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01/08/2022

For the week 1/3-1/7

[Posted 9:30 PM ET, Friday]

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Edition 1,186

Jan. 6…a year later…

I pulled out my copy of the late Sen. Barry Goldwater’s classic, “The Conscience of a Conservative” the other day.  If you are young and don’t know much more than maybe his name, Goldwater, deeply misunderstood but a major reason why Ronald Reagan won the presidency in 1980, represented true conservative values.

The following quotation of his was also misunderstood, but it always made perfect sense to me.

“I would remind you that extremism in the defense of liberty is no vice!  And let me remind you also that moderation in the pursuit of justice is no virtue!”

Goldwater was a hardcore anti-Communist.  I am too.  I won’t go through my personal history again, but suffice it to say, every day I stare for a moment at a painting I have in my living room, one given to me by my Uncle Eugene in Prague, 1973.  He painted it…a beautiful landscape of the Tatra Mountains.

I saw that particular trip how he was living behind the Iron Curtain, as well as my Uncle Geza in Budapest, and I’ve held certain core beliefs ever since. 

Today, America is being tested in more ways than one.  January 6, as Ohio Republican Rep. Anthony Gonzalez summed it up, “was an unconstitutional attempt, led by the president of the United States, to overturn an American election and reinstall himself in power illegitimately.”

We’re also being tested by two dictatorial Communist leaders, Vladimir Putin and Xi Jinping.

But I’m a RINO (Republican in name only) in Donald Trump’s twisted mind.

“In many ways a RINO is worse than a Radical Left Democrat, because you don’t know where they are coming from and you have no idea how bad they really are for our Country,” Trump wrote in a recent statement, before he bagged out on his press conference.

To Trump, and other so-called Republicans of today, Barry Goldwater (who would have hated Trump…especially after his performance in Helsinki) would have been a RINO as well. 

So, too, then would have been Ronald Reagan.  And today, Mitt Romney, George W. Bush, Liz Cheney and Adam Kinzinger are RINOs.

It’s actually comical.  But I’m sure as hell not taking it.  I donated money Thursday to Liz Cheney’s campaign.  You may be shocked that I also gave money to Georgia Gov. Brian Kemp’s campaign because I want him to defeat charlatan David Perdue in their upcoming primary, Kemp having certified the election results from 2020, earning him the opprobrium of Trump and his acolytes.

I then want Kemp to beat Stacey Abrams in the worst way.

That’s who I am, though you shouldn’t have needed reminding.

In reading some of Barry Goldwater’s quotes, however, I came across this one that was rather prescient:

“Those who seek absolute power, even though they seek it to do what they regard as good, are simply demanding the right to enforce their own version of heaven on earth. And let me remind you, they are the very ones who always create the most hellish tyrannies.  Absolute power does corrupt, and those who seek it must be suspect and must be opposed. Their mistaken course stems from false notions of equality, ladies and gentlemen.  Equality, rightly understood, as our founding fathers understood it, leads to liberty and to the emancipation of creative differences.  Wrongly understood, as it has been so tragically in our time, it leads first to resist concentrations of power, private or public, which enforce such conformity and inflict such despotism. It is the cause of Republicanism to ensure that power remains in the hands of the people.”

On 11/20/21 in this space, I wrote of Rep. Gonzalez, one of the 10 Republicans who voted to impeach Donald Trump, and his comments about the former president and the lessons of Jan. 6.

“It looks to me – and I think any objective observer would come to this conclusion – that (Trump) evaluated what went wrong on January 6.  Why is it that he wasn’t able to steal the election?  Who stood in his way?

“Every single American institution is just run by people. And you need the right people to make the right decision in the most difficult times.  He’s going systematically through the country and trying to remove those people and install people who are going to do exactly what he wants them to do, who believe the big lie, who will go along with anything he says.

“And, again, I think it’s all pushing towards one of two outcomes. He either wins legitimately, which he may do, or, if he loses again, he will just try to steal it.  But he will try to steal it with his people in those positions.

“And that’s then the most difficult challenge for our country.  You ask yourself the question, do the institutions hold again?  Do they hold with a different set of people in place? I hope so.  But you can’t guarantee it.”

America is in a dark place.

Gonzalez added: “The country – as much as I despise almost every policy of the Biden administration – can survive bad policy.  The country can’t survive torching the Constitution.”

Barry Goldwater sure would have had a lot to say about the direction of the Republican Party today and fealty to a single man.

---

Former vice president Dick Cheney was on the House floor as it opened Thursday for a moment of silence and brief remarks by Speaker Nancy Pelosi.  Cheney was there in support of his daughter, Rep. Liz Cheney, one of the few Republicans who has condemned Trump, and one of two Republicans serving on the select committee investigating the attack. 

The elder Cheney, who rose through the ranks at the Capitol to be House Republican whip, told reporters, when asked about the current GOP leadership and Jan. 6, “It’s not a leadership that resembles any of the folks I knew when I was here for 10 years.”

He added in a statement afterwards: “I am deeply disappointed at the failure of many members of my party to recognize the grave nature of the January 6 attacks and the ongoing threat to our nation.”

Liz Cheney told reporters: “The future of the country is at stake right now, and there are moments when we all have to come together in order to defend the Constitution. …A party who is in thrall to a cult of personality is a party that is dangerous for the country.”

---

President Biden forcefully denounced Donald Trump for promoting lies and tearing down democracy because he could not stand the fact that he lost a free and fair election, accusing his predecessor and his allies, declaring, “You can’t love your country only when you win.  Those who stormed this Capitol and those who instigated and incited and those who called on them to do so,” he added, “held a dagger at the throat of America, at American democracy.”

Biden condemned Trump for waging an “undemocratic” and “un-American” campaign against the legitimacy of the election system that he likened to the actions of autocrats and dictators in faraway countries.

“The former president of the United States of America has created and spread a web of lies about the 2020 election,” Biden said.  “He’s done so because he values power over principle, because he sees his own interests as more important than his country’s interests and America’s interests, and because his bruised ego matters more to him than our democracy or our Constitution.  He can’t accept he lost.  He refused to accept the results of an election.”

“You can’t love your country only when you win,” the president said.  “You can’t obey the law only when it’s convenient.  You can’t be patriotic when you embrace and enable lies.”

“He’s not just a former president,” Biden added.  “He’s the defeated former president.  He lost by 7 million of your votes.”

Biden assailed Trump for trying to rewrite history and for casting the attackers of a year ago as patriots. “Is that what you thought when you looked at the mob ransacking the Capitol, destroying property, literally defecating in the hallways, rifling through the desks of senators and representatives, hunting down members of Congress?” Biden asked.  “Patriots?  Not in my view.”

Biden also took on efforts by Republicans to recast the narrative of what happened on Jan. 6, which some of them have dismissed as little more than a protest that got out of hand.  “This wasn’t a group of tourists,” Biden said.  “This was an armed insurrection. They weren’t looking to uphold the will of the people.  They were looking to deny the will of the people.”

During parts of Biden’s speech, he signaled certainty that democracy would prevail; at other times he seemed less sure.

“The fragility of democracy is this: That if we are not vigilant, if we do not defend it, democracy simply will not stand. It will falter and fail.”

Donald Trump fired back quickly with a string of written statements issued from Mar-a-Lago.

“Biden is working hard to try and deflect the incompetent job he is doing, and has done, on the horrible Afghanistan withdrawal (surrender), the Borders, COVID, Inflation, loss of Energy Independence, and much more,” Trump said.  “Everything he touches turns to failure.  That’s what you get when you have a rigged Election.”

He added that Biden “used my name today* to try to further divide America,” and added, “The Democrats want to own this day of January 6th so they can stoke fears and divide America.  I say, let them have it because America sees through their lies and polarizations.”

*Biden only referred to Trump as “the former president.”

Trump did not discuss the riot itself at all in his statement.

I watched Fox News’ Tucker Carlson last night, curious to get his take on the day’s events.

In his opening, Carlson asked, on the topic of Jan. 6, “Why are we still talking about this?”

Because Donald Trump literally hasn’t stopped talking of a stolen election since late on the evening of Nov. 3, 2020, and that led to Jan. 6 and its aftermath, that’s why! 

Tucker asked: “Was it a greater threat than inflation?”

Schmucker then said of President Biden’s address: “We’re not going to show his speech because it was awful and weird.”

-----

A new USA TODAY/Suffolk University Poll finds that Americans by overwhelming margins see the nation’s democracy as in peril.

Across partisan lines, more than 8 in 10 Republicans, Democrats and independents say they are worried about the future of America’s democracy.  They disagree on whether the Jan. 6 mob represented an effort to undermine democracy or to fix it.  Eighty-five of Democrats call the rioters “criminals.”  Two-thirds of Republicans say, “They went too far, but they had a point.”

A majority of Republicans, 58%, say Joe Biden wasn’t legitimately elected to the White House, even though audits and investigations in a half-dozen states debunked former President Donald Trump’s claims of voter fraud.

One of those called for the poll, Candice W., 44, a ticket broker from Bountiful, Utah (USA TODAY gave her full name, I’m not), summed it up: “He created doubt where there is no doubt. That is really the risk to democracy, the fact that no one’s ever going to believe anything ever again. There are certain people that will never trust another election as long as they live. They’ll always feel like they were wronged or scammed or whatever.”

She called watching the attack “horrifying.”

With Republicans set to gain control of the House, at which point they will disband the special House Select Committee investigating Jan. 6, the timetable is tight.  An interim report will be released this summer and a final report before the end of the year, chairman Bennie Thompson, D-Miss., said.

A 53% majority of Americans say the investigation is “important for the future of democracy”; 42% call it “a waste of time away from other important issues.”

On that, there is a partisan split that marks almost every aspect of American politics: 88% of Democrats say the committee’s work is important; 78% of Republicans call it a waste of time.

By nearly 4-to-1, 71%-19%, Americans say the nation’s democracy is weaker than it was four years ago. That is almost the same finding as in a USA TODAY/Suffolk Poll taken a year ago, soon after the attack, when that was the view of 70%-17%.

On the question of whether a similar attack on the Capitol could happen again: 48% say it’s not likely, 46% say it is.

Karl Rove / Wall Street Journal

“We’re in an acrimonious period of partisan tribalism and have been for some time.  Both parties are guilty of overwrought denunciations of their political opponents.  My criticisms are often aimed at Democrats; on the anniversary of Jan. 6, I’m addressing squarely those Republicans who for a year have excused the actions of the rioters who stormed the Capitol, disrupted Congress as it received the Electoral College’s results, and violently attempted to overturn the election.

“These apologists say those who stormed the Capitol were innocent patriots, tourists visiting the seat of the national government to petition their elected representatives peacefully.  We’re told that these harmless, ordinary Americans are being persecuted as political prisoners.

“Let’s stipulate that while the thousands who went to the Capitol a year ago were wrong to insist the election was stolen, most weren’t violent as they exercised their First Amendment rights to gather peacefully on the Mall – just as I had seen liberals gather to protest both inaugurations of President George W. Bush.

“But last year there were several thousand protesters willing to use force to disrupt Congress in its constitutional duty to receive and certify the electoral vote.  Some went to Washington with that purpose in mind. Others were swept up in the moment’s savagery, led astray by stronger wills with dangerous motives.

“The leaders of this group were intent on committing violence, some having planned to do so for weeks.  Many wore tactical gear. Some came armed with chemical agents, flagpoles, batons and sticks.  They broke through barricades and assaulted approximately 140 police officers, in some cases with an officer’s own shield or gear. They smashed doors and windows, illegally entered the Capitol, ransacked offices and searched for leaders of Congress, and made dire threats about what would happen if they found them.

“More than 725 people have been charged so far, and law enforcement is searching for hundreds more suspects who appear on video or social media, some recorded attacking police officers.  At least 163 people have pleaded guilty, and 71 have been sentenced.  Only one defendant’s charges have been dismissed.  Many of the most serious trials have yet to be held, as lawyers prepare defenses or negotiate plea deals.

“So, on this anniversary, here’s a simple thought experiment; What if the other side had done it?  What if in early January 2017, Democrats similarly attired and armed had stormed the Capitol and attempted to keep Congress from receiving the Electoral College results for the 2016 presidential election?

“What if Democrats claimed that Donald Trump’s razor-thin victories in Michigan, Pennsylvania and Wisconsin resulted from extensive voter fraud and should be rejected, despite having failed to establish in a single court that extensive fraud had actually occurred?

“What if some of these Democrats breached the Capitol defenses and threatened violence against the Republican speaker, Paul Ryan, and Republican Senate majority leader, Mitch McConnell?

“What if they insisted that in his role as Senate president then-Vice President Joe Biden had sole authority to seat Hillary Clinton’s electors from any contested states and thereby hand her the presidency?

“If this happened, would some of my fellow Republicans have accepted it as merely a protest?  Would they have called patriots those charged with violent acts against our country, its laws and Constitution?  Would they have accepted such extralegal means to change the outcome of a presidential election?

“No they would not.  I’m certain of that.

“If Democrats had done what some Trump supporters did on that violent Jan. 6, Republicans would have criticized them mercilessly and been right to do so.  Republicans would have torched any high official who encouraged violence or stood mute while it was waged and been right to do so.  Republicans would have demanded an investigation to find who was responsible for the violence and been right to do so.

“To move beyond Jan. 6, 2021, we must put country ahead of party.  For Democrats, that means resisting their leadership’s petty habit of aggravating partisan fault lines by indiscriminately condemning all who came to Washington that day.

“We Republicans have a heavier burden.  I’ve been a Republican my entire life, and believe in what the Republican Party, at its best, has represented for decades.  There can be no soft-pedaling what happened and no absolution for those who planned, encouraged and aided the attempt to overthrow our democracy.  Love of country demands nothing less.  That’s true patriotism.”

Editorial / New York Post

“Democrats aim to use Thursday’s anniversary of the Capitol riot to wave the bloody shirt, repeating the ludicrous claims of a GOP ‘war on democracy,’ where hordes of insurrectionists are a lit match away from sparking chaos and violence.

“Sadly, this is nothing more than milking the ongoing gift of former President Donald Trump’s endless denialism about the 2020 election for every last ounce of outrage they can produce.

“We endorsed Trump.  We view President Joe Biden’s performance in the last year as a disaster. But the simple fact is that Trump lost, fair and square: His charges of stolen, suppressed and/or faked voters are baseless.

“We wish he would agree.  Trump should have been remembered for the good he did while in office: triggering an economic boom that delivered record gains for the working class; at last stabilizing the southern border; fostering the vaccines that remain America’s chief weapons against Covid.

