Week in Review

---

Week in Review

02/27/2021

For the week 2/22-2/26

[Posted 9:00 PM ET, Friday]

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

Special thanks to Paul C. for his ongoing support.

Edition 1,141

I’ve told you since the national lockdown hit last March that as part of my daily routine, I pass two commuter parking lots (New Providence and Murray Hill, which is part of New Providence), both of which have at least 150 spots.  Pre-pandemic, both lots were full daily…commuters headed into New York to earn a living.  [These are the first two stops west of Summit, a major hub where two lines converge before the trek continues to Gotham.]

So from time to time the past year I’ve updated you and commented that I’ve been floored how in the New Providence lot, there has never been more than 2 cars since the lockdown…two…and in the other, Murray Hill, just 3 or 4, max…so about five out of in excess of 300 available spots.

I don’t remember if I took a guess last spring where we’d be end of 2020, but I probably would have commented much like the airlines did in April after air travel collapsed to nothing…that by yearend they’d be flying at 50% capacity (and I do indeed have that entire conversation in these pages).

But it struck me yesterday, a beautiful weather day as the Great Snow Melt of 2021 took hold (we had 40 inches in this area in the span of about 24 days), that there was not a single car in the New Providence lot!  Three weeks away from being exactly one year since the lockdown.

So driving home I thought of New York City and all those commuters converging from New Jersey, Connecticut, Long Island, and other parts of the city, who were not going in.  All the businesses that serviced them.  All the people out of work, many of whom have lost that particular job forever.

It’s certainly not the first time I’ve thought this. I’ve only mused about it, oh, about 320 of 345 days, but it just hit me differently yesterday.

And then last night, an esteemed opinion writer was thinking the same thing as she posted her weekly column.

Peggy Noonan / Wall Street Journal

“You can know something yet not fully absorb it. I think that’s happened with the pandemic. It is a year now since it settled into America and brought such damage – half a million dead, a nation in lockdown, a catastrophe for public schools.  We keep saying ‘the pandemic changed everything,’ but I’m not sure we understand the words we’re saying.

“It will be decades before we fully appreciate what the pandemic did to us, and I mean our entire society – our culture, power structures, social ways, economic realities.  We’ll see it more clearly when we look back from 2030 and 2040. A lot is not fully calculable now, and some problems haven’t presented themselves.  One is going to be the profound psychological impact on some young people – how anxious and frightened this era will leave them, even how doom-laden.  Kids 5 and 7 years old were trapped in a house surrounded by screens, and the screens said ‘germs’ and ‘death’ and ‘invisible carriers.’  The pictures were of sobbing people on gurneys. We should be especially concerned about kids who are neglected and have no calm in the house, because they were left most exposed to the endless vibrations of the adults on the screens, and had no schools or teachers to help them.

“But we’re in a transformational time….

“Look at the cities. I’m not sure we see the implications of what has happened there.  In New York we are witnessing, for the first time in a century and a half, the collapse of the commuter model.  You had to be in the magic metropolis if you were going to be in the top of your profession – finance, theater, law, whatever.  Many couldn’t afford to live in the city because it’s where the top, moneyed people were, so they lived in the near-outside – New Jersey, Long Island, Connecticut. That is what my people did when they came to America a century ago, settling in Brooklyn and commuting to work as cooks and maids in the great houses of Manhattan.

“But now you don’t have to be in the city.  The top people are everywhere. You can be pretty much home and be the best.  The office towers of Midtown are empty.

“In the past year the owners of great businesses found how much can be done remotely. They hadn’t known that!  They hadn’t had to find out.  They don’t have to pay that killer rent for office space anymore.  People think it will all snap back when the pandemic is fully over but no, a human habit broke; a new way of operating has begun.  People will come back to office life to some degree, maybe a significant one; not everything can be done remotely; people want to gather, make friends, instill a sense of mission; but it will never be what it was.

“The closed shops in and around train stations and office buildings, they’re not coming back.  The empty towers – people say, ‘Oh, they can become luxury apartments!  Really?  Why would people clamor for them, so they can have a place in the city and be near work?  But near work has changed. So you can be glamorous?  Many of the things that made Manhattan glamorous – shows, restaurants, clubs, museums, the opera – are wobbling….

“In the short term, New York needs to hold on to the wealthy – the top 5% in New York pay 62% of state income taxes – and force down crime.  If you tax the rich a little higher, most will stay: There’s a lot of loyalty to New York, a lot of psychic and financial investment in it.  But if you tax them higher for the privilege of being attacked on the street by a homeless man in a psychotic episode, they will leave.  Because, you know, they’re human.

“No one can stay fixed in the old world, in the Before Times. We’re in the After Times, and every stakeholder, as they say, is going to have to be generous, patient and farsighted in a way they’ve never been before. That’s the kind of bargain people who know how to survive make. We’re in a battle for our survival, and should start absorbing this.”

---

More than 100,000 restaurants have closed for good across the country, the National Restaurant Association estimates.  Yes, perhaps 50% of them are replaced by new outlets in a year or two, but that means many jobs will be lost long-term.  Unemployed restaurant workers will need to retrain and many will struggle doing so.

Last November, Bill Gates raised eyebrows when he predicted that half of business travel and 30 percent of “days in the office” would go away forever.  In a new report from McKinsey Global Institute, the conclusion was 20 percent of business travel won’t come back and about 20 percent of workers could end up working from home indefinitely.  And that means fewer jobs at hotels, restaurants and downtown shops, in addition to ongoing automation of office support roles and some factory jobs.

---

On a different topic, in an amazingly distressing Senate hearing on Tuesday, top officials responsible for security at the Capitol on Jan. 6 as it was overrun by a mob backing former president Donald Trump’s efforts to prohibit the certification of the electoral college vote, blamed wide-ranging intelligence failures, pointing to lapses that included a missed email warning of violence and a larger inability to recognize the threat posed by domestic right-wing extremism.

Testimony from three now-resigned officials – Capitol Police chief Steven Sund, House Sergeat-at-Arms Paul Irving and Senate Sergeant-at-Arms Michael Stenger – each sought to minimize their responsibility for the events on that violent and chaotic day.

But each, to varying degrees, detailed how they were caught off-guard by the scale and ferocity of the pro-Trump crowd, which escalated from a peaceful protest to a violent mob in the matter of a few hours while security officials scrambled to respond.

“None of the intelligence we received predicted what actually occurred,” Sund said at the hearing.  “We properly planned for a mass demonstration with possible violence. What we got was a military-style, coordinated assault on my officers and a violent takeover of the Capitol Building.”

For his part, Irving denied a claim made by Sund that he had cited “optics” in denying a request for military assistance two days before rioters breached the Capitol.  Rather, he said that he, Sund and Stenger had agreed at the time that the intelligence assessment they received – indicating a pro-Trump rally similar to two others that had taken place in the weeks before – did not justify a military deployment.

“I was not concerned about appearance whatsoever – it was all about safety and security,” Irving said. “Any reference [to ‘optics’] would have been related to appropriate use of force, display of force.  And, ultimately, the question on the table when we look to any security asset is, does the intelligence warrant it?”

Another witness, D.C. police chief Robert J. Contee III, described how he was frustrated at the slow deployment of National Guard troops as the scope of the violence became clear.  He recounted a phone call that included Capitol security officials, as well as D.C. leaders and Defense Department brass.

“There was not an immediate yes of, ‘The National Guard is responding,’ ‘The National Guard is on the way,’” he said.  “The response was more asking about the plan: What was the plan for the National Guard?...How this looks with boots on the ground of the Capitol?”

“My response to that was simply, I was just stunned,” Contee added.  “I have officers that were out there literally fighting for their lives, and, you know, we’re kind of going through what seemed like an exercise to really check the boxes, and it was not an immediate response.”

Contee and Sund both warned that the Capitol attack reflected a larger failure of domestic intelligence – one that takes threats from homegrown extremists as seriously as those coming from foreign threats.  Both did so in the context of explaining their failure to act on an intelligence bulletin issued by the FBI’s Norfolk field office the day before the attack.

The report relayed credible calls for violence: “Stop calling this a march, or rally, or a protest,” said one of the messages.  “Go there ready for war.  We get our President or we die.  NOTHING else will achieve this goal.”

We learned at the hearing for the first time that in the case of Sund, chief of the Capitol Police, that the bulletin was forwarded to the force through the Joint Terrorism Task Force, but it only reached as far as the department’s intelligence division.  It was not forwarded to Sund or to the two sergeants-at-arms.

And there were differences in the timeline of the official response to the breaching of the Capitol, including a stark difference between Sund and Irving involving their conversations on Jan. 6 as rioters entered the building. 

Sen. Gary Peters (D-Mich.), the chairman of the Homeland Security and Governmental Affairs Committee, noted in comments closing the hearing Tuesday that the failure to recognize the scope of the extremist threat contributed to a “once-in-a-lifetime failure.”

“There’s no question our federal counterterrorism resources are not focused on effectively addressing the growing and deadly domestic terror threat,” he said.  “There’s no question in my mind that there was a failure to take this threat more seriously.”

As for former President Trump, he is slated to speak at the Conservative Political Action Conference (CPAC) on Sunday, his first public appearance since his Jan. 6 address.  What will he say?

Karl Rove / Wall Street Journal

“One approach would be to devote the speech to his anger and grievances over losing the election.  He could complain it was stolen and brag about winning more than 74 million votes. He could claim credit for every GOP victory, from flipping House seats to adding state legislative chambers, while blaming others – notably Minority Leader Mitch McConnell – for every GOP failure, including losing the Senate.

“Mr. Trump could also declare he’ll be involved in the 2022 midterms by endorsing candidates who share his MAGA views and punishing those ‘very weak’ Republicans who’ve betrayed him, an unsubtle message of cross me and I’ll destroy you.  If Mr. Trump follows this route, the media will happily make the day’s story line his declaration of civil war on other Republicans.

“Mr. Trump took this approach in his disastrous campaign stop the night before the Jan. 5 Georgia Senate runoffs.  If he repeats it at CPAC, he’ll be speaking to the shrinking share of the electorate that believes his every claim.  The events of Jan. 6 diminished the former president’s appeal, and his shtick is getting old.  People are tuning him out as his power to dominate the conversation and cow intraparty opponents diminishes each day, whether he recognizes it or not.

“There’s a second approach Mr. Trump could take Sunday. He could emphasize his agenda and contrast it with Mr. Biden’s policies starting with the new administration’s immigration proposal. He could share an expanded vision of where he would be taking America if he were still in the Oval Office, something he failed to do during his re-election campaign. He could remind people of his pre-Covid economic achievements.  He could finally express compassion about those who died or suffered from Covid and declare his pride in Operation Warp Speed, which by his administration’s final week reached the daily vaccination target Mr. Biden had set for the end of his first 100 days: one million vaccinations.

“Mr. Trump could say he’ll encourage, endorse and support MAGA candidates in 2022, but avoid trash-talking other Republicans. He could heed Florida Sen. Rick Scott’s wise statement Tuesday that Republicans ‘don’t have time’ for civil war as Democrats pursue a far-left agenda.

“In short, Mr. Trump could help his supporters overcome their frustration by offering a forward-looking program of action. He could even acknowledge Mr. Biden as the legitimate president and condemn Jan. 6’s violence. It wouldn’t hurt and could actually improve the former president’s standing.

“Leaders who come out of the wilderness after defeat do so by changing their approach and re-creating themselves.  It’s unclear whether Mr. Trump has the ability to change, especially after a defeat that left him embittered and isolated.  What are the odds Mr. Trump takes the more constructive second tack?  His choice Sunday will tell us a lot about his future and what the GOP will face in the next few years.  Let’s hope Mr. Trump heeds the Grail Knight and chooses wisely.”

