset purchases by October.  Others are saying November.

The next Fed meeting is Sept. 21-22, at which point they could lay out more of a plan going forward.

On the economic data front, it was inflation week, with the July consumer price index coming in at 0.5%, 0.3% ex-food and energy; up 5.4% on headline year-over-year, and 4.3% on core.

Producer prices were up even more, 1.0%, both on headline and core, for July, and up 7.8% and 6.2%, respectively, Y/Y, both all-time highs.

But there are some signs of moderation, such as in used car prices and the cost of airline tickets, while oil prices are moderating, at least temporarily, which will be reflected more in the coming months as we continue to roll off pandemic lows from a year ago.

The CPI, while elevated at 0.5% for July, was down from 0.9% in June.

Weekly jobless claims came in at 375,000, basically in line with consensus.

A report from the Labor Department showed U.S. job openings hit a fresh record in June amid reports the country continues to face a labor shortage.

Job vacancies jumped by 590,000 to 10.1 million on the last day of the month, up from a record 9.5 million openings in May.

The figure comes as companies struggle to find workers in sectors such as leisure and hospitality as the economy reopens.

The shortfall has been blamed on a lack of affordable childcare (which could only worsen all over again if the Delta variant spreads much further), generous unemployment benefits (which are running off) and pandemic-related retirements and career changes.

Some also believe there are too many low-skilled jobs being advertised, and not enough suitable candidates.

The job openings data contrasts with the official payroll data, such as in the economy adding 943,000 jobs in July, as reported a week ago.  By this measurement, payrolls remain 5.7 million lower than before the pandemic’s onset in February 2020.

There was no change to the Atlanta Fed’s GDPNow barometer for the third quarter, 6.0%, but we get a key report on July retail sales next Tuesday that could move the needle.

Lastly, the Treasury Department reported the budget deficit for July, -$302 billion, while for the first ten months of the fiscal year, we have a deficit of $2.5 trillion, down from $2.8 trillion in the same period a year earlier, with the gap between spending and revenue shrinking as the recovery from the pandemic-induced slump boosted tax collections.

Europe and Asia

It was a light week for economic news from the eurozone, with a reading on June industrial production coming in down 0.3% compared with May, though up 9.7% year-over-year.

Turning to Asia…China reported July exports slowed, up 19.3% year-over-year vs. a 32.2% pace in June as Covid outbreaks in the country create uncertainty on the future path of Chinese growth.

Exports to the U.S. rose 13.4%, while imports from the United States rose 25.6%, with the trade gap between the two at $35.32 billion for the month vs. $32.58bn in June.

China’s exports to the EU rose 17.2% last month, imports up 19.8%.

The July reading on factory-gate prices in China (producer prices) rose a whopping 9.0%, according to the National Bureau of Statistics, but consumer prices were up only 1.0%.  You see the same PPI story around the world.

[Japan’s PPI for July was up 5.6% from a year ago.]

Separately, the partial closure of one of China’s biggest cargo ports due to coronavirus has raised concerns about the impact on global trade.  Ningo-Zhoushan in eastern China is the world’s third-busiest cargo port.

The closure, due to a worker being infected with the Delta variant, threatens more disruption to supply chains ahead of the key Christmas shopping season.

This comes as the cost of shipping from China and South East Asia to the East coast of the U.S. has already hit a record high, according to the Freightos Baltic global container freight index.

Back to Japan, support for Prime Minister Yoshihide Suga’s administration fell below 30% for the first time since he became premier in September, a poll by Asahi newspaper showed on Monday.

But the poll also revealed that 56% of the Japanese people said it was good to hold the Tokyo Olympics as scheduled, while 32% thought it was a bad idea.

Taiwan’s exports rose for a 13th straight month in July at a stronger-than-expected pace, +34.7% year-over-year, setting a new record, as the island’s manufacturers rushed production to meet a global shortage of computer chips for cars and technology gadgets, as economies around the world reopened…for the most part.  Asia has obviously been in the midst of a serious Covid problem.

July exports to China, Taiwan’s largest trading partner, jumped 23.8% Y/Y, and were up 28% to the United States.

Street Bytes

--For a second straight week, the Dow Jones and S&P 500 finished at record highs today, the Dow up 0.9% on the week to 35515, while the S&P closed at 4468, up 0.7%, and 19.0% for the year.  Nasdaq declined a smidge, 0.1%, but is within a good hour’s rally of a new record of its own.

Early in the week the market was buoyed by the passing of the infrastructure bill (even if we do have a long ways to go on that before it’s official), and optimism over economic growth and earnings, but then a low reading on consumer confidence today, as the Delta variant surged in some parts of the country, dampened the optimism.

The S&P still has not had a 5% pullback since October.

--U.S. Treasury Yields

6-mo. 0.04%  2-yr. 0.21%  10-yr. 1.28%  30-yr. 1.93%

--The International Energy Agency said on Thursday that the Delta variant and its impact on the global economy will result in the world consuming less oil this year than previously thought.

In its monthly market report, the Paris-based organization said that the worsening of the pandemic, as well as revisions to historical data, mean its global oil demand outlook has been “appreciably downgraded,” with some of this year’s forecast recovery shifted to 2022.

Investors have become concerned about falling demand in China, where Beijing authorities last week canceled all large-scale exhibitions and events for the remainder of August.  That, and other measures aimed at slowing the spread of the Delta variant, has spooked traders who were already worried about the fragile nature of China’s economic recovery.

The IEA cut its 2021 global oil demand growth forecast by 100,000 barrels a day, while upgrading its 2022 forecast by 200,000 barrels a day.  Demand is still expected to return to pre-pandemic highs in the second half of next year, the report said.