“Instead, he is remembered more for his false claims the election was stolen – and for Jan. 6.

“Yes, Democrats and their allies did all they could to loosen voting rules in 2020, using the pandemic as an excuse, and to boost turnout in anti-Trump areas.  But it was all kosher enough under America’s long traditions of partisan combat.

“Trump’s claims of being robbed are every bit as bogus as the Big Lie that Hillary Clinton’s team spun after her 2016 loss, though she managed to sell her ‘Russiagate’ conspiracy theory to a lot more well-connected (and all-too-willing) dupes in government and the media.

“But, where Clinton’s lies led America’s elites to disgrace themselves with hundreds of false ‘news’ stories and a ridiculous impeachment, Trump’s lies produced the disgrace of the Jan. 6 riot – a rampage through the U.S. Capitol by hundreds of deluded fools, exacerbated by unforgivable security failures, motivated by some nutty aim of preventing the final ratification of the presidential results.”

Gerald F. Seib / Wall Street Journal

“When a mob of Trump supporters ransacked the Capitol on Jan. 6 in an attempt to overturn the results of a national election, it was logical to assume that, in the aftermath of such a national embarrassment, two developments would ensue. First, former President Donald Trump’s role as a dominant figure in the Republican Party would be reduced, and, second, the durability of his election-fraud myth would be diminished.

“Almost exactly a year later, neither has happened.

“In some ways, in fact, the opposite may have occurred.  From his Mar-a-Lago exile in Florida, Mr. Trump raises millions of dollars for his political-action committee.  He is endorsing Republican congressional candidates who hew to his view of events, and threatening those who don’t….

“Mr. Trump’s mantra is that the election was stolen from him through some combination of unfair changes in election rules during the coronavirus pandemic and outright fraud (he isn’t very clear on which he is blaming more), and that the rioters on Jan. 6 were seeking to right a wrong.  That they got carried away isn’t his fault, even though he sent them on their way toward the Capitol that day with a warning that ‘if you don’t fight like hell, you’re not going to have a country anymore.’  Mr. Trump hasn’t given an inch on any of those counts, which signals to his supporters that they shouldn’t either.

“Third, Jan. 6 revealed the depths of mistrust in the country.  The FBI’s official website contains 17 videos of the violence at the Capitol on Jan. 6, some so gruesome they are age-restricted so young people can’t see them.  Yet some continue to insist that there wasn’t really much violence, and that the media and prosecutors are exaggerating the misdeeds of Jan. 6.

“That suggests a profound lack of confidence in American institutions, which runs across the political spectrum.  Just as Democrats fault Republicans for not accepting the legitimacy of Mr. Biden’s victory, so do Republicans fault Democrats for undermining Mr. Trump’s legitimacy as president with a long and misguided search for Russian collusion in his 2016 victory.

“This is a problem for both parties – and, really, for everybody.  If Republicans won’t accept the outcome of elections today, the country is just a short step from Democrats refusing to accept the outcome of elections tomorrow.  A year after Jan. 6, the risks of such a downward spiral are as high as ever.”

Wall Street and the Economy

Federal Reserve officials are preparing to move quicker on raising interest rates in a bid to keep the economy from overheating amid high inflation and near-full employment, as revealed in the minutes from the Dec. 14-15 Federal Open Market Committee meeting, released Wednesday. The news spooked the markets that day as it would appear the FOMC will move in March (the March 15-16 meeting) to hike rates, a bit sooner than some traders were betting on.  I thought May, myself.

Prospects for another year of growth above the economy’s speed limit with inflation already strong – along with a larger balance sheet that’s suppressing longer-term borrowing costs – “could warrant a potentially faster pace of policy rate normalization,” per the minutes.

Officials also saw the timing of reducing the $8.8 trillion balance sheet as likely “closer to that of policy-rate liftoff than in the committee’s previous experience.”

The details of the Fed’s pivot toward more aggressively fighting inflation, as telegraphed recently, suggested it will show greater urgency than the gradualism of the past.  They also indicated a desire to smash market perceptions that the central bank is losing its grip on surging prices.

The 5.7% annual increase in the Fed’s preferred inflation gauge in November overshot officials’ 2% target for the ninth consecutive month, toppling their earlier predictions that prices would moderate as supply-chain issues resolved.

It does need to be noted that the Fed’s Dec. 14-15 meeting occurred before infections from the Omicron variant began to skyrocket, so depending on the trajectory of cases and hospitalizations by the Jan. 25-26 meeting, let alone March, the timetable on Fed changes in policy could move out a bit. We’ll see.

St. Louis Federal Reserve Bank President James Bullard said at a meeting in St. Louis that the FOMC can be ready to take the steps needed to combat rising inflation, including a rate increase as early as March once the taper is complete.

“The FOMC is in (a) good position to take additional steps as necessary to control inflation, including allowing passive balance sheet runoff, increasing the policy rate, and adjusting the timing and pace of subsequent policy rate increases,” said Bullard, who votes on the FOMC this year.

“With the real economy strong but inflation well above target, U.S. monetary policy has shifted to more directly combat inflation pressure,” Bullard said, adding that he expects cases of the Omicron variant to slow in the coming weeks.

As a result, the FOMC could decide to increase rates sooner and faster than previously expected, he said, echoing statements in the FOMC minutes of the December meeting.

“The FOMC could begin increasing the policy rate as early as the March meeting in order to be in a better position to control inflation.  Subsequent rate increases during 2022 could be pulled forward or pushed back depending on inflation developments.”

The Fed’s hawkish comments roiled the global bond market as well as our own.

Meanwhile, a record 4.5 million Americans quit their jobs in November while openings remain elevated, highlighting persistent churn in the labor market.  The number of available positions fell to 10.6 million from an upwardly revised 11.1 million in October, the Labor Department’s Job Openings and Labor Turnover Survey, or JOLTS, showed Tuesday.

One million left the leisure and hospitality sector alone.  Transportation and warehousing registered the second-most resignations on record.

Total hires were little changed in November at 6.7 million.

Employers have added 18.5 million jobs since April 2020, still leaving the U.S. 3.9 million jobs short of what it had before the pandemic.

But in Friday’s jobs report for December, the unemployment rate fell to 3.9%, even as the job gains were putrid, 199,000, and yet another month where the figure was well below Wall Street’s expectations.

However, in keeping with a recent pattern, the Labor Department revised November’s tally up from 210,000 to 249,000, and October’s from 546,000 to 648,000.

The reports have been all over the place and haven’t exactly made sense, especially the last two months.  Part of the problem with the latest report is that it was for a survey week ending Dec. 12, before Omicron took hold, so now we wait to see what the January report will look like. 

The below-expectations job gains in December likely reflect labor shortages as well as anomalies with the so-called seasonal adjustment, used by the government to strip out seasonal fluctuations from the data.

Average hourly earnings rose a strong 0.6%, but the 4.7% year-over-year increase was a tick down from November’s 4.8%.

U6, the underemployment rate, fell from 7.7% to 7.3%.

The ISM manufacturing index for December was 58.7 (50 the dividing line between growth and contraction), but this was below expectations, ditto the services figure, 62.0, well below forecasts and a big drop from November’s record 69.1.

The reading on November factory orders was better than expected, 1.6%.

The Atlanta Fed’s GDPNow barometer for fourth-quarter growth is down to a still robust 6.7%.

Europe and Asia

We had the final PMI data for December in the eurozone, with the EA19 composite at 53.3 vs. November’s 55.4. Manufacturing was 58.0 vs. 58.4, services 53.1 vs. November’s 55.9.

German: 57.4 mfg., 48.7 services
France: 55.6 mfg., 57.0 services
Italy: 62.0 mfg., 53.0 services
Spain: 56.2 mfg., 55.8 services
Ireland: 58.3 mfg., 55.4 services
Netherlands: 58.7 mfg.
Greece: 59.0 mfg.
Austria: 58.7 mfg.

UK: 57.9 mfg., 53.6 services (down sharply from November’s 58.5 as Omicron led to a steep fall in spending on face-to-face consumer services).

Joe Hayes / IHS Markit

“The accelerated expansion in output we saw in November unfortunately turned out to be brief. Amid a resurgence of Covid-19 infections across the euro area, growth slowed to the weakest since March in December.  In Germany, where measures to combat Covid-19 have been more stringent than other monitored euro area countries, levels of economic activity broadly stagnated in December.  Nonetheless, slower growth was seen across the board.

“The spread of the Omicron variant had a particularly profound impact on the service sector, reflecting renewed hesitancy among customers due to the novel strain of the virus.  Looser travel restrictions in recent months had facilitated greater levels of tourism, which in turn provided additional support to the eurozone service sector.  However, this was withdrawn in December as overseas demand declined for the first time since May.

“There was also little to cheer with regards to inflation.  Although there was a marginal easing of price pressures, we’re still in excessively hot territory – increases in both input and output costs were the second-quickest on record.

“As euro area nations deal with the latest developments in the pandemic, it’s clear that risks to the economy are now greater as tighter restrictions to curb the spread of Covid-19 are more likely than they have been recently.”

--Separately, the volume of retail trade rose 1.0% in the euro area for the month of November over October, and up a strong 7.8% from a year ago, well above expectations (but pre-Omicron).

But a flash estimate for inflation in the eurozone in December came in at 5.0%, up from 4.9% in November, according to Eurostat, with energy up 26.0% annualized.

Ex-food and energy, the flash estimate was 2.7%, which compares with 0.4% Dec. 2020.

The flash inflation rate in Germany was 5.7%.

So with the above in mind, it should be no surprise that Eurostat also reported that November industrial producer prices rose 1.8% for the month, and have now increased by 23.7% vs. Nov. 2020 in the euro area.

None of this makes for comfortable reading at the European Central Bank, which has consistently underestimated price pressures and come under fire for this from some of its own policymakers.

The ECB sees inflation back under 2% by the end of this year on core, but a number of influential policymakers warn that the risks are skewed towards higher figures and that above-target readings could persist into next year.

But no policy action from the ECB is likely anytime soon.  The bank curbed but extended stimulus only a few weeks ago, and no big review of its stance is likely before March.  The ECB also argues that, unlike in the United States, wage growth, a precondition of durable price pressures, is anemic, while the surge in coronavirus infections will likely limit economic activity and weigh on inflation.

Turning to Asia…in China, the private Caixin manufacturing PMI for December came in at 50.9, with the services reading at 53.1.  Last week, the official government (state-owned enterprises, vs. Caixin’s small- and medium-sized business index) was 50.3 on mfg., 52.7 services.

Japan reported a manufacturing PMI for December of 54.3, with services at 52.1, as pandemic restrictions have been eased.

But household spending, a key metric here, for November was -1.3% vs. a year ago, well below forecasts, ditto the -1.2% month-on-month.

In South Korea, the manufacturing PMI for December was 51.9, while in Taiwan it came in at 55.5.

Street Bytes

--Stocks started 2022 on the wrong foot, with all the major averages falling, especially after the Fed’s hawkish minutes.  The Dow Jones fell 0.3% to 36231, the S&P 500 -1.9% and Nasdaq a whopping 4.5%.  The tech-heavy index is now off 7% from its Nov. 19 high.

Next week we have a slew of important economic data, including on inflation, and we have the start of earnings season.

Monday and Tuesday, Apple Inc.’s stock briefly reached a market value peak of $3 trillion (roughly $182.80 per share), but then failed to hold that gain by the session’s end and finished the week at $172.    Aside from surging demand for iPhones, MacBooks and iPads during the pandemic, the company has an ongoing massive share repurchase program that has helped fuel the stock rally, buying back $348 billion worth in the five years through the September quarter of 2021, reducing its share count by 23% over that period.

--Oil rose on Tuesday as OPEC+ producers agreed to stick with their planned increase for February based on indications that the Omicron variant would have only a mild impact on demand.

OPEC+ agreed to its planned increase of 400,000 barrels per day in oil output in February.  Its decision reflects easing concern of a big surplus in the first quarter, as well as a wish to provide consistent guidance to the market.

“The storm is over,” said one OPEC delegate.

Global manufacturing activity remained strong in December, suggesting Omicron’s impact on output had been subdued.

Analysts warned, however, that OPEC+ may have to change tack if tension between the West and Russia over Ukraine flares up and hits fuel supplies, or if Iran’s nuclear talks with major powers make progress, which would lead to an end to oil sanctions on Tehran.

But then oil surged Thursday to $80 on WTI because of escalating unrest in oil producer Kazakhstan and supply outages in Libya, before closing the week at $78.91.

--U.S. Treasury Yields

6-mo. 0.23%  2-yr. 0.86%  10-yr. 1.76%  30-yr. 2.12%

The yield on the 10-year is at levels not seen in two years, Jan. 2020, pre-pandemic, while the German 10-year (bund) is ‘up’ to -0.05%, which is the ‘highest’ level since May 2019. [It was -0.39% last Dec. 3.]

--Ford Motor on Wednesday reported declines in its December and 2021 U.S. sales despite record performance by its electrified vehicles.

December sales dropped 17% year-over-year to 173,740 vehicles, with car sales down nearly 67%.  EV sales for the month soared 121% to 12,284 units.  Fourth-quarter U.S. sales rose 27% sequentially to 508,451 vehicles, but full-year sales were down 6.8% to about 1.91 million units.

“Last year was a foundational year for Ford in the electrified vehicle segment and this year we continue to expand, adding the F-150 Lightning and E-Transit to our electric vehicle lineup,” said Andrew Frick, vice president of Ford sales in the U.S. and Canada, and curator at the Frick Museum in New York.

The company recently said it aims to almost double the annual production capacity of its F-150 Lightning electric pick-up truck to 150,000 units amid robust demand. [About 200,000 reservations have been placed for the opportunity to order one of the trucks, the company has said; i.e., don’t expect to take delivery of one for a while in many instances.]

For December, Ford also reported double-digit declines in its U.S. truck and sport utility vehicle sales.  But for the 2021 full year, Mustang Mach-E sales came to 27,140 units, making it the second best-selling full-electric SUV in the U.S. behind Tesla’s’ Model Y, Ford said.

My good friend, Dr. W., ordered his Mach-E December 2020 and took delivery on 11/1/21.  I asked him for his early comments this week.

“My only current complaint is that it is very software driven with a ridiculous number of options to pick from on a giant dashboard display. Lots of interesting features…but it’s not super intuitive as I would have hoped.  The cold weather also definitely decreases the range. The nightmare traffic jam on I-95 would really have been awful if only electric vehicles were available.