Biden Bits

--The House is poised to pass President Biden’s $1.9 trillion Covid relief package tonight, but a ruling late Thursday by the Senate parliamentarian, Elizabeth MacDonough, dealt a major blow to prospects that the final legislation will include a hike in the minimum wage to $15 an hour.  MacDonough, as expected, found that the wage provision did not qualify for action under budget reconciliation, a fast-track procedure that would let Democrats pass the stimulus with only 50 votes.

But Friday’s vote will bring most Americans one step closer to receiving $1,400 relief payments and move action to the Senate, where disagreements among Democrats over the minimum wage had been the biggest obstacle to turning the pandemic relief plan into law.

The goal is to reach agreement between the House and Senate versions by mid-March.

--In a 50/50 Senate, West Virginia Democrat Joe Manchin is enjoying the power he is engendering as a moderate capable of playing both sides.  Manchin has announced that he would not support President Biden’s pick of Neera Tanden as director of the Office of Management and Budget and days later, her nomination appeared all but doomed.

Manchin, as the most conservative Democrat in the caucus, really has more power than Senate Majority Leader Chuck Schumer and he will clearly take advantage of this.

As for Tanden’s nomination, I am far from a fan, but it is more than a bit rich that some Republicans are so bent out of shape over her mean tweets after the same folks played down and forgave four years of Donald Trump’s despicable tweets.  Not one Republican, for example, voted against confirming Richard Grenell, Trump’s ambassador to Germany, despite his Twitter trolling.

--Joe Biden’s nominee to be director of the CIA, William Burns, told a Senate committee on Wednesday at his confirmation hearing that he saw competition with China – and countering its “adversarial, predatory” leadership – as the key to U.S. national security.

Burns, 64, a former career diplomat who worked in both Democratic and Republican administrations, is expected to easily win confirmation, having already been confirmed by the Senate five times, including as ambassador to Russia and three senior positions at the State Department.

Burns said, “Outcompeting China will be key to our national security in the days ahead.”  He called China “a formidable, authoritarian adversary,” that is strengthening its ability to steal intellectual property, repress its people, expand its reach and build influence within the United States.

Russian aggression is a constant concern, especially its involvement in U.S. elections and the recent SolarWinds hack that penetrated government agencies and that U.S. officials have blamed on Russian hackers, Burns added.

When Burns is confirmed, that will mean that at least President Biden has his security team in place – including Secretary of State Antony Blinken, Defense Secretary Lloyd Austin, and Director of National Intelligence Avril Haines, who all easily won confirmation.

--Attorney General nominee Merrick Garland was terrific in his confirmation hearing Monday and will be handily confirmed.  Even Sen. Lindsey Graham heaped praise on the judge, calling him a “very good pick” for the post.

--The House voted Thursday to pass the Equality Act, a far-reaching measure that has been decades in the making and would prohibit discrimination based on sexual orientation and gender identity.

The House passed it in 2019 but the legislation was blocked in the Republican-led Senate.  This time, Democrats control the White House, House and Senate, but it still faces an uphill fight in the Senate, where it would need 60 votes to break a legislative filibuster.

The House voted 224 to 206, with three Republicans joining all Democrats to vote yes.

The legislation would amend federal civil rights laws to ensure protections for LGBTQ Americans in employment, education, housing, credit, jury service and other areas.

The Pandemic

The U.S. formally acknowledged 500,000 deaths this week, President Biden memorializing this tragic number in a sundown ceremony Monday.

“The people we lost were extraordinary,” Biden said.  “They span generations. Born in America, immigrated to America.  But just like that, so many of them took their final breath alone in America.”

The 500,000 mark was via Johns Hopkins data, but you’ve noticed my metric, worldometers, is a few days ahead of them.  Both will end up at the same figure, whenever this scourge is finally ruled officially over…which may not be for years more.

It was a year ago that President Trump was tweeting statements like: “The Coronavirus is very much under control in the USA. …Stock Market starting to look very good to me!” [Feb. 24]

“It’s going to disappear.  One day, it’s like a miracle, it will disappear.”  [Feb. 28]

But on Feb. 25, Nancy Messonnier of the Centers for Disease Control and Prevention told reporters that “ultimately, we expect we will see community spread in the United States.  It’s not a question of if this will happen, but when this will happen, and how many people in this country will have severe illnesses.”  She added, “Disruptions to everyday life may be severe, but people might want to start thinking about that now.”

If you’re thinking, ‘How come I don’t remember this woman’s name,’ it’s because she was sidelined after this remark by the administration.

The day after, President Trump said at his White House news conference, “We’ve done, really, an extraordinary job. …This is going to end.”

It hasn’t.

Covid-19 death tolls, as of tonight….

World…2,528,322
USA…523,082
Brazil…252,988
Mexico…183,692
India…156,970
UK…122,415
Italy…97,227
France…86,147
Russia…85,304
Germany…70,421
Spain…69,142
Iran…59,899
Colombia…59,518
Argentina…51,887
South Africa…49,784
Peru…45,903
Poland…43,353
Indonesia…35,786
Turkey…28,432
Ukraine…25,742
Belgium…22,006
Canada…21,915

Source: worldometers.info

U.S. daily death tolls…Sun. 1,247; Mon. 1,374; Tues. 2,404; Wed. 2,525; Thurs. 2,414; Fri. 2,246.

Covid Bytes

--If you want to see some disconcerting trends, one year into the pandemic, go to worldometers and look at the charts on Brazil and Peru.  Or maybe don’t.  It may ruin your weekend, ditto the news we had 80,000 cases today…the most in a while.  That is far from the 20,000 or so we need to get to.  Hospitalizations have leveled off as well after a steep drop.  Actually, they’ve ticked up.

I need a beer.

--But, Johnson & Johnson’s single-dose vaccine was found to protect against Covid-19, according to an analysis from scientists at the Food and Drug Administration on Wednesday, setting the stage for a final decision on emergency use authorization for a new and easier-to-use shot to help tame the pandemic.

The FDA confirmed J&J’s work that overall the vaccine is about 66% effective at preventing moderate to severe Covid-19.  And the agency said the shot is safe to use.

So tonight an FDA advisory panel voted in favor of authorizing the vaccine for emergency use, with the FDA likely to give its blessing Saturday or Sunday.  J&J has said it could ship 3-4 million doses next week.

It’s a race against time…ramping up the vaccine supply amid the emergence of highly contagious new variants.

--Pfizer and BioNTech have begun a study testing in people whether the companies’ Covid-19 shot can provide protection against emerging strains of the coronavirus.

The two said Thursday they have started the small study to see whether a third dose of their authorized vaccine would increase its effectiveness against new variants, such as the strain first identified in South Africa.

The approach differs from that of Moderna Inc., which said Wednesday it had made a new vaccine targeting the strain found in South Africa and shipped doses to U.S. government researchers for human testing.

Pfizer and BioNTech said they were in discussions with U.S., European and other health regulators about studying a tweaked version of their vaccine that researchers designed to protect against the South African variant.

Earlier, a real-world test of Pfizer’s vaccine in more than half a million people confirms that it’s very effective at preventing serious illness or death, even after one dose.

Wednesday’s published results, from a mass vaccination campaign in Israel, give strong reassurance that the benefits seen in smaller, limited testing persisted when the vaccine was used much more widely in a general population with various ages and health conditions.

The vaccine was 92% effective at preventing severe disease after two shots and 62% after one.  Its estimated effectiveness for preventing death was 72% two to three weeks after the first shot, a rate that may improve as immunity builds over time.

--Meanwhile, Pfizer and Moderna vowed to increase the supply of vaccines to the United States; the companies telling a House committee on Tuesday that they anticipate a big surge in doses after making manufacturing improvements – an additional 140 million delivered in the next five weeks.

--The UK’s rapid vaccine rollout contributed to a substantial drop in infections, hospitalizations and deaths from Covid, according to data that add to a growing body of evidence that the shots provide significant protection against the disease.

The new information is preliminary and hasn’t been reviewed by other scientists, but it certainly provides reasons for optimism.

The information appears to vindicate the UK’s policy of stretching limited vaccine supplies by delaying a second shot to up to 12 weeks after the first, while also emphasizing the extra protection that comes from a second shot.

Researchers in Scotland earlier published a preliminary analysis of 5.4 million health records showing similar results.  They found that hospitalizations with Covid-19 were 85% lower among those receiving a single dose of Pfizer’s shot a month after injection, compared with those who didn’t get vaccinated.  A single dose of the shot from AstraZeneca PLC led to a 94% reduction in hospitalizations.

--Just two examples of how new restrictions are still being put in place around the world.  Kuwait’s Civil Aviation Authority last Saturday announced it was extending an entry ban for non-Kuwaiti citizens until further notice as part of new coronavirus measures.

And the mayor of Nice, in southern France, called on Sunday for a weekend lockdown in the area to reduce the flow of tourists as it battles a sharp spike in Covid infections to triple the national rate.

--One benefit of mask wearing, social distancing, little travel, and work-at-home and virtual schooling has been we’ve had little flu this season, preventing the once-feared “twindemic” of flu and Covid.  Plus there was a greater push to get people vaccinated against the flu as well.

Wall Street and the Economy

In two days of congressional testimony, Federal Reserve Chairman Jay Powell spoke against the backdrop of an economy still down 10 million jobs since last February, a seemingly rapid recovery in all but jobs, a potential $1.9 trillion relief package working its way through Congress, and some experts warning that it all adds up to inflation that would hurt both consumers and businesses.

So Powell delivered a blunt message that the economic outlook still remains wildly uncertain and that the central bank must continue its extraordinary efforts to support the economy.

While declining to weigh in on the Biden administration’s spending plans, Powell pushed back on Republicans’ claims that the economy is on the cusp of running too hot and sparking inflation.

“The economic recovery remains uneven and far from complete, and the path ahead is highly uncertain,” he said.  “There is a long way to go.”

Powell added, “The economy is a long way from our employment and inflation goals, and it is likely to take some time for substantial further progress to be achieved.”  He kept repeating this message all week.

To bolster growth, the Fed will continue to encourage lending and spending by holding interest rates near zero, where they have been since March, and by continuing to buy large quantities of bonds to keep money pumping through the system.  While some have been concerned the Fed might slow those bond purchases sooner rather than later, Powell allayed such fears.

But while the Fed controls the short end of the yield curve, it’s the market that controls the longer end and interest rates have been spiking.  The yield on the key 10-year, through which standard mortgages are pegged, soared to 1.61% overnight Thursday from a yearend close of 0.91%, before ending the week at 1.40%. 

Understand that the consensus view on Wall Street was for the 10-year to finish 2021 at somewhere between 1.3% and 1.4%.  I’ve been harping on ‘interest expense’ when it comes to the federal budget and pointed out how the latest 10-year deficit projections from the Congressional Budget Office are going to be woefully off when it comes to their projections for rates over the next decade, which will mean a far higher annual ‘interest expense’ than currently forecast.

But Powell knows this and he reiterated that the Fed plans to keep buying bonds until it sees “substantial further progress” toward its twin goals of full employment and stable inflation.  America can “expect us to move carefully, and patiently, and with a lot of advance warning” when it comes to slowing that support, Powell said.