Meanwhile, Wednesday, the White House urged OPEC to boost oil production, saying planned increases are insufficient to fuel post-pandemic economic recovery.  The remarks came as the U.S. attempts to tamp down rising consumer prices, particularly that of gasoline.

But global demand may not keep up with the supply already expected next year if OPEC and its allies continue plans to unwind production cuts, the IEA said.

--Saudi Arabian energy giant Aramco saw its profits jump almost four times with the steep rise in oil prices as demand recovered, at least until now.  The company said the easing of Covid restrictions, vaccinations, stimulus measures and the return of economic activity have supported results.

Oil is up more than 40% since the start of the year, while Aramco’s CEO gave an upbeat assessment for the rest of 2021.

The world’s biggest oil producer said net income rose by 288% to $25.5 billion for the second quarter.

CEO Amin Nasser noted: “Our second quarter results reflect a strong rebound in worldwide energy demand and we are heading into the second half of 2021 more resilient and more flexible, as the global recovery gains momentum.”

Last month, Exxon Mobil posted a rise in income of $4.7bn in the second quarter, compared to a loss of more than $1billion.

--There was cause for optimism in the U.S. restaurant sector just weeks ago.  Those who had survived waves of closures last year had headed into the summer ready for a big rebound, and for a while it was emerging.

But then the Delta variant took hold and now restaurant operators are seeing a more mixed picture.  Recent surveys clearly show an American public that is pulling back again in some regions.

In the Los Angeles market, where indoor mask mandates returned last month, dining visits were 17% lower in the week ending Aug. 1 compared with the same period in 2019, which was a reversal from more dining visits before the mask mandate was reintroduced.

National restaurant same-store sales in the week ending July 25 were the worst weekly performance in the last five weeks, though they remained higher compared with the same period in 2019, according to restaurant-analytics firm Black Box Intelligence.

New York City will require people to show proof of at least one dose for indoor dining by Monday, Aug. 16, with inspections and enforcement starting the week of Sept. 13.

But at least chains are seeing a boost from delivery and online ordering.

--Boeing Co. faces a potentially lengthy delay of months for the second test flight of its Starliner capsule as the company tries to sort out a glitchy valve problem and confronts a busy schedule in coming months at the International Space Station.

The company said Thursday that it’s gotten nine of 13 valves working normally but had no update on when the Starliner could be ready for a launch or any dates it might be targeting.

Just another setback for Boeing and its effort to show NASA that the ship can safely and reliably transport people to the ISS. 

Earlier Thursday, a Northrop Grumman Corp. Cygnos cargo vessel with supplies docked at the station and NASA plans another resupply trip later this month with a SpaceX Dragon craft.

Boeing did receive some good news, however, Thursday as China said it was beginning to test the 737 MAX airliner.

--As alluded to above, Southwest Airlines warned on Wednesday it may not be profitable in the third quarter, as the more infectious Delta variant hits bookings.  The airline said cancellations had increased this month, becoming the first major U.S. carrier to flag a hit from the more infectious strain.

The company forecast third-quarter operating revenue to be down 15% to 20% versus 2019, a cut of about three to four points from its prior outlook issued three weeks ago.  Southwest said the effects of the pandemic in August and September revenue trends would make it difficult for the company to be profitable in the third quarter of 2021.

--Separately, airline seat capacity in China dropped 32% in a week as the country imposed measures to contain coronavirus flare-ups.

--TSA checkpoint travel numbers vs. 2019 levels….

8/12…79 percent of 2019 base
8/11…75
8/10…75
8/9…79
8/8…82
8/7…84
8/6…77
8/5…76

This is going to be interesting to follow…if we aren’t solidly in the 80s, every day, there’s your clear sign of Delta variant hesitancy.

--Walt Disney Co. earnings topped Wall Street forecasts for the most recent quarter as its streaming services picked up new customers and the pandemic-hit theme parks unit recorded a profit.  Shares of the entertainment company rose 5% in after-hours trading Thursday, but slipped on Friday to finish with only a slight gain.

Disney CFO Christine McCarthy said that looking forward, theme park reservations at both U.S. parks remain strong, even as Covid cases surge.  Florida, where the flagship Walt Disney World is located, is the epicenter of the latest outbreak, posting record cases and hospitalizations in recent days.

“We are still bullish about our parks business going forward,” said CEO Bob Chapek on a call with analysts.  For April through July 3, Disney posted earnings per share of 80 cents, excluding certain items, well above forecast.  Net income came in at $918 million in the three months through July 3, compared with a loss of $4.72 billion in its fiscal third quarter a year ago.  Revenue climbed 45% to $17.02 billion.

Disney has staked its future on building streaming services to compete with Netflix in the crowded market for online entertainment. Disney+, Hulu and ESPN+…the company’s three online subscription offerings…gained close to 15 million new subscribers to total nearly 174 million.  Disney+ had 116 million paying customers at the end of the quarter, just ahead of the Street’s estimates.

Theme park revenue rose for the first time in five quarters, hitting $4.34 billion.  Net income for the division reached $356 million, compared with a loss of nearly $1.9 billion a year earlier when many Disney parks were closed.

--According to compensation consulting firm Johnson Associates, bonuses for Wall Street’s bankers are expected to be as much as 35% higher in 2021, with the biggest boost going to investment banking underwriters amid a surge in multi-billion-dollar deals, like Discovery and NBCUniversal.

Banks like Goldman Sachs and JPMorgan have posted record earnings as the economy booms.

Sales and trading professionals can expect their bonuses to increase as much as 25 percent amid the new highs in the equity markets, including overseas.

--Warren Buffett’s Berkshire Hathaway Inc. on Saturday said many of its businesses are enjoying strong recoveries from the early depths of the pandemic, fueling rebounds in profits and revenue.

The company Buffett has run since 1965 also signaled the billionaire’s confidence in its future by repurchasing $6 billion of its own shares in the second quarter, even as its stock price regularly set new highs.

