Week in Review

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Week in Review

08/07/2021

For the week 8/2-8/6

[Posted 9:30 PM ET, Friday]

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Edition 1,164

Covid cases are surging all over again.  In Southeast Asia, massive spikes in Indonesia, Malaysia, Vietnam and Thailand are impacting the global supply chain, and now China is concerned over a resurgence of the virus in some of its provinces when they thought they had it wiped out.

Here in the U.S., if you are in the airline industry and you think business travel is coming back, you’re wrong. In fact I’ve said quite a few prescient things the last few months, like on this topic.  Next time I’m taking a victory lap.

But amid the darkness, we are finally seeing a pickup in vaccinations among the non-believers.

“The silver lining of this is that people are waking up to this and this may be a tipping point for those who have been hesitant,” National Institutes of Health Director Francis Collins said on the talk shows Sunday.  “That’s what desperately needs to happen if we’re going to get this Delta variant put back in its place, because right now it’s having a pretty big party in the middle of the country.”

I’ve been a little miffed that my city of Summit, N.J., hasn’t issued a Covid update all summer.  Finally, today, we received the numbers from our regional health department…34 confirmed cases in July, which we learned is double that of June’s 16 cases.

So it’s circulating anew.

But what was interesting was this.  “Among the most-recent confirmed cases, (the regional health dept.) reports 13 cases involved residents identified as fully vaccinated, and who presented as asymptomatic or experiencing mild symptoms, and a 41-year-old unvaccinated individual who was hospitalized.”

Further confirmation us vaccinated folks can still get it, but also further proof we won’t get seriously ill.

Nonetheless, today our governor, Phil Murphy (Dem.), mandated that students in preschool through 12th grade, as well as staff members and visitors, must wear masks indoors in all schools as the new academic year begins in a few weeks.

It’s an interesting call, given that Murphy is up for reelection this fall and his Republican opponent will have a field day with it.

That said, just wear the freakin’ mask.  It’s no big deal, as long as the classrooms are back to normal size, and that’s where the teachers’ unions will come in.  Here we go, all over again.

It’s the adults who are the assholes.  The kids adapt as they always have.  These crying mothers that their child is getting hurt by having to wear a mask all day are so full of merde.

This week I had a cool opportunity.  My high school classmate, Rev. Michael Westbrook and his fantastic wife, Maria, have a terrific youth program at their church in Newark, N.J.  Michael invited me to speak to his high school kids, but it was going to be on Zoom.  I said, “No…no Zoom.  I’m only doing it in person.”  I hate Zoom.

So the Rev. had a hybrid setup.  I addressed those who were comfortable being in a room together, while down the hall there was a Zoom setup for the rest.

I was their first in-person speaker since the pandemic started.  And they were a great group, no one complaining about having a mask on the whole time, even as I went on and on for a Castroesque 70 minutes!

What did I talk about?  Hey, it’s me.  What do you think I did?  I’m not treating them any different than my normal readership. I wanted them to know everything from Lebanon and Afghanistan, to the plight of the early black ballplayers, to Ronnie Spector and the Ronettes…I gave them my take on all the voting rights issues in the state legislatures, community service, my 24-hour rule, and even the North Carolina-Georgetown 1982 NCAA basketball final.

And all the while, the masks stayed on.  They were engaged, and asked questions.  Masks are not a big deal, people.

And thank you for the opportunity, Michael and Maria!

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I don’t agree with all the following, but a little different take on today’s environment.

Editorial / New York Post

“Let’s face it: The CDC and its public-health peers have been disaster shows all pandemic long (recall the test it insisted was the only acceptable one, until it turned out to not work?), but the failing has reached the level that the only rational thing to do is to not take its hopeless advice as gospel. Be sensible, but don’t let the scaremongering stop you living your life.

“The risk of death or hospitalization for anyone who’s gotten jabbed remains very, very low.  Kids under 12 are also extremely safe.  And, yes, even a single shot of the two-step Moderna and Pfizer jabs does a world of good.

“So get vaxxed. Don’t make a scene over the stupid ‘Mask on the planes, trains and taxis’ rules.  Try to persuade any unvaxxed friends and family to get jabbed.  (But don’t scream: it doesn’t help; people have reasons that make sense to them.)

“Look: If the jabs had any significant side effects, the media would be blaring about them.

“Basically, stay sane – and try to spread the sanity.  Humans are social animals; the holdouts will catch up eventually.

“The coronavirus may be here to stay, but the menace is gone. From 1918 through 1920, the Spanish flu infected roughly a third of the world population, killing tens of millions. The distant descendants of that virus still kill tens of thousands of people globally each year – but life goes on.  That’s the inevitable future of Covid because evolution favors strains that are more contagious but far less deadly, since killing your host is a losing ‘strategy.’

“In the decade after the Spanish flu, the nation saw an explosion of social, economic and cultural exuberance. Something like that is our own future, too, once our elites get past their hysteria.  It’s now time to move on – and let the good times roll.”

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Another issue of major import these days is the $1 trillion infrastructure bill being debated and worked on in the Senate.  As I’ve noted many times, President Biden must get this passed.

But even should this occur, progressive Democrats in the House are likely to torpedo it, as they want the follow-on $3.5 trillion package that is to follow, which has no chance in hell of receiving a single Republican vote…in either body.

The rest of Biden’s presidency is not only at risk, but certainly Democratic House members must understand their own political futures could be in peril in 2022, starting with their ever-slim current majority.

Democratic caucus chairman Hakeem Jeffries (N.Y.) went after the progressive wing of his party in an interview with the New York Times on Wednesday.  Jeffries, a fave of mine, is tired of hearing liberals bitching about how Democrats – and their leaders, of which he is one – aren’t doing enough to advance progressive policies.

“The extreme left is obsessed with talking trash about mainstream Democrats on Twitter, when the majority of the electorate constitute mainstream Democrats at the polls,” Jeffries said.  “In the post-Trump era, the anti-establishment line of attack is lame – when President Biden and Democratic legislators are delivering millions of good-paying jobs, the fastest-growing economy in 40 years and a massive child tax cut.”

Biden’s Agenda

--After days of debate and votes on amendments, U.S. Senate lawmakers worked behind the scenes on Thursday to largely wrap up the infrastructure bill on which they can agree so that they are able to move on to what is likely to be a partisan brawl over a sweeping budget spending plan.

Democratic Senate Majority Leader Chuck Schumer vowed to delay the start of their five-week summer break into next week to consider the $3.5 trillion budget resolution.

“Everybody understands that right behind this is going to be the budget, and I don’t think anybody’s looking to extend this out any longer than necessary,” Republican Senator John Cornyn told reporters.

But then Congress’ nonpartisan scorekeeper, the Congressional Budget Office, said yesterday that the infrastructure deal would increase the federal deficit by hundreds of billions of dollars, contradicting the claims of the plan’s authors, so this could strain support for the package, making the ultimate fate unclear.

The CBO found the plan would directly add $256 billion to the deficit over the next 10 years, which is probably understating the final toll.

Lawmakers involved in the deal have repeatedly insisted that the measure would be paid for with new sources of revenue and other budget changes.

So now, final passage has been pushed out until at least Saturday.  Among the unresolved issues is how to modify a provision of the bill dealing with reporting requirements for cryptocurrency transactions for tax collections.

The legislation includes $110 billion in new spending for roads and bridges, $73 billion for electric grid upgrades, $66 billion for rail and Amtrak, and $65 billion for broadband expansion.  And it provides $55 billion for clean drinking water and $39 billion for transit.

--U.S. Customs and Border Protection (CBP) stopped 834 unaccompanied minors at the U.S.-Mexico border Wednesday, the most since the Biden administration began releasing a daily tally of apprehensions of children earlier this year.

Additionally, a top DHS official estimated in a court filing that more than 19,000 children traveling alone were picked up by immigration officers last month.  That number would top the previous high of 18,877 in March of this year and works out to an average of more than 600 unaccompanied children being apprehended per day.

The numbers released Thursday also revealed that the number of kids held by CBP has increased more than fourfold since late May, when the Departments of Homeland Security (DHS) and Health and Human Services (HHS) released their first daily report.

On May 27, 635 children were in CBP custody. As of Wednesday, that number had swelled to 2,784.

Jason L. Riley / Wall Street Journal

“If it’s unfair to lay all blame for the mess on the southern border at the feet of President Biden, his administration certainly deserves the lion’s share.

“For all the devastation that Covid-19 has heaped on us, the pandemic provided a breather for border patrol. Apprehensions at the Mexican border are a proxy measure of illegal entries, and in the fiscal year ending Sept. 30, 2020, there were about half as many apprehensions as there were a year earlier.