Over the last six months or so, Chair Powell has made it clear the Fed is prepared to let inflation run a little hot for a spell, above its old 2% target, which is no longer a firm target, in order to make sure we get back to full employment, and that’s where the 10 million figure comes in.  The official unemployment rate of 6.3%, up from 3.5% in February 2020, is probably closer to 10% when you weigh in all those who have left the labor force during the pandemic.

“I really do not expect that we’ll be in a situation where inflation rises to troubling levels,” Powell said.  “This is not a problem for this time, as near as I can figure.”

And he pushed back on the idea that government spending is poised to send prices rocketing out of control.

“There perhaps once was a strong connection between budget deficits and inflation – there really hasn’t been lately,” Powell said.  He added that while he does expect prices to jump around in coming months, there is a distinction between a temporary pop in prices and a sustained increase.

Meanwhile, without the Fed’s intervention, the economy is going to be growing strongly with the vaccine rollout and a probable rapid reopening (this is where the danger of the variants, admittedly, could be a mitigating factor), let alone the looming stimulus package.

---

As for the economic data, we had a release of personal income for January today, up a whopping 10% vs. expectations of 9.5%*, with the steep rise due to federal stimulus payments in the month, i.e., those $600 checks.  Consumption rose 2.4%.  The core personal consumption expenditures index that the Fed favors as its inflation barometer rose just 1.5%.

*The Commerce Dept. notes that without the $600 checks and $300 increase in weekly unemployment payments, personal income would have declined for the third time in four months.

January durable goods (big ticket items) came in up 3.4%, 1.4% ex-transportation.

The first major manufacturing reading for February, the Chicago PMI, came in at 59.5, less than expected and vs. a prior 63.8, but still robust (50 the dividing line between growth and contraction).

New home sales in January were better than expected, 923,000 annualized, with the median sales price of $346,400 up from $328,900 a year ago, up over 5%.

The S&P CoreLogic Case-Shiller 20-city home price index for December was up 0.8% over the prior month, up 10.1% from a year ago.  The Phoenix market remained the hottest, up 14.4% year-on-year.

A second look at fourth-quarter GDP came in at 4.1%, as expected.  The initial read was 4.0% (ann.)

So talk about a volatile year…seasonally adjusted annualized rates

Q1 2020… -5.0%
Q2 2020… -31.4%
Q3 2020… 33.4%
Q4 2020… 4.1%

In 2019, the four quarterly figures were all between 1.5% and 2.9%.

Lastly, jobless claims for the past week came in at 730,000, a substantial decline from a prior revised figure of 841,000, but still above Great Recession highs and probably lowballed by the severe storms across much of the nation during the reporting period.

Europe and Asia

Little economic news this week, in both Europe and Asia, ahead of next week’s PMI data for February.

Euro area inflation was 0.9% in January, up from -0.3% (annualized) in December, according to Eurostat.  A year ago, Jan. 2020, inflation was running at a 1.4% pace.

Germany 1.6% (ann.), France 0.8%, Italy 0.7%, Spain 0.4%

Brexit: Fishermen in Northern Ireland, actually all food exporters, are transiting through the Republic and booking space on ferries leaving Rosslare (Ireland) for Dunkirk, thus avoiding some of the problems faced by exporters who have used the “land bridge” to the Continent, in other words routed through Britain.

For example, the traditional route had NI food going across from Belfast or Larne to Cairnryan, then down to Dover and across to France.  But now oysters, let’s say, travel through the Republic, avoiding checks, delays and paperwork.  Exporters say it’s cost effective, as they are increasingly scared of the bridge.

Reminder, Northern Ireland, while a part of the UK, has secure access to European markets because it remains part of the EU’s single market for goods.

But this arrangement is causing friction between London and Brussels.

Along these lines, because of all the new paperwork involved in trading between Britain and the EU, cargo rates from France into the UK have risen 44.7% in the first two months of the year, according to logistics firm Transporen (and Bloomberg).  The knock-on effect will ultimately be stock shortages and inflated prices for consumers.

In Asia…just a few items in Japan, where January industrial production was up 4.2% over December, up down 5.3% year-over-year.  Retail sales were down 2.4% y/y.

Street Bytes

Stocks had a rough go of it, though the Dow Jones hit a new record high Wednesday, before tumbling over 1,000 points Thursday and Friday.  While the markets were buffeted by the volatility in the bond market and the ongoing rotation out of tech stocks, as I’ve been writing ad nauseum, equities are overvalued…it’s just as I’ve also noted we know they can remain so a long time, like years in the case of the late ‘90s rally after then-Fed Chairman Alan Greenspan warned of “irrational exuberance.” 

That’s why there is such intense focus on the Treasury market.  In bonds, ‘speed kills.’  It’s not about an increase in yields, it’s the rapidity of same and for a while, until today, it was chaos in the bond pits and that roiled markets around the world.

Anyway, the Dow Jones ended down 1.8% for the week to 30932, after a new closing high of 31961 Wednesday.  The S&P lost 2.4% and Nasdaq 4.9%, its worst week since October.

Next week, aside from the ISM readings on manufacturing and the service sector, we have the February jobs report, this as earnings season has been winding down, much to the selfish delight of your editor, who hates it.

--U.S. Treasury Yields

6-mo. 0.05%  2-yr. 0.13%  10-yr. 1.40%  30-yr. 2.15%

An incredibly volatile week, but in the end the yield on the 10-year only rose 6 basis points, the 30-year just two.

--Crude oil had been trading over $63 today, before closing at $61.60, nonetheless the highest weekly close since January 3, 2020.

--The Federal Aviation Administration (FAA) said on Tuesday it was ordering immediate inspections of Boeing 777 planes with Pratt & Whitney PW4000 engines before further flights after a catastrophic engine failure on a United flight on Saturday.

Operators must conduct a thermal acoustic image inspection of the large titanium fan blades located at the front of each engine, the FAA said.  The National Transportation Safety Board said on Monday that a cracked fan blade from the United Flight 328 engine that caught fire was consistent with metal fatigue.

Flight 328 had just taken off from Denver, bound for Honolulu, when the engine failed, shedding parts over a Denver suburb, incredibly injuring no one on the ground.  Had some of the larger pieces hit in a crowded shopping center Saturday, or an apartment complex, it’s a different story.

“Based on the initial results as we receive them, as well as other data gained from the ongoing investigation, the FAA may revise this directive to set a new interval for this inspection or subsequent ones,” the FAA said.

In March 2019, after a 2018 United engine failure attributed to fan blade fatigue, the FAA ordered inspections every 6,500 cycles.  A cycle is one take-off and landing.  South Korea’s transport ministry said on Tuesday it had told its airlines to inspect the fan blades every 1,000 cycles following guidance from Pratt after the latest United incident.

The Pratt & Whitney engines are used on 128 planes, or less than 10% of the global fleet of more than 1,600 delivered 777 widebody jets.  Japan imposed a temporary suspension on flights using the P&W engine.  It was in December 2020 that a Japan Airlines 777 with a PW4000 engine also had an issue with the fan blades, one with a metal fatigue crack.

--In a good sign for the airline industry, major European discount airliner EasyJet said its ticket sales more than quadrupled in the hours after British Prime Minister Boris Johnson outlined a road map for a return to air travel.

Bookings for flights from the UK jumped 337 percent after Johnson said Monday that international trips may restart as soon as May 17th.  Sales of package holidays soared 630 percent, the low-cost carrier said.

While the uptick represents only several hours of sales, it validates optimism for consumer demand waiting to be unleashed over the crucial summer season. 

EasyJet CEO Johan Lundgren said in a statement: “We have consistently seen that there is pent up demand for travel. This surge in bookings shows that this signal from the government that it plans to reopen travel has been what UK consumers have been waiting for.”

However, if I were you, I would avoid the sunny spots that are getting a lion’s share of the early bookings – Malaga, Alicante and Palma in Spain, Faro in Portugal and the island of Crete, especially in August.

Unless you like drunken hordes….

Not that I myself have not been part of a drunken horde once or two in my life.

More broadly, and depressingly, no one expects travel numbers, whether overseas or in the United States, to return to 2019 levels until 2023/24. 

As a recent Wall Street Journal piece put it, when looking at global tour operators, one of the major depressants is the simple fact that so few of the world’s population will be inoculated this year; less than 20%, according to recent estimates by UBS.  Thus many nations will need to be cautious in reopening their borders.

--Aer Lingus lost $681 million last year as Covid restrictions devasted air travel in its key market.  Revenues fell 82 percent in 2020.

Aer Lingus is owned by IAG, which also owns British Airways and Iberia.  IAG lost $8.35bn after tax in 2010, against a profit of $2.06bn in 2019.  Group revenues fell 75 percent.  CEO Luis Gallego said, “Despite this crisis, our liquidity remains strong.”

--TSA checkpoint travel numbers….

2/25…44 percent of 2020 level…I will shift to a comparison with 2019 next week, see below
2/24…39
2/23…37
2/22…42
2/21…47
2/20…48
2/19…44
2/18…39

As of 3/1/20…the nation was still traveling at the same passenger rate as 3/1/19…

2,280,000 vs. 2,301,000, but then the numbers began to fall as Covid fears spread. 

3/17/20 we had under 1,000,000 passengers for the first time…

953,000 vs. the prior year’s 2,177,000

By 3/23/20…compared with 3/23/19

331,000 vs. 2,434,000

We bottomed 4/14/20…

87,000 vs. 2,208,000 the prior year

--Home Depot said pandemic-fueled shopping trends have continued into 2021, driving demand for home improvement and home goods.  HD reported a surge in fiscal fourth quarter results on Tuesday, with sales jumping 25% for the do-it-yourself retailer.

Sales in the three months thru Jan. 31 rose to $32.3 billion from $25.8 billion a year earlier, ahead of consensus.  Earnings rose to $2.65 a share from $2.28 a share in the same period of 2019, also beating the Street.

“Our ability to grow the business by over $21 billion in fiscal 2020 is a testament to both the investments we have made in the business as well as our associates’ unwavering commitment to our customers,” CEO Craig Menear said. 

CFO Richard McPhail said: “While we are not able to predict how consumer spending will evolve, if the demand environment during the back half of fiscal 2020 were to persist through fiscal 2021, it would imply flat to slightly positive comparable sales growth and operating margin of at least 14%.

Comparable sales in the fiscal fourth quarter were up almost 25%, better than the consensus.  For the full year, the sales were up about 20%.  Analysts are predicting a slight decline in this metric for this year.

--HD rival Lowe’s Companies reported better-than-expected fiscal fourth-quarter results on Wednesday as the pandemic kept more people at home and bolstered an interest in do-it-yourself renovations and projects.

Sales for the Mooresville, North Carolina-based retailer in the three months through Jan. 29 jumped to $20.3 billion from $16 billion a year earlier, beating expectations. Earnings also topped the Street.

“Strong execution enabled us to meet broad-based demand driven by the continued consumer focus on the home, with growth over 16% in all merchandizing departments, over 19% across all U.S. regions and 121% on Lowes.com,” CEO Marvin Ellison said in a statement.

While the pandemic has eased some, Lowe’s said it saw “continued sales momentum” in February after its fourth-quarter gains, when comparable store sales jumped 28% year-on-year against expectations from about 22% growth.

“Looking ahead to 2021, we expect to grow market share and drive further operating margin expansion,” Ellison said.

Lowe’s reiterated targets for the current year that were laid out in December, when sales expectations were pegged at between $82 billion and $86 billion after the retailer modeled scenarios that looked at various levels of demand.  In the just-ended year, Lowe’s sales were $89.6bn.

Lowe’s said it spent about $1.3 billion on support for its workers, communities and on store safety because of Covid-19 in fiscal 2020.