“My suggestion for folks thinking of an EV now is consider a three-year lease.  Cars should have a much greater range in 3-4 years with much denser and more stable batteries (which can, in turn, absorb a much higher recharging current resulting in road charging potential decreasing to 5-10 minutes).  Once road recharging gets down to the same as filling up with a tank of gas, EVs will take off.”

Ford shares hit $24.31 on Tuesday, its highest close since 2001.  The stock has nearly tripled over the past 52 weeks; the best performer in the S&P 500.

--GM revealed its new Chevrolet Silverado EV on Wednesday during a virtual Consumer Electronics Show.

The electric pickup rivals the Ford F-150 Lightning.  The 2024 Silverado has an expected 400-mile range on a full charge and uses GM’s Ultium Platform.

GM also said on Tuesday that the new 2022 Chevrolet Silverado LD and the GMC Sierra LD will roll out by the middle of the year.  The standard pickup trucks will feature new interiors, generate lower greenhouse gas emissions, add new off-road and luxury packages, and include the addition of Super Cruise as an option for the first time.

Meanwhile, BrightDrop, GM’s electric commercial vehicle business, said Wednesday it struck an agreement to supply electric vehicles to Walmart while announcing an expanded partnership with FedEx.

Walmart has reserved 5,000 EV600 and smaller EV410 delivery vans of BrightDrop, as part of the retailer’s efforts to have a zero-emissions logistics fleet by 2040.  Walmart intends to use BrightDrop vans for the InHome delivery service, which the former aims to expand to 30 million U.S. households by the end of this year from 6 million, according to GM’s subsidiary.

FedEx reserved priority production for 2,000 electric delivery vans over the next few years.  FedEx could also book up to 20,000 more vans in the years to come, BrightDrop said.

BrightDrop’s EV600 is in production and the new eV410 will be available in late 2023, it said.

--But Japanese automaker Toyota Motor Corp. outsold GM in the United States in 2021, marking the first time the Detroit automaker has not led U.S. auto sales for a full year since 1931.

Toyota sold 2.332 million vehicles in the United States in 2021, compared with 2.218 million for General Motors, the automakers said on Tuesday.  GM’s U.S. sales were down 13% for 2021 – and down 43% in the fourth quarter – while Toyota was up 10% for the year.  GM last had lower sales in 2010 at 2.202 million.  [And you saw above, Ford came in at 1.91 million.]

For all of 2020, GM’s U.S. sales totaled 2.55 million, compared with Toyota’s 2.11 million and Ford Motor’s 2.04 million.

It’s all a little deceiving as last year was marred by a shortage of semiconductors used heavily in vehicles, forcing automakers to focus on their most profitable models.  Toyota just did a better job of managing its supply chain and the company said “being No. 1 is never a focus or priority.”

Toyota does not see it as sustainable that it can retain its U.S. sales lead and had no plans to use the 2021 accomplishment in any kind of advertising.

GM under CEO Mary Barra has emphasized profitability over volume, abandoning such money-losing markets as Europe and Russia.

For the entire industry, sales finished 2021 at just under 15 million vehicles, according to Wards Intelligence, with the annual sales rate in the month of December finishing at 12.4 million.  The full-year number was well below the five-year average of 17.3 million from 2015-2019.  IHS Markit forecasts U.S. sales are expected to reach nearly 15.5 million in 2022.  Toyota sees industry sales jumping to 16.5 million this year.

Hyundai Motor America sales chief Randy Parker said in an interview, “If you would have asked me to predict how the year was going to go at the beginning of (last) January, I would have gotten it all wrong because this whole microchip shortage just came out of left field and it wreaked a lot of havoc.”

“But at the same time, it sharpened our skill set,” Parker said.  “I’m very bullish on 2022.”

Hyundai’s U.S. sales rose 19% to more than 738,000 vehicles.

Nissan’s sales fell 20% in the fourth quarter but rose 8.7% for the year. Honda’s sales were up 8.9% for the year.

--Meanwhile, Tesla reported Sunday that it delivered 936,000 cars in 2021, up 87 percent from the year before, despite the computer chip shortage that has disrupted auto production around the world.

In the fourth quarter alone, the company delivered more than 308,000 vehicles, a 71 percent increase from the quarter a year earlier. The overwhelming share of the deliveries were of the Model 3 sedan and the Model Y hatchback.  Wall Street analysts had been expecting deliveries of about 266,000 cars in the fourth quarter, and about 855,000 for the year.

Tesla’s shares soared in response, but fell back the rest of the week on valuation concerns, along with the rest of the Nasdaq market.

Tesla has had issues concerning product quality recently, including a recall of more than 475,000 vehicles for separate defects that could affect safety.

In addition, the company and its Autopilot driver-assistance system have come under closer scrutiny by safety regulators in the U.S.

--Boeing secured an order for 50 new 737 MAX airplanes from Allegiant Air, with options for 50 additional jetliners, marking the plane maker’s first deal with an ultra-low-cost carrier in the U.S., the companies said Wednesday.

Allegiant said it selected the Boeing 737-7 and 737-8-200 models, which are expected to lower fuel use and carbon emissions by 20% compared with its current fleet, which consists of Airbus A319s and A320s.  Allegiant’s prior strategy was to pick up second-hand jets at bargain prices, which had helped it accumulate over 100 jets built by Boeing’s European rival.

The first 737 MAX deliveries are slated for 2023.

Boeing had previously lost hard-fought medium-haul contests to Airbus at Dutch KLM and Australia’s Qantas.  Such “flips” are rare due to the cost of retraining pilots.

--Ryanair flew 9.5 million passengers in December, the airline confirmed on Tuesday.  The Irish carrier said that it operated more than 62,200 flights last month, 81 percent of the available seats.

The 9.5 million was below an earlier forecast of 10 million to 11 million made before the emergence of Omicron prompted governments to impose new travel restrictions.

The 9.5m is multiples of the 1.9 million passengers Ryanair flew in December 2020.  Europe’s largest discount airliner flew 11.2 million people in December 2019, before Covid-19 struck.

Ryanair expected to fly only 6-7 million this month, per a December forecast.

--Nearly 2,000 U.S. flights were canceled Thursday, and at least another 2,600 today, the 13th straight day of more than 1,000 cancellations and the airline industry’s worst stretch since the start of the pandemic.

Carriers have canceled more than 27,000 flights since Christmas Eve, according to FlightAware.

But it is expected the wave of cancellations will ease as infection rates fall and the weather improves.

--TSA checkpoint travel numbers vs. 2019….

1/6…75 percent of 2019 levels
1/5…67
1/4…84
1/3…89
1/2…92 (Sun.)
1/1…69
12/31…71
12/30…86

From here on we’ll really get to gauge the impact of Omicron, at least over the coming few weeks.

--AT&T and Verizon Communications said they agreed to delay their rollout of a new 5G service for two weeks, reversing course after previously declining a request by U.S. transportation officials.

The two companies on Sunday had rebuffed a Dec. 31 request by Transportation Secretary Pete Buttigieg and FAA Administrator Scott Dickson to delay their rollout of a new 5G signal for up to two weeks to allow aviation regulators to address safety concerns at airports on a rolling basis.

U.S. airlines have said that their operations would face significant disruption if the FAA imposes flight restrictions to address the agency’s safety concerns. The FAA and aviation groups worry the new 5G signals, frequencies known as the C-band, could interfere with key cockpit safety systems.

--Shares in Macy’s Inc. fell Wednesday as the company planned to reduce its U.S. store hours for the rest of January as it prepares for potential Covid-19 cases among workers with the Omicron variant driving up infections.

Walmart announced Monday that it had temporarily shut almost 60 stores in Covid hotspots in December to sanitize them against the virus, while Apple closed all of its 12 New York city stores to indoor shopping.

Walmart also said it will now provide up to one week of paid time-off if a worker contracts Covid, instead of its earlier policy for up to two weeks.

--In a case that exposed Silicon Valley’s culture of hubris and hype, Elizabeth Holmes was convicted Monday of duping investors into believing her startup Theranos had developed a revolutionary medical device that could detect a multitude of diseases and conditions from a few drops of blood.

A jury convicted Holmes, who was CEO throughout the company’s turbulent 15-year history, on two counts of wire fraud and two counts of conspiracy to commit fraud after seven days of deliberation.  The 37-year-old was acquitted on four other counts of fraud and conspiracy that alleged she deceived patients who paid for Theranos blood tests, too.

Holmes now faces up to 20 years in prison for each count, although legal experts say she is unlikely to receive the maximum sentence.

--Canada’s manufacturing PMI for December was a solid 56.5, down from 57.2 in November.  There has been growth (above 50) every month since July 2020.

Today, Statistics Canada reported that the economy added 54,700 jobs in December, better than forecast, as the jobless rate fell to 5.9%.

--Bitcoin, which hit an all-time of $69,000 on Nov. 9, touched $41,000 in trading early Friday and sits at about $41,800 Friday evening.

--The inflation rate in Turkey is at 36% these days, with consumer prices rising 13.6% in December alone, the Turkish Statistical Institute released this week.  Turkey’s lira shed 44% of its value in 2021 as the central bank slashed interest rates under a drive by President Tayyip Erdogan to prioritize credit and exports over currency stability.  On Monday, the lira fell a further 4% to 13.7 against the dollar.  The inflation rate here could reach 50% by the spring unless the direction of monetary policy is immediately reversed.

--Sales of electric cars in Norway rose last year by 48%, ensuring that almost two out of every three new automobiles were battery powered and making Tesla the top selling brand there.  Seeking to become the first nation to end the sale of petrol and diesel cars by 2025, oil-producing Norway exempts battery electric vehicles from taxes imposed on rivals using internal combustion engines.

But, remember, sports fans…if you’re thinking you want to go to Norway for clean air, beer is very expensive there. And at the end of the day….

--Tesla was criticized in the U.S. after opening a showroom in China’s controversial Xinjiang region.

The move was welcomed by some in China, but others, such as Republican Sen. Marco Rubio, who sponsored a bill signed into law by President Biden in December that requires firms to prove that goods imported from Xinjiang were not produced with forced labor, spoke out about Tesla’s decision.

Rubio tweeted: “Nationless corporations are helping the Chinese Communist Party cover up genocide and slave labor in the region.”

--Huawei Technologies Co. said revenue dropped by nearly a third in 2021, as the effects of U.S. export restrictions hammered the Chinese tech giant’s main business lines.

Huawei’s revenue fell 29% to about $99 billion for the year, the company said, an unusual decline in full-year revenue for the once booming tech firm.

Chairman Guo Ping said in a year-end letter to employees that Huawei would face another challenging year.

The far-reaching U.S. export controls, which blocked the company from obtaining critical chips and other components, have had the most pronounced impact on its smartphone business, the world’s largest in 2020 before sales all but dried up because of challenges in obtaining chips.

Huawei’s 5G telecom business was also blocked in a number of Western countries following pressure from the U.S., which regards Huawei equipment as vulnerable to espionage or disruption by the Chinese government.  Huawei denies its equipment is a threat and says it is owned by employees and operates independently of the government.

--Samsung Electronics on Friday said its October-December operating profit likely jumped 52% on-year to its highest fourth-quarter profit in four years, helped by solid demand for server memory chips and higher margins in chip contract manufacturing.

The world’s largest memory chip and smartphone maker estimated fourth-quarter profit at $11.5 billion.  Revenue likely rose 23% from the same period a year earlier.

Samsung will formally issue its earnings later in the month.

--Walgreens Boots Alliance raised its earnings guidance for the fiscal year following higher-than-expected results in the first quarter on Thursday, driven by growth across all its segments and higher levels of Covid-19 vaccinations and testing.

For the quarter ended November, Walgreens reported adjusted EPS of $1.68, up from $1.22 a year ago.  The Street called for $1.34.  Sales rose to $33.9 billion from $31.44 billion.  Wall Street was looking for $32.95 billion.

“This strong performance was underpinned by enhanced execution across all of our business segments and supported by ongoing contributions from vaccination and testing,” said CEO Rosalind Brewer on a call with analysts.

Walgreens has administered more than 56 million Covid-19 vaccinations, over 9 million boosters and 22.9 million tests to date, including 15.6 million vaccinations and 6.5 million tests in the first quarter.

U.S. comp store sales grew 7.9%.  Comparable pharmacy sales increased 6.8% due to higher prescriptions filled during the quarter, including vaccinations.

--Americans borrowed more than ever to buy homes in 2021, with mortgage lenders issuing $1.61 trillion in purchase loans last year, according to estimates by the Mortgage Bankers Association.  That is up slightly from $1.48 trillion in 2020 and above the previous record of $1.51 trillion in 2005.

The forces that pushed Americans into the housing market in the early months of the pandemic – low interest rates and a desire for bigger homes – continue to drive up prices and mortgage balances.  Many Americans also just have more cash and savings.  It eventually goes somewhere.

Rising mortgage rates have slowed the wave of refinances that drove the boom in mortgage lending since the spring of 2020, and now the Fed is going to be raising rates a number of times in 2022.

Already, the 30-year fixed rate is 3.22%, according to Freddie Mac, and that was before this week’s big spike in the 10-year.  A year ago, the 30-year stood at 2.65%.

--Bed Bath & Beyond reported miserable earnings for the three months ended Nov. 27, losing $276.4 million, or $2.78 per share, though adjusted for restructuring costs and other items was 25 cents, much worse than the break-even quarter industry analysts had projected.  The company last year lost $75 million in the quarter.

Revenue was $1.88 billion, down sharply from $2.62 billion and also short of the $1.96 billion that Wall Street was looking for.

The company said it struggled to get everything on shelves that shoppers wanted amid ongoing issues tied to backups in the supply chain.

Comparable sales, which includes stores and digital, declined 7% in the third quarter.

For the current quarter ending in February, Bed Bath & Beyond said it now expects revenue in the range of $2.1 billion, also below expectations.

But instead of falling the company’s shares rose on the news as it has gained the attention of those investing in meme stocks.

--Speaking of meme stocks, GameStop Corp. shares soared Thursday after the company announced it is launching a division to develop a marketplace for nonfungible tokens (NFTs) and establish cryptocurrency partnerships, per various reports citing people familiar with the matter.

Chairman Ryan Cohen has been tapping executives from companies including Amazon.com to turn GameStop away from brick-and-mortar and towards e-commerce.

--Hollywood closed out 2021 with more fireworks at the box office for “Spider-Man: No Way Home,” which topped all films for the third straight week and already charts among the highest-grossing films ever.  But even with all the champagne popping for “No Way Home,” the film industry has both optimism and concern over ticket sales that while double those of 2020, are still well below the pre-pandemic pace.