“After Mr. Biden took office, the initial rise in border arrests was thought to be no big deal.  ‘What we’re seeing right now is a predictable seasonal shift,’ the Washington Post reported confidently in March.  ‘When the numbers drop again in June and July, policymakers may be tempted to claim that their deterrence policies succeeded.  But that will just be the usual seasonal drop.’

“Except that no serious deterrence policies emerged, and the numbers didn’t drop or even level off.  They’ve increased every month of the Biden administration, even during the hottest part of the summer, when they normally come down… For the current fiscal year through June, CBP recorded more than 1.1 million apprehensions.  The last time it reached even a million was 2006.

“Don’t worry, it gets worse.”

Mr. Riley is referring to the Covid angle, and the failure of U.S. authorities to test adult migrants for the coronavirus in jam-packed border processing centers, which is creating a potential for new transmissions.

“No one can say for certain how big a role these high levels of illegal immigration have played in the spread of the virus, but the Biden administration can’t have it both ways.  If the president wants the public to defer to public-health officials when it comes to masking and social distancing, he can’t expect people to ignore these same officials when they tell us that large numbers of recent migrants may be contributing to the crisis.”

Rep. Henry Cuellar (D-Texas), whose district includes the border, called on the administration to take action.

“Our DHS agents, & border communities, are overwhelmed & must be prioritized.  DHS will again encounter over 180,000 immigrants at the southern border during July – adding to the more than 1M immigrants that have arrived at the southern border in FY21.  Something has to change!”

Cuellar and Republican Sen. Lindsey Graham sent a letter to President Biden last week, urging him to name former Department of Homeland Security Secretary Jeh Johnson as border czar.

But the administration just chooses to ignore the issue.  And so they will get slaughtered at the polls in the mid-terms.

--A group of real estate entities asked a federal court late Wednesday to block enforcement of the Biden administration’s new eviction moratorium, reopening a battle that seems headed for the Supreme Court.

Arguing that the Centers for Disease Control and Prevention “caved to the political pressure” by creating what the administration called a “targeted,” 60-day freeze on evictions in counties with a high spread of Covid-19, the groups asked the district court in Washington, D.C., to immediately block the new moratorium.

“A majority of the Supreme Court made clear that the eviction moratorium exceeds the CDC’s statutory authority and could not be extended beyond July 31,” the Alabama Association of Realtors and other groups said in court papers.  “The Supreme Court’s ruling was hardly ambiguous.  Indeed, the White House clearly acknowledged that the Supreme Court had ruled that the CDC lacked authority to extend the moratorium.”

Editorial / Washington Post

“Americans behind on their rent payments may have cheered when the Centers for Disease Control and Prevention announced Tuesday a new eviction moratorium for most of the nation, this one set to last until October. With some 6 million people owing back rent, many of them victims of Covid-19’s sudden economic damage, there is little doubt about the need for aid, particularly because people are about to be thrown out of their homes just as disease rates are climbing.

“But the CDC’s action was almost certainly illegal.  Under pressure from House Speaker Nancy Pelosi and progressive Democrats, President Biden and the CDC may have muted accusations that they failed to stick up for desperate renters.  The administration also may succeed in giving many Americans a short reprieve from eviction.  But perhaps not as long as advertised – because courts may strike it down before October – and at the expense of the rule of law.

“The CDC crafted its new moratorium after a previous eviction ban expired last week.  The old policy covered the whole country and had been in place since September.  But Supreme Court Justice Brett M. Kavanaugh warned in June that the CDC has ‘exceeded its existing statutory authority by issuing a nationwide eviction moratorium’ and that it could not be renewed absent ‘clear and specific congressional authorization.’  Justice Kavanaugh was the crucial fifth vote that stopped the court from immediately striking down the old eviction ban, giving states an extra few weeks to begin distributing some $47 billion in federal rental aid.

“The CDC on Tuesday tried to get around this ruling by issuing a new ban that covers only areas ‘experiencing substantial and high levels of community transmission.’ This amounts to 80 percent of counties.  Advocates argue that the rise of the Delta variant may have changed the court’s thinking and that the new policy is more closely tailored to the worsening public health situation.  They also argue that Justice Kavanaugh may uphold another temporary policy while federal rental aid money is still only trickling out.

“That is unlikely. The law the CDC relies on to justify its unilateral eviction ban authorizes the agency to impose measures such as ‘inspection, fumigation, disinfection, sanitation, pest extermination, and destruction of animals,’ not to freeze the rental housing market month after month in nearly the entire country.  Many landlords are themselves desperate, on the hook to keep up their properties, pay taxes and service loans whether their tenants pay their rent.  Justice Kavanaugh in June clearly signaled willingness to disregard their plight – and the law’s limitations – for another few weeks, not months….

“Indeed, the onus remains on states and localities: they cannot count on the new moratorium, issued on shaky legal ground, to absolve them of responsibility to aid renters.

“If the Trump administration had ignored a direct warning from the Supreme Court, Democrats would rightfully line up to condemn the president.  Mr. Biden does not get a pass on the rule of law because his heart is in the right place.”

The Pandemic

Covid-19 death tolls, as of tonight….

World…4,289,601
USA…632,638
Brazil…561,807
India…427,401
Mexico…243,165
Peru…196,760
Russia…163,301
UK…130,178
Italy…128,187
Colombia…122,087
France…112,158
Argentina…107,213
Indonesia…104,010
Iran…93,086
Germany…92,271
Spain…82,006
Poland…75,281
South Africa…74,352
Ukraine…53,065
Turkey…51,976
Chile…35,880
Romania…34,305
Ecuador…31,774
Czechia…30,367
Hungary…30,033
Philippines…28,673
Canada…26,654
Belgium…25,264
Pakistan…23,702
Bangladesh…22,150
Tunisia…20,679

U.S. daily death tolls…Sun. 213; Mon. 262; Tues. 516; Wed. 656; Thurs. 559; Fri. 747.

Covid Bytes

--The director-general of the World Health Organization called for a moratorium on coronavirus vaccine booster shots to allow vaccine access to countries struggling to obtain jabs as the global total of Covid-19 cases surpassed 200 million Wednesday.

“We call on everyone with influence – Olympic athletes, investors, business leaders, faith leaders and every individual in their own family and community – to support our call for a moratorium on booster shots…until at least the end of September,” Dr. Tedros Adhanom Ghebreyesus said. 

Tedros said the goal was to focus on enabling at least 10% of the population of every country to be vaccinated.

Top U.S. health officials have said there is not yet enough data to support booster shots, even for the elderly and immunocompromised, though Israel is now recommending them for those groups.  But the WHO’s call for a booster moratorium comes as infections are surging across the U.S. – where vaccine is plentiful but vaccine hesitancy remains a serious concern.

[Germany and Britain are among those talking of booster shot for the elderly and high-risk groups in September.]

--The United States reached a milestone of getting at least one coronavirus vaccine dose to 70 percent of adults on Monday, almost a month after President Biden’s original July 4 goal.

Biden tweeted: “Unlike a year ago, we have the ability to save lives and keep our economy growing.  We know we can dramatically lower the cases in the country.  We can do this.  Get vaccinated.”

--Florida Republican Gov. Ron DeSantis ripped President Biden Wednesday, accusing the White House of trying to implement a “biomedical security state” and warning that “I don’t want to hear a blip about Covid” until the administration’s border policy changes.

“This is a guy who ran for president saying he was gonna ‘shut down the virus.’  And what has he done?” DeSantis asked.  “He’s imported more virus from around the world by having a wide-open southern border.”

“I can tell you, whatever variants are around the world, they’re coming across that southern border,” the governor added.  “And so, he’s not shutting down the virus, he’s helping to facilitate it in our country.”

DeSantis then turned his ire on the CDC’s recommendation that masks be worn in all K-12 schools by students, teachers, staff and visitors.

“I can tell you in Florida, the parents are going to be the ones in charge of that decision,” he said.

Biden had said earlier in the week: “If some governors aren’t willing to do the right thing to beat this pandemic, then they should allow businesses and universities who want to do the right thing to be able to do it,” Biden said Tuesday in response to pushback against mask and vaccine mandates. “I say to these governors, ‘Please, help.’  But if you aren’t going to help, at least get out of the way of the people who are trying to do the right thing.  Use your power to save lives.”

The fact is, Gov. DeSantis, your state has become the epicenter of the current surge.

Hospitalizations across the U.S. swelled to nearly 56,000 Covid patients on Tuesday, with Florida hitting an all-time state high of 11,863 people who were in hospital beds receiving care for confirmed cases.