--Macy’s Inc. forecast 2021 sales largely above Wall Street estimates on Tuesday with major gains expected in the back half of the year as the retailer bets on its growing online business and the return of customers to its department stores when Covid-19 vaccinations curb the pandemic’s impact.

The upbeat outlook from Macy’s follows better-than-expected results in the holiday quarter as stimulus checks and strong online demand eased the blow from the health crisis.  Retailers are expected to benefit from another wave of stimulus-driven consumer spending in the coming months should Congress pass the Biden administration’s relief plan that includes sending a $1,400 check to most households.

With homebound shoppers reducing purchases of formal work attire and dresses, Macy’s saw casual apparel, home and beauty perform well in the holiday quarter.  Macy’s expects sales between $19.75 billion and $20.75 billion for 2021, in line with current estimates, but the company forecast full-year profits below expectations.

In the fourth quarter, online sales jumped 21%, though same-store sales dropped 17%.  Forced to shutter stores for months and revamp business strategies almost completely, department stores have been among the hardest hit during the pandemic, compared with “essential” retailers such as Walmart and Target.  Macy’s net sales fell about 19% to $6.78 billion in the fourth quarter, though exceeding expectations.

--Costco is boosting its minimum hourly wage to $16 starting next week, the warehouse retailer’s chief executive said during congressional testimony on Thursday.

The $1-an-hour wage increase exceeds the pay that competitors Target, Walmart and other big box retailers offer and comes amid the national discussion about raising the federal minimum wage to $15 an hour.

“This isn’t altruism,” Costco’s CEO, Craig Jelinek, told the Senate Budget Committee on Thursday.  “In the long run, by minimizing turnover, maximizing employee productivity, commitment and loyalty, we encourage our employees to view Costco as providing a career rather than just a job.”

--Johnson & Johnson has socked away $3.9 billion to help cover the costs of thousands of lawsuits it’s facing over accusations that its baby powder is laced with asbestos.

The company revealed its 2020 litigation expenses in a Monday regulatory filing, saying the money was “primarily associated with talc related reserves and certain settlements.”

Some 25,000 plaintiffs have filed lawsuits against J&J related to its talc-based baby powder, according to the filing, many of whom claim they got cancer after using the product.

J&J has faced baby powder safety concerns since a 2018 Reuters investigation found it knew for decades that asbestos was mixed in with the talc.

The company announced last May that it would stop selling its iconic Baby Powder in the U.S. and Canada.  J&J attributed the decision to changing consumer habits as well as “misinformation around the safety of the product and a constant barrage of litigation advertising.”

--Dell Technologies posted better-than-expected results for the fiscal fourth quarter, driven by both continued strong personal computer demand and signs of improving fundamentals in its enterprise hardware unit.

For the quarter ended Jan. 31, Dell posted revenue of $26.1 billion, up 9%, and well ahead of Street consensus of $24.5bn.  Earnings of $2.70 a share were up 35% from a year ago and also beat expectations.

Dell said revenue from its Client Solutions Group (CSG), including its PC business, was $13.8 billion, up 17%.  The company said it shipped a record 50.3 million PCs in the 2020 calendar year, up 8% from 2019.

Dell CFO Tom Sweet said in an interview, “IT spending is expected to increase this year. CSG will have another good year, with more strength in the front half of the year.”

For the full year, Dell had record revenue of $94.2 billion, up 2%.

--HP Inc. posted stronger-than-expected results for the quarter ended Jan. 31, as well, driven by impressive demand for both notebook computers and consumer printers.

For its fiscal first quarter, HP posted revenue of $15.6 billion, up 7% from a year earlier, beating the Street.

HP’s Personal Systems Group, which includes notebook and desktop computers, had revenue of $10.6bn, up 7%.  Units sold were up 15%, with notebooks up 33%, and desktops down 23%.

Printing revenue was $5 billion, up 7% year over year, with hardware units sold up 16%, including 18% growth in consumer printers and commercial units flat.  Print revenues were up 55% from consumers, while commercial print revenue was down 11%.  Ergo, the work-at-home trend impact.

--Salesforce posted slightly better-than-expected results for the quarter ended Jan. 31, but the numbers weren’t strong enough to provide any significant lift to its share price.

For its fiscal fourth quarter, the cloud-based provider of enterprise sales software posted revenue of $5.82 billion, up 20% from a year earlier and above the Street’s forecasts, while adjusted profits of $1.04 a share were also above the guidance range.

For the April quarter, Salesforce sees revenue of about $5.88bn, and $25.65bn to $25.75bn for the fiscal year.

For last year, revenue was  $21.25bn, up 24%.

--Best Buy reported fourth-quarter adjusted earnings of $3.48 per share, up from $2.90 a year ago.

Sales rose 11.5% to $16.94 billion during the 13-week period ended Feb. 1 (the holiday quarter) from $15.20bn a year ago.  But the sales figure fell short of expectations (comp sales, up 12.6%, missed expectations of a 14.4% rise) and the shares fell 9% Thursday as the company also issued full-year revenue guidance that called for a comp sales range of down 2% to up 1%, signaling a slowdown in the coronavirus-driven demand for remote-work computer equipment.

The company, like many others, is unsure how the rollout of vaccines would affect consumer demand and shopping patterns.

Best Buy is increasing its reliance on part-time employees, adding 2,000 positions after laying off about 5,000 mostly full-time workers in 2020.  It reduced its total workforce by 17% in the last fiscal year.  Store traffic fell 15% in the fourth quarter due to a new surge in virus infections, while supply shortages of new gaming consoles and large appliances also hit the retailer’s performance.

--Anheuser-Busch InBev saw its shares fall 5% on Thursday, despite the world’s largest brewer forecasting “meaningfully” better earnings in 2021.

The company warned it would, however, face margin pressures this year due to commodity prices and currency exchange rates – headwinds it experienced in the final three months of 2020.

The Budweiser brewer did see signs of a recovery in the fourth quarter as revenue grew 4.5%, helped by 1.6% growth in beer volumes and prices also rising.  The strongest recovery came in Mexico and Brazil.

But earnings came in lower than analyst consensus.

Full-year revenue declined 3.7% to $46.9 billion as total volumes fell 5.7%, driven by the impact of the pandemic, which forced bars and restaurants around the world to shut for large parts of last year.

But a shift in consumer habits to more drinking at home and its own response through e-commerce channels helped deliver beer volume growth of 2.2% in the second half.

The Belgium-based company, which also makes Stella Artois and Corona, sees 2021 top- and bottom-line results to “improve meaningfully” as people drink more and prices continue to rise as countries reopen.  But margin concerns worry investors.

--U.S Farmers are expected to plant a record amount of acres this year to take advantage of high agricultural prices after years of tough market conditions.

The U.S. Department of Agriculture projects that farmers will plant 182 million acres of corn and soybeans in 2021, an all-time high and up roughly eight million acres from last year – driven by a jump in soybean acreage.

Prices have been lifted by surging demand for U.S. soybeans in China, where the country continues to rebuild a hog herd that was decimated by African swine fever in 2019. As of last week, Chinese buyers had purchased 35.9 million tons of U.S. soybeans since the start of September – up nearly 24 million tons from the same period a year earlier.

High soybean prices are a hopeful sign for farmers after a tough stretch. In 2020, 552 Chapter 12 bankruptcy cases – a chapter of the bankruptcy code designed for farmers – were filed, down 7% from the previous year but still the third-highest total in the past decade, according to the American Farm Bureau Federation.

But as for the outlook, the USDA cautions its dependent on the weather and some forecasters don’t see an ideal setup for growing crops this year because of the weather phenomenon known as La Nina, which can cause dry weather in some parts of the globe and heavy rainfall in others.  Some are forecasting a hot, dry summer for the western Corn Belt.

--I noted the other day how lumber prices have been soaring and on the local NBC television station the other night, they had a report on the impact.  As in numerous Jersey shore communities are delaying or rethinking their boardwalk refurbishment plans because the lumber is too expensive.  Most are now just going to do patchwork repairs to get through the coming season, which promises me to be a boffo one.

--Marriott International named a new CEO, a week after the death of its longtime chief executive Arne Sorenson.

Anthony “Tony” Capuano, a 25-year veteran at the world’s biggest hotel chain, will join the board of directors as he succeeds Sorenson.  Capuano is 55, and was previously group president, global development, design and operations.  He becomes just the second CEO who is not a member of the Marriott family, Sorenson being first when he assumed the role in 2012.

--Snap Inc. shares jumped to a record after the social media company forecast revenue growth of 50% or more for several years, buoyed by investments in more engaging adverting and innovations in augmented reality.

The company, parent of the Snapchat app, is “in a position to drive multiple years of 50%-plus revenue growth,” Peter Sellis, senior product director, said at a presentation at the company’s investor day.

--Foxconn Technology Group, the world’s biggest electronics contract manufacturer, has agreed to assemble cars for electric-vehicle startup Fisker Inc., sending Fisker’s shares soaring, as Taipei-based Foxconn, the iPhone assembler, looks to expand into the automotive sector.

The two companies have a memorandum of understanding to jointly produce more than 250,000 vehicles a year, the companies announced Wednesday.

Fisker CEO Henrik Fisker said there is a very good chance initial production will be in the U.S., possibly at the Foxconn facility in Wisconsin.

Shares in Fisker leaped 39% on the news, to $22.58.  The company began trading publicly in October after merging with a special-purpose acquisition company (SPAC) backed by private-equity firm Apollo Global Management Inc.

The Foxconn collaboration is for Fisker’s second model, which the company wants to start building in the fourth quarter of 2023.

--Another electric car maker, Lucid Motors, announced it plans to launch a rival to Tesla’s Model 3 in 2024 or 2025.  CEO Peter Rawlinson said it is early to make their own battery cells for now, adding that it has contracts with suppliers LG Chem and Samsung.  The former Tesla engineer also said six automakers have reached out to him over the past month and expressed interest in its technology and potential cooperation.

--Speaking of Tesla, the shares plunged early Tuesday, hit by a broad selloff of high-flying technology stocks and the fall of bitcoin, in which Tesla had recently very publicly invested $1.5 billion.

Tesla shares hit $900 on Jan. 25, with a closing record high of $883 on Jan. 26, and then plunged to $619 Tuesday morning, before finishing the day at $698.  They closed the week at $670, down 24% in a month.

Bitcoin had fallen from a peak of $58,354 on Feb. 21 to $45,000 two days later, after a Germany-based trader (Valentijn van Nieuwenhuijzen, who I had never heard of) said he was “taking chips off the table” on Tesla as its $1.5 billion investment in the cryptocurrency could “backfire now.”

It finished the week (at least as of early this evening) at $47,500.  It was $45,800 an hour-and-a-half earlier.  The whole thing is so stupid.

--On the Texas power crisis….

The energy crisis is over, but the settling of the massive bills left behind is just beginning.  And the water crisis is far from over, with millions still facing shortages, tens of thousands dealing with broken water pipes, the water infrastructure overall severely damaged.

Residents, businesses and cities, however, face soaring bills as the deep freeze sent electricity and natural gas prices skyrocketing, while triggering the blackouts that lasted in places for four days.

Wholesale power prices on Texas’ main power grid hit the ceiling price of $9,000 per megawatt hour for parts of five straight days.  That was exponentially higher than the average price, which was $21.18 per megawatt hour in 2020, according to the Electric Reliability Council of Texas, or Ercot, the nonprofit that controls the grid.

Now power retailers and municipal utilities are trying to figure out how to pass on the billions of dollars in costs to customers, some of whom face bills in the thousands of dollars that may need to be stretched out over time.