--The New York Times announced it had agreed to buy subscription-based sports website The Athletic for $550 million in an all-cash deal, subject to closing adjustments, confirming earlier media reports.

The acquisition is expected to be immediately accretive to the Times’ revenue growth rate.  The Athletic will be a subsidiary of The Times Company and continue to operate separately.  The Athletic’s founders Alex Mather and Adam Hansmann will stay on in the company.

The Pandemic

The U.S. is urging that everyone 12 and older get a Covid-19 booster as soon as they’re eligible, to help fight the hugely contagious Omicron mutant that’s ripping through the country.

Boosters already were encouraged for all Americans 16 and older, but Wednesday the Centers for Disease Control and Prevention endorsed an extra Pfizer shot for younger teens – those 12 to 15 – and strengthened its recommendations that 16- and 17-year-olds get it, too.

While Omicron can slip past a layer of the vaccines’ protection to cause milder infections, studies show a booster dose at least temporarily revs up virus-fighting antibodies to levels that offer the best chance at avoiding symptomatic infection, even from Omicron.

The rate of Americans who are ending up in the hospital, however, has dropped 50 percent compared to the record highs seen a year ago, data shows.

While new Covid cases have more than tripled in the past few weeks, three percent of those cases are being admitted in hospitals, according to the CDC.

That rate is down from the 6.5 percent of cases hospitalized at the beginning of 2021.  The problem is in the large numbers of Omicron.

The CDC was forced to clarify its rationale behind its decision to shorten recommended isolation and quarantine guidance, and not back more testing to resume normal activities, following criticism that its shift wasn’t driven by current science.

In a posting on its website Tuesday, the CDC said it had opted to change the guidelines based on emerging scientific evidence concerning when and for how long a person is most likely to transmit the highly infectious Omicron variant.

“Infectiousness peaks around one day before symptom onset and declines within a week of symptom onset, with an average period of infectiousness and risk of transmission between 2-3 days before and 8 days after symptom onset,” the agency said.

Last week, the CDC reduced its recommended quarantine and isolation periods in most cases from 10 days to five, with a subsequent five days of masking when around other people.

Some public-health experts said that adding a requirement that people take a rapid antigen test before resuming contact with other people would help prevent the sick or the exposed from unwittingly transmitting the virus to others.

But the CDC didn’t alter its stance on testing in the revisions posted Tuesday.  The agency said that testing was an option for those who have access to at-home screening.

Yup, a giant mess and another black eye for Rochelle Walensky and Co.

Meanwhile, here in New Jersey, which once again is Ground Zero (along with New York), we are now up to over 5,700 hospitalizations, vs. 644 on Nov. 7.  At a certain point, while it’s a plus Omicron isn’t as severe, the sheer number of infections is beginning to overwhelm hospitals all over again as staff becomes infected (or quits).  And you’ve seen the issues with little kids, who aren’t eligible for vaccinations as yet.  What are their long-term side effects going to be?

But as I’ve written recently, we will look back on this period as the “final spasm.”  At the same time, I’m tired of pounding the table on vaccines.  I just ask, for those of you haven’t gotten the shots, and/or the booster, why would you want to be like those young soldiers in the cemetery up the road from Appomattox, some of the last to die in the war?

Covid-19 death tolls, as of early tonight….

World…5,496,795
USA…858,346
Brazil…619,878
India…483,193
Russia…314,604…s/b over 575,000
Mexico…299,933
Peru…202,934
UK…149,744
Indonesia…144,121
Italy…138,697
Iran…131,821
Colombia…130,250
France…125,206
Argentina…117,428
Germany…114,491
Poland…99,428
Ukraine…97,088
South Africa…92,252
Spain…89,934
Turkey…83,388
Romania…58,971
Philippines…51,871
Hungary…39,780
Chile…39,232
Czechia…36,507
Ecuador…33,699
Vietnam…33,877
Malaysia…31,644
Bulgaria…31,471
Canada…30,657
Pakistan…28,961
Belgium…28,446
Bangladesh…28,098
Tunisia…25,643
Iraq…24,198
Egypt…21,909
Thailand…21,799
Greece…21,263
Netherlands…21,065

[Source: worldometers.info]

U.S. daily death tolls…Mon. 767; Tues. 1,847; Wed. 1,802; Thurs. 2,143; Fri. 2,025.

Covid Bytes

--The World Health Organization has warned against describing the Omicron variant as mild, saying it is killing people across the world.

Recent studies suggest that Omicron is less likely to make people seriously ill than previous Covid variants.

But the record number of people catching it has left health systems under severe pressure, said WHO chief Dr. Tedros Adhanom Ghebreyesus.

“In fact, the tsunami of cases is so huge and quick, that it is overwhelming health systems around the world.,” said Tedros.

On Monday, the U.S. recorded more than one million Covid cases in 24 hours.

The WHO said the number of global cases has increased by 71% in the last week, and in the Americas by 100%.  [Just look at the worldometers.info charts if you need convincing.]  The WHO added that 90% of the severe cases worldwide were with the unvaccinated.

Yes, if you are vaccinated, Omicron is less severe compared to Delta, but it is still hospitalizing and killing people.

--The CEO of Moderna, Stephane Bancel, said that he anticipates people will need a second Covid-19 booster shot this fall as the vaccine’s efficacy wanes over the next few months.

Bancel, speaking at a Goldman Sachs healthcare conference on Thursday, said Moderna is working on a booster shot focused on the Omicron variant, however it’s unlikely that it will be available in the next two months.

“I still believe we’re going to need boosters in the fall of ’22 and forward,” Bancel said.

A new study from Israel showed that a fourth dose of the vaccine boosts antibodies five-fold, Israeli Prime Minister Naftali Bennett announced on Tuesday.  The country has already begun dosing immunocompromised individuals.

--The Omicron variant is fueling a Covid-19 surge in India, with new cases climbing nearly 30 percent to 117,000 on Friday, the most since June last year at the tail-end of the deadly second wave of infections driven by the Delta variant.

Cases have risen 11-fold in just two weeks.

“The pandemic is expanding and the surge is exponential,” said Balram Bhargava, who heads the state-run Indian Council of Medical Research.

More than 80 percent of the cases sequenced in the Delhi capital region and financial center Mumbai now involve the Omicron variant.

The good news is that not many people falling sick are needing medical treatment and most are recovering more quickly than in previous waves.

In Mumbai, where the city hit a single-day pandemic record of 20,181 new infections on Friday, only five percent of these required medical help.

--One in 10 people in London had coronavirus last week as Omicron sweeps through Britain, according to official estimates published on Wednesday.  But Boris Johnson said Britain’s rollout of booster vaccines made new restrictions unnecessary as he eased rules on testing for travelers arriving into the country.

The Office for National Statistics estimated that almost 3.75 million people in Britain were infected with coronavirus last week, accounting for one in 15 people in England, one in 20 in Scotland and Wales and one in 25 in Northern Ireland.  The data is based on swabs collected from randomly selected households across the country.

--Italy has made Covid-19 vaccination mandatory for people aged 50 and above in an attempt to ease pressure on its health service and reduce fatalities.  Just look at Italy’s chart.

--French President Emmanuel Macron was accused of using divisive, vulgar language after he used a slang term to say he wanted to make life difficult for unvaccinated people.

“I really want to piss them off, and we’ll carry on doing this – to the end,” he told Le Parisien newspaper.

Three months ahead of a presidential election, opponents of Macron said his words were unworthy of a president.

MPs halted debate on a law barring the unvaccinated from much of public life.

--I was watching a report this week concerning Hong Kong and a traveler there who was about to start a new job but tested positive at the airport upon arrival.  So, he was forced into a quarantine hotel, with strange roommates, for four weeks!  That’s the very nightmare I’ve been writing of in trying to work on travel plans to various spots in Asia.

Two days after I saw the report, Hong Kong officials implemented the city’s strictest restrictions yet, including banning all passenger flights from eight countries (the U.S., Britain, Australia, and Canada among them), as it holds firm to a “zero-Covid” policy amid a growing outbreak of the Omicron variant.

Then today, it quarantined all 100 people, including local legislators, who attended an illegal party after one positive test result emerged from the group.

--In New York City’s courthouses, Omicron is so out of control that arraignments have turned into a hot zone where anyone present receives a Covid-19 exposure alert, public defenders said Wednesday.

“Everyone who is entering these spaces is getting sick,” Legal Aid Society union president Lisa Ohta said at a virtual news conference.

Ms. Ohta said members are testing positive after working a single shift.

--Novak Djokovic was left stranded at an Australian airport overnight, and then placed in a hotel for quarantined individuals, caught in a political maelstrom over whether to honor the World No. 1’s medical exemption from vaccine requirements or send him home due to a visa blunder.

Djokovic, who is seeking a record-breaking 21st Grand Slam win at the Australian Open, touched down in Melbourne Wednesday night after a 14-hour flight from Dubai.  But he was still awaiting permission early Thursday morning to enter the country after it emerged that his team had applied for a visa that does not allow for medical exemptions.

Australia, especially the state of Victoria, has endured the world’s longest cumulative lockdown and an outbreak of the Omicron variant has sent case numbers to record levels.

Prime Minister Scott Morrison said shortly before Djokovic’s arrival that there would be “no special rules” for him on his exemption.  “If that evidence is insufficient, then he won’t be treated any different to anyone else and he’ll be on the next plane home,” Morrison told a medical conference earlier.

Foreign Affairs

Russia/Ukraine/Kazakhstan: Sudden unrest in Kazakhstan this week presented an unneeded distraction for Russian President Vladimir Putin, as he was forced to send paratroopers, with other regional allies contributing forces (part of the Collective Security Treaty Organization), to help Kazakh President Kassym-Jomart Tokayev put down major unrest that swept his country.

Tokayev said today that constitutional order had mostly been restored in the central Asian country.

The Kazakh interior ministry said that 26 “armed criminals” had been “liquidated” and more than 3,000 of them detained, while 18 police and national guard servicemen had been killed since the start of the protest (two found decapitated).

“An anti-terrorist operation has been launched.  The forces of law and order are working hard.  Constitutional order has largely been restored in all regions of the country,” Tokayev said.

Reuters reported seeing armored personnel carriers and troops in the main square of Almaty, Kazakhstan’s largest city, where soldiers fired at protesters a day before.

The announced casualty figures are way understated as there has been heavy fighting.

The violence has been unprecedented in a state ruled firmly since Soviet times by leader Nursultan Nazarbayev (81), who had held on to the reins despite stepping down three years ago as president.

The uprising, which began as protests against a New Year’s Day fuel price hike, swelled Wednesday, when protesters chanting slogans against Nazarbayev stormed and torched public building in Almaty and other cities.  Protesters accused Nazarbayev’s family and allies of amassing vast wealth while the nation of 19 million remained poor.

The unrest has seen the internet and banks mostly shut down across the country.

Tokayev, Nazarbayev’s hand-picked successor, blamed the unrest on foreign-trained terrorists.

The Russian deployment is a gamble by the Kremlin that rapid military force could secure its interests in the oil and uranium-producing nation.

Meanwhile, next week sees critical meetings between the United States, Russia and NATO, with 100,000 Russian troops poised on the border of Ukraine, ready to invade at a moment’s notice.

Putin has issued his demands: he wants the alliance to forswear all further expansion – everywhere, and not just in Ukraine and Georgia, two former Soviet states.  He wants America to stop protecting its allies with tactical nuclear weapons and short- and medium-range missiles. And Putin wants a veto over troop deployments and exercises in the eastern parts of NATO territory and over military cooperation with all former Soviet countries.

Putin, knowing these demands are way over the top and that the U.S. and NATO would never accept them, could be creating a pretext for invading Ukraine.

But given what follows, Vlad the Impaler has to have second thoughts.

David Ignatius / Washington Post

“How can the United States and its allies help Ukraine become a porcupine – a prickly, stubborn nation that would be hard for an invading Russian army to digest?  Top U.S. officials are mulling this question as they prepare for a crucial meeting with Russia on Monday.

“Russia is heading to Geneva with what amounts to an ultimatum: Unless President Vladimir Putin gets security guarantees from the West, he’s prepared to invade. Biden administration officials say they want a diplomatic solution, but they’ve also been delivering warnings through public and private channels that an invasion would be bloody, protracted and extremely damaging for Russia.

“ ‘What you’re seeing is a concerted effort by the administration and its allies to make it clear to Putin that an invasion of Ukraine would be a very bad idea,’ Air Force  Secretary Frank Kendall said in an interview Thursday. The Air Force has flown B-52 bombers and RC-135 reconnaissance planes over eastern Ukraine in recent weeks, as part of its effort to deter Russia.

“Ukraine was a pushover for Russia in its 2014 seizure of Crimea, but a lot has changed since then. The Ukrainian army is better trained and equipped; the population is more united against Russian interference; and the United States and NATO allies are ready to provide weapons and training for a long battle of resistance if Russian forces move across the border toward Kyiv.

“U.S. officials view Ukraine as potentially similar to Iraq, a country that the United States tried and failed to transform through military power after invading in 2003.  The populations and land areas of the two nations are roughly equal; both are about 70 percent urbanized. Both have ethnic fractures and a streak of independence.

“The United States and its allies have begun thinking carefully about how they would support a Ukrainian insurgency with training and weapons, including Stinger antiaircraft missiles….

“To stiffen Ukraine’s ability to resist, the United States and NATO have dispatched teams in recent weeks to survey air defenses, logistic, communications and other essentials.  The United States likely has also bolstered Ukraine’s defenses against Russian cyberattacks and electronic warfare.  Once the terrain is frozen in February, Russia’s far larger army could surge toward Kyiv from the north, east and south.  But the aftermath would probably be a long, arduous campaign….

“Putin is telling Russians that an invasion may be necessary to stop NATO’s encroachment. The paradox is that a Russian attack would probably produce the very outcome Putin wants to avoid.  NATO has discussed plans to move troops forward after an invasion, which would make Russia less secure.

“A protracted war in Eastern Europe would have other consequences that are hard to predict. As in the Syrian civil war, millions of refugees would stream across the border, straining the European Union.  But a war would stress Russia, too, as body bags arrive home in Moscow, adding to Putin’s domestic political problems.  Ukrainian insurgents might seek havens in Poland and Romania, further complicating the situation.

“This showdown is a test of resolve, and Putin probably thinks he has a big advantage over President Biden, who is relatively unpopular and leads a sharply divided country.  But stung by criticism of the chaotic U.S. withdrawal from Afghanistan, Biden will resist any repeat in Ukraine.  Another plus for Biden: His team has skillfully shared intelligence and conducted joint planning with NATO allies.