--Moderna’s coronavirus vaccine booster appears to produce a “robust” antibody response against the fast-spreading Delta variant, the company said Thursday as it warned that the third shot would “likely” be needed this fall.

As part of its earnings report, the drugmaker revealed that its original two-dose vaccine regimen remains highly effective through six months after the second shot, but the company believes that the “increased force of infection resulting from Delta” will lead to a surge of breakthrough infections in vaccinated people over the next few months.

“We are pleased that our Covid-19 vaccine is showing durable efficacy of 93% through six months, but recognize that the Delta variant is a significant new threat so we must remain vigilant,” Moderna CEO Stephane Bancel said in a statement.

Moderna’s 93% efficacy rate after six months is higher than Pfizer’s estimate for its own vaccine, which the company reported last week to be about 84%, and it’s just slightly lower than the 94.1% rate in the immediate days after full immunization.

--CNN President Jeff Zucker told staff Thursday that the network fired three employees who came to work without getting a Covid-19 vaccine, as the company steps up efforts to keep the virus from spreading in its offices.

“In an email to employees Thursday, Zucker said that the terminated employees violated the company’s honor system, which asked workers to attest that they were vaccinated but didn’t require them to produce documentary evidence of their vaccination.

“Let me be clear – we have a zero-tolerance policy on this,” Zucker said.  “You need to be vaccinated to come to the office.  And you need to be vaccinated to work in the field, with other employees, regardless of whether you enter an office or not.”

--New York City Mayor Bill de Blasio announced Tuesday that New Yorkers will have to show proof of vaccination at gyms, bars, restaurants and live performances.

Enforcement is scheduled to begin Sept. 13, which coincides with the first day of school for kids in the Big Apple.

--Louisiana and seven San Francisco Bay Area counties are among those areas mandating people wear masks indoors starting this week.

In the former, it was simply inevitable.  You saw New Orleans fully open, big crowds again, and you knew it wasn’t going to work…it was just too soon, especially for one of the least vaccinated states.

But I hope you enjoyed the Jell-o shot girls, guys, and you didn’t make the mistake of wearing a white shirt like I did one time while partaking in same.

--Sen. Lindsey Graham (R-S.C.) revealed Monday that he has tested positive for Covid despite being vaccinated against the virus.

Graham said he began to feel ill over the weekend and the House physician informed him of the diagnosis early Monday.

“I started having flu-like symptoms Saturday night and went to the doctor this morning,” Graham said in a statement.  “I feel like I have a sinus infection and at present time I have mild symptoms.”

He added that he was glad he got the vaccine because without it, “I am certain I would not feel as well as I do now.”

Wall Street and the Economy

Federal Reserve Vice Chairman Richard Clarida said the economy’s recovery is such that the Open Market Committee could consider lifting interest rates from near zero by early 2023.  Like whoopty-damn-do.  Hardly a reason to panic.

Clarida said under his current projections for inflation and employment, “commencing policy normalization in 2023 would…be entirely consistent with our new flexible average inflation targeting framework.”

Clarida, whose term expires in January, was a leading architect of the Fed’s new policy unveiled one year ago by Fed Chairman Jerome Powell.  That framework calls for the central bank to seek periods of inflation moderately above its 2% goal to make up for past misses of the target.

The Fed’s framework wasn’t designed for an environment where prices are surging due to bottlenecks and supply shortages associated with reopening the economy. 

At their meeting in June, 13 of 18 Fed officials projected they would raise interest rates from near zero by 2023, with seven expecting to raise rates next year.

On the economic data front, the July ISM reading on manufacturing came in at 59.5 (50 the dividing line between growth and contraction), the second straight month it slowed, while the service sector reading rose to 64.1, up from 60.1 in June and the fastest pace since this series began in 2008, surpassing the record set in May.

Manufacturing is suffering (slightly, given the still robust figure) because of supply-chain problems and labor shortages.

Service sector industries, including restaurants and bars, trucking companies and hotels, are facing many of the same problems but have been aided by strong demand that has helped them surmount some of those issues.

Separately, the U.S. trade deficit widened to a record in June as the resurgent American economy drove strong demand for foreign-made goods ahead of the Delta-variant surge.

The trade gap in goods and services expanded 6.7% from May to a seasonally adjusted $75.7 billion, the Commerce Department said Thursday.  Before the pandemic, the monthly trade deficit had hovered for years between $40 billion and $50 billion.

And so we then received today’s key July employment report and it was a good one.  Nonfarm payrolls rose by 943,000, with June revised upward to 938,000.  The July increase was the largest since August 2020.

The unemployment rate fell from 5.9% all the way to 5.4%, lowest since March 2020, when the pandemic first took hold in the U.S.

Hotels and restaurants, the leisure and hospitality sectors, reopening and doing brisk business, added 380,000 jobs last month.  But the hospitality industry still has 1.7 million fewer jobs than in February 2020, a large share of the 5.7 million jobs employers have yet to recover from the pandemic downturn.

So no impact from surging coronavirus cases amid the Delta variant as yet, but understand the survey is conducted mid-month, which was before some local governments imposed mask mandates and other restrictions, and before leading corporations began to delay return-to-office plans.  Which will make August’s report more telling.

Average hourly earnings rose a solid 4% from a year earlier, with wages for leisure and hospitality workers, the lowest paid group, increasing nearly 10%, as restaurants offer bonuses and better pay to draw workers into the labor force.

Earlier, the National Federation of Independent Business, a trade group for U.S. small business owners, reported nearly half of U.S. small business owners can’t fill jobs, a record-high and more than double the historical average.

So with all the above, a very early look at third-quarter growth, courtesy of the Atlanta Fed’s GDPNow barometer, sits at 6.0%.

Europe and Asia

We had the July PMIs for the eurozone this week and the final composite was 60.2 vs. June’s 59.5.  The manufacturing figure for the EA19 was 62.8, while the service sector reading was 59.8.

Germany: 65.9 manufacturing, 61.8 services (a record)
France: 58.0 mfg., 56.8 services
Italy: 60.3 mfg., 58.0 services
Spain: 59.0 mfg., 61.9 services

UK: 60.4 mfg., 59.6 services

Chris Williamson / IHS Markit

“Europe’s service sector is springing back into life.  Easing virus restrictions and further vaccination progress are boosting demand for a wide variety of activities, especially in the tourism, travel and hospitality sector.  It’s not just the consumer sector that is booming, however, with business and financial service providers also enjoying a growth spurt as broader economic recovery hopes build.

“Alongside the sustained elevated growth recorded in the manufacturing sector, the impressive strength of the service sector’s expansion in July means the eurozone should see GDP growth accelerate in the third quarter.

“Worries about the Delta variant have become more widespread, however, subduing activity in some instances and raising concerns about the possibility of virus restrictions being tightened again.  Hence services growth in July was slightly less marked than the earlier flash estimate and future expectations cooled to the lowest since March, presenting a significant downside risk to the outlook and hinting that growth could begin to slow again as we head toward the autumn.

“Furthermore, up to now companies have generally seen little resistance from customers to higher prices, but this could change after the current rebound from lockdown restrictions has passed.”

Separately, euro area retail trade rose by 1.5% in June compared with May, according to Eurostat; up 5.0% from June 2020.

Brexit: Just a brief note.  One of Britain’s challenges post-Brexit is similar to elsewhere in the world.  Companies across key parts of the economy can’t find enough workers.  Hundreds of thousands of individuals are being forced to self-isolate, worsening labor shortages caused by Britain’s points system for hiring non-U.K. nationals.

Turning to Asia…China’s private Caixin PMI figures for July came in at 50.3 for manufacturing, and 54.9 for the service sector, up strongly from the prior month’s 50.3.

Japan’s non-manufacturing PMI for July was a poor 47.4, with ongoing Covid restrictions.

June household spending in the country was down 3.2% month-over-month, -5.1% year-over-year.

On the manufacturing side, South Korea registered 53.0 for last month, while Taiwan was at 57.6.

Street Bytes

--Stocks resumed their climb, owing to more generally solid earnings and strong economic data, highlighted by today’s jobs report.

The Dow Jones and S&P 500 both hit new all-time highs today, 35208 on the former, 4436 on the latter, while Nasdaq hit a new high of its own Thursday (14895), before a slight pullback Friday.

On the week the Dow rose 0.8%, the S&P advanced 0.9%, and Nasdaq added 1.1%.

--U.S. Treasury Yields

6-mo. 0.04%  2-yr. 0.21%  10-yr. 1.30%  30-yr. 1.95%

The 10-year rose a whopping seven basis points on the week following the strong jobs report.  Wake me up when it gets to 1.70%.

Next week we do get important inflation data for July which might move the markets a bit.