In Denton, a North Texas university city that suffered outages and natural-gas supply shortages, city leaders are looking to borrow up to $300 million to cover fuel expenses from last week, which amounts to around $2,000 for each of the city’s 150,000 residents.

Last Tuesday alone (Feb. 16), Denton officials said the municipal utility racked up a $75 million power bill, more than it spent on electricity for all of its last fiscal year!

Texas deregulated its power market in 1999.  While residents of Austin and some other cities still have traditional utilities that furnish power for them, most Texans in Houston, Dallas and other cities choose their electric retailer. They are offered an array of options, ranging from fixed-price long-term contracts to contracts that track the hourly fluctuations of the wholesale market.

Bloomberg estimates the cost of electricity sold from early Monday, Feb. 15, to Friday, Feb. 19, to be $50.6 billion, compared with $4.2 billion the prior week.

Individual consumers on variable rate contracts are seeing power bills as high as $9,000.

John Bridges / Austin American-Statesman

“ ‘The government you elect is the government you deserve,’ Thomas Jefferson famously said. Tom must’ve never made it to Texas.

“Texans deserve better government.

“For too long, Texans have elected people more interested in dismantling government than actually running one.  As we painfully learned this week, small government sounds good right up until the power goes out and the faucet runs dry.

“Texans deserve a government that puts the people, the governed, first.

“For too long, our elected leaders have put their own political interests first, their cronies second and business interests third.

“Texans deserve a government that actually does the hard work to build and safeguard the critical systems on which we all depend….

“Our government has dismantled the social safety net and outsourced what’s left.

“Our regulatory agencies work to protect the businesses they regulate, not the people they serve….

“This week, Texans could not keep the lights on.  Texas could not keep the water flowing. Texas could not keep the roads open.

“And our leaders struggled to tell us why.  They gave us no warning that the power failure could be coming. When it did, they disappeared for the critical first day and have since offered precious little explanation or guidance.

“In Texas, the buck doesn’t stop here – it just gets on a plane to Mexico.

“Rather than face up to the fact that they’ve been warned about Texas power grid vulnerabilities for a decade, numerous Texas officials sought to shift blame to other agencies or to frozen wind turbines, because renewable energy is somehow a liberal conceit. Gov. Abbott spent more time talking about the Green New Deal than the old raw deal he and others have dealt this state….

“If Texas wants its own power grid and to run it the Texas way, its government must tirelessly regulate, inspect and enforce to ensure that Texans have life-sustaining electricity in the brutal heat of summer and killer cold of winter.  Our leaders must be open, forthright and transparent with us about the system’s failures and the costs to fix it….

“Texans don’t ask much of our government. But is it too much to ask that government not try to kill us?

“Texans deserve better.  Let’s remember these frozen, powerless, waterless nights on Election Day.”

--Southern California home prices and sales jumped by double digits in January from a year earlier, as prospective buyers rushed to take advantage of rock-bottom mortgage rates, which as noted above, are now rapidly rising.

The six-county region’s median price rose 13% from a year earlier to $599,500 last month, according to data released Monday by DQNews.  Sales increased 13.5%

In Orange County, the median price rose 6.7% to $799,000, while sales climbed 12%.

In Los Angeles County, the median price rose 12.6% to $690,000, with sales up 14.3%.

In Riverside County, the median price rose 17.1% to $455,364; sales up 10.1%.

And, one more…San Diego County’s median rose 9.4% to $640,000, though sales were up just 1.8%.

But this will be interesting to follow as 2021 evolves.  Affordability and rising rates will have an impact.

--Goodyear Tire & Rubber Co. agreed to buy Cooper Tire & Rubber Co., a deal that would combine the two biggest tire manufacturers based in the U.S.

Goodyear said Monday it is paying $2.8 billion in cash and stock for its smaller rival.

The acquisition would add scale for Goodyear, giving it annual revenue of roughly $17.5 billion, more than 50 factories and around 72,000 employees.

The companies said they are eyeing $165 million of cost cuts annually within two years after the deal is complete, i.e., layoffs.

Goodyear was the third-largest tire company globally by tire sales for 2019, behind  France’s Michelin, and Japan’s Bridgestone.  Cooper was 13th.

The pandemic weighed on sales of both last year.  Goodyear’s fell 16% to $12.3 billion, Cooper’s fell 8% to $2.5bn.

--U.S. Postmaster General Louis DeJoy told lawmakers that the U.S. mail system is losing $10 billion a year and urgently needs reform and legislative relief from Congress.

“I would suggest that we are on a death spiral,” DeJoy told the House Oversight and Government Reform committee at a hearing Wednesday.  He didn’t’ rule out changing first-class delivery standards or other significant changes.

DeJoy, a supporter of Donald Trump appointed to head the Postal Service last year, suspended operational changes in August after heavy criticism over postal delays.  He plans to release a new 10-year strategic “break-even” plan soon.

Delays in paychecks and other mail deliveries by the Postal Service have gotten worse since even the summer.  I don’t understand it.  I’ve told you that items I used to send that never took more than 3 days to get to their destination were suddenly taking 12, or more.  It wasn’t like that in the summer, when the USPS had an excuse…Covid absences.

DeJoy also rebuffed calls from some Democrats to step down vowing that he will stay “a long time. Get used to it.”

This guy is highly unlikeable. 

--GameStop Corp. shares more than doubled in trading on Wednesday, surprising those who thought the video game retailer’s stock price would stabilize after recent hearings in Congress into the fierce rally and steep dive that upended Wall Street in January.  Then Thursday, the shares soared from $91 to $184, intraday, plunged to $101, went back to $170, before closing at $106.  Today they closed at $100.

Foreign Affairs

Iran: President Biden on Thursday directed U.S. military air strikes in easter Syria against facilities belonging to what the Pentagon said were Iran-backed militia, in a calibrated response to recent rocket attacks against U.S. targets in Iraq.  The strikes appeared to be limited in scope, lowering the risk of escalation, though there are conflicting reports on casualties.

Biden’s decision to strike only in Syria and not in Iraq also gives the Iraqi government some breathing room as it carries out its own investigation of a Feb. 15 attack that wounded Americans.

Pentagon spokesman John Kirby said in a statement: “At President Biden’s direction, U.S. military forces earlier this evening conducted airstrikes against infrastructure utilized by Iranian-backed militant group in eastern Syria.  President Biden will act to protect American and Coalition personnel. At the same time, we have acted in a deliberate manner that aims to de-escalate the overall situation in both eastern Syria and Iraq,” Kirby said.

Representative Michael McCaul (Tex.), the top Republican on the House Foreign Affairs Committee, said the strikes were the right move.  “Responses like this are a necessary deterrent and remind Iran, its proxies, and our adversaries around the world that attacks on U.S. interests will not be tolerated,” McCaul said.

On the nuclear front, despite Iran’s repeated breaches of the 2015 accord, Tehran softened its initial position of slashing access for the International Atomic Energy Agency to a range of its nuclear related sites.

In a deal struck last weekend in Tehran by UN atomic chief Rafael Grossi, Iran agreed to provide footage and measurements of its declared nuclear facilities after several months if the U.S. lifts sanctions. It also agreed to provide footage of activities at sites that make key nuclear equipment, such as centrifuge rotors and uranium ore mines.

Grossi said Tuesday that it wasn’t yet clear whether Iran would carry out its threat to no longer report its plans for building new nuclear facilities or adjusting existing ones to the IAEA, a key heads-up for inspectors.  Grossi said failing to do so would put Iran “in violation” of their core nuclear obligations.  That could lead the IAEA Board to take action against Iran.

While the atomic agency will lose its daily access to sites where Iran is enriching uranium, it will be able to continue monitoring Iran’s fissile material production and stockpile, and the purity of the uranium it produces through inspections.  Thus the international community knows how much nuclear fuel Tehran has stockpiled that could be used in a nuclear weapon.

The IAEA on Tuesday said Iran was continuing to install hundreds of more advanced centrifuges at its sites at Natanz and Fordow over the past three months and that Iran’s stock of enriched uranium had reached 2,967.8 kilograms, compared with the limit of 202.8kg written into the nuclear accord.  That is enough for two nuclear weapons, if refined to weapons grade, experts have said.

Meanwhile, Israeli Prime Minister Benjamin Netanyahu said Tuesday: “Israel isn’t pinning its hopes on an agreement with an extremist regime like [Iran],” speaking at a memorial service for the 1920 Battle of Tel Hai.  “We already saw what these agreements are worth…with North Korea.”

“With or without an agreement, we will do everything so [Iran isn’t] armed with nuclear weapons,” he said.

Referring to the story of Purim, which began on Thursday night, Netanyahu said: “2,500 years ago, a Persian oppressor tried to destroy the Jewish people, and just as he failed then, you will fail today… We didn’t make a journey of thousands of years to return to the Land of Israel to allow the delusional ayatollahs’ regime to finish the story of the rebirth of the Jewish People.”  [Jerusalem Post]

Netanyahu has been meeting with his defense officials to discuss Israel’s strategy and response to the Biden administration’s attempted rapprochement with Iran.

Israeli officials are split on whether they should advocate for the U.S. to stay out of the Iran deal until it can get a better, more-secure agreement, or be more supportive of what President Biden’s stated plan is, to rejoin the Joint Comprehensive Plan of Action, as the 2015 Iran deal is officially called, and then negotiate tougher terms.

Netanyahu favors the first, harder line.  Israeli officials do seem pleased, at least, with the cooperation they are receiving from new Secretary of State Antony Blinken and National Security Advisor Jake Sullivan.

Back to Tehran, the consensus is that hardliners and pragmatists in the regime appear to have coalesced around a strategy of cranking up enrichment and raising questions about cooperation with the IAEA in order to push the Biden administration into dropping the “maximum pressure” campaign of sanctions launched by Donald Trump.  Supreme Leader Ayatollah Ali Khamenei upped the ante on Monday, saying Iran might enrich uranium up to 60% purity if needed, while repeating a denial of any Iranian intent to seek nuclear weapons, for which 90% enrichment would be required.

Sunday, Iranian Foreign Minister Mohammad Javad Zarif reiterated Iran’s stance that Washington should take the first step by lifting all sanctions, if it wants to revive the accord.

“The United States must return to the deal and lift all sanctions… The United States is addicted to sanctions but they should know that Iran will not yield to pressure,” he said.  “We are not seeking nuclear weapons.”

Saudi Arabia: President Biden called ailing Saudi King Salman, rather than de facto leader, Crown Prince Mohammed bin Salman, as the administration prepared to release an unclassified intelligence report establishing MBS directed the killing of the dissident U.S.-based journalist Jamal Khashoggi.

A classified version of the report was completed shortly after Khashoggi was lured into a Saudi Consulate in Turkey and killed by a team of assassins on Oct. 2, 2018.  But the Trump administration withheld the findings, reflecting the former president’s embrace of the up-and-coming crown prince as the presumptive heir to the kingdom’s throne even after Khashoggi’s brutal slaying.

The decision to release the report comes as President Biden looks to reshape the relationship between Washington and Riyadh in ways that will inevitably strain it.  Biden is already slashing U.S. support for the Saudi-led war in Yemen, while attempting to resuscitate the Iran nuclear agreement.

Riyadh first falsely claimed that Khashoggi had left the consulate, but later admitted that he had been killed.  However, MBS never acknowledged ordering the assassination.

So then a 3-page report was released this afternoon and it said MBS did indeed approve the operation.