“Russia’s border worries aren’t limited to Ukraine.  Moscow and its allies from the former Soviet Union sent troops Thursday to quell an uprising in Kazakhstan.  Post-Soviet life is getting messier, in Belarus, Ukraine and now Kazakhstan. Quelling rebellions on Russia’s periphery will stretch Putin’s resources.

“Putin’s biggest disadvantage in Ukraine may be that he has lost the element of surprise that was so effective in 2014.  The whole world is watching.  When you try to make a ‘net assessment’ of the Ukraine confrontation, an invasion looks very costly.  But history is a recurring story of overconfident leaders making foolish mistakes.”

One side item…former heavyweight boxing champ Vitali Klitschko threw a verbal jab at President Putin as he began training with Ukraine military reservists amid the growing tensions between the two countries.

Klitschko, now mayor of Kyiv, described Putin as a “gangrene” afflicting Europe.

“Many of us served in the army and those skills had to be restored,” Klitschko said in comments to the Daily Telegraph.  “I think that such training is essential for top and middle-level officials of a country that has been at war for almost eight years.”

The 6’7” PhD dubbed “Dr. Ironfist,” reportedly said his pugnacious background would serve Ukraine’s largest city well in the event of a conflict.

“I think it is more about character traits that all professional athletes share. Self-discipline, meticulousness, persistence and a strong sense of focus are key principles that help you succeed, no matter what you are doing,” he told the Telegraph.

“As for my celebrity status, my connections are very helpful and give me a big advantage,” he added.  “Because Ukraine cannot overcome the tough challenges it faces without friends and reliable partners.”

Don’t underestimate Klitschko’s leadership value.

China/Taiwan: Taipei’s air force staged drills to intercept Chinese planes, simulating a war scenario, as it sought to show its combat readiness amid heightened tensions with China, which claims the island as its own.

The exercises were part of a three-day drill to show Taiwan’s battle readiness ahead of the Lunar New Year holiday at the end of this month.

Taiwan has termed China’s military activities as “grey zone” warfare, designed to both wear out Taiwan’s forces by making them repeatedly scramble, and also to test its response.

In a new year message for China last week, Taiwan President Tsai Ing-Wen said military conflict is not the answer.  Beijing responded with a stern warning that if Taiwan crossed any red line it would lead to “profound catastrophe.”

Seth Cropsey / Wall Street Journal…Cropsey former deputy undersecretary of the Navy and a former naval officer…

“A crisis may be imminent in Ukraine as Vladimir Putin gathers troops on the Russian border for a possible invasion.  American policy makers have also begun focusing on a potential conflict in Taiwan, one that is coming to a boil more slowly.  But American statesmen ought to understand: These events can’t be viewed in isolation; they are connected and part of a larger political competition for Eurasia.”

[Cropsey then covers much of what David Ignatius does when it comes to Russia and Ukraine.]

“Although separated by geography, Ukraine and Taiwan occupy similar positions in the Russian and Chinese strategic experience and historical imagination.  Capturing each is essential to all other strategic objectives. …For the Chinese Communist Party, seizing Taiwan would allow the country to break out of the First Island Chain and conduct offensive operations against Japan, the Philippines and even U.S. territories in the Central Pacific….

“Taiwan is proof that Chinese-speaking peoples are fully capable of governing themselves.  The modern Communist Party stems from a brutal revolutionary regime that savaged the Chinese people, murdering millions through its messianic ambitions and sheer incompetence.  Only by consuming Taiwan can China confirm its superiority.  Given the political capital the Communist Party has invested in subduing Taiwan, it may no longer have a way to de-escalate even if it wanted to.

“The clearest obstacle to Russian and Chinese escalation is Ukraine’s and Taiwan’s affiliations with the U.S. and its allies.  Mr. Putin understands that a spiraling conflict with NATO would overwhelm the Russian military.  Unable to hide casualty counts as he did in Syria, Libya and Ukraine in 2014, he would face domestic opposition.  Mr. Putin has an incentive to isolate Ukraine militarily and separate the issue from NATO, striking only when the time is right.

“Similarly, a Sino-American conflict involving a broader Pacific coalition would prove dangerous for the Communist Party’s survival: A blockade against Chinese Middle Eastern resource imports could destroy the regime in weeks to months.

“Yet a fait accompli against Taiwan is more viable than a similar strike against Ukraine.  Russia’s likely strategic objective would be the capture of a land corridor between Donbas and Crimea.  Yet in 2014, the Ukrainian armed forces, reeling from Russia’s annexation of Crimea and relying upon paramilitaries for additional combat power, repulsed a Russian offensive against Mariupol and drove Russian and separatist forces back to their current salient.

“Seven years of warfare have given the Ukrainian military valuable combat experience.  Ukrainian society, even in the east, is increasingly hostile to Russia. The Ukrainian public seems willing to accept casualties….

“By contrast, Taiwan is small and densely populated.  Its military isn’t equipped to sustain air and sea control around the island, a prerequisite for defending against amphibious invasion. And it is highly likely that the Communist Party has positioned intelligence assets on Taiwan ready to sow discord throughout Taiwanese society and disrupt civilian communications.  The question for the People’s Liberation Army is less whether it can take Taiwan, but whether it can succeed before a potential American and allied coalition can respond.

“With China and Russia in strategic cooperation, this is a very dangerous situation.  The margin of force between potential enemies in the Western Pacific is far thinner than in Easter Europe, given China’s increasingly capable military.  Russia wouldn’t have to deploy major ground or naval units to the Asia-Pacific, nor time its offensives with China’s.  The Russian Pacific Fleet has enough submarines to bog down Japanese and U.S. units needed to defend Taiwan in shielding the Japanese home islands.  That would make China’s mission much more likely to succeed.

“Roughly concurrent offensive operations in two hemispheres would overstress American and allied resources.  Taiwan must become capable of defending itself.  But more broadly, the U.S. must begin thinking about its strategic challenges globally, not in regional segments. This is a contest for Eurasia – and thus for the world.”

David Satter / Wall Street Journal

“Thirty years (after the fall of the Soviet Union), we no longer face an adversary like (the U.S.S.R.), which threatened to overrun Europe and was capable of making its influence felt in every corner of the globe.  Yet the perseverance and sense of honor that defeated the Soviet Union are still needed today.

“The U.S. withdrawal from Afghanistan is a painful reminder of how far we have come.  Communism and radical Islam are ideologies that divide the world into the elect and the profane, deny individuality and suppress free will.  Both treat man-made dogma as infallible truth and seek to impose it by force.

“Against this background, the Afghan war was lost the minute Americans began repeating ‘no more endless wars’ and cynically disregarding those we would leave behind, announced we were heading for the exits.

“The Soviet Union is part of our past, but our task is to draw the proper lessons from its demise.  Instead, the U.S. has turned inward. The defense of universal values has been replaced with internal political fights over such issues as climate change and gender identity. This is a tragic and dangerous situation.  Soviet communism was defeated, but history moves in cycles.  It is foolish to think we will never face an ideological challenge again.”

North Korea: Pyongyang said it test fired a “hypersonic missile” this week that successfully hit a target, state news agency KCNA reported on Thursday, as the country pursues new military capabilities amid stalled denuclearization talks.

The launch on Wednesday was the first by North Korea since October and was detected by several militaries in the region, drawing criticism from the United States, Japan and South Korea.

North Korea first tested a hypersonic missile in September, joining a race headed by major military powers to deploy the advanced weapons system.

Unlike ballistic missiles that fly into outer space before returning on steep trajectories, hypersonic weapons fly toward targets at lower altitudes and can achieve more than five times the speed of sound – or about 3,850 mph.

KCNA claims that in Wednesday’s test, the “hypersonic gliding warhead” detached from its rocket booster and maneuvered 75 miles laterally before it “precisely hit” a target 430 miles away.

More maneuverable missiles and warheads are aimed at being able to overcome missile defenses like those wielded by South Korea and the United States, analysts have said.

Did the North actually pull this off as claimed.  There are serious doubts, but no doubt they are making progress on the program.

Earlier, leader Kim Jong Un called for solutions to economic hardships and development of military prowess in a speech at a major policy meeting, state media reported on Saturday.

Food shortages and other domestic hardships were put in the foreground as Kim laid out plans for 2022 at the plenary meeting of the ruling Worker’s Party’s central committee.  He also vowed to build up North Korea’s military in light of the “destabilizing” situation on the Korean Peninsula and international politics.

And Kim pledged to “boost agricultural production to completely resolve the country’s food problems,” according to the state media report.

The 37-year-old Kim recently wrapped up his first decade in power.  And, boy, what a great track record he’s put together, right, boys and girls?

Iran: Progress has been made regarding the Iran nuclear talks although time is running out, France’s foreign minister said on Friday.  Indirect talks between Iran and the United States on salvaging the 2015 Iran nuclear deal resumed on Monday.

Western diplomats have indicated they are hoping to have a breakthrough by the end of January or early February, but sharp differences remain with the toughest issues still unresolved.  Iran has rejected any deadline imposed by Western powers.

“I remain convinced we can reach a deal.  Bits of progress have been made in the last few days,” Jean-Yves Le Drian told French media.  “We have been heading in a positive direction in the last few days, but time is of the essence, because if we don’t get an accord quickly there will be nothing to negotiate.”

In an interview on Thursday, Iran’s foreign minister also suggested the situation was positive, but repeated Tehran’s position that all sanctions must be lifted and that Washington should provide guarantees that it will not pull out again.

This week saw the arrival in Vienna of South Korea’s Vice Foreign Minister to discuss with Iran, the United States and other parties the possible release of $7 billion of frozen Iranian assets held in the Asian country because of U.S. sanctions.  Any release would need to be approved by Washington.  The ministry said in a statement that the vice minister had agreed with the Iranians that the release of the frozen assets “should take place in an urgent manner.”

Western powers have said progress was too slow and negotiators had “weeks not months” left before the 2015 deal becomes meaningless.

After Donald Trump pulled Washington out of the deal in 2018, re-imposing U.S. sanctions, Iran breached many of the deal’s nuclear restrictions and has kept plowing ahead, well beyond them, since.

Random Musings

--Presidential approval ratings….

Gallup: 43% approve of President Biden’s job performance, 51% disapprove; 40% of independents approve (Dec. 1-16).

Rasmussen: 41% approve, 58% disapprove (Jan.7)

--A new USA TODAY/Suffolk University poll raises a red flag for Republicans on the midterm elections, while offering mixed advice for President Biden on whether he should fight or fold on his big domestic initiative.

Republicans have become increasingly confident they will regain control of the House and perhaps the Senate but the party has lost the 8-point advantage it had on the generic congressional ballot in November’s poll.  Now, unnamed Democratic candidates narrowly lead unnamed Republicans by 39%-37%.

That’s a big shift from November, when Republicans led 46%-38%.  Democrats haven’t gained as much as Republicans lost some voters to the ranks of the undecided, up to 24% from 16%.

At the same time, Biden’s job approval is just 40% vs. 54% disapproval.  One reason, by 62%-33%, those surveyed say Biden isn’t a strong leader.

Kamala Harris’ approval rating is 32%, which is actually an improvement over November’s 28%.

As for Build Back Better, 38% say the president should move on to other initiatives, 34% say he should keep fighting for it and 21% say he should scale it back in an effort to get it passed.

--Donald Trump abruptly canceled his plans to hold a press conference on the first anniversary of the Capitol riot, as I told you last week was supposed to be the case.

“In light of the total bias and dishonesty of the January 6th Unselect Committee of Democrats, two failed Republicans, and the Fake News Media, I am cancelling the January 6th Press Conference at Mar-a-Lago on Thursday,” Trump said in a statement on Tuesday.

“What has become more and more obvious to ALL is that the Lamestream Media will not report the facts that Nancy Pelosi and the Capitol Sergeant-at-Arms denied requests for the D.C. National Guard or Military to be present at the Capitol. Their emails and correspondence with the Department of Defense exist, but the media won’t ask for this evidence, or report the truth!” Trump added.

The story is that Trump canceled because he realized the networks weren’t going to cover it, including Fox News.

Republican Sen. Lindsey Graham (S.C.), a Trump confidante, said he told the former president over a weekend golf game at Mar-a-Lago “that the upside of a news conference is pretty small.  You’re in the driver’s seat.  It will be an event that won’t penetrate the way you would like and focus on election reform.  With every passing day your hand gets stronger.  And I didn’t think a news conference advanced the ball.”

The House Select Committee said this week it wanted to talk to Fox News host Sean Hannity because he had relevant communications with the president and his staff while the riot was under way and in the days following it.  The panel’s leaders pointed to excerpts of Mr. Hannity’s text messages, such as one Jan. 5, 2021, in which the committee said he wrote to then-White House chief of staff Mark Meadows that “I do NOT see January 6 happening the way he is being told,” referring to Trump.

The committee also disclosed a note Hannity sent to Meadows and Rep. Jim Jordan – before the Jan. 20 inauguration of Biden – in which he wrote: “He can’t mention the election again. Ever.”

Hannity added, in what the committee said was an apparent reference to Trump, “I did not have a good call with him today.  And worse, I’m not sure what is left to do or say, and I don’t like not knowing if it’s truly understood.  Ideas?”

--A new Reuters/Ipsos poll has Donald Trump holding a commanding lead over other potential Republican candidates in the 2024 presidential election, leading Fla. Gov. Ron DeSantis by 43 percentage points.

Asked who they would support in 2024, 54 percent of Republicans picked Trump, while 11 percent chose DeSantis and 8 percent selected former Vice President Mike Pence.

--New York Attorney General Letitia James recently subpoenaed former president Trump and his two eldest children, demanding their testimony in connection with an ongoing civil investigation into the family’s business practices, according to a court filing made public Monday.

The subpoenas for Trump, his son Donald Jr. and his daughter Ivanka stem from an investigation “into the valuation of properties owned or controlled” by Trump and his company, the Trump Organization, the filing said.

The Trumps are expected to file court papers seeking to quash the subpoenas.

Trump sued James last month, seeking to end the investigation after she requested that he sit for a Jan. 7 deposition.

--Albany County, New York, prosecutors said Tuesday that they wouldn’t move forward with a misdemeanor sex crime charge against former Gov. Andrew Cuomo, removing the most immediate legal threat to the embattled Democrat.

Cuomo was charged last October with forcibly touching his assistant Brittany Commisso during a 2020 encounter at the Executive Mansion in Albany.  Ms. Commisso spoke to investigators working for Albany County Sheriff Craig Apple, whose office filed the charge against Cuomo without coordinating with the district attorney, P. David Soares, officials said.  Cuomo had been scheduled to be arraigned Friday in Albany City Court.