--Oil prices fell again today, and for the week posted their steepest losses in nine months, on worries that travel restrictions to curb the spread of the Delta variant will derail the global recovery in energy demand.

Japan is poised to expand emergency restrictions to more regions of the country, while China, the world’s second-largest consumer of crude, has imposed curbs in some cities and canceled scores of flights.

Oil finished the week at $67.84, down $6, or 8% on the week.

--Russia is now supplying more oil to the U.S. than any other foreign producer aside from Canada as American refiners scour the globe for gasoline-rich feedstocks to feed surging motor-fuel demand.

U.S. imports of crude and refined petroleum products from Russia surged 23% in May to 844,000 barrels a day from the prior month.  Mexico was edged out of the No. 2 spot as its shipments to its northern neighbor rose by less than 3%.

Russia is favored by the refiners because the ‘grade’ of the crude is perfect for them vs. having to process thick, sludgy crude from Venezuela and the Middle East.

--Tyson Foods Inc. will now require vaccinations for its entire U.S. workforce, which drew pushback from some union leaders, signaling tensions between management and workers over stepped-up efforts to guard against the disease.

The Arkansas-based company’s target, which includes both processing plants and corporate office workers, is partly subject to discussions with labor unions that represent around one-third of the company’s hourly workers, Tyson officials said.

The company said it would offer a $200 bonus to its front-line workers as an incentive, but some union leaders said U.S. regulators hadn’t yet fully approved the vaccines.

Tyson has a workforce of 120,000.

The moves comes has some of the nation’s biggest companies tighten vaccination and mask policies in response to rising infections.

Morgan Stanley has required employees to be vaccinated before they return to the office, and last week Google and Facebook said they would require all employees at their U.S. campuses to be vaccinated.  BlackRock, the global investment manager, is allowing only vaccinated workers into its U.S. offices for now and said people will be free to go maskless and sit next to each other and congregate without restrictions.

The Related Co., one of New York’s largest developers, with about 2,100 employees, is requiring all workers – union and nonunion – to receive at least their first vaccine shot by Aug. 31. Workers who do not have a medical or religious exemption and refuse to get vaccinated will be terminated.

Walt Disney and the NFL have also started requiring vaccines.

But Walmart and Amazon have declined to require their hourly workers to get vaccinated, though Walmart said employees at its headquarters will be required to get vaccinated by Oct. 4.

Separately, Walmart, Sam’s Club and Target are among the large retailers requiring employees to wear masks regardless of their vaccination status in Covid hot spots.

Publix, the supermarket chain, announced it will require all store employees, regardless of vaccination status, “to wear face coverings over their noses and mouths while inside any Publix location.”

Kroger, the nation’s largest grocer, requires unvaccinated associates to wear masks and requests that unvaccinated customers wear masks when in its stores and facilities.

Lowe’s is requiring employees to “wear masks indoors at all U.S. locations and while working in a customer’s home or business – regardless of vaccination status.”

Ford is requiring all its employees at its two Louisville, Ky., plants, regardless of vaccination status, to wear masks amid increasing Covid case counts.

At the same time, however, some big companies are delaying the return of their corporate employees’ to offices.  In the case of Amazon.com, not until next year.  Amazon had been targeting early September for regular office work to resume.

Wells Fargo & Co. said it was delaying its staggered office return to Oct. 4.  Earlier, Apple said it was pushing back its corporate employees’ return to October from September.

Lastly, this afternoon, Amazon said all workers at its hundreds of U.S. warehouses will have to wear masks starting Monday, including those who are vaccinated, which hadn’t been the case.

--General Motors posted strong second-quarter earnings and raised its full-year profit guidance but said the lingering computer-chip shortage and rising commodity costs would weigh on second-half results.

That disappointed investors and the shares fell hard Wednesday, 9%, their biggest decline of the past year. The stock had been on a run, rising 39% this year through Tuesday and more than tripling since March 2020.

Investors believe that GM could have trouble managing expectations, with the continuing chip shortage and pandemic clouding the outlook.

“What you’re hearing from us is a real acknowledgement of what we see with Covid,” GM finance chief Paul Jacobson told analysts Wednesday.  “We’re cautious.”  He said the virus caused recent chip-supply problems out of Malaysia.

So this disrupts production schedules, but at the same time automakers are benefiting from record pricing amid tight car supplies.

GM nonetheless boosted its forecast for full-year pretax profit of between $11.5 billion and $13.5 billion – the top end of which would be a record – but falling short of analysts’ forecasts.

CEO Mary Barra said GM will continue to grapple with the semiconductor shortage through this year and into 2022.  The company said it would make about 100,000 fewer vehicles in North America in the second half of 2021.

Through the second quarter, GM had cut production by roughly 325,000 vehicles in North America because of the chip shortage, but fewer than 10,000 were large pickups or big SUVs, as the company diverts chips from other, less-popular models to keep the truck plants going.

--Auto makers including GM, Ford and Jeep maker Stellantis announced on Thursday at the White House that they will aim to make electric vehicles account for 50% of their U.S. sales by 2030. 

Other auto makers are expected to make similar announcements regarding sales targets for EVs as consumers begin warming to them and as the car companies lay heavy bets on the new technology.

“This industry’s going to spend $330 billion over the next five years on electrification alone,” said John Bozzella, president of the Alliance for Automotive Innovation, a lobbying group, at a conference on Wednesday.

But the sales targets remain predicated on local and federal government support, such as increasing availability of charging and purchase subsidies.  Federal lawmakers are proposing up to $7.5 billion for states and municipalities to build electric-vehicle charging stations as part of the infrastructure bill moving through the Senate.

And the fact is EVs make up just 2.2% of new-auto sales today, up from 1.4% in 2020, according to Edmunds.

--Back on March 11, 2020, the World Health Organization declared the spread of Covid-19 a global pandemic.

In the days that followed, us consumers rapidly stockpiled supplies of all kinds – from canned food and toilet paper to disinfecting wipes.

But as the economy reopens, the Covid cleaning craze is over, and investors saw this on Tuesday when shares in Clorox plunged 9.5% (after being down as much as 12%), as the company reported results for its fiscal fourth quarter that disappointed Wall Street.

On March 11, 2020, shares of Clorox finished the day at $169.40.  At the end of Tuesday, they were $164.06.  [They finished the week at $162.50.]

Clorox reported sales declines in three of its four main segments, with the company attributing that “primarily to the deceleration of shipments from peak levels during the Covid-19 pandemic, including more rapid than expected deceleration in the Health and Wellness segment,” CEO Linda Rendle said in a statement.

CFO Kevin Jacobsen told analysts the company is dealing with an “unprecedented cost environment in terms of inflation.”  The company is expecting some $300 million of commodity and transportation related costs in the year ahead.

--It has been a mess at the airports this week.  Spirit Airlines, which has canceled more than 1,300 flights since Sunday as it grapples with a series of issues including tech outages and staffing shortages, on Wednesday said cancellations should ease in the days to come as it reboots its operation.

And then they announced Wed. evening that they had already canceled 313 Thursday flights or 40% of its schedule.

It thus became the fifth consecutive day of extreme frustration for passengers on the budget airline ahead of another busy summer travel weekend.

Spirit canceled more than 400 flights per day, or 60% of its operation, on Tuesday and Wednesday alone.

Much larger American Airlines canceled hundreds of flights early in the week as it struggled to recover from summer storms in the Dallas/Fort Worth and Miami hubs, the former its largest.  But American’s operations by week’s end had at least stabilized.

That said, staffing is an issue throughout the industry, as crews reach their maximum number of work hours, after being scheduled out to the max, according to a spokesman for the Assn. of Professional Flight Attendants at American.

--Boeing Co. scrubbed the launch of its CST-100 Starliner to the International Space Station on Tuesday due to a system glitch, a fresh setback for the company following the vehicle’s botched 2019 debut.

Boeing engineers ruled out “a number of potential causes, including software,” but were working to understand an issue with the valves in the propulsion system.

The delay calls into question the future schedule, including a follow-on mission with a crew onboard, which Boeing has said would take place no earlier than December.

The Starliner capsule was loaded with supplies for the ISS.  The launch had been slated for last Friday, but was postponed by NASA after the space station was briefly thrown out of control with seven crew members aboard, when a docked Russian service module inadvertently reignited its jet thrusters.  Russia’s space agency blamed a software glitch.

Boeing has been plagued by one issue after another, going back to the two fatal 737 MAX crashes.

Meanwhile, Elon Musk’s SpaceX and the Crew Dragon have launched three crewed space station missions since 2020.

--A major deal between the Port Authority of New York and New Jersey and Amazon is moving forward, and it will mean big changes at Newark Liberty International Airport.