“We assess that Saudi Arabia’s Crown Prince Mohammad bin Salman approved an operation in Istanbul, Turkey to capture or kill Saudi journalist Jamal Khashoggi,” the U.S. Office of the Director of National Intelligence said in the report.

The intelligence agency based its assessment on the crown prince’s control of decision-making, the direct involvement of one of his key advisers and his own protective detail, and his “support for using violent measures to silence dissidents abroad, including Khashoggi,” it added.

“Since 2017, the Crown Prince has had absolute control of the Kingdom’s security and intelligence organizations, making it highly unlikely that Saudi officials would have carried out an operation of this nature without the Crown Prince’s authorization,” the report said.

The United States then imposed sanctions on some of those involved but not the crown prince himself, which is causing major consternation in some circles tonight.

Saudi Arabia said after it rejected the assessment of the U.S. intel community.

“The government of the Kingdom of Saudi Arabia completely rejects the…assessment in the report pertaining to the Kingdom’s leadership, and notes that the report contained inaccurate information and conclusions,” the Saudi Foreign Ministry said in a statement.

For its part the Biden administration appeared to be trying to make clear that killings of political opponents were not acceptable to the United States while preserving relations with the crown prince, who may rule one of the world’s top oil exporters for decades and be an ally against common foe Iran.

Qatar: The Guardian (and Yahoo News) had an extraordinary report on the number of migrant workers who have died during Qatar’s preparation of the 2022 World Cup, which they’ll be hosting.

According to government data from the home nations of the workers, including India, Pakistan, Nepal, Bangladesh and Sri Lanka, more than 6,500 workers have died, or an average of 12 deaths per week since Qatar was awarded the World Cup in 2010.

FIFA gave the Cup to Qatar despite widespread concerns over human rights violations and treatment of migrant workers.  Amnesty International has since documented conditions of workers being “exploited” and “subjected to forced labor.”

“They can’t change jobs, they can’t leave the country, and they often wait months to get paid,” a report from the human rights organization states.

According to The Guardian, 2,711 workers from India, 1,641 from Nepal, 1,018 from Bangladesh, 824 from Pakistan and 557 from Sri Lanka have died working in Qatar since 2010.  The Guardian estimates that the actual death toll of migrant workers is “considerably higher” since the data it cites is limited to the listed countries.

The nation with a population of less than 3 million is dependent on 2 million migrant workers to man its labor force.

The listed causes of death include electrocution, blunt injuries due to a fall from height and suicide.

Daytime temperatures in Qatar can approach 120 degrees during the summer.  Normally played in the summer, Qatar’s World Cup will be held in November and December because of the oppressive heat.

The nation has built or is building seven new stadiums in addition to significant infrastructure upgrades, including roadways, hotels and an airport in preparation to host the WC.

Qatar’s government didn’t dispute The Guardian’s findings and characterized the death toll as “expected” in a statement to the publication.

“The mortality rate among these communities is within the expected range for the size and demographics of the population,” the statement read.  “However, every lost life is a tragedy, and no effort is spared in trying to prevent every death in our country.”

FIFA, which also provided a statement to The Guardian, said in part, “the frequency of accidents on FIFA World Cup construction sites has been low when compared to other major construction projects around the world.”

China: The Dutch parliament on Thursday passed a non-binding motion saying that the treatment of the Uighur Muslim minority in China amounts to genocide, the first such move by a European country.  Activists and UN rights experts say at least one million Uighurs are being detained in camps in the remote western region of Xinjiang.  The activists and some Western politicians accuse China of using torture, forced labor and sterilizations.

China denies any human rights abuses and says its camps provide vocational training and are needed to fight extremism.

But good for the Dutch.  Their motion said, “A genocide on the Uighur minority is occurring in China,” though it stopped short of directly saying the Chinese government was responsible.

The motion said that actions by the Chinese government such as “measures intended to prevent births” and “having punishment camps” fell under UN Resolution 260, generally known as the genocide convention.

The author of the motion, a center-left lawmaker, Sjoerd Sjoerdsma, separately proposed lobbying the International Olympic Committee to move the 2022 Winter Olympics away from Beijing.

“Recognizing the atrocities that are taking place against the Uighurs in China for what thye are, namely genocide, prevents the world from looking the other way and forces us into action,” Sjoerdsma told Reuters.

China’s representatives across the spectrum accuse the West of using the Uighur issue to meddle in their internal affairs.

Canada passed a resolution labeling China’s treatment of the Uighurs genocide earlier this week.  The motion – which passed 266 to 0 – made Canada the second country after the United States to recognize such actions thusly.

Lawmakers also voted to pass an amendment asking Canada to call on the IOC to move the 2022 Beijing Olympics “if the Chinese government continues this genocide.”

The issue of the Olympics is a huge one.  Pressure will begin mounting across the West to change the venue.  Or some nations will flat-out boycott the Games.  I envision immense pressure in Congress to do the same.

What I’m trying to figure out is what Beijing will do in terms of its aggressive posture, say, in the South China Sea and with regards to Taiwan over the next six months or so.  It desperately needs the Olympics to enhance its image. 

For example, at least 10 Chinese bombers took part in maritime strike exercises in the South China Sea recently, immediately after an escalation of the U.S. military presence in the disputed waterway.  The operation was just reported, though took place sometime after the Lunar New Year holiday, which ended on February 17, as reported by state broadcaster CCTV.  [Taiwan scrambled its air force twice last weekend after Chinese fighter aircraft and bombers carried out separate drills close to Taiwan-controlled islands.]

This Wednesday, the U.S. sent a guided missile destroyer through the Taiwan Strait to demonstrate “the United States military will continue to fly, sail and operate anywhere international law allows,” according to a statement from the U.S. Seventh Fleet.

Speaking of Hong Kong, the city-state’s High Court denied bail to media tycoon Jimmy Lai, just over a week after the city’s top court ruled that a previous decision to let him await trial under house arrest stemmed from a judge’s erroneous interpretation of the national security law.

The 73-year-old founder of the Next Digital media group and the tabloid-style Apple Daily newspaper has spent 68 days behind bars, and will remain in custody while he stands trial over his alleged involvement in an unauthorized assembly during 2019’s social unrest.

But Lai is facing eight separate charges, including under the Beijing-imposed national security law in six cases.  The guy is in a maximum-security prison and could remain there the rest of his life.  It should make your blood boil if you care about freedom and democracy, both now gone in Hong Kong…with the snap of a finger.  The West’s lack of a response was pathetic.

Russia: National Security Advisor Jake Sullivan said Sunday on CBS’ “Face the Nation” that the United States is preparing sanctions and other measures to punish Moscow for actions that go beyond the sprawling SolarWinds cyber espionage campaign, including the near-fatal poisoning of Russian opposition leader Alexei Navalny.  Sullivan said the response, expected in the coming weeks, “will include a mix of tools seen and unseen, and it will not simply be sanctions. …The bottom line is that we will ensure that Russia understands where the United States draws the line on this kind of activity.”

Speaking of Navalny, a Russian court on Saturday found him guilty of slandering a World War II veteran in a case he says was used by the authorities to tarnish his reputation.  Navalny had been accused of defaming the veteran who took part in a promotional video backing constitutional reforms last year that allowed Vladimir Putin to run for two more terms in the Kremlin after 2024 if he wanted to.  This time, Navalny was fined $11,000.

Separately, Navalny lost his appeal of his current jailing, the last legal obstacle to sending him to a prison camp to serve out a term of about 2 ½ years for violating probation rules while recovering in Germany from his near-fatal nerve agent attack that he and Western governments blame on Russian security services.

Under Russia’s criminal justice system, being transferred to a penal colony can take two weeks, traveling on a specialized prisoner train wagon, with stops at transfer prisons, during which inmates are generally not allowed to contact lawyers or family members.  Their destination is often unknown until they arrive.

Sounds just lovely.

Myanmar: Mass protests continue across the country against military rule, as Indonesia’s efforts to steer a path out of the crisis failed, a diplomatic visit scrapped.  This week saw huge rallies and a general strike on Monday to denounce the military’s Feb. 1 coup and demand the release of elected leader Aung San Suu Kyi, despite a warning from authorities that confrontation could get people killed.   At least three protesters have been shot and killed thus far, but security forces have shown more restraint compared with earlier crackdowns against people who had pushed for democracy during almost half a century of direct military rule.

Random Musings

--Presidential approval ratings….

Gallup: 56% approve of President Biden’s job performance, 40% disapprove (Feb. 3-18). [Initial split had been 57-37.]  53% of independents approve, down from an initial 61%.

Rasmussen: 49% approve of President Biden’s job performance, 49% disapprove (Feb. 26), unchanged from last week.

According to a survey from the American Research Group, 58% of Americans say they approve of the way Joe Biden is handling his job as president and 34% say they disapprove.  In January, 30% approved of the way Trump was handling his job as president and 66% disapproved.

When it comes to Biden’s handling of the economy, 61% of Americans approve and 33% disapprove.  In January, 38% approved of the way Trump was handling the economy and 57% disapproved.

When it comes to Biden’s handling of the coronavirus, 62% of Americans approve and 29% disapprove.  In January, 29% approved of the way Trump was handling the outbreak and 68% disapproved.

--The Supreme Court on Monday rejected a last-ditch attempt by former President Trump to shield his financial records, issuing a brief, unsigned order requiring Trump’s accountants to turn over his tax and other records to the office of the Manhattan district attorney, Cy Vance Jr., a Democrat.

The court’s order was a huge blow for Trump, who has gone through extraordinary lengths to keep his tax returns and related documents secret. There were no dissents noted.

Vance replied in a three-word statement; “The work continues.”

Ordinarily grand jury testimony would be kept secret and the public may never see the information.  But the New York Times has obtained more than two decades of tax return data of Trump and his companies.

The Times’ reports said Trump has sustained significant losses, owes enormous debts that he is personally obligated to repay, has avoided paying federal income taxes in 11 of the 18 years the Times examined and paid just $750 in both 2016 and 2017.

As a candidate in 2016, Trump promised to disclose his tax returns, but never did.  Instead, he fought to shield them for reasons not completely known.  In 2019, the United States Court of Appeals for the Second Circuit, in New York, ruled that state prosecutors may require third parties to turn over a sitting president’s financial records for use in a grand jury investigation.

Trump then appealed to the Supreme Court and in July, the justices soundly rejected Trump’s central constitutional argument that state prosecutors are powerless to investigate a sitting president.

“No citizen, not even the president, is categorically above the common duty to produce evidence when called upon in a criminal proceeding,” Chief Justice John Roberts Jr. wrote for the majority in that decision.  But the court gave Trump another opportunity to challenge the subpoena on narrower grounds.

Trump issued a statement in response to the S.C. decision titled “The Continuing Political Persecution of President Donald J. Trump,” which read in part:

“This investigation is a continuation of the greatest political Witch Hunt in the history of our Country, whether it was the never ending $32 million Mueller hoax, which already investigated everything that could possibly be investigated, ‘Russia Russia Russia,’ where there was a finding of ‘No Collusion,’ or two ridiculous ‘Crazy Nancy’ inspired impeachment attempts where I was found NOT GUILTY. It just never ends!

“So now, for more than two years, New York City has been looking at almost every transaction I’ve ever done, including seeking tax returns which were done by among the biggest and most prestigious law and accounting firms in the U.S…. the Supreme Court never should have let this ‘fishing expedition’ happen, but they did.  This is something which has never happened to a President before, it is all Democrat-inspired in a totally Democrat location, New York City and State, completely controlled and dominated by a heavily reported enemy of mine, Governor Andrew Cuomo.  These are attacks by Democrats willing to do anything to stop the almost 75 million people (the most votes, by far, ever gotten by a sitting president) who voted for me in the election – an election which many people, and experts, feel that I won. I agree!