Soares, a Democrat, said that his office found Ms. Commisso cooperative and credible, but it was dropping the charge because “after review of all the available evidence we have concluded that we cannot meet our burden at trial.”

Soares said he remained “deeply troubled by allegations like the ones at issue here.  Although avenues for criminal prosecution in these cases are sometimes limited, I encourage victims of workplace harassment and abuse to continue to come forward and bring these issues to light so that these important discussions can continue.”

Cuomo is also being investigated for the potential misuse of state resources in the production of his pandemic memoir as well as the state’s Covid-19 policies in nursing homes.  He has denied wrongdoing on both fronts.

--Twitter said it banned the personal account of far-right Rep. Marjorie Taylor Greene for multiple violations of the platform’s Covid-19 misinformation policy.

The Georgia Republicans’ account was permanently suspended under the “strike” system Twitter launched in March, which uses artificial intelligence to identify posts about the coronavirus that are misleading enough to cause harm to people.

In a statement on the messaging app Telegram, Greene blasted Twitter’s move as un-American.

The ban applies to her personal account, but does not affect her official Twitter account, @RepMTG.

--A 2009 settlement agreement between late financier Jeffrey Epstein and Virginia Giuffre provided a release from liability for “any other person or entity” who could have been a defendant against claims by Giuffre, a court filing showed on Monday.  The deal, which provided for Giuffre to be paid $500,000, was made public as part of Giuffre’s civil lawsuit accusing Britain’s Prince Andrew of sexual abuse.

Giuffre’s lawsuit accuses Andrew of forcing her to have sex more than two decades ago when she was under 18 at the London home of former Epstein associate Ghislaine Maxwell, and abusing her at two of Epstein’s homes.

So it was up to New York City federal District Judge Lewis Kaplan to determine whether the clause in the 2009 settlement shields others from liability should Giuffre sue them.

Rebutting Andrew’s lawyers that claim Giuffre failed to “articulate what happened to her at the hands” of the prince, on Tuesday, Judge Kaplan forcefully disagreed.

“It was sexual intercourse, involuntary sexual intercourse,” Kaplan told defense attorney Andrew Brettler.  “There isn’t any doubt about what that means.”

Kaplan closed the virtual hearing by saying he would decide “pretty soon” whether the lawsuit will proceed.

[At week’s end, there is a chance Maxwell’s conviction could be overturned and a new trial declared.  Not likely, but a possibility due to a juror who works as an executive assistant at Carlyle.  In video and newspaper interviews since the Dec. 29 verdict, Scotty David said he was a victim of sex abuse as a child and that his story helped sway other members of the panel who questioned the credibility of Maxwell’s accusers.  A big issue will be just how truthful he was on his juror questionnaire.]

--Poor South Africa can’t catch a break.  A day after the funeral for the beloved Desmond Tutu, a large fire at the Houses of Parliament gutted many of the buildings, doing untold damage to historic structures, archives, and artwork.

The National Assembly building, where the Parliament meets, was gutted. 

--Twelve people, including eight children, died in a tragic apartment building fire in Philadelphia on Wednesday morning.

The fire is among the city’s deadliest ever and officials do not as yet have an official cause, though a child may have lit a Xmas tree.

Eight people managed to escape the building through one of the two exits.

There were four smoke detectors in the building and fire investigators said none were operational, though the building had been inspected in May, according to the Philadelphia Housing Authority, which also said there were six, not four, detectors.  The question will be, did the inspector(s) actually check the detectors?

[Having recently been through a home inspection in my town of Summit, I can tell you the inspector checked each one of them.]

--Five Americans died of rabies last year – the largest number in a decade – and health officials said Thursday that some of the people didn’t realize they had been infected or refused life-saving shots.

The CDC said three of the deaths, all stemming from contact with bats, could have been prevented.

--Several U.S. cities set new records for murders last year. Philadelphia, Portland, Ore., Louisville, Ky., and Albuquerque, N.M., had their deadliest years on record.  Philadelphia, the nation’s sixth-largest city, had 562 homicides, surpassing its previous high of 500 set in 1990.

Criminologists and local law-enforcement officials don’t agree on the reasons for the surge in violent crime. Some cite stress from the pandemic.  Some point to frayed relations between law enforcement and Black communities after police killings, and others blame bail reform and moves in some cities to bring fewer prosecutions.

Homicides rose by 4% in 22 major American cities through the third quarter of 2021, according to a study by the Council on Criminal Justice, a think tank focusing on criminal-justice policy and research.

In 2020, murders in the U.S. rose nearly 30% from the prior year to 21,570, the largest single-year increase ever recorded by the FBI.

New York City, which recorded a nearly 45% increase in 2020, had a 4% murder rise through Dec. 26, 2021, when compared with the same period the prior year.  Chicago, which had a 55% increase in 2020, had a 3% rise in 2021.

And in Dallas, murders were down 13% in 2021 after the city had its highest murder total in more than 15 years in 2020.

--The three white men convicted of murdering Ahmaud Arbery nearly two years ago were sentenced today to life in prison, two of them, Travis and Greg McMichael, without the possibility of parole.

--After one of the driest years in recent memory, Los Angeles – and California – is off to a good start on the water front.  The state received more precipitation in the final three months of 2021 than in the previous 12 months, the National Weather Service reported.

The three-month tally of 33.9 trillion gallons of water since the start of the water year (Oct. 1 thru Sept. 30) compares with Lake Tahoe, which holds about 40 trillion gallons.

But as the 2021 water year was California’s driest in a century, the state still needs a lot more.

“Not getting paid for three months and then getting a normal paycheck doesn’t put you back to normal in your bank account,” said Noah Diffenbaugh, a climate scientist at Stanford University.

--As alluded to above in my remarks on Tesla, we had a little situation on Interstate 95 in Virginia on Monday night into Tuesday.  Thousands of cars and tractor trailers stranded as the result of a heavy snowstorm that fell on top of rain that had frozen over, overwhelming the road crews.

Even Virginia Sen. Tim Kaine was stranded in his car for 27 hours, a commute from his home to the Capitol that typically takes two hours.

Then yesterday we had a similar situation in Kentucky as a result of another storm and a 75-car pileup on the interstate.

---

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

God bless America.

---

Gold $1796
Oil $78.91

Returns for the week 1/3-1/7

Dow Jones  -0.3%  [36231]
S&P 500  -1.9%  [4677]
S&P MidCap  -1.7%
Russell 2000  -2.9%
Nasdaq  -4.5%  [14935]

Bulls 50.5
Bears
23.5…splits the prior two weeks…42.2/24.1 (12/21); 46.4/23.8 (12/28)

Hang in there.

Brian Trumbore

 



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Week in Review

01/08/2022

For the week 1/3-1/7

[Posted 9:30 PM ET, Friday]

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

Edition 1,186

Jan. 6…a year later…

I pulled out my copy of the late Sen. Barry Goldwater’s classic, “The Conscience of a Conservative” the other day.  If you are young and don’t know much more than maybe his name, Goldwater, deeply misunderstood but a major reason why Ronald Reagan won the presidency in 1980, represented true conservative values.

The following quotation of his was also misunderstood, but it always made perfect sense to me.

“I would remind you that extremism in the defense of liberty is no vice!  And let me remind you also that moderation in the pursuit of justice is no virtue!”

Goldwater was a hardcore anti-Communist.  I am too.  I won’t go through my personal history again, but suffice it to say, every day I stare for a moment at a painting I have in my living room, one given to me by my Uncle Eugene in Prague, 1973.  He painted it…a beautiful landscape of the Tatra Mountains.

I saw that particular trip how he was living behind the Iron Curtain, as well as my Uncle Geza in Budapest, and I’ve held certain core beliefs ever since. 

Today, America is being tested in more ways than one.  January 6, as Ohio Republican Rep. Anthony Gonzalez summed it up, “was an unconstitutional attempt, led by the president of the United States, to overturn an American election and reinstall himself in power illegitimately.”

We’re also being tested by two dictatorial Communist leaders, Vladimir Putin and Xi Jinping.

But I’m a RINO (Republican in name only) in Donald Trump’s twisted mind.

“In many ways a RINO is worse than a Radical Left Democrat, because you don’t know where they are coming from and you have no idea how bad they really are for our Country,” Trump wrote in a recent statement, before he bagged out on his press conference.

To Trump, and other so-called Republicans of today, Barry Goldwater (who would have hated Trump…especially after his performance in Helsinki) would have been a RINO as well. 

So, too, then would have been Ronald Reagan.  And today, Mitt Romney, George W. Bush, Liz Cheney and Adam Kinzinger are RINOs.

It’s actually comical.  But I’m sure as hell not taking it.  I donated money Thursday to Liz Cheney’s campaign.  You may be shocked that I also gave money to Georgia Gov. Brian Kemp’s campaign because I want him to defeat charlatan David Perdue in their upcoming primary, Kemp having certified the election results from 2020, earning him the opprobrium of Trump and his acolytes.

I then want Kemp to beat Stacey Abrams in the worst way.

That’s who I am, though you shouldn’t have needed reminding.

In reading some of Barry Goldwater’s quotes, however, I came across this one that was rather prescient:

“Those who seek absolute power, even though they seek it to do what they regard as good, are simply demanding the right to enforce their own version of heaven on earth. And let me remind you, they are the very ones who always create the most hellish tyrannies.  Absolute power does corrupt, and those who seek it must be suspect and must be opposed. Their mistaken course stems from false notions of equality, ladies and gentlemen.  Equality, rightly understood, as our founding fathers understood it, leads to liberty and to the emancipation of creative differences.  Wrongly understood, as it has been so tragically in our time, it leads first to resist concentrations of power, private or public, which enforce such conformity and inflict such despotism. It is the cause of Republicanism to ensure that power remains in the hands of the people.”

On 11/20/21 in this space, I wrote of Rep. Gonzalez, one of the 10 Republicans who voted to impeach Donald Trump, and his comments about the former president and the lessons of Jan. 6.

“It looks to me – and I think any objective observer would come to this conclusion – that (Trump) evaluated what went wrong on January 6.  Why is it that he wasn’t able to steal the election?  Who stood in his way?

“Every single American institution is just run by people. And you need the right people to make the right decision in the most difficult times.  He’s going systematically through the country and trying to remove those people and install people who are going to do exactly what he wants them to do, who believe the big lie, who will go along with anything he says.

“And, again, I think it’s all pushing towards one of two outcomes. He either wins legitimately, which he may do, or, if he loses again, he will just try to steal it.  But he will try to steal it with his people in those positions.

“And that’s then the most difficult challenge for our country.  You ask yourself the question, do the institutions hold again?  Do they hold with a different set of people in place? I hope so.  But you can’t guarantee it.”

America is in a dark place.

Gonzalez added: “The country – as much as I despise almost every policy of the Biden administration – can survive bad policy.  The country can’t survive torching the Constitution.”

Barry Goldwater sure would have had a lot to say about the direction of the Republican Party today and fealty to a single man.

---

Former vice president Dick Cheney was on the House floor as it opened Thursday for a moment of silence and brief remarks by Speaker Nancy Pelosi.  Cheney was there in support of his daughter, Rep. Liz Cheney, one of the few Republicans who has condemned Trump, and one of two Republicans serving on the select committee investigating the attack. 

The elder Cheney, who rose through the ranks at the Capitol to be House Republican whip, told reporters, when asked about the current GOP leadership and Jan. 6, “It’s not a leadership that resembles any of the folks I knew when I was here for 10 years.”

He added in a statement afterwards: “I am deeply disappointed at the failure of many members of my party to recognize the grave nature of the January 6 attacks and the ongoing threat to our nation.”

Liz Cheney told reporters: “The future of the country is at stake right now, and there are moments when we all have to come together in order to defend the Constitution. …A party who is in thrall to a cult of personality is a party that is dangerous for the country.”

---

President Biden forcefully denounced Donald Trump for promoting lies and tearing down democracy because he could not stand the fact that he lost a free and fair election, accusing his predecessor and his allies, declaring, “You can’t love your country only when you win.  Those who stormed this Capitol and those who instigated and incited and those who called on them to do so,” he added, “held a dagger at the throat of America, at American democracy.”

Biden condemned Trump for waging an “undemocratic” and “un-American” campaign against the legitimacy of the election system that he likened to the actions of autocrats and dictators in faraway countries.

“The former president of the United States of America has created and spread a web of lies about the 2020 election,” Biden said.  “He’s done so because he values power over principle, because he sees his own interests as more important than his country’s interests and America’s interests, and because his bruised ego matters more to him than our democracy or our Constitution.  He can’t accept he lost.  He refused to accept the results of an election.”

“You can’t love your country only when you win,” the president said.  “You can’t obey the law only when it’s convenient.  You can’t be patriotic when you embrace and enable lies.”

“He’s not just a former president,” Biden added.  “He’s the defeated former president.  He lost by 7 million of your votes.”

Biden assailed Trump for trying to rewrite history and for casting the attackers of a year ago as patriots. “Is that what you thought when you looked at the mob ransacking the Capitol, destroying property, literally defecating in the hallways, rifling through the desks of senators and representatives, hunting down members of Congress?” Biden asked.  “Patriots?  Not in my view.”

Biden also took on efforts by Republicans to recast the narrative of what happened on Jan. 6, which some of them have dismissed as little more than a protest that got out of hand.  “This wasn’t a group of tourists,” Biden said.  “This was an armed insurrection. They weren’t looking to uphold the will of the people.  They were looking to deny the will of the people.”

During parts of Biden’s speech, he signaled certainty that democracy would prevail; at other times he seemed less sure.

“The fragility of democracy is this: That if we are not vigilant, if we do not defend it, democracy simply will not stand. It will falter and fail.”

Donald Trump fired back quickly with a string of written statements issued from Mar-a-Lago.

“Biden is working hard to try and deflect the incompetent job he is doing, and has done, on the horrible Afghanistan withdrawal (surrender), the Borders, COVID, Inflation, loss of Energy Independence, and much more,” Trump said.  “Everything he touches turns to failure.  That’s what you get when you have a rigged Election.”

He added that Biden “used my name today* to try to further divide America,” and added, “The Democrats want to own this day of January 6th so they can stoke fears and divide America.  I say, let them have it because America sees through their lies and polarizations.”

*Biden only referred to Trump as “the former president.”

Trump did not discuss the riot itself at all in his statement.

I watched Fox News’ Tucker Carlson last night, curious to get his take on the day’s events.