Omaha, Nebraska-based Berkshire’s manufacturing, service and retailing businesses suffered last year as economic activity plunged, job losses soared and shoppers stayed home.  But now, Berkshire said its BNSF railroad, namesake auto dealership and housing units are among many businesses seeing “significant” recoveries despite supply chain disruptions and higher costs, with earnings and revenue in some instances topping pre-pandemic levels.

Berkshire has $192 billion of investments in Apple Inc., Bank of America and American Express, with revenue jumping 22% to $69.1 billion.  Berkshire also owns such businesses as GEICO and See’s Candies.

This past quarter was also notable for Buffett’s revealing that if he were to step down (and he turns 91 on Aug. 30), the next chief executive would be Greg Abel, a vice chairman overseeing Berkshire’s non-insurance businesses.

--Home prices in the U.S. are rising so rapidly they are outweighing the benefit of low borrowing rates.  In the second quarter, the typical mortgage payment for a single-family home rose to $1,215, from $1,019 a year earlier, the National Association of Realtors said this week, even as mortgages rates declined.

--A Carnival ship that set sail from Texas had 27 Covid-19 positive people aboard Wednesday, the highest number of reported cases on a U.S. ship since the cruise industry opened back up this summer.

The Carnival Vista arrived in Belize City with 26 infected crew members and one infected guest, according to the Belize Tourism Board.

Officials noted that there were more than 4,000 people on the ship, and 99.98 percent of the crew was vaccinated, along with the vast majority of the passengers.

The infected crew members are now in isolation, but “most are asymptomatic or have very mild symptoms,” Belize officials said.

--Sixteen years after acquiring Reebok for $4 billion, the German sportswear giant Adidas is selling it for a little more than half that to Authentic Brands Group, a serial acquirer of struggling brands.

In the past few years, Authentic has acquired Brooks Brothers and Forever 21, adding to a stable that includes Sports Illustrated.  The acquisition of Reebok was for about $2.5 billion and comes as Authentic prepares to go public.

Reebok has 70 percent of its sales outside the U.S. and Canada these days, though its world headquarters will remain in Boston.  The company hasn’t been a real factor in the sportswear game since the 1980s, when it was a formidable rival to Nike.

--Hackers behind one of the biggest ever cryptocurrency heists have returned more than a third of $613 million in digital coins they stole, the company at the center of the hack said on Wednesday.

Poly Network, a decentralized finance platform that facilitates peer-to-peer transactions, said on Twitter that $260 million of the stolen funds had been returned but that $353 million was outstanding.

The company, which allows users to swap tokens across different blockchains, said on Tuesday it had been hacked and urged the culprits to return the stolen funds, threatening legal action.  The hackers exploited a vulnerability in the digital contracts Poly Network uses to move assets between different blockchains, according to a blockchain forensics company.

The hackers or hacker have not been identified.

--The Tokyo Olympics garnered a historically low television audience over 17 days.

NBC averaged 15.5 million viewers according to Nielsen prime time telecast data, a record low for an Olympics on the network that has carried the Summer Games since 1988.

The Tokyo audience declined 41% from the 2016 Summer Games in Rio.  Since 2016, competition for viewers has grown exponentially with the addition of new streaming platforms, which have cut into the numbers for many major TV events.

NBC did draw a large audience over its Peacock streaming service and other platforms.

--“Jeopardy!” is a huge money maker for those stations that air it, and producer Sony, and after weeks of guest hosts that included celebrities from TV, sports and journalism, the daily syndicated quiz show chose its executive producer, Mike Richards, as the successor to Alex Trebek.

It just seems like the fix was in all along.  Personally, I thought CNBC’s David Faber was a natural for the job.

After fan backlash to the selection process that turned messy in recent weeks, according to reports, Sony Pictures Television split the pie by naming another guest host, Big Bang Theory actress Mayim Bialik, as emcee for “Jeopardy!” prime-time and spinoff series, including a new college championship.

The new season will debut on September 13, the 38th season for the program.

Foreign Affairs

Afghanistan: By week’s end, the Taliban had captured Afghanistan’s second and third largest cities in a lightning advance just weeks before America is set to end its longest war.

The seizure of Kandahar and Herat mark the biggest prizes yet for the Taliban, who have taken 12 of the country’s 34 provincial capitals as part of a weeklong blitz, and now control an estimated 2/3s of the country overall. 

With security rapidly deteriorating, the Pentagon was forced to announce Thursday that it was sending 3,000 troops to help evacuate some personnel from the U.S. Embassy in Kabul.  In the next week, an additional 3,500 U.S. soldiers will be sent to Kuwait and put on standby in case even more combat troops are needed in Kabul, and about a thousand other personnel will deploy to Qatar to assist Afghan allies evacuated from their home country with American help.

The additional muscle will augment a force of approximately 650 American troops who have been in Kabul since the U.S. military all but completed its withdrawal from the country last month.  Those forces have been split between the embassy and the airport.

Separately, Britain said about 600 troops would be deployed on a short-term basis to support British nationals leaving the country, and Canada and others are sending special forces to evacuate their embassies. 

Kabul isn’t directly under threat yet, but U.S. intelligence agencies now estimate it could fall within 30 days.

Tens of thousands of Afghans have been fleeing their homes across the country amid fears the Taliban will again impose a brutal, repressive government, all but eliminating women’s rights and conducting public executions.

Peace talks in Qatar remain stalled.

“We demand an immediate end to attacks against cities, urge a political settlement, and warn that a government imposed by force will be a pariah state,” said Zalmay Khalilzad, the U.S. envoy to the talks.  Oh brother.