On Thursday, the agency’s board of commissioners gave the green light to a 20-year lease with Amazon Global Air, which paves the way for a new, “state-of-the-art cargo campus.”

The deal is expected to lead to the creation of more than 1,000 jobs.

So for those of us who live on a flight path to Newark, and are light sleepers, more flights at 3:30 a.m.  But good for the local economy.

--United Airlines became the first major airline to make vaccinations mandatory for all employees.

TSA checkpoint travel numbers vs. 2019 levels….

8/5…76 percent of 2019 base
8/4…76
8/3…75
8/2…78
8/1…83 …new pandemic high of 2,238,462 travelers
7/31…85
7/30…81
7/29…78

Global air traffic has fallen back a step, with airline seat capacity at 68% compared with the same week of 2019.  The spread of the Delta variant is the reason, according to Bloomberg data, principally in Asia, including the broadest virus outbreak in China since the pandemic began.

An example of the problems in Asia came this week when Indonesia’s biggest budget airline operator, Lion Air Group, announced plans to furlough around 8,000 employees as travel businesses suffered disruption due to new Covid-19 restrictions.  This is 25% to 35% of its total workforce of 23,000.

--Uber Technologies Inc.’s ridership rebounded strongly in the second quarter from last year’s pandemic lows, but a continuing driver shortage and uncertainty about how the Delta variant will affect consumer behavior pushed the shares lower.

Uber said its adjusted loss narrowed to $509 million in the second quarter from $837 million in the year-earlier period, but this was worse than expected.  Uber spent money in the quarter on incentives to woo drivers amid a shortage that has been driving up passenger fares.  The shares fell 5% in response.

Uber’s bottom line is dragged down by its capital-intensive food-delivery business.

Easing pandemic restrictions boosted Uber’s rides business in the second quarter, but rising Delta variant infections could damp prospects in the near future.

CEO Dara Khosrowshahi said the company’s ride bookings grew in July from the previous month but cautioned that “no one can predict what happens with Delta going forward.”

The company’s bookings grew 114% year-over-year to $21.9 billion in the three months ended June.  Bookings for Uber Eats grew 85%.  Uber takes a cut from bookings, and second-quarter revenue more than doubled.

--Shares in Robinhood Markets Inc., after a lackluster first week following its initial public offering, soared this week on no news whatsoever, but because the stock became “the meme of memes,” a reference to stocks popularized this year by retail investors congregating in online platforms such as Reddit’s WallStreetBets.

So at $65, the stock was well above its IPO price of $38.  It helped that Wednesday marked the first day that investors could trade options on Robinhood shares.

But then the stock cratered on Thursday to close at $51, after a filing with the SEC indicated that early investors in the company can sell up to about 98 million shares over time.  At the end of the week the shares were trading at $55.

--PepsiCo said Tuesday it has agreed to divest its Tropicana, Naked and certain other North American juice brands to private-equity firm PAI Partners for approximately $3.3 billion in a joint venture deal that would see the food and beverage giant retain a non-controlling interest in the transferred operations.

PAI will control the joint venture, while Pepsi will have a 39% stake, with Pepsi having exclusive U.S. distribution rights for the brands for “small-format and foodservice channels,” the company said in a statement.

The deal allows Pepsi to focus on its “portfolio of healthier snacks, zero-calorie beverages, and the products like SodaStream which are focused on being better for people and the planet,” Pepsi CEO Ramon Laguarta said.

The transferred businesses generated $3 billion in net revenue, but their operating profit margins lagged Pepsi’s.

Pepsi will take the proceeds and invest in product innovation and expansion, including enhanced scale in branded juice drinks and other chilled categories.

--SEC Chairman Gary Gensler said the agency will regulate cryptocurrency markets to the maximum extent possible using its existing authority, while also calling on Congress to grant the SEC more scope and resources to oversee the sector.

Calling the asset class rife with “fraud, scams and abuse,” Gensler signaled the SEC is likely to become more active in policing crypto trading and lending platforms, as well as so-called stablecoins.

“We just don’t have enough investor protection in crypto. Frankly, at this time, it’s more like the Wild West,” Gensler said at a forum.  “We have taken and will continue to take our authorities as far as they go.”

--The New York Times reported as part of its quarterly earnings results on Wednesday that it had eight million subscriptions and expected to add as many this year as it did in 2019, when President Donald Trump dominated headlines and a pandemic had yet to melt the global economy. The company estimated it will have 8.5 million paid print and digital subscriptions by the end of 2021.

The Times has been focusing on digital subscriptions, adding 142,000 new ones in the second quarter.  At the end of June, the Times had 7.9 million total subscribers, with 7.1 million paying for its digital products.  Of the digital subscribers, 5.3 million subscribed to the News app.

The company reported $93 million in adjusted operating profit on $499 million in revenue, beating estimates.  The shares rose 7%+ in response.

--Fox Corp., parent of Fox News and the Fox broadcast network, said revenue rose in the latest quarter, as the company expects the return of live sports and entertainment events will continue to propel its growth.

Revenue for the company’s fiscal fourth quarter was $2.89 billion, up 20% from the year-ago period.

Revenue at Fox’s cable programming, which also includes the Fox Business Network and Fox Sports channel as well as Fox News, was $1.4 billion.  That is a 10% increase from a year ago.

Revenue in the TV station unit rose 30% from a year ago to $1.45 billion on higher advertising sales as local markets recovered from coronavirus-related restrictions from a year earlier.

--ViacomCBS on Thursday reported lower second-quarter earnings despite a record jump in the number of streaming subscribers as the media company and Comcast’s Sky unit agreed to launch ViacomCBS’ Paramount+ streaming service in Europe.

The company said it added 6.5 million global streaming subscribers during the quarter to more than 42 million, led by gains in Paramount+.

--In an interview on CNN on Wednesday with Anderson Cooper, Bill Gates acknowledged that his relationship with the disgraced financier Jeffrey Epstein was “a huge mistake,” and he said that his divorce, which became final this week, was “definitely a very sad milestone.”

The New York Times revealed in 2019 that Gates had met Epstein at his Manhattan townhouse on numerous occasions starting in 2011.  Gates told Cooper: “I had several dinners with him, hoping that what he said about getting billions of philanthropy dollars for global health, through contacts that he had, might emerge. When it looked like that wasn’t a real thing, that relationship ended. But it was a huge mistake to spend time with him, to give him the credibility of being there.”

He added, “You know, there were lots of others in that same situation, but I made a mistake.”

Cooper asked Gates about his wife’s concerns about his workplace behavior.  According to the Times, Gates pursued women who worked for him at Microsoft and the Bill and Melinda Gates Foundation.

Asked if he had regrets, Gates replied: “Certainly, everyone does. …Within the family, we’ll heal as best we can, and learn from what’s happened.”

Both Bill and Melinda French Gates have pledged to keep working at the foundation on issues including global health, poverty reduction and gender equality.

On the pandemic, Gates praised the efficacy and mass production of the vaccines, but expressed worry about how easily the Delta variant can be spread.

“We wanted to be nearer the end than we are,” he said, “but Delta’s very bad news.”

--Through the first four nights of the Tokyo Olympics, according to Sportico, viewership of NBCUniversal’s Olympics coverage, across its networks, was down 43 percent compared with Rio in 2016, to 17.5 million viewers from 30.7 million.  Primetime coverage on NBC was down nearly 50 percent.

The positive is that NBC is having success with its Peacock streaming service , delivering its largest audiences in its short life span.

The Games will still be profitable for NBC due in part to Peacock, though no estimates were given by the company.  The Rio Games generated a profit of $250 million for NBCUniversal.

NBC may be forced to offer some advertisers make up ad inventory, including spots on Sunday Night Football this fall, to make up for the shortfalls in viewership.

Foreign Affairs

Iran: The Iranians have been busy…never a good thing…and now their new hardline leader is officially in charge.

Editorial / The Economist

“On the first day of his two-part inauguration on August 3rd, Ebrahim Raisi regretted that he could not kiss the hand of his mentor, Ayatollah Ali Khamenei, owing to Covid-19 restrictions. But there was no doubting the bond between Mr. Raisi, Iran’s new president, and Mr. Khamenei, its supreme leader. Both men are hardline clerics who view the world, and the West in particular, with suspicion.  ‘Trusting the West does not yield results,’ said Mr. Khamenei in the run-up to the ceremony.

“Some in Iran may be pushing for confrontation.  On July 29th, just days before the inauguration, a drone laden with explosives was flown into the mv Mercer Street, an oil tanker off the coast of Oman managed by an Israeli-owned firm.  Two crew members, a Briton and a Romanian, were killed.  America, Britain, Israel and Romania blamed Iran, which denied involvement.  Saeed Khatibzadeh, an Iranian foreign-ministry spokesman, accused Israel of creating ‘instability, terror and violence’ and warned that ‘whoever sows the wind shall reap the whirlwind.’