“The new phenomenon of ‘headhunting’ prosecutors and AGs – who try to take down their political opponents using the law as a weapon – is a threat to the very foundation of our liberty. That’s what is done in third world countries.  Even worse are those who run for prosecutorial or attorney general offices in far-left states and jurisdictions pledging to take out a political opponent. That’s fascism, not justice – and that is exactly what they are trying to do with respect to me, except that the people of our Country won’t stand for it.”

Reminder:

Joe Biden…81,282,361
Donald Trump…74,222,960…which, rounded off, is not 75m.

It’s rather rich to talk of fascism when in the Senate by a 57-43 bipartisan vote, you were found to have fomented an insurrection to overthrow the results of a free and fair election and disenfranchise 81.282 million voters.

Thursday, the Manhattan district attorney’s office enforced a subpoena on Trump’s accounting firm and now has the tax records in hand, a spokesperson for the office confirmed.

Cy Vance’s wide-ranging investigation will include an examination of whether Trump or his businesses lied about the value of assets to gain favorable loan terms and tax benefits.  The D.A. is also scrutinizing hush-money payments paid to women on Trump’s behalf.

Vance, whose term expires at the end of the year, has previously hinted he wasn’t going to seek reelection, so either he’ll act fast, undoubtedly already having a ton of information needed for a prosecution, or he will hand off the investigation to someone else.  He recently hired former mafia prosecutor Mark Pomerantz as a special assistant district attorney to assist in the Trump probe.

--Republican Sen. Mitt Romney said Donald Trump would likely win the GOP presidential nomination if he decided to run again in 2024.  Romney said he expects the former president will continue to play a big role in the Republican Party even though he was voted out of office.

“He has by far the largest voice and a big impact in my party,” Romney said at a New York Times Dealbook virtual event on Tuesday. “I don’t know if he’s planning to run in 2024 or not, but if he does, I’m pretty sure he would win the nomination.”

Asked whether he would campaign against Trump if he were to run, Romney responded: “I would not be voting for him.”

Rep. Liz Cheney (R-Wy.), the third-ranking House Republican, said in a speech earlier Tuesday that Republicans must acknowledge the damage done by Trump’s false claims that the 2020 presidential election was stolen from him, and his encouragement of the mob that stormed the U.S. Capitol.

Wednesday, Rep. Cheney went further. When asked whether Trump should be speaking at the Conservative Political Action Conference (CPAC), Cheney said: “That’s up to CPAC.  I don’t believe that he should be playing a role in the future of the party or the country.”

Cheney’s comments were made after House Minority Leader Kevin McCarthy (R-Calif.) had said seconds before that Trump has the right to speak there.  Cheney’s comment then caused McCarthy to end the GOP leaders’ news conference.

“On that high note, thank y’all very much,” he said.

--Which leads me to the Suffolk University/USA TODAY Poll that garnered a lot of attention from last Sunday.  The survey found that the voters who backed Donald Trump in November’s election are ready to choose sides…and it’s Trump.

By double digits, 46%-27%, those surveyed said they would abandon the GOP and join the Trump party if the former president decided to create one. The rest were undecided.

Half of those polled said the GOP should become “more loyal to Trump,” even at the cost of losing support among establishment Republicans.  Just one in five, 19%, said the party should become less loyal to Trump and more aligned with establishment Republicans.

The survey of 1,000 Trump voters, identified from 2020 polls, found they expressed stronger loyalty to Trump the person (54%) than they did to the Republican Party that twice nominated him for the White House (34%).

The figure should be distressing to Senate Republican leader Mitch McConnell and other senior GOP figures who had hoped Trump’s decisive defeat for re-election and his subsequent impeachment might mean a post-Trump era was poised to begin.

But the overwhelming allegiance the former president commands among the party’s voters gives him the standing to weigh in on GOP primaries and seek retribution on those officeholders who voted to impeach and convict him.

Trump voters are prepared to punish those who crossed him. Eight in 10 said they would be less likely to vote for a Republican candidate who had supported Trump’s impeachment, as 10 representatives did in the House.  An equal portion, 80%, said the seven Republican senators who voted to convict Trump had been motivated by political calculations, not their consciences.

And we have this startling finding.  Asked to describe what happened during the assault on the Capitol, 58% of Trump voters called it “mostly an antifa-inspired attack that only involved a few Trump supporters.”  That’s more than double the 28% who called it “a rally of Trump supporters, some of whom attacked the Capitol.”  Four percent said it was “an attempted coup inspired by President Trump.”

More than nine of 10 Trump voters said the former president wasn’t guilty of inciting an insurrection.

Three of four, 73%, said Joe Biden wasn’t legitimately elected.

--So in keeping with all the above, on Fox News Monday night, host Tucker Carlson said: “We spent all day trying to locate the famous QAnon, which in the end we learned is not even a website.  If it’s out there, we could not find it.”

Oh brother.

Rep. Adam Kinzinger (R-Ill.) replied in a tweet:

“Next step in the whitewash: ‘who is this ‘Q’ of which you speak? There is no website!’  Deny, plead ignorance, misdirect…is there any question why people are confused? Quit lying, accept reality and use your energy to make us a better country. #Country1st #restoreourgop”

The same Tucker Carlson, in playing a clip from a Senate hearing considering the nomination of Merrick Garland to serve as attorney general, where Garland said that he would “supervise the prosecution of white supremacists and others who stormed the Capitol on January 6,” said in response: “There’s no evidence that white supremacists were responsible for what happened on Jan. 6. That’s a lie.”

But during Tuesday’s hearing, the officials who were responsible for Capitol security that day were asked by Sen. Amy Klobuchar (D-Minn.) whether they would “agree that this attack involved white supremacists and extremist groups.”  The responses were a resounding “Yes.”

--During the same Senate hearing, Senator Ron Johnson (R-Wis.) claimed that he had a battery of questions for the officials testifying about security lapses on that day and instead Johnson spent his time delineating baseless claims about how the day unfolded written by a lone observer that had been published on a far-right website.

The gist of the assessment is that since most of those present in D.C. that day were run-of-the-mill Trump supporters, those who stormed the Capitol must almost necessarily have been something else.

“He describes four different types of people: plainclothes militants, agents provocateurs, fake Trump protesters, and then a disciplined, uniformed column of attackers,” Johnson said of the article.  “I think these are the people that probably planned this.”

As evidence that the crowd observed at the Capitol was not likely to have attacked Capitol Police officers or vandalized the building, Johnson offered another observation from the same article: “Many wore pro-police shirts or carried pro-police black-and-blue flags.”  He didn’t mention the sentence that preceded that in the article: “Some said they were police officers from around the country.”  Which, of course, some rioters were.  [Philip Bump / Washington Post]

Last week, Johnson had offered that the events of the day didn’t amount to an “armed insurrection” because he didn’t see any guns.  But to deny the facts, that the crowd was comprised of supporters of Donald Trump, including many who were white nationalists and far-right extremists, is a lie.  The reality is a condemnation of Trump, who encouraged thousands of people to be there that day and repeatedly egged them on by claiming the election was stolen.

Rep. Kinzinger replied to Sen. Ron Johnson’s disinformation, tweeting: “It’s disgraceful for a sitting Senator to spread disinformation so blatantly.  It’s a disservice to the people he serves to continue lying to them like this. It’s dangerous and it must stop.”

--House Minority Whip Steve Scalise (R-La.) said Sunday on ABC’s “This Week” that he would not say the election wasn’t “stolen.”

“Look, Joe Biden is the president,” Scalise said to ABC’s Jonathan Karl.  “There were a few states that did not follow their state laws, that’s really the dispute that you’ve seen continue on.”

Karl challenged Scalise on the extent of Biden’s win.

“I know Joe Biden is the president.  He lives at the White House. I asked you, is he the legitimate president of the United States and can you concede that this election was not stolen,” Karl asked.  “Very simple question.  Please just answer it.”

“Once the electors are counted, yes he’s the legitimate president.  But if you’re going to ignore the fact that there were states that did not follow their own state legislatively set laws, that’s the issue at heart, that millions of people still are not happy with and don’t want to see it happen again,” Scalise said.

--Former Vice President Mike Pence declined an invitation to speak at the Conservative Political Action Conference, but there were reports Wednesday that Pence has told Trump loyalists the two have patched things up.  Pathetic.

--Arkansas Republican Gov. Asa Hutchinson was asked Sunday whether he’d support Donald Trump in another presidential bid in 2024 and Hutchinson had a simple reply: “No, I wouldn’t.”

The governor argued that the GOP needed to listen to other voices in the party and not let itself be singularly defined by the former president.

“Well, he will only define our party if we let him define our party,” Hutchinson said, noting that conservatives can still welcome Trump into events like CPAC.

Hutchinson cautioned, however, that the party should also hear “those that have different points of view,” like Louisiana Republican Sen. Bill Cassidy, who Hutchinson said was “still arch-conservative, but a different voice for the future of our party.”

--Hot off his whirlwind trip to Cancun, Sen. Ted Cruz (R-Texas) found a new scapegoat for his ill-fated decision to flee the state during its crisis in order to take a little beach vacation.  It’s the media’s fault.

“I think the media is suffering from Trump withdrawal,” Cruz told Fox News’ Sean Hannity on Monday.  “Where they’ve attacked Trump every day for four years, they don’t know what to do so they obsess over my taking my girls to the beach.”

Hannity, in defending Cruz, falsely claimed that the senator was just going to Cancun to drop off his daughters for a trip with friends and quickly return home.

“You dropped off your daughters in Mexico, you came home in a day, probably less than a day,” Hannity said.  “I still think you can be a father and senator at the same time.”

That had been Cruz’s initial claim, but he since admitted it was a lie and that he intended to stay through the weekend.  Hannity had delivered the same lie last week when Cruz corrected him.  But not now…Cruz just went along with it.  All the media’s fault.

--New York Rep. Alexandria Ocasio-Cortez (D) showed off her immense clout when she announced she planned to raise money to help victims of the extreme weather in Texas and power failure, and in less than 96 hours she had raised almost $5 million.  AOC then traveled to the state over the weekend to see the situation firsthand.

The fact is, many House politicians can’t raise $5 million over the course of a two-year election cycle, as the Washington Post’s Chris Cillizza pointed out.

The future impact is potentially on the Senate, as in AOC could run against Senate Majority Leader Schumer, which has him bending over backwards to appease her.  Something to watch over the next year.

--Todd South / Military Times

Of the first 180 charged in crimes stemming from the Jan. 6 attack on the Capitol, one in five were either currently serving in the military or had once worn the uniform.

“The links between the insurrection…and the military community seemed shocking to many leaders and the public overall.

“But maybe they shouldn’t be.

“For decades, domestic extremists have flaunted ties to the U.S. military, seeking to claim the status, credibility and effective tactical training that military service entails.

“And for decades top leaders in the military have promised to go after domestic extremists – like militia groups, white supremacists and those who advocate against the government – when discovered in the ranks.

“Yet, past efforts focused on disciplining individuals rather than addressing a broader problem across the military. Despite finding recent evidence of troops with known ties to extremist groups like the Atomwaffen Division or Identity Evropa (Ed. aka American Identity Movement), the military leadership’s response has never drawn as much institutional support as other high-profile problems like sexual assault, suicide or hazing.