The onslaught represents a stunning collapse of Afghan forces after the United States spent nearly two decades and $830 billion trying to establish a functioning state after toppling the Taliban in the wake of the September 11 attacks.  The advancing Taliban ride on American-made Humvees and carry M-16s pilfered from Afghan forces.

Editorial / New York Post

“It doesn’t get more idiotic: ‘The Taliban also has to make an assessment about what they want their role to be in the international community,’ White House Press Secretary Jen Psaki said with a straight face Wednesday.

“Oh, and the State Department has sent diplomats to ‘press the Taliban to stop their military offensive and to negotiate a political settlement, which is the only path to stability and development in Afghanistan.’  They’re also begging to have the U.S. embassy in Kabul left alone, warning that future U.S. aid is at risk – and so effectively promising that we’ll actually subsidize these barbarians.

“Hello?  The Taliban has never given a damn about world opinion or ‘stability and development.’  It was a global pariah when it ruled Afghanistan in the ‘90s, ignoring the handwringing as it crushed the country’s women, destroyed those 1,500-year-old Buddha statues and hosted the al-Qaeda plotters of 9/11.

“And it hasn’t changed a whit since, blowing off all diplomatic efforts these last 20 years to get it to abandon its drive to reconquer the country.

“These are fanatics out of the 10th century. They’re turning girls as young as 12 into sex slaves as they advance.

“The Afghan army, meanwhile, is showing all the fortitude of the Iraqi forces who melted before ISIS in 2014: Provincial capitals (plural) are falling every day… (To be fair, Afghan morale surely fell through the floor when Americans started literally abandoning bases in the middle of the night.)

“Now it’s a race to Kabul, where Uncle Sam is desperately rushing to airlift out all Americans in a replay of the 1975 fall of Saigon.

“The White House can pretend that diplomacy might somehow save the Afghan government, but its real sentiments rest in President Joe Biden’s words while campaigning last year, when he said he’d have ‘zero responsibility’ for what happened after he pulled U.S. troops out.

“We didn’t disagree with Biden’s move to remove the last U.S. ground forces, just as Donald Trump promised as well when he was in office.  That’s plainly what most Americans wanted, too. Afghanistan had become an endless war.

“But any pullout had to have a plan.  Not an utterly disastrous cut-and-run, with virtually no provision for the Afghans who worked with us all these years.

“The Army of the Republic of South Vietnam fought off an invasion in 1972 – with the help of massive U.S. airpower; 1975 was a disaster because anti-war liberals in Congress prevented more airstrikes.

“The same thing is happening now in Afghanistan.  Adela Raz, the Afghan ambassador to the United States, is perfectly right to complain that current U.S. air support is ‘extremely limited.’  Nothing forced Biden to go soft there.

“But the president said Tuesday he does ‘not regret’ his decisions.

“U.S. presidents have been making mistakes on Afghanistan for two decades.  But this rout is all on Biden.”

David Ignatius / Washington Post

“The bloody war in Afghanistan is nearing what may be a final tipping point this week, as the Taliban races to encircle Kabul and the United States pumps in 3,000 troops to protect the evacuation of Americans from the Afghan capital.

“Don’t ‘wait until it’s too late,’ Pentagon spokesman John Kirby told reporters Thursday, explaining the sudden decision to send in extra U.S. forces to safeguard the departure of Americans who might otherwise be trapped in the war’s brutal endgame.  ‘It’s doing the right thing at the right time to protect our people.’

“For President Biden, who had hoped for an orderly U.S. withdrawal from Afghanistan, the chaos in Kabul carries echoes of the fall of Saigon in 1975 – precisely the image he wanted to avoid.  And the Taliban’s drive for military victory – ignoring pledges to negotiate a transition of power – will raise questions about whether its promises to prevent al-Qaeda from rebuilding safe havens in Afghanistan can be trusted….

“What appears ahead is a battle for Kabul itself, a bloody confrontation from which the Biden administration is trying to extricate as many Americans as possible.  The Taliban, having nearly encircled the approaches to the capital, may decide to delay the final battle.

“U.S. officials hope the Taliban will be deterred by a warning this week from neighbors – Pakistan, Russia, China and Turkey – that they won’t recognize a Taliban government if the insurgents take power by force.  This diplomatic pressure is welcome, but late and limited.  Many key countries have been displaying the diplomatic equivalent of schadenfreude – savoring America’s predicament rather than considering their own future difficulties.

“The Taliban will have difficulty swallowing Afghanistan, for all its success on the battlefield. Afghanistan has become an increasingly urban and modern society since the U.S. invasion in 2001. The Taliban’s military forces number only about 80,000, in a country of about 39 million.  For millions of Afghan women, who have been attending schools and universities the past two decades and sharing in a freer country, the prospect of a Taliban return to power is especially bleak.”

Editorial / Washington Post

“President Biden has been crystal clear about getting U.S. forces out of Afghanistan: He wants it done by Aug. 31.  Come the 20th anniversary of the terrorist attacks of Sept. 11, 2001, there must be no U.S. boots on the ground. The terrible problem is that by Sept. 11 the Taliban, unseated when the United States invaded 20 years ago, might be in complete control again.  Mr. Biden’s precipitous withdrawal, as well as his refusal to offer more meaningful assistance to Afghanistan’s government, risks disaster….

“Mr. Biden surveys the impending disaster and absolves himself of any responsibility.  It’s up to Afghan leaders, he said Tuesday, to come together.  ‘They’ve got to fight for themselves, fight for their nation.’

“The truth is they had been fighting, but the United States trained them to do it with support from U.S. advisers and contractors.  Suddenly this support is gone. The Biden administration says it will take care of people who worked directly for the United States and face the most danger of Taliban violence and reprisal.  This is the right thing to do. In a real sense, though, this country assumed at least partial responsibility for all Afghans.  Leaving them now means walking away from that responsibility. Afghan lives ruined or lost will belong to Mr. Biden’s legacy just as surely as any U.S. dollars and lives his decision may save.”