Then, on August 3rd, came another incident in nearby waters. Gunmen boarded a bitumen tanker, the mv Asphalt Princess, and sailed it towards Iran before disembarking some 15 hours later, after the crew reportedly sabotaged the engines.  The crew said the assailants were Iranians, according to recordings of communications between the ship and the Emirati coastguard heard by Argus Media, an energy-information firm. Iran denied involvement.  The Asphalt Princess is owned by a firm in Dubai that had another vessel hijacked two years ago by the Islamic Revolutionary Guard Corps, Iran’s most powerful military force….

“A shadow war between Iran and Israel has also been escalating… An attack earlier this year on Iran’s main uranium-enrichment complex, in Natanz, using planted explosives, did significant damage.

“If the IRGC is behind the attacks on shipping, it will come as no surprise… ‘Under the new administration, Iran will be much more assertive,’ says Mohammad Marandi, an academic who is close to the IRGC.

“All of this complicates efforts to revive the nuclear deal signed in 2015 by Iran and six world powers….

“President Joe Biden has promised to return to the deal if Iran comes back into compliance.  In an address on August 3rd, Mr. Raisi said his government would take steps to lift the ‘tyrannical’ sanctions imposed by America.  But a sixth round of indirect negotiations to revive the JCPOA ended in June.  There is no date set for the resumption of talks.  Iran, meanwhile, has continued to expand its nuclear activity. It is enriching uranium beyond the levels required for civilian use and it has sharply curbed cooperation with inspectors….

“America and Britain may want to limit any response (to the recent tanker attacks) in order to keep the JCPOA talks alive.  Israel’s leaders, never fans of the nuclear deal, may prefer more forceful action.  ‘This time the price is going up,’ says Amos Yadlin, a former head of Israeli military intelligence.”

Editorial / Wall Street Journal

“Here’s an idea: Stop negotiating with Iran on a nuclear deal that would reward the regime by lifting sanctions and handing it cash and investment to finance new UAV and other attacks throughout the region and beyond.

“In recent weeks Iran has plotted to kill an Iranian-born U.S. citizen in New York City, encouraged its proxies to attack U.S. bases in Iraq, and accelerated its violations of the 2015 nuclear accord.  A new hardline President is taking power in Tehran and has said a renewed deal can contain no limits on Iran’s regional behavior.  Instead of making more concessions, Mr. Biden should walk away and step up the sanctions.”

Israel: Thursday, the Israel Defense Forces escalated their response to rocket attacks this week by launching rare airstrikes on Lebanon.  The army said in a statement that jets struck the launch sites from which rockets had been fired on Wednesday.  The IDF blamed the state of Lebanon for the shelling and warned “against further attempts to harm Israeli citizens and Israel’s sovereignty.”

The airstrikes were a marked escalation at a politically sensitive time.  Israel’s new eight-party governing coalition is trying to keep peace under a fragile cease fire that ended an 11-day war with Hamas’ militant rulers in Gaza in May.

Speaking of Lebanon, this week marked the one-year anniversary of the catastrophic explosion in Beirut that killed 214 and destroyed 300,000 homes, plunging an already sick economy into a total economic crisis, which the World Bank has described as among the three worst in the world in the past 150 years.

“At some point the crisis gets so bad that even the building blocks of a recovery end up disappearing,” said Mike Azar, a debt-finance expert who has advised U.S. government agencies.  “You never get back to the kind of economy that you had before.”

No one has been held accountable for last year’s disaster at the Port of Beirut, despite gross negligence in storing 2,700 tons of ammonium nitrate for six years prior to the explosion.

Afghanistan: The Taliban claimed responsibility on Wednesday for an attack on the home of a top military official in Kabul that killed eight people, highlighting the insurgents’ ability to strike in the heart of the Afghan capital as they continue their sweeping military campaign.

The raid began around 8 p.m. on Tuesday with a car bomb that detonated outside the home of the acting defense minister. For several hours afterward, other blasts and sporadic gunfire could be heard in the center of the city after gunmen stormed the building and security forces fought to rescue the roughly 80 people trapped inside.

The complex attack was the largest the Taliban have carried out in the city in nearly a year, penetrating a neighborhood that is home to many high-ranking Afghan officials and close to Kabul’s heavily fortified green zone.

The attack was incredibly brazen.  Mohammad Azim Mohsini, a member of Parliament who is the defense minister’s neighbor, left his home minutes before the initial explosion, and after the blast, one attacker entered his house, killing four people…part of a group that had gathered earlier to mourn the death of Mohsini’s mother.

The defense minister survived the attack.  The Taliban said this was just “the beginning of retaliatory attacks,” suggesting the insurgents planned to target Afghan military officials and the small contingent of foreign troops that remain in the country to protect diplomats and Kabul’s international airport after the withdrawal of U.S. forces.

An Afghan general, Gen. Sami Sadat, has warned of “devastating” consequences for global security if the Taliban win in their fight against government forces.

Sadat is leading the battle against the Taliban in the southern province of Helmand, where intense fighting has broken out in its capital Lashkar Gah.  The Taliban have taken districts in the city center.

Gen. Sadat was confident his forces would hold the city, but he said, overall, the Taliban were being reinforced by fighters from other Islamist groups and warned that their gains posed a threat beyond Afghanistan.

“This will increase the hope for small extremist groups to mobilize in the cities of Europe and America, and will have a devastating effect on global security,” he said.

“This is not a war over Afghanistan, this is a war between liberty and totalitarianism.”

Finally, the UN special envoy for Afghanistan, Deborah Lyons, told the Security Council today that the war has entered a “new, deadlier, and more destructive phase” with more than 1,000 civilians killed in the past month during a Taliban offensive.

“A party that was genuinely committed to a negotiated settlement would not risk so many civilian casualties, because it would understand that the process of reconciliation will be more challenging the more blood is shed.”

China: I wrote of China’s growing nuclear weapons ambitions a few weeks ago, with the discovery of a new field of silos for intercontinental ballistic missiles in Gansu province, some 1,300 miles west of Beijing.  But then a second field was identified, with about 110 silos in eastern Xinjiang, 240 miles northwest of the first site.  Some experts are concluding China is now aiming for a tenfold increase in ICBMs.

Editorial / Washington Post

“When the first new field appeared, speculation arose that China might be playing a shell game, moving a few missiles among many silos.  But the discovery of a second field throws this theory into doubt. The second field is unsettling evidence of a major Chinese nuclear weapons expansion, which Adm. Charles Richard, head of U.S. Strategic Command, warned of in testimony to Congress in April.

“China already is aiming at creating a land-sea-air triad like those of Russia and the United States, and soon it will have the capability of multiple, independently targeted reentry vehicles, or MIRVs.  Adm. Richard said China has ‘moved a portion of its nuclear force to a Launch on Warning (LOW) posture and [is] adopting a limited ‘high alert duty’ strategy.’

“An unanswered question is what China thinks it will gain by vaulting to a nuclear posture closer to that of the United States and Russia.  The response by the United States and the West is even more nuclear weapons – a new arms race – or nuclear arms control, in which China has not shown much interest.  The new missile silos are an ominous sign of a growing challenge, made even more vexing by the other tensions between Washington and Beijing.”

On the issue of Hong Kong….

Editorial / Wall Street Journal

“The sad reality for any President watching Beijing dismantle a free and vibrant Hong Kong is that the outside world has few options to stop it. So kudos to President Biden for finding one that at least delivers relief to those in personal jeopardy.

“Secretary of State Antony Blinken announced Thursday that the U.S. will offer Hong Kongers ‘safe haven’ for 18 months from forced departure from the U.S. if they fear returning to the city.  He says the step is a response to China’s ‘sweeping National Security Law,’ which has ‘fundamentally altered the bedrock of Hong Kong’s institutions.’  Hong Kongers have ample reason to fear, given that police there are now arresting people even for booing the Chinese national anthem.

“In January the British did their part for Hong Kongers by giving holders of British National (Overseas) passports the option to resettle in the U.K. and apply for citizenship. A Home Office fact sheet reckons that there are 2.9 million BN(O) holders in Hong Kong, with a further 2.3 million eligible dependents – impressive numbers given the city’s total population of 7.5 million.

“The Biden Administration’s suspension of deportations follows its business advisory last month warning U.S. companies that doing business in a territory where Beijing is enforcing a new national security law carries ‘potential reputational, regulatory, financial, and, in certain instances, legal risks associated with their Hong Kong operations.’