In his opening, Carlson asked, on the topic of Jan. 6, “Why are we still talking about this?”

Because Donald Trump literally hasn’t stopped talking of a stolen election since late on the evening of Nov. 3, 2020, and that led to Jan. 6 and its aftermath, that’s why! 

Tucker asked: “Was it a greater threat than inflation?”

Schmucker then said of President Biden’s address: “We’re not going to show his speech because it was awful and weird.”

-----

A new USA TODAY/Suffolk University Poll finds that Americans by overwhelming margins see the nation’s democracy as in peril.

Across partisan lines, more than 8 in 10 Republicans, Democrats and independents say they are worried about the future of America’s democracy.  They disagree on whether the Jan. 6 mob represented an effort to undermine democracy or to fix it.  Eighty-five of Democrats call the rioters “criminals.”  Two-thirds of Republicans say, “They went too far, but they had a point.”

A majority of Republicans, 58%, say Joe Biden wasn’t legitimately elected to the White House, even though audits and investigations in a half-dozen states debunked former President Donald Trump’s claims of voter fraud.

One of those called for the poll, Candice W., 44, a ticket broker from Bountiful, Utah (USA TODAY gave her full name, I’m not), summed it up: “He created doubt where there is no doubt. That is really the risk to democracy, the fact that no one’s ever going to believe anything ever again. There are certain people that will never trust another election as long as they live. They’ll always feel like they were wronged or scammed or whatever.”

She called watching the attack “horrifying.”

With Republicans set to gain control of the House, at which point they will disband the special House Select Committee investigating Jan. 6, the timetable is tight.  An interim report will be released this summer and a final report before the end of the year, chairman Bennie Thompson, D-Miss., said.

A 53% majority of Americans say the investigation is “important for the future of democracy”; 42% call it “a waste of time away from other important issues.”

On that, there is a partisan split that marks almost every aspect of American politics: 88% of Democrats say the committee’s work is important; 78% of Republicans call it a waste of time.

By nearly 4-to-1, 71%-19%, Americans say the nation’s democracy is weaker than it was four years ago. That is almost the same finding as in a USA TODAY/Suffolk Poll taken a year ago, soon after the attack, when that was the view of 70%-17%.

On the question of whether a similar attack on the Capitol could happen again: 48% say it’s not likely, 46% say it is.

Karl Rove / Wall Street Journal

“We’re in an acrimonious period of partisan tribalism and have been for some time.  Both parties are guilty of overwrought denunciations of their political opponents.  My criticisms are often aimed at Democrats; on the anniversary of Jan. 6, I’m addressing squarely those Republicans who for a year have excused the actions of the rioters who stormed the Capitol, disrupted Congress as it received the Electoral College’s results, and violently attempted to overturn the election.

“These apologists say those who stormed the Capitol were innocent patriots, tourists visiting the seat of the national government to petition their elected representatives peacefully.  We’re told that these harmless, ordinary Americans are being persecuted as political prisoners.

“Let’s stipulate that while the thousands who went to the Capitol a year ago were wrong to insist the election was stolen, most weren’t violent as they exercised their First Amendment rights to gather peacefully on the Mall – just as I had seen liberals gather to protest both inaugurations of President George W. Bush.

“But last year there were several thousand protesters willing to use force to disrupt Congress in its constitutional duty to receive and certify the electoral vote.  Some went to Washington with that purpose in mind. Others were swept up in the moment’s savagery, led astray by stronger wills with dangerous motives.

“The leaders of this group were intent on committing violence, some having planned to do so for weeks.  Many wore tactical gear. Some came armed with chemical agents, flagpoles, batons and sticks.  They broke through barricades and assaulted approximately 140 police officers, in some cases with an officer’s own shield or gear. They smashed doors and windows, illegally entered the Capitol, ransacked offices and searched for leaders of Congress, and made dire threats about what would happen if they found them.

“More than 725 people have been charged so far, and law enforcement is searching for hundreds more suspects who appear on video or social media, some recorded attacking police officers.  At least 163 people have pleaded guilty, and 71 have been sentenced.  Only one defendant’s charges have been dismissed.  Many of the most serious trials have yet to be held, as lawyers prepare defenses or negotiate plea deals.

“So, on this anniversary, here’s a simple thought experiment; What if the other side had done it?  What if in early January 2017, Democrats similarly attired and armed had stormed the Capitol and attempted to keep Congress from receiving the Electoral College results for the 2016 presidential election?

“What if Democrats claimed that Donald Trump’s razor-thin victories in Michigan, Pennsylvania and Wisconsin resulted from extensive voter fraud and should be rejected, despite having failed to establish in a single court that extensive fraud had actually occurred?

“What if some of these Democrats breached the Capitol defenses and threatened violence against the Republican speaker, Paul Ryan, and Republican Senate majority leader, Mitch McConnell?

“What if they insisted that in his role as Senate president then-Vice President Joe Biden had sole authority to seat Hillary Clinton’s electors from any contested states and thereby hand her the presidency?

“If this happened, would some of my fellow Republicans have accepted it as merely a protest?  Would they have called patriots those charged with violent acts against our country, its laws and Constitution?  Would they have accepted such extralegal means to change the outcome of a presidential election?

“No they would not.  I’m certain of that.

“If Democrats had done what some Trump supporters did on that violent Jan. 6, Republicans would have criticized them mercilessly and been right to do so.  Republicans would have torched any high official who encouraged violence or stood mute while it was waged and been right to do so.  Republicans would have demanded an investigation to find who was responsible for the violence and been right to do so.

“To move beyond Jan. 6, 2021, we must put country ahead of party.  For Democrats, that means resisting their leadership’s petty habit of aggravating partisan fault lines by indiscriminately condemning all who came to Washington that day.

“We Republicans have a heavier burden.  I’ve been a Republican my entire life, and believe in what the Republican Party, at its best, has represented for decades.  There can be no soft-pedaling what happened and no absolution for those who planned, encouraged and aided the attempt to overthrow our democracy.  Love of country demands nothing less.  That’s true patriotism.”

Editorial / New York Post

“Democrats aim to use Thursday’s anniversary of the Capitol riot to wave the bloody shirt, repeating the ludicrous claims of a GOP ‘war on democracy,’ where hordes of insurrectionists are a lit match away from sparking chaos and violence.

“Sadly, this is nothing more than milking the ongoing gift of former President Donald Trump’s endless denialism about the 2020 election for every last ounce of outrage they can produce.

“We endorsed Trump.  We view President Joe Biden’s performance in the last year as a disaster. But the simple fact is that Trump lost, fair and square: His charges of stolen, suppressed and/or faked voters are baseless.

“We wish he would agree.  Trump should have been remembered for the good he did while in office: triggering an economic boom that delivered record gains for the working class; at last stabilizing the southern border; fostering the vaccines that remain America’s chief weapons against Covid.

“Instead, he is remembered more for his false claims the election was stolen – and for Jan. 6.

“Yes, Democrats and their allies did all they could to loosen voting rules in 2020, using the pandemic as an excuse, and to boost turnout in anti-Trump areas.  But it was all kosher enough under America’s long traditions of partisan combat.

“Trump’s claims of being robbed are every bit as bogus as the Big Lie that Hillary Clinton’s team spun after her 2016 loss, though she managed to sell her ‘Russiagate’ conspiracy theory to a lot more well-connected (and all-too-willing) dupes in government and the media.

“But, where Clinton’s lies led America’s elites to disgrace themselves with hundreds of false ‘news’ stories and a ridiculous impeachment, Trump’s lies produced the disgrace of the Jan. 6 riot – a rampage through the U.S. Capitol by hundreds of deluded fools, exacerbated by unforgivable security failures, motivated by some nutty aim of preventing the final ratification of the presidential results.”

Gerald F. Seib / Wall Street Journal

“When a mob of Trump supporters ransacked the Capitol on Jan. 6 in an attempt to overturn the results of a national election, it was logical to assume that, in the aftermath of such a national embarrassment, two developments would ensue. First, former President Donald Trump’s role as a dominant figure in the Republican Party would be reduced, and, second, the durability of his election-fraud myth would be diminished.

“Almost exactly a year later, neither has happened.

“In some ways, in fact, the opposite may have occurred.  From his Mar-a-Lago exile in Florida, Mr. Trump raises millions of dollars for his political-action committee.  He is endorsing Republican congressional candidates who hew to his view of events, and threatening those who don’t….

“Mr. Trump’s mantra is that the election was stolen from him through some combination of unfair changes in election rules during the coronavirus pandemic and outright fraud (he isn’t very clear on which he is blaming more), and that the rioters on Jan. 6 were seeking to right a wrong.  That they got carried away isn’t his fault, even though he sent them on their way toward the Capitol that day with a warning that ‘if you don’t fight like hell, you’re not going to have a country anymore.’  Mr. Trump hasn’t given an inch on any of those counts, which signals to his supporters that they shouldn’t either.

“Third, Jan. 6 revealed the depths of mistrust in the country.  The FBI’s official website contains 17 videos of the violence at the Capitol on Jan. 6, some so gruesome they are age-restricted so young people can’t see them.  Yet some continue to insist that there wasn’t really much violence, and that the media and prosecutors are exaggerating the misdeeds of Jan. 6.

“That suggests a profound lack of confidence in American institutions, which runs across the political spectrum.  Just as Democrats fault Republicans for not accepting the legitimacy of Mr. Biden’s victory, so do Republicans fault Democrats for undermining Mr. Trump’s legitimacy as president with a long and misguided search for Russian collusion in his 2016 victory.

“This is a problem for both parties – and, really, for everybody.  If Republicans won’t accept the outcome of elections today, the country is just a short step from Democrats refusing to accept the outcome of elections tomorrow.  A year after Jan. 6, the risks of such a downward spiral are as high as ever.”

Wall Street and the Economy

Federal Reserve officials are preparing to move quicker on raising interest rates in a bid to keep the economy from overheating amid high inflation and near-full employment, as revealed in the minutes from the Dec. 14-15 Federal Open Market Committee meeting, released Wednesday. The news spooked the markets that day as it would appear the FOMC will move in March (the March 15-16 meeting) to hike rates, a bit sooner than some traders were betting on.  I thought May, myself.

Prospects for another year of growth above the economy’s speed limit with inflation already strong – along with a larger balance sheet that’s suppressing longer-term borrowing costs – “could warrant a potentially faster pace of policy rate normalization,” per the minutes.

Officials also saw the timing of reducing the $8.8 trillion balance sheet as likely “closer to that of policy-rate liftoff than in the committee’s previous experience.”

The details of the Fed’s pivot toward more aggressively fighting inflation, as telegraphed recently, suggested it will show greater urgency than the gradualism of the past.  They also indicated a desire to smash market perceptions that the central bank is losing its grip on surging prices.

The 5.7% annual increase in the Fed’s preferred inflation gauge in November overshot officials’ 2% target for the ninth consecutive month, toppling their earlier predictions that prices would moderate as supply-chain issues resolved.

It does need to be noted that the Fed’s Dec. 14-15 meeting occurred before infections from the Omicron variant began to skyrocket, so depending on the trajectory of cases and hospitalizations by the Jan. 25-26 meeting, let alone March, the timetable on Fed changes in policy could move out a bit. We’ll see.

St. Louis Federal Reserve Bank President James Bullard said at a meeting in St. Louis that the FOMC can be ready to take the steps needed to combat rising inflation, including a rate increase as early as March once the taper is complete.

“The FOMC is in (a) good position to take additional steps as necessary to control inflation, including allowing passive balance sheet runoff, increasing the policy rate, and adjusting the timing and pace of subsequent policy rate increases,” said Bullard, who votes on the FOMC this year.

“With the real economy strong but inflation well above target, U.S. monetary policy has shifted to more directly combat inflation pressure,” Bullard said, adding that he expects cases of the Omicron variant to slow in the coming weeks.

As a result, the FOMC could decide to increase rates sooner and faster than previously expected, he said, echoing statements in the FOMC minutes of the December meeting.

“The FOMC could begin increasing the policy rate as early as the March meeting in order to be in a better position to control inflation.  Subsequent rate increases during 2022 could be pulled forward or pushed back depending on inflation developments.”

The Fed’s hawkish comments roiled the global bond market as well as our own.

Meanwhile, a record 4.5 million Americans quit their jobs in November while openings remain elevated, highlighting persistent churn in the labor market.  The number of available positions fell to 10.6 million from an upwardly revised 11.1 million in October, the Labor Department’s Job Openings and Labor Turnover Survey, or JOLTS, showed Tuesday.

One million left the leisure and hospitality sector alone.  Transportation and warehousing registered the second-most resignations on record.

Total hires were little changed in November at 6.7 million.

Employers have added 18.5 million jobs since April 2020, still leaving the U.S. 3.9 million jobs short of what it had before the pandemic.

But in Friday’s jobs report for December, the unemployment rate fell to 3.9%, even as the job gains were putrid, 199,000, and yet another month where the figure was well below Wall Street’s expectations.

However, in keeping with a recent pattern, the Labor Department revised November’s tally up from 210,000 to 249,000, and October’s from 546,000 to 648,000.

The reports have been all over the place and haven’t exactly made sense, especially the last two months.  Part of the problem with the latest report is that it was for a survey week ending Dec. 12, before Omicron took hold, so now we wait to see what the January report will look like. 

The below-expectations job gains in December likely reflect labor shortages as well as anomalies with the so-called seasonal adjustment, used by the government to strip out seasonal fluctuations from the data.

Average hourly earnings rose a strong 0.6%, but the 4.7% year-over-year increase was a tick down from November’s 4.8%.

U6, the underemployment rate, fell from 7.7% to 7.3%.

The ISM manufacturing index for December was 58.7 (50 the dividing line between growth and contraction), but this was below expectations, ditto the services figure, 62.0, well below forecasts and a big drop from November’s record 69.1.

The reading on November factory orders was better than expected, 1.6%.

The Atlanta Fed’s GDPNow barometer for fourth-quarter growth is down to a still robust 6.7%.

Europe and Asia

We had the final PMI data for December in the eurozone, with the EA19 composite at 53.3 vs. November’s 55.4. Manufacturing was 58.0 vs. 58.4, services 53.1 vs. November’s 55.9.

German: 57.4 mfg., 48.7 services
France: 55.6 mfg., 57.0 services
Italy: 62.0 mfg., 53.0 services
Spain: 56.2 mfg., 55.8 services
Ireland: 58.3 mfg., 55.4 services
Netherlands: 58.7 mfg.
Greece: 59.0 mfg.
Austria: 58.7 mfg.