“Even today, as the attack on the Capitol heightened concerns, the Pentagon cannot say how many service members in uniform may have ties to extremist ideologies that are a threat to both the military and the nation at large.  The Defense Department has no central tracking of allegations or disciplinary actions related to extremism.

“In the past, defense officials have downplayed the issue, claiming the numbers were low and that mere membership in such organizations is not a crime, making it difficult to track.

“Military leaders note, correctly, that efforts to tackle the problem aggressively is fraught because the Constitution protects freedom of speech and the law prohibits criminalizing affiliations that may be deemed fundamentally political in nature rather than a threat to harm the public.

“But others who study the problem say much more can be done, and the military’s ability to enforce standards for good order and discipline gives commanders and senior leaders powerful tools to send a message and remove or punish service members who are identified as a problem….

“The new defense secretary, Lloyd Austin, vowed at his confirmation hearing in January to ‘rid our ranks of racists and extremists, and to create a climate where everyone fit and willing has the opportunity to serve this country with dignity.”

Austin then directed the service secretaries and joint chief of staff to conduct a 60-day stand-down for leaders to speak with troops about the problem “and get a sense from them about what they’re seeing at their level,” said Pentagon spokesman John Kirby.

Todd South:

“But it won’t be easy.  As a practical matter, monitoring the activities of 1.3 million active-duty service members is challenging.  Culturally, it’s not a problem leaders have prioritized over the years.  And legally, it’s difficult to distinguish between the casual gestures of some troops and the real warning signs of potentially illegal extremist activity by others….

“Austin recalled his time in the mid-1990s when he was a lieutenant colonel with one of the Army’s elite groups, the 82nd Airborne Division.  In 1995, racist paratroopers in the unit murdered a Black couple near Fort Bragg in North Carolina.

“A subsequent investigation uncovered nearly two dozen skinheads in the division and sparked a global review of extremism in the Army’s ranks.

“ ‘We woke up one day and discovered that we had extremist elements in our ranks, and they did bad things that we certainly held them accountable for,’ Austin said at his confirmation hearing.

“ ‘But we discovered that the signs for that activity were there all along. We just didn’t know what to look for or what to pay attention to – but we learned from that.’

“There were warning signs, Austin said, but leaders didn’t see them….

“ ‘I can tell you that most of us were embarrassed that we didn’t know what to look for, and we didn’t really understand that being engaged more with your people on these types of issues can pay big dividends,’ Austin said.

“ ‘We can never take our hands off the wheel on this,’ he said.  ‘This has no place in the military of the United States of America.’”

--Editorial / Crain’s New York Business

“Gov. Andrew Cuomo, riding high just six months ago for taking decisive action to deal with the Covid-19 pandemic, is facing what could be the greatest challenge of his political life.

“A growing number of elected officials, some of whom are fellow Democrats, want to strip him of the emergency powers granted a the beginning of the pandemic – powers that he has for the most part used wisely to curtail the spread of the disease.

“The pushback, especially from Democrats, is a sign that some state lawmakers have had enough of the autocratic governor who seems to relish provoking his political colleagues at every turn, many of them in his own party.

“The sad part of Cuomo’s fall from grace is that it was completely of his own making.

“The immediate cause of Cuomo’s problems is how his administration dealt with the nursing home population last year during the initial surge of the pandemic. He was critized initially for forcing homes to admit or readmit elderly patients who had tested positive for Covid-19 and then for underreporting the number of nursing home Covid deaths to the federal government.

“For most of last year and early this year, Cuomo pushed back against his critics, insisting he did nothing wrong.  It was not until recently that he acknowledged that mistakes may have been made, especially after one of his closest aides reportedly told a group of Democratic officials that the administration purposely underreported nursing home deaths because it was afraid of triggering a federal investigation….

“What Cuomo should have done, and what he needs to do now, is sincerely apologize to the families of the nursing home residents affected by his decisions and to the people of New York by playing fast and loose with the figures on deaths at the facilities.

“He has had the opportunity to do that all along but instead has chosen to dig in and assert that this entire affair has been blown out of proportion.

“He has compounded his problems by reportedly threatening some elected officials within his own party for publicly criticizing him.  It is more than a little ironic that the person he has most resembled recently has been the politician he railed against for much of last year: Donald J. Trump.

“It is time for Cuomo to take the high road, finally. Show some humility, sir, and get back to the task at hand: effectively leading the residents who elected you.”

Well the above was written prior to this week’s latest development…that a former member of Gov. Cuomo’s administration who previously accused him of sexual harassment offered new details Wednesday, saying he once kissed her on the lips without consent after a private meeting.

Lindsey Boylan said that during her more than three years working as an economics adviser in the administration, Cuomo “would go out of his way to touch me on my lower back, arms and legs,” compared her to one of his rumored ex-girlfriends and once joked they should play strip poker.

Boylan, a Democrat running for Manhattan borough president, made her accusation in a post on the website Medium.  She was a former deputy secretary for economic development and special advisor to the governor.  Boylan had tweeted in December that Cuomo sexually harassed her, but she hadn’t revealed any details and declined interviews until now.

Boylan said she initially spoke up about her experiences because of reports Cuomo was being considered as President Biden’s pick for attorney general.

Editorial / New York Post

“Gov. Cuomo has long portrayed himself as a model of propriety – a paragon of virtue, competence, leadership.  Yet now a starkly different picture of him is emerging: that of a bully, a liar and, it appears, a sexual harasser….

“In a 1,700-word essay, (Boylan) lays out creepy details of how Cuomo eyed her from early on; went ‘out of his way’ to touch her on her ‘lower back, arms and legs’; asked her to play strip poker while flying home on ‘his taxpayer-funded jet’; and blocked her exit from his office and kissed her ‘on the lips’ without warning.

“Her piece, which provided e-mail and text images to support her claims, backed up accusations she’d first made in December….

“The gov had ‘created a culture within his administration where sexual harassment and bullying is so pervasive’ that it’s ‘expected.’

“The governor, she adds, uses ‘intimidation’ to silence critics. Another woman told her that she, too, was ‘scared of what would happen’ if she rejected his advances. When Boylan first lodged her accusations in December, someone from Team Cuomo leaked parts of her confidential personnel file ‘in an effort to smear me.’

“Yes, it’s all allegations; Cuomo has every right to give his side of the story. On the other hand, when Christine Blasey Ford accused then-Judge Brett Kavanaugh of sexual assault, the governor insisted everyone believe her – and that Kavanaugh take a lie-detector test.

“More, the pattern here is unmistakable: Assemblyman Ron Kim, a fellow Democrat, says Cuomo called him at home and threatened to ‘destroy’ him if he didn’t recant his charges against the governor for nursing-home misdeeds.  Right on cue, the gov began to lodge accusations against Kim days later.

“Others have come forward, too. …Mayor de Blasio calls Kim’s account ‘classic Cuomo,’ adding he knows ‘a lot of people’ who’ve suffered similar abuse.

“Team Cuomo’s order sending Covid-contagious patients to nursing homes, fueling needless deaths, is surely enough to question his pose as a competent ‘leader.’  All the more reason to impeach.”

--Erik Prince, the former head of the security contractor Blackwater Worldwide and a prominent supporter of Donald Trump, as well as the brother of former education secretary Betsy DeVos, was found to have violated a United Nations arms embargo on Libya by sending weapons to a militia commander who was attempting to overthrow the internationally backed government, according to UN investigators, the New York Times first reported.

Prince, who I said long, long ago was a bad guy, deployed a force of foreign mercenaries, armed with attack aircraft, gunboats and cyberwarfare capabilities, to eastern Libya at the height of a major battle in 2019.

The operation, which cost $80 million, also involved the formation of a hit squad that could track down and kill selected Libyan commanders.

During the Trump administration, Prince, aside from being a generous donor and staunch ally of the president, often was in league with the likes of Steve Bannon and Roger Stone in seeking to undermine Trump’s critics.

--A Gallup survey released Wednesday reported a record number of U.S. adults, 5.6%, identify as LGBTQ, an increase propelled by a younger generation staking out its presence in the world.

The survey marks more than a 1 percentage point jump from the last poll in 2017 in which 4.5% of adults identified as LGBTQ.

The estimated 18 million adults who identify as being in this group is largely reflective of the emergence of Generation Z adults, those 18 to 23: 1 in 6, or 15.9%, identify as LGBTQ.  By contrast, less than 2% of respondents born before 1965 do.

Among LGBTQ adults, a majority or 54.6% identify as bisexual, the poll shows. About a quarter, or 24.5%, identify as gay; 11.7% as lesbian; 11.3% as transgender.

Among Generation Z, 72% who identify as LGBTQ say they are bisexual.

--I will be commenting extensively on Tiger Woods’ auto accident in that other column I do, but for here, thank God he didn’t kill anyone when his car crossed over the other lane, let alone leave his kids without a father.

But I can’t help but wonder what the impact will be on Genesis Motor, the luxury division of Hyundai.  I’ve always liked Genesis and want them to do well.  My first reaction, though, on seeing Tiger was driving one of their courtesy cars from the golf tournament Genesis and Tiger sponsored days earlier at Riviera was ‘uh oh.’

But then you realize how well built the passenger compartment was, like the best race cars these days that are designed to absorb much of the impact up front to help protect the driver, like the upper torso.

Just as happens in Formula One and Indy Car crashes, though, the legs often get sacrificed.

The important thing is for Tiger to be able to see his kids grow up.  A golfing comeback?  That’s the last thing on my mind as a fan.

--We note the passing of Fanne Foxe (Annabel Battistella), the “Argentine Firecracker,” “the Tidal Basin Bombshell.” She was 84.

Battistella was a striptease dancer in Washington, D.C., and went by the stage name Fanne Foxe.  To make a very long story short, anyone outside D.C. had no idea who she was until late on the night of Oct. 7, 1974, U.S. Park Police, having tailed a Lincoln Continental that was swerving and speeding without headlights on near the Jefferson Memorial, finally pulled it over.

A female passenger in an evening gown ran from the car and ended up in the Tidal Basin, drunk.  A man was standing near the car (a friend had been driving the two) and he was a rather important politician…Congressman Wilbur Mills of Arkansas, who some called the most powerful man in Washington next to the president.

Mills was chairman of the crucial House Ways and Means Committee and it turns out he and Foxe had been having an affair, Mills being married.

Well seeing as this came just two months after Richard Nixon resigned from Watergate, the press was hungry for another story.  Mills, who was drunk and had been in a fight with Foxe that night, was plastered all over the national news but nonetheless won re-election a month later.

Mills maintained Foxe, err, Battistella, was a family friend (they lived in the same D.C. apartment tower) and a companion of Mills’ wife.

Well, Mills’ alcoholism got the best of him and after making a public fool of himself at an appearance at the theatre Foxe was working, he was removed as Ways and Means chairman and would leave office in 1977.  He died in 1992.

Ah, “The Tidal Basin Bombshell.”  RIP.

---

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

Our thanks to our healthcare workers and first responders.

God bless America.

---

Gold $1733
Oil $61.60

Returns for the week 2/22-2/26

Dow Jones  -1.8%  [30932]
S&P 500   -2.5%  [3811]
S&P MidCap  -1.5%
Russell 2000  -2.9%
Nasdaq   -4.9%  [13192]

Returns for the period 1/1/21-2/26/21

Dow Jones  +1.1%
S&P 500  +1.5%
S&P MidCap  +8.2%
Russell 2000  +11.5%
Nasdaq  +2.4%

Bulls 59.1
Bears 18.1…[last week’s figures, no update]

Hang in there…Mask up, wash your hands.

Brian Trumbore

 

---