“GOP Sen. Ben Sasse of Nebraska underscored the bipartisan American support for Hong Kong by applauding the President’s move as ‘a solid step,’ but he wants the U.S. to go further.  He says Washington should ‘offer full asylum to Hong Kongers who flee Chairman Xi’s brutal oppression.’  Mr. Sasse is right.  Mr. Biden should also press Beijing to release such Hong Kongers as publisher Jimmy Lai and others who have been imprisoned merely for supporting freedom and democracy.

“Washington can’t stop President Xi Jinping from turning his wrecking ball on Hong Kong. But opening America’s doors, as the British have done, would give desperate Hong Kong people another escape route – and the United States the benefit of their talents and enterprise.”

Random Musings:

--Presidential approval ratings….

Gallup: 50% approve of President Biden’s job performance, 45% disapprove, 48% of independents approve (July 6-21).

Rasmussen: 48% approve, 51% disapprove (Aug. 6).

--A Harvard Harris Poll shows Biden’s approval rating at 52%, down 10 points from the same poll in June, with 43% disapproving.

The poll showed that Covid-19 has once again replaced the economy as the issue most important to voters, after two weeks of confused messaging from the White House and the CDC in reaction to a surge in Delta variant cases.

The administration’s challenges at the U.S.-Mexico border, fears surrounding growing inflation, and spikes in violent crime in the nation’s biggest cities are also playing into the poll numbers.

Mark Penn, the co-director of the survey, put it plainly, “the honeymoon…is officially over.”

“Overall the country has come down from its mood highs as the Delta variant is putting a crimp in America’s plan to party now and go back to work after Labor Day,” Penn said, as reported by The Hill.

--A new Quinnipiac University national poll has President Biden with a 46% approval rating, 43% disapproving.  This compares to a positive 49-41 split in May.

On the president’s handling of the coronavirus, Americans approve 53-40 percent, but this is way down from 65-30 in May.

On his handling of the economy, Biden receives a negative 43-48 percent approval rating, compared to a positive 48-43 in May.

On his handling of foreign policy, Biden receives a split 42-44 percent approval rating, compared to a negative 39-44 percent approval in May.

As the Senate debates the $1 trillion bipartisan infrastructure bill, Americans say by a 65-28 margin that they support it, including 64-29 by independents.  Republicans, 54-41 percent, oppose it.

But Americans also say 62-32 percent that they support a $3.5 trillion spending bill on social programs such as child care, education, family tax breaks, and expanding Medicare for seniors.

--On Tuesday, New York State Attorney General Letitia James issued a scathing 168-page report on an investigation she led which found New York Governor Andrew Cuomo had violated state and federal laws against sexual harassment and a toxic work environment. 

“This investigation has revealed conduct that corrodes the very fabric and character of our state government,” James said during a press briefing.

After her report, which outlined 11 cases of harassment by women who had worked with Cuomo, was made public, President Biden and other prominent Democrats called on the governor to step down.

A defiant Cuomo then issued a pre-recorded statement, dismissing allegations of sexual harassment and blasting the bombshell AG report on his behavior as “biased.”

The governor addressed specific claims made by current and former staffers who claim he repeatedly made inappropriate and sexual comments and advances and in one case groped an aide’s breast.

“The facts are much different than what has been portrayed,” Cuomo said.  “I never touched anybody inappropriately…or made inappropriate sexual advances.”

In his scripted response, which included a montage of the governor kissing celebrities on the cheek, Cuomo said he would “not be distracted” from his work as governor.

He said, as he has in the past, that he often hugs people, kisses them on the cheek or takes their faces into his hands arguing that it is not a sexual gesture.

Maybe not, but it’s the gesture of a creep!

“I do it with everyone,” Cuomo said, adding that his actions are “meant to convey warmth, nothing more.”

The head of New York’s Democratic Party said Wednesday that he had urged Cuomo to step down.

At stake, Jay Jacobs said, were elections next year for Congress, the State Senate “and local races that count.”  There will also be a gubernatorial election in 2022, and Cuomo, now in his third term, has been holding fundraisers.

Meanwhile, Andrew Cuomo’s brother, Chris, said nothing in his prime-time slot on CNN, Tuesday, Wednesday or Thursday, following the report on the governor and the calls for him to resign.

Chris Cuomo, earlier in the year, had to apologize for participating in strategy sessions with Andrew Cuomo’s aides.  CNN at the time called them “inappropriate” when they were first reported, though Chris Cuomo faced no discipline.

But then it emerged on Tuesday in AG James’ report that Chris Cuomo was heavily involved in strategy sessions with his brother’s team, yet, again, CNN is sticking by him.

Editorial / Washington Post

“ ‘What’s crazy is if you or I did what is alleged we’d be fired on the spot no questions asked…and it would be the right thing, too.’  That is what a former senior staff member to New York Gov. Andrew M. Cuomo (D) texted to a member of the governor’s staff after allegations became public that Mr. Cuomo had made sexual overtures to a young woman who had worked for him.  To which the current staff member responded, ‘That’s the damn truth.’ The exchange is detailed in a report that concluded Mr. Cuomo sexually harassed multiple women with conduct that broke state and federal laws.  If there was any doubt about Mr. Cuomo’s fitness to continue in office, it was removed with the details of his treatment of women and the toxic culture of the governor’s executive chamber that enabled the harassment to occur….

“His harassment was not limited to his own staff but extended to other state employees, including a state trooper, and members of the public.  The environment in the governor’s office was described as abusive and vindictive; one woman who had publicly accused Mr. Cuomo of harassment was targeted for retaliation through the release of her personnel file.

“ ‘Our investigation revealed that these were not isolated incidents. They were part of a pattern,’ said Joon H. Kim, a former top federal prosecutor, who was hired, along with Anne L. Clark, a respected employment lawyer, by Ms. James to examine the allegations against Mr. Cuomo….

“Mr. Cuomo nonetheless seems to think he can tough out the scandal – staying in office and even running for a fourth term – with his characteristic bravado and bullying….

“Make no mistake: What the witnesses described was sexual harassment….

“It is dispiriting to read in the report how the governor’s staff, acting either out of loyalty or fear, cosseted the governor and enabled his behavior.  Even when they took action – transferring to another office a female assistant who had complained, or trying to prevent the governor from ever being alone with a woman – they seemed more intent on protecting him than the women he was allegedly victimizing.

“While the report claims that Mr. Cuomo violated state and federal laws, Ms. James did not make a criminal referral.  She said the report is public, and police and prosecutors can follow up.   Certainly, it gives the Democrats who control the state legislature an obvious road map for impeachment.”

Editorial / New York Post

“It’s time for Gov. Andrew Cuomo to do one honorable thing: step down.  If he refuses, lawmakers should remove him.  Pronto.

“The case for his departure – whether voluntary or forced – was clear long before state Attorney General Letitia James released her damning report Tuesday.  Now there’s no longer any excuse for delay….

“Heck, President Joe Biden, a Cuomo ally, also thinks the gov should go.  He said in March that Cuomo would need to resign if the investigation confirms the allegations.  Now that it has, Biden said Tuesday he’s sticking to his position.

“Good for him…

“Yes, (Cuomo) denies he crossed any lines or did anything ‘inappropriate,’ though he admits he did regularly kiss and hug many people.  He claims his victims – all 11 of them! – simply misinterpreted his well-meaning statements and gestures.

“Yet James’ probers found his denials ‘lack credibility’ and are ‘inconsistent with the weight of the evidence.’  They note his failure to recall specific incidents and ‘blanket denials’ stand ‘in stark contrast to the strength, specificity and corroboration of the complainants’ recollections, as well as the reports of many other individuals who offered observations and experiences of the governor’s conduct.’….

“Yet as bad as the findings are, they don’t even touch on his numerous other scandals – most notably, his order for nursing homes to accept Covid-contagious patients, and then his coverup of the actual number of residents of those homes who died of the disease.

“New Yorkers need a governor they can look up to, someone they can trust as honorable, honest and decent. Cuomo has shown he’s not up to it.  It’s long past time for him to go.”

A Marist poll conducted Tuesday night had 63 percent of registered voters in New York believing Cuomo should resign, while only 29 percent want him to finish up his term.

And 59 percent want the Legislature to impeach him if he doesn’t, compared with 28 percent who do not.

Only 12 percent say Cuomo deserves to be reelected, down from 36 percent when Marist asked the question in February.

And today we had a new Quinnipiac University poll of New York voters, 70 percent of whom think Cuomo should resign, 25 percent say he should not.  Independents go 76-19 for resignation.

Cuomo’s job approval is at an all-time low since taking office, 28 percent, with 63 percent disapproving.