Editorial / Wall Street Journal

“Former Defense Secretary Bob Gates famously wrote that President Biden has been on the wrong side of every major foreign-policy issue in his long career. The world is getting another example as Mr. Biden’s hell-bent, ill-planned withdrawal from Afghanistan is turning into a strategic defeat and moral debacle….

“Many Afghan troops are fighting bravely, but they lack the air support that has been their main military advantage.  Mr. Biden blundered in withdrawing all U.S. air power from the country, including private contractors who assist the Afghan air force in maintaining helicopters and planes.  The contractors are now literally having to assist via Zoom calls, while the U.S. military flies too few sorties from the Persian Gulf region to slow the Taliban.

“The White House has failed to understand what’s happening, with leaks saying the Administration is surprised by the Taliban assault. Surprised?  The military warned Mr. Biden and so did U.S. intelligence. The Taliban began this offensive on May 1, two weeks after Mr. Biden announced his withdrawal, aiming for the symbolic date of Sept. 11.

“The Pentagon said Thursday it is sending 3,000 troops back into the country to protect the withdrawal of U.S. Embassy personnel, as well as the evacuation of Afghan translators who assisted the U.S.  This is necessary but one more sign that the White House had no plan for helping our Afghan allies….

“Meanwhile, Donald Trump issued a statement absolving himself of all responsibility, though he cut the bad deal with the Taliban and set the 2021 withdrawal date.  ‘I personally had discussions with top Taliban leaders whereby they understood what they are doing now would not have been acceptable,’ Mr. Trump said.  ‘It would have been a much different and much more successful withdrawal, and the Taliban understood that better than anyone.’

“That’s not what Mr. Trump said in the spring when he praised the withdrawal and claimed credit. Both men were so determined to get political credit for bringing the troops home that they failed to face the consequences.  The military offered a way to keep a minimal force in the country, providing air and other support to Afghan troops.  Mr. Biden refused that advice and bet on retreat.

“Many Americans may not care now what happens in Afghanistan.  But, as in Vietnam, the abandonment of our allies will have significant costs.  When the world’s rogues sense that a superpower lacks the will to support its friends, they soon look for other ways to take advantage.”

Israel: Israeli Defense Minister Benny Gantz said Tuesday that “Israel will not stand by while Iran advances its nuclear program.”

The defense minister made the comments when speaking at IDF’s Northern Command, as tensions ramp up on the border with Lebanon, with rockets having been fired into Israel by the Iran-backed Lebanese terrorist group Hezbollah.  This also comes amid Lebanon’s ongoing economic crisis.

Gantz said Israel is willing to provide aid to their northern neighbor but added that it “will not enable the tragedy in Lebanon to cross the border into Israel. We are well aware of Hezbollah’s attempts to exploit the situation at the expense of the safety and livelihoods of Lebanese citizens – under the direct influence of Iran.”

“At the same time, we will continue to defend ourselves against the Iranian attempt to become an existential threat to the State of Israel and to transfer advanced munitions to its proxies on our borders. We will operate in the time and place and via the means that we will determine,” Gantz added.

Hezbollah is said to now have between 130,000 and 150,000 rockets and missiles, with many of them being capable of reaching deep into Israel, including ballistic missiles with a range of 700 kilometers.

It is believed that in the next war, Hezbollah will attempt to launch 1,500 to 3,000 rockets per day until the last day of the conflict.  To compare it with the recent war in Gaza, the last round of fighting with Hamas and Palestinian Islamic Jihad saw 4,400 rockets in 11 days.

But any short conflict with Hezbollah would be much deadlier than with terrorist groups in the Gaza Strip.

Iran: Meanwhile, Tehran is dealing with record Covid-19 case numbers and deaths, a full 1 ½ years into the pandemic, and the Iranian public is increasingly angered when they see images of vaccinated Westerners without face masks on the internet or on TV while they remain unable to get the shots.

Only 3 million of Iran’s more than 80 million people have received both vaccine doses, and the leadership has only itself to blame, as Ayatollah Ali Khamenei refused to accept vaccine donations from Western countries.  The Islamic Republic has sought to make the shots domestically, though that process lags far behind other nations.

[Much more next week on the failed nuclear negotiations.]

China: Beijing recalled its ambassador to Lithuania on Tuesday and urged Vilnius to do the same over Lithuania’s growing relationship with Taiwan, as lawmakers in the Baltic state were holding an extraordinary session to discuss the spiraling migrant crisis on its border with Belarus.

Lithuania has accused Belarus of using migrants to apply pressure to the European Union to reverse biting sanctions on the country.  [Latvia also has a problem with migrants from Belarus.]

“We don’t respond well to threats. We survived a Communist regime for over half a century and we are not responding to threats from the Russian authoritarian regime.  We are a Western, independent country, and we are not going to allow China or Belarus or Russia to somehow dictate that,” said opposition Social Democratic Party MP Dovile Sakaliene, a vocal China critic who was sanctioned by Beijing in March.

Lithuania was the first republic to declare independence from the Soviet Union and Sakaliene said because the diplomatic row coincided with a debate on Belarusian and Russian influence in the Baltics, it was a reminder of this authoritarian history.

Over the course of the year, Lithuania has emerged as China’s staunchest critic in the European Union.

The issue over Taiwan came because Taipei said it would open a diplomatic outpost in Lithuania.  It would be the self-ruled island’s first such de facto embassy in Europe to bear the name “Taiwan,” which Beijing sees as a violation of its one-China policy.

Lithuania also plans to open a representative trade office in Taiwan by the end of the year.