Today, while Cuomo’s attorneys issued a lame rebuttal of the AG report, one of the staffers who accused the governor of groping her filed a criminal complaint against him.  The unnamed assistant alleges Cuomo reached under her shirt and groped her breast at the Executive Mansion late last year.

The State Assembly’s impeachment investigation into Cuomo is “nearing completion” as lawmakers warn they will “soon consider potential articles of impeachment against” him.

Cuomo has been given until Aug. 13 to provide any “additional evidence,” according to a letter sent to his lawyers on Thursday.

The Assembly Judiciary Committee is slated to meet Monday morning.

--Mike Carey, a coal lobbyist backed by former President Trump, beat a field of ten other primary hopefuls in central Ohio, in a special election for an open House seat Tuesday.  The race reinforced Trump’s status as GOP kingmaker, after his preferred candidate lost a special election in Texas last week.

In another Ohio race, Cuyahoga County Council member Shontel Brown pulled out a victory for the Democratic establishment in Cleveland, besting progressive Nina Turner, thus handing the liberal wing of the party a big blow. 

Turner was supported by Sen. Bernie Sanders, for whom she had been a leading voice on his presidential campaign staff, along with Rep. Alexandria Ocasio-Cortez and others.

--Trump has $102 million in political cash he can wield as the GOP eyes retaking majorities in Congress next year, according to filings last Saturday with the Federal Election Commission.

Trump’s political-action committees reported receiving $82 million during the first half of the year through June 30, with $62 million of that flowing to Save America PAC, a leadership committee that issues Trump’s press statements and candidate endorsements.

--A draft letter reportedly circulated late last year by a Donald Trump-loyalist at the Justice Department shows the lengths his allies were willing to go to overturn the presidential election.

The draft December 28 letter, published by ABC News, urged top Georgia officials to convene the state legislature in a special session to evaluate supposed “irregularities” in the 2020 election.

The letter said, falsely, that Justice Department had identified “significant concerns that may have impacted the outcome of the election in multiple States, including the State of Georgia.”

According to internal Justice Department emails also obtained by ABC News, the letter was circulated by Jeffrey Clark, a top department official who was working with the then-President to get the department more directly involved in the Trump election reversal crusade. Clark was acting attorney general of the civil division at the time.

He sent the draft letter, according to the emails, to acting Attorney General Jeffrey Rosen and acting Deputy Attorney General Richard Donoghue.  Though the letter was directed to Georgia, Clark’s email indicated that he wanted to send similar versions to “each relevant state.”

“I set it up for signature by the three of us.  I think we should get it out as soon as possible,” Clark told Rosen and Donoghue, according to the emails obtained by ABC News.

“I see no valid downsides to sending out the letter,” Clark said.

Donoghue, in his emailed response obtained by ABC News, vehemently expressed opposition to sending the letter.  He noted that former Attorney General William Barr had publicly announced that the department had not found evidence of mass voter fraud that would have changed the outcome of the election.  Donoghue said he was unaware of any developments since Barr’s assessment that would have changed that conclusion.  Furthermore, Donoghue noted it was not in DOJ’s typical practices to update non-law enforcement actors on the progress of investigations, as Clark’s draft letter to the Georgia officials promised the department would do.

Donoghue told Clark in the email that there was “no chance” he would sign the draft letter “of anything remotely like this.”  Donoghue added that, from where he stood, “this is not even in the realm of possibility.”

On January 2, Rosen weighed in to make clear that he was “not prepared to sign such a letter,” according to the email chain.

The internal documents were turned over by the department to the House Oversight Committee, ABC News said, as the committee investigates Trump’s attempts to overturn the election.

Just another of several examples of how Trump tried to weaponize the Justice Department in his efforts to reverse his electoral defeat.  Trump himself demanded that DOJ officials declare the election “illegal” and “corrupt,” according to notes of a December 27 call Trump had with Rosen and Donoghue released last week by the House committee.

--According to a new Yahoo News/YouGov poll, a majority of Republicans, 66 percent, continue to insist that “the election was rigged and stolen from Trump,” while just 18 percent believe “Joe Biden won fair and square.”  Twenty-eight percent of independent voters also said they think Trump was the rightful winner.

Overall, since January, similar surveys have found that between 27 and 29 percent of people believe the election was rigged.

Regarding the House select committee’s investigation into the Jan. 6 attack, 62 percent of Trump supporters (31 percent of the total) said they think “there have been enough investigations already.”

--A federal judge rejected the argument that U.S. Capitol rioters held in jail are being prosecuted for their political views and disavowed attempts to downplay the magnitude of the deadly insurrection during a sentencing on Wednesday.

“You called yourself and everyone else patriots, but that’s not patriotism,” Judge Amy Berman Jackson said of defendant Karl Dresch.  “Patriotism is loyalty to country, loyalty to the Constitution, not loyalty to the head of state. That is the tyranny we rejected on July 4.”

Jackson, known for her sharp criticism of the Trump administration’s moves, called Dresch an “enthusiastic participant” in the effort “to subvert democracy, to stop the will of the people and replace it with the will of the mob.”

The federal court in Washington, D.C., has repeatedly acted as a referee concerning the severity of the Jan. 6 attack, with several judges expressing their disgust with defendants’ actions and the shocking violence and details made public as Capitol riot cases move through the courts and prosecutors reveal evidence they’ve gathered.

Dresch was sentenced by Jackson to six months in jail after pleading guilty to a misdemeanor charge of illegally demonstrating in the Capitol building, which has become a typical plea deal that the Justice Department has offered to nonviolent rioters who did not go far into the building.  Dresch was released this week because he has been in jail since mid-January and received credit for time already served.

“The defendant did not spend six months in jail because he is a political prisoner.  He was not prosecuted for his political views,” Jackson said.  “The defendant came to the Capitol because he placed his trust in someone who repaid that trust by lying to him.”

In May, Jackson wrote that Trump “continues to propagate the lie that inspired the attack on a near daily basis,” and that “the anger surrounding the false accusation continues to be stoked by multiple media outlets as well as state and federal party leaders who are intent on censuring those who dare to challenge the former President’s version of events.” 

--We note the passing of longtime AFL-CIO labor union leader Richard Trumka, who died Thursday at age 72.

News of his death was announced by President Biden and Senate Majority Leader Chuck Schumer.  Trumka had been AFL-CIO president since 2009, after serving as the organization’s secretary-treasurer for 14 years.

“The working people of America have lost a fierce warrior at a time when we needed him most,” Schumer said from the Senate floor.

Trumka oversaw a union with more than 12.5 million members.

Democratic Sen. Joe Manchin said he was “heartbroken” to learn of the death of his friend.

“Rich’s story is the American story – he was the son and grandson of Italian and Polish immigrants and began his career mining coal.  He never forgot where he came from.  He dedicated the rest of his career to fighting for America’s working men and women,” Manchin said in a statement.

Trumka was the son and grandson of coal miners.  He grew up in the small southeast Pennsylvania town of Nemacolin, where he worked as a coal miner while attending Penn State University.

Trumka was elected in 1982 at age 33 as the youngest president of the United Mine Workers of America.

There, he led a successful strike against the Pittston Coal Company, which tried to avoid paying into an industrywide health and pension fund.

As AFL-CIO president, he ushered in a more aggressive style of leadership and vowed to revive unions’ sagging membership rolls and pledged to make the labor movement appeal to a new generation of workers who perceive unions as “only a grainy, faded picture from another time.”

--The death toll from last week’s catastrophic flooding in central China continues to rise, now over 300.    

--And Turkey and Greece are battling some of the worst wildfires ever.  In Turkey, flames sweeping through its southwestern coastal regions forced the evacuation of tens of thousands of people, while police have been going door to door in some suburbs of Athens, ordering everyone to leave.

“We are witnessing a catastrophe of historic proportions and climate change is the basic cause,” said Alexis Tsipras, leader of Greece’s main political opposition, and former prime minister.  “We must support our frontline fighters and all who lost the efforts of a lifetime in a few minutes.”

The region is experiencing its worst heatwave in at least 30 years.                                               

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

We thank our first responders and healthcare workers.

God bless America.

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Gold $1763
Oil $67.84

Returns for the week 8/2-8/6

Dow Jones  +0.8%  [35208]
S&P 500  +0.9%  [4436]
S&P MidCap  +0.5%
Russell 2000  +1.0%
Nasdaq  +1.1%  [14835]

Returns for the period 1/1/21-8/6/21

Dow Jones  +15.0%
S&P 500  +18.1%
S&P MidCap  +17.8%
Russell 2000  +13.9%
Nasdaq  +15.1%

Bulls 54.1
Bears 16.3

Have a good week.

Brian Trumbore

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