China’s foreign ministry said in a statement: “We urge the Lithuanian side to immediately rectify its wrong decision, take concrete measures to undo the damage, and not to move further down the wrong path,” the statement said.  “We also warn the Taiwan authorities that ‘Taiwan independence’ is a dead end and any attempt at separatist activities in the international arena is doomed to fail.”

Meanwhile, a court in China has convicted a Canadian businessman of espionage and sentenced him to 11 years in prison.

Michael Spavor has been detained since 2018, after being arrested with fellow Canadian ex-diplomat Michael Kovrig.

The verdict comes amid an extradition battle involving Meng Wanzhou, a senior executive at Chinese tech giant Huawei, residing in Vancouver.

Critics have accused China of treating both Spavor and Kovrig as political bargaining chips, held as part of what is known as “hostage diplomacy.”

Canadian Prime Minister Justin Trudeau said the conviction was “absolutely unacceptable and unjust.”

Finally, the Beijing Winter Olympics are rapidly coming up, Feb. 4, 2022.  Calls for a boycott are growing in some circles.

Editorial / Washington Post

“Weird as the spectacle in Tokyo might, at times, have been, skiing, snowboarding and ice dancing across China while the dictatorship tightens its grip, and millions suffer, would be grotesque.  Yet that is what participating nations, the IOC and the Games’ corporate sponsors seem to have in mind.  They all dismiss the boycott that human rights groups seek as either inappropriate or futile.

“To be sure, a boycott would probably not change China’s behavior, while athletes who have worked their whole lives for a shot at Olympic gold would pay a heavy price.  But if there is to be no boycott, then countries and companies must deny China the unchallenged showcase it craves.  The United States and its fellow democracies should devise appropriate condemnations and time for them at the Olympics.  As for the private sector, U.S. companies can speak up when they choose to do so, as many showed by their support of voting rights and opposition to anti-transgender legislation in this country; they should neither support nor celebrate an event in a country committing crimes against humanity. The United States and other media – the Games’ official broadcaster, NBC, very much included – must insist on covering the whole truth about China, and not just feel-good Olympics stories, while they are in the country.  And athletes, too, have a responsibility to show solidarity with China’s oppressed, as we hope and expect many will do, before, during and after the medal ceremonies.

“No government, company or individual should be complicit in the glorification of the Chinese regime’s crimes.”

Russia: Authorities announced a new criminal charge against Kremlin critic Alexei Navalny on Wednesday, the latest move in a crackdown ahead of September’s parliament election that could add as much as three years to his prison term.

Navalny, President Putin’s fiercest critic, is serving a 2 ½-year sentence for parole violations he calls trumped up.

The Investigative Committee, which probes serious crimes, said in a statement that Navalny had been charged with creating an organization that “infringes on the personality and rights of citizens,” a crime punishable by up to three years in jail.  A jail term of that length could keep Navalny in custody past the next presidential election in 2024, when Putin’s current six-year term in the Kremlin is due to end.

The Investigative Committee said that Navalny’s Anti-Corruption Foundation had incited Russians to break the law and take part in unauthorized protests demanding his release in January that authorities said were illegal.

As Navalny’s supporters posted on Telegram messenger, identifying themselves as ‘Team Navalny,’ “No one infringes on the personality and rights of citizens like Putin himself and all his henchmen, including the Investigative Committee.”

The IC also announced a new criminal investigation into two close Navalny allies, who are based abroad.

Editorial / Washington Post

“When Mr. Biden met with Mr. Putin in June, the American president raised Mr. Navalny’s persecution and vowed to keep up the pressure, because ‘that’s what we are, that’s who we are.’  Mr. Biden pledged to ‘standup for the universal and fundamental freedoms that all men and women have, in our view.’  Yet two months later, Mr. Putin’s war on civil society grinds on.”

Canada: Prime Minister Trudeau is planning a snap election for Sept. 20 to seek voter approval for the government’s costly plans to combat Covid-19, the announcement coming this Sunday.

Trudeau aides have said for months that the ruling Liberals would push for a vote before the end of 2021, two years ahead of schedule.  Trudeau only has a minority government and relies on other parties to push through legislation.  In recent months he has complained about what he calls opposition obstruction.

The Liberals racked up record levels of debt as they spent heavily to shield individuals and businesses from Covid-19.  They plan to inject an extra $80 billion into the economy over the next three years.

Growth is set to rebound in the third quarter and Canada currently has one of the world’s best inoculation records.

But a snap vote is a distinct gamble for Trudeau and his party.

Random Musings

--Presidential approval ratings…

Gallup: No update.

Rasmussen: 47% approve of Biden’s job performance, 52% disapprove (Aug. 13).

--New York Gov. Andrew Cuomo resigned on Tuesday.  A stunning fall in about a week after a bombshell report by New York state Attorney General Letitia James that laid out evidence of sexual misconduct against 11 women, most on his staff, including a state trooper he had assigned to his personal security detail.  Democrats from Albany to the White House immediately piled on, saying Cuomo needed to save the party by stepping down.

But while in his resignation speech he took responsibility for his actions and apologized to his accusers, Cuomo also called James’ report “false.”  He said, “rashness has replaced reasonableness,” an impeachment would “brutalize people” and claimed he was unaware that cultural lines had shifted in the treatment of female subordinates.

It was an amazingly arrogant performance.

So Lieutenant Governor Kathy Hochul is set to become the first woman to serve as governor of New York.  By her own admission, she hardly knows Cuomo, and he never included her in the major decisions of the day. 

Hochul served as a town supervisor in upstate New York for a lengthy spell, and in 2011, won a special election for a U.S. congressional district no Democrat had won in 40 years.  She was elected as lieutenant governor in 2014 on Cuomo’s ticket.

But she was almost never present at Cuomo’s much-publicized briefings at the start of the coronavirus crisis.  However, the distance from him may now prove to be a blessing in November 2022, if Hochul decides to run for governor, as is expected.

Meanwhile, Hochul is going to be a little-known governor from upstate, and she’s going to need the support of the probable mayor of New York, Democrat Eric Adams.  The two need each other and should get along swimmingly.

Editorial / New York Daily News

“Gov. Cuomo had no choice.  If he didn’t resign, he would have been removed through impeachment and conviction.  So instead of being dragged out, he walks away on Aug. 24, handing over the reins to Kathy Hochul.  It was the right thing to do, even as he denied the sexual harassment he has been accused of by women who bravely risked everything to come forward.

“There will be plenty of time during the next two weeks and beyond to evaluate his 10 years, seven months and 24 days as governor, and his earlier record as state attorney general, federal cabinet secretary, homeless advocate and his father’s top political aide.

“For now we praise him for sparing the state a drawn out fight when Covid is returning with a vengeance and there are dozens of other problems to fix.  Maybe he just saw that he didn’t have the votes.  Maybe he knows that his denials are ultimately unsustainable.  Whatever it is, Cuomo wants to be remembered not for fighting with bare knuckles to the bitter end, but for bowing out with at least a thimble of grace.

“Sexual harassment, intentional or not (as Cuomo contends) makes the lives of working women a constant, exhausting, degrading uphill climb, and that is why it is intolerable. That Cuomo is felled should end any doubt in anyone’s mind about what is okay and what isn’t.

“This is a profoundly sad moment, not just for a man who held great promise, but for the state of New York.

“No doubt there are high-fives, among progressives who’ve long loathed Cuomo and among conservatives who are the governor’s ideological enemies.  Cuomo was and is, as we said upon endorsing him for reelection, a piece of work.  But those celebrating should be careful what they wish for.  Cuomo’s been making the hard decisions for a decade plus.  Now those choices will be up to those who delight in his departure.  May they, and our next governor, do the right and not the easy things.”

This afternoon, the New York State Assembly opted to suspend its impeachment probe with Cuomo’s announcement he is stepping down.

--Tom Hamburger, Rosalind S. Helderman and Amy Gardner / Washington post, on the plight of local election officials these days:

“Nine months after the 2020 election, local officials across the country are coping with an ongoing barrage of criticism and personal attacks that many fear could lead to an exodus of veteran election administrators before the next presidential race.

“ ‘The complaints, the threats, the abuse, the magnitude of the pressure – it’s too much,’ said Susan Nash, a city clerk in Livonia, Mich., who has contended with ongoing questions about the integrity of the process in her community.

“As Trump continues to promote the false notion that the 2020 White House race was tainted by fraud, there is mounting evidence that his attacks are curdling the faith that many Americans once had in their elections – and taking a deep toll on the public servants who work to protect the vote.

“A Monmouth poll taken in June found that a third of Americans believed that President Biden won the White House due to fraud, including 63 percent of Republicans and Republican-leaning independents.

“Officials from counties large and small say they are inundated with false claims, such as unsubstantiated allegations that Chinese hackers siphoned votes or that ballots marked by Sharpie pens were disqualified.

“The anger is palpable and personal, leading many to fear for their safety.

“On Friday, an orange prison jump suit was delivered to offices of the Maricopa County (Arizona) Board of Supervisors, addressed to the five-member board, which has strongly denounced a recount of 2020 ballots commissioned by the GOP-led state Senate as a sham.

“Threats against the Republican-majority board have picked up in recent weeks, particularly after it refused to comply with the Senate’s most recent demand for access to local computer routers and internal logs, said Maricopa County Supervisor Bill Gates.  The board’s stance led some members of the state Senate to call for the supervisors to be jailed and even held in solitary confinement.

“Last week, Gates said, the board received a voice mail in which a caller threatened to kill each member and their families.

“ ‘This stuff isn’t organic,’ Gates said, saying the attacks amount to ‘a whole dehumanizing of people.’

“ ‘It’s that concept that we’re somehow not worthy of respect or safety,’ he said.  ‘That we’re traitors.’”

It’s sick.

--Trump campaign attorneys Rudy Giuliani and Sidney Powell on Wednesday lost their bids to dismiss defamation claims brought by voting machine company Dominion Voting Systems.  Dominion has filed multiple lawsuits against Trump allies and conservative television networks.  The company said it was defamed because Trump and his supporters spread false claims that it rigged the 2020 election against him.

--In closed-door testimony Saturday before the Senate Judiciary Committee, former acting attorney general Jeffrey Rosen said he had to “persuade the president not to pursue a different path” at a high-stakes January meeting in which Trump considered ousting Rosen as the nation’s most powerful law enforcement officer.

According to a person familiar with the testimony, Rosen’s opening statement also characterized as “inexplicable” the actions of his Justice Department colleague, Jeffrey Clark, who was willing to push Trump’s false claims of election fraud and whom Trump considered installing as acting attorney general to replace Rosen.

Two weeks ago, Congress obtained and released handwritten notes from Rosen’s deputy, Richard Donoghue, who participated in phone calls with Trump and Rosen in which the president urged them to cast doubt on the integrity of the election.

Saturday, Rosen appeared before the Senate committee, for seven hours, to deliver his account directly.  Donoghue testified as well.

--The UN Climate Report

Three decades after a group of scientists sanctioned by the United Nations first warned that humans were fueling a dangerous greenhouse effect, the same body – the Intergovernmental Panel on Climate Change – issued its latest and most dire assessment.  The report detailed how humans have altered the environment at an “unprecedented” pace and cautioning that the world risks increasingly catastrophic impacts in the absence of rapid greenhouse gas reductions.

The landmark report, compiled by 234 authors and relying on 14,000 studies from around the globe, lays out the most up-to-date understanding of the physical science on climate change.  The report also comes less than three months before a critical summit this November in Scotland, where world leaders face mounting pressure to act quickly.

The assessment states there is no remaining scientific doubt that humans are fueling climate change.  But now the issue is, according to the authors, whether the world can act jointly to stave off disaster.

UN Secretary General Antonio Guterres called the findings “a code red for humanity” and said societies must embrace the transformational changes necessary to limit warming as much as possible.

The authors state carbon dioxide in the atmosphere has risen to levels not seen in 2 million years.  The oceans are turning acidic.  Sea levels continue to rise.  Arctic ice is disintegrating.  Weather-related disasters are growing more extreme and affecting every region of the world, as we’ve seen in just the past few months.

But for all the dire news, lead author Claudia Tebaldi, a scientist at the Pacific Northwest National Laboratory, said people should not dwell in regret for the failures of the past, but rather they should focus on what can still be done.  Each degree of warming that humans avoid saves us from climate catastrophes that don’t have to happen.

Separately, greenhouse gas emissions from the U.S. energy industry are on track to surge the most in more than three decades as utilities increasingly turn to coal to power the economic recovery.

Carbon emissions will rise 7% this year to 4.89 billion metric tons, according to government data released Tuesday, the biggest increase since at least 1990. Coal’s share of the U.S. power mix will increase to 23%, up from 20% last year, as high natural gas prices prompt utilities to burn more of the dirtiest fossil fuel.

But, despite the significant increase in emissions, they won’t be back to pre-pandemic levels, as they took a massive 11% dive in 2020.  The Energy Department in January predicted emissions would rebound just 4.7% this year.

Coal is getting a price boost around the world because of the global recovery and ensuing increase in power consumption.  U.S. exports are rising as a result, and miners are ramping up production.  Coal output in the U.S. is expected to climb 13% in 2021 as demand grows both domestically and internationally.

George Will / Washington Post…the other side…

“Because unusual weather events are routinely reported as consequences of climate change, (physicist Steven E.) Koonin, (formerly of Caltech, now at New York University after serving as the senior scientist in President Barack Obama’s Energy Department) warns: ‘Climate is not weather. Rather, it’s the average of weather over decades.’  Of course the climate is changing (it never has not been in Earth’s 4.5 billion years), the carbon footprints of the planet’s 8 billion people affect the climate, and the effects should be mitigated by incentives for behavioral changes and by physical adaptations….

“Sea levels, currently rising a few millimeters a year, have been rising for 20,000 years.  Koonin cites recent research that the rate of rise ascribable to melting glaciers has ‘declined slightly since 1900 and is the same now as it was 50 years ago.’  The melting of the Greenland and Antarctic ice sheets contributes no more to rising sea levels in recent decades than it did 70 years ago.  The average warmest temperature across the United States has hardly changed since 1960 and is about what it was in 1900….

“New coal-fired power plants in China and India will double and triple those nations’ emissions, respectively.  There are, Koonin says, five times more people ‘developing’ than ‘developed,’ and in this century cumulative carbon dioxide emissions from developing nations will be larger than from developed nations.  Every 10 percent reduction that the developed world makes (‘a reduction it has barely managed in 15 years’) will offset less than four years of emissions from growth in the developing world.

“Koonin notes that this week’s UN study expresses low confidence in most reported trends in hurricane properties over a century, is uncertain whether there is more than natural variability in Atlantic hurricanes and calls its extreme emissions scenarios unlikely. Some of its plausible emissions scenarios project 1.5 to 2.7 degrees Celsius warming by 2100.

“By then, however, global gross domestic product, which grows by a larger multiple than population, will mean a much-increased per capita global wealth.  A previous UN report said that a large global temperature rise of 3 degrees Celsius might negatively impact the global economy as much as 3 percent by 2100.  Koonin says: Assuming, conservatively, 2 percent annual growth, the world economy, today about $80 trillion, would grow to about $400 trillion in 2100; climate impacts would reduce that to $388 trillion.  Not quite an ‘existential’ threat.”

--Greece’s prime minister apologized for failures in tackling the wildfires tearing across the country.  Hundreds of firefighters have been battling huge blazes that have forced thousands of people to flee their homes and destroyed scores of properties.

“We may have done what was humanly possible, but in many cases it was not enough,” Kyriaskos Mitsotakis said.

Meanwhile, Turkey has been dealing with its worst floods on record, following devastating wildfires, the death toll in the former rising to 27.

The wildfires had just been brought under control when the floods hit the same southern coastal region.  Torrents of water tossed cars and heaps of debris along streets, bridges were washed out, with Turkey’s interior minister saying, “This is the worst flood disaster I have seen.”

So in the span of about four weeks, we’ve had record/deadly flooding in Germany, Belgium, Turkey and China.

Speaking of China, there were further deadly floods in Hubei province today, with the town of Liulin receiving 19.7 inches of rain in the span of 12 hours.  At least 21 died.

--Lastly, NOAA announced today that July was the planet’s hottest month ever recorded, though official records ‘only’ date back 142 years, to 1880.  The combined land and ocean-surface temperature was 1.67 degrees Fahrenheit above the 20th-century average of 60.4 degrees F., according to federal scientists.

---

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.

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Gold $1781
Oil $68.02

Returns for the week 8/9-8/13

Dow Jones  +0.9%  [35515]
S&P 500  +0.7%  [4468]
S&P MidCap  +0.5%
Russell 2000  -1.1%
Nasdaq  -0.1%  [14822]

Returns for the period 1/1/21-8/13/21

Dow Jones  +16.0%
S&P 500  +19.0%
S&P MidCap  +18.4%
Russell 2000  +12.6%
Nasdaq  +15.0%

Bulls 56.4
Bears 15.9

Have a good week.

Brian Trumbore

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