UK: 57.9 mfg., 53.6 services (down sharply from November’s 58.5 as Omicron led to a steep fall in spending on face-to-face consumer services).

Joe Hayes / IHS Markit

“The accelerated expansion in output we saw in November unfortunately turned out to be brief. Amid a resurgence of Covid-19 infections across the euro area, growth slowed to the weakest since March in December.  In Germany, where measures to combat Covid-19 have been more stringent than other monitored euro area countries, levels of economic activity broadly stagnated in December.  Nonetheless, slower growth was seen across the board.

“The spread of the Omicron variant had a particularly profound impact on the service sector, reflecting renewed hesitancy among customers due to the novel strain of the virus.  Looser travel restrictions in recent months had facilitated greater levels of tourism, which in turn provided additional support to the eurozone service sector.  However, this was withdrawn in December as overseas demand declined for the first time since May.

“There was also little to cheer with regards to inflation.  Although there was a marginal easing of price pressures, we’re still in excessively hot territory – increases in both input and output costs were the second-quickest on record.

“As euro area nations deal with the latest developments in the pandemic, it’s clear that risks to the economy are now greater as tighter restrictions to curb the spread of Covid-19 are more likely than they have been recently.”

--Separately, the volume of retail trade rose 1.0% in the euro area for the month of November over October, and up a strong 7.8% from a year ago, well above expectations (but pre-Omicron).

But a flash estimate for inflation in the eurozone in December came in at 5.0%, up from 4.9% in November, according to Eurostat, with energy up 26.0% annualized.

Ex-food and energy, the flash estimate was 2.7%, which compares with 0.4% Dec. 2020.

The flash inflation rate in Germany was 5.7%.

So with the above in mind, it should be no surprise that Eurostat also reported that November industrial producer prices rose 1.8% for the month, and have now increased by 23.7% vs. Nov. 2020 in the euro area.

None of this makes for comfortable reading at the European Central Bank, which has consistently underestimated price pressures and come under fire for this from some of its own policymakers.

The ECB sees inflation back under 2% by the end of this year on core, but a number of influential policymakers warn that the risks are skewed towards higher figures and that above-target readings could persist into next year.

But no policy action from the ECB is likely anytime soon.  The bank curbed but extended stimulus only a few weeks ago, and no big review of its stance is likely before March.  The ECB also argues that, unlike in the United States, wage growth, a precondition of durable price pressures, is anemic, while the surge in coronavirus infections will likely limit economic activity and weigh on inflation.

Turning to Asia…in China, the private Caixin manufacturing PMI for December came in at 50.9, with the services reading at 53.1.  Last week, the official government (state-owned enterprises, vs. Caixin’s small- and medium-sized business index) was 50.3 on mfg., 52.7 services.

Japan reported a manufacturing PMI for December of 54.3, with services at 52.1, as pandemic restrictions have been eased.

But household spending, a key metric here, for November was -1.3% vs. a year ago, well below forecasts, ditto the -1.2% month-on-month.

In South Korea, the manufacturing PMI for December was 51.9, while in Taiwan it came in at 55.5.

Street Bytes

--Stocks started 2022 on the wrong foot, with all the major averages falling, especially after the Fed’s hawkish minutes.  The Dow Jones fell 0.3% to 36231, the S&P 500 -1.9% and Nasdaq a whopping 4.5%.  The tech-heavy index is now off 7% from its Nov. 19 high.

Next week we have a slew of important economic data, including on inflation, and we have the start of earnings season.

Monday and Tuesday, Apple Inc.’s stock briefly reached a market value peak of $3 trillion (roughly $182.80 per share), but then failed to hold that gain by the session’s end and finished the week at $172.    Aside from surging demand for iPhones, MacBooks and iPads during the pandemic, the company has an ongoing massive share repurchase program that has helped fuel the stock rally, buying back $348 billion worth in the five years through the September quarter of 2021, reducing its share count by 23% over that period.

--Oil rose on Tuesday as OPEC+ producers agreed to stick with their planned increase for February based on indications that the Omicron variant would have only a mild impact on demand.

OPEC+ agreed to its planned increase of 400,000 barrels per day in oil output in February.  Its decision reflects easing concern of a big surplus in the first quarter, as well as a wish to provide consistent guidance to the market.

“The storm is over,” said one OPEC delegate.

Global manufacturing activity remained strong in December, suggesting Omicron’s impact on output had been subdued.

Analysts warned, however, that OPEC+ may have to change tack if tension between the West and Russia over Ukraine flares up and hits fuel supplies, or if Iran’s nuclear talks with major powers make progress, which would lead to an end to oil sanctions on Tehran.

But then oil surged Thursday to $80 on WTI because of escalating unrest in oil producer Kazakhstan and supply outages in Libya, before closing the week at $78.91.

--U.S. Treasury Yields

6-mo. 0.23%  2-yr. 0.86%  10-yr. 1.76%  30-yr. 2.12%

The yield on the 10-year is at levels not seen in two years, Jan. 2020, pre-pandemic, while the German 10-year (bund) is ‘up’ to -0.05%, which is the ‘highest’ level since May 2019. [It was -0.39% last Dec. 3.]

--Ford Motor on Wednesday reported declines in its December and 2021 U.S. sales despite record performance by its electrified vehicles.

December sales dropped 17% year-over-year to 173,740 vehicles, with car sales down nearly 67%.  EV sales for the month soared 121% to 12,284 units.  Fourth-quarter U.S. sales rose 27% sequentially to 508,451 vehicles, but full-year sales were down 6.8% to about 1.91 million units.

“Last year was a foundational year for Ford in the electrified vehicle segment and this year we continue to expand, adding the F-150 Lightning and E-Transit to our electric vehicle lineup,” said Andrew Frick, vice president of Ford sales in the U.S. and Canada, and curator at the Frick Museum in New York.

The company recently said it aims to almost double the annual production capacity of its F-150 Lightning electric pick-up truck to 150,000 units amid robust demand. [About 200,000 reservations have been placed for the opportunity to order one of the trucks, the company has said; i.e., don’t expect to take delivery of one for a while in many instances.]

For December, Ford also reported double-digit declines in its U.S. truck and sport utility vehicle sales.  But for the 2021 full year, Mustang Mach-E sales came to 27,140 units, making it the second best-selling full-electric SUV in the U.S. behind Tesla’s’ Model Y, Ford said.

My good friend, Dr. W., ordered his Mach-E December 2020 and took delivery on 11/1/21.  I asked him for his early comments this week.

“My only current complaint is that it is very software driven with a ridiculous number of options to pick from on a giant dashboard display. Lots of interesting features…but it’s not super intuitive as I would have hoped.  The cold weather also definitely decreases the range. The nightmare traffic jam on I-95 would really have been awful if only electric vehicles were available.

“My suggestion for folks thinking of an EV now is consider a three-year lease.  Cars should have a much greater range in 3-4 years with much denser and more stable batteries (which can, in turn, absorb a much higher recharging current resulting in road charging potential decreasing to 5-10 minutes).  Once road recharging gets down to the same as filling up with a tank of gas, EVs will take off.”

Ford shares hit $24.31 on Tuesday, its highest close since 2001.  The stock has nearly tripled over the past 52 weeks; the best performer in the S&P 500.

--GM revealed its new Chevrolet Silverado EV on Wednesday during a virtual Consumer Electronics Show.

The electric pickup rivals the Ford F-150 Lightning.  The 2024 Silverado has an expected 400-mile range on a full charge and uses GM’s Ultium Platform.

GM also said on Tuesday that the new 2022 Chevrolet Silverado LD and the GMC Sierra LD will roll out by the middle of the year.  The standard pickup trucks will feature new interiors, generate lower greenhouse gas emissions, add new off-road and luxury packages, and include the addition of Super Cruise as an option for the first time.

Meanwhile, BrightDrop, GM’s electric commercial vehicle business, said Wednesday it struck an agreement to supply electric vehicles to Walmart while announcing an expanded partnership with FedEx.

Walmart has reserved 5,000 EV600 and smaller EV410 delivery vans of BrightDrop, as part of the retailer’s efforts to have a zero-emissions logistics fleet by 2040.  Walmart intends to use BrightDrop vans for the InHome delivery service, which the former aims to expand to 30 million U.S. households by the end of this year from 6 million, according to GM’s subsidiary.

FedEx reserved priority production for 2,000 electric delivery vans over the next few years.  FedEx could also book up to 20,000 more vans in the years to come, BrightDrop said.

BrightDrop’s EV600 is in production and the new eV410 will be available in late 2023, it said.

--But Japanese automaker Toyota Motor Corp. outsold GM in the United States in 2021, marking the first time the Detroit automaker has not led U.S. auto sales for a full year since 1931.

Toyota sold 2.332 million vehicles in the United States in 2021, compared with 2.218 million for General Motors, the automakers said on Tuesday.  GM’s U.S. sales were down 13% for 2021 – and down 43% in the fourth quarter – while Toyota was up 10% for the year.  GM last had lower sales in 2010 at 2.202 million.  [And you saw above, Ford came in at 1.91 million.]

For all of 2020, GM’s U.S. sales totaled 2.55 million, compared with Toyota’s 2.11 million and Ford Motor’s 2.04 million.

It’s all a little deceiving as last year was marred by a shortage of semiconductors used heavily in vehicles, forcing automakers to focus on their most profitable models.  Toyota just did a better job of managing its supply chain and the company said “being No. 1 is never a focus or priority.”

Toyota does not see it as sustainable that it can retain its U.S. sales lead and had no plans to use the 2021 accomplishment in any kind of advertising.

GM under CEO Mary Barra has emphasized profitability over volume, abandoning such money-losing markets as Europe and Russia.

For the entire industry, sales finished 2021 at just under 15 million vehicles, according to Wards Intelligence, with the annual sales rate in the month of December finishing at 12.4 million.  The full-year number was well below the five-year average of 17.3 million from 2015-2019.  IHS Markit forecasts U.S. sales are expected to reach nearly 15.5 million in 2022.  Toyota sees industry sales jumping to 16.5 million this year.

Hyundai Motor America sales chief Randy Parker said in an interview, “If you would have asked me to predict how the year was going to go at the beginning of (last) January, I would have gotten it all wrong because this whole microchip shortage just came out of left field and it wreaked a lot of havoc.”

“But at the same time, it sharpened our skill set,” Parker said.  “I’m very bullish on 2022.”

Hyundai’s U.S. sales rose 19% to more than 738,000 vehicles.

Nissan’s sales fell 20% in the fourth quarter but rose 8.7% for the year. Honda’s sales were up 8.9% for the year.

--Meanwhile, Tesla reported Sunday that it delivered 936,000 cars in 2021, up 87 percent from the year before, despite the computer chip shortage that has disrupted auto production around the world.

In the fourth quarter alone, the company delivered more than 308,000 vehicles, a 71 percent increase from the quarter a year earlier. The overwhelming share of the deliveries were of the Model 3 sedan and the Model Y hatchback.  Wall Street analysts had been expecting deliveries of about 266,000 cars in the fourth quarter, and about 855,000 for the year.

Tesla’s shares soared in response, but fell back the rest of the week on valuation concerns, along with the rest of the Nasdaq market.

Tesla has had issues concerning product quality recently, including a recall of more than 475,000 vehicles for separate defects that could affect safety.

In addition, the company and its Autopilot driver-assistance system have come under closer scrutiny by safety regulators in the U.S.

--Boeing secured an order for 50 new 737 MAX airplanes from Allegiant Air, with options for 50 additional jetliners, marking the plane maker’s first deal with an ultra-low-cost carrier in the U.S., the companies said Wednesday.

Allegiant said it selected the Boeing 737-7 and 737-8-200 models, which are expected to lower fuel use and carbon emissions by 20% compared with its current fleet, which consists of Airbus A319s and A320s.  Allegiant’s prior strategy was to pick up second-hand jets at bargain prices, which had helped it accumulate over 100 jets built by Boeing’s European rival.

The first 737 MAX deliveries are slated for 2023.

Boeing had previously lost hard-fought medium-haul contests to Airbus at Dutch KLM and Australia’s Qantas.  Such “flips” are rare due to the cost of retraining pilots.

--Ryanair flew 9.5 million passengers in December, the airline confirmed on Tuesday.  The Irish carrier said that it operated more than 62,200 flights last month, 81 percent of the available seats.

The 9.5 million was below an earlier forecast of 10 million to 11 million made before the emergence of Omicron prompted governments to impose new travel restrictions.

The 9.5m is multiples of the 1.9 million passengers Ryanair flew in December 2020.  Europe’s largest discount airliner flew 11.2 million people in December 2019, before Covid-19 struck.

Ryanair expected to fly only 6-7 million this month, per a December forecast.

--Nearly 2,000 U.S. flights were canceled Thursday, and at least another 2,600 today, the 13th straight day of more than 1,000 cancellations and the airline industry’s worst stretch since the start of the pandemic.

Carriers have canceled more than 27,000 flights since Christmas Eve, according to FlightAware.

But it is expected the wave of cancellations will ease as infection rates fall and the weather improves.

--TSA checkpoint travel numbers vs. 2019….

1/6…75 percent of 2019 levels
1/5…67
1/4…84
1/3…89
1/2…92 (Sun.)
1/1…69
12/31…71
12/30…86

From here on we’ll really get to gauge the impact of Omicron, at least over the coming few weeks.

--AT&T and Verizon Communications said they agreed to delay their rollout of a new 5G service for two weeks, reversing course after previously declining a request by U.S. transportation officials.

The two companies on Sunday had rebuffed a Dec. 31 request by Transportation Secretary Pete Buttigieg and FAA Administrator Scott Dickson to delay their rollout of a new 5G signal for up to two weeks to allow aviation regulators to address safety concerns at airports on a rolling basis.

U.S. airlines have said that their operations would face significant disruption if the FAA imposes flight restrictions to address the agency’s safety concerns. The FAA and aviation groups worry the new 5G signals, frequencies known as the C-band, could interfere with key cockpit safety systems.

--Shares in Macy’s Inc. fell Wednesday as the company planned to reduce its U.S. store hours for the rest of January as it prepares for potential Covid-19 cases among workers with the Omicron variant driving up infections.

Walmart announced Monday that it had temporarily shut almost 60 stores in Covid hotspots in December to sanitize them against the virus, while Apple closed all of its 12 New York city stores to indoor shopping.

Walmart also said it will now provide up to one week of paid time-off if a worker contracts Covid, instead of its earlier policy for up to two weeks.

--In a case that exposed Silicon Valley’s culture of hubris and hype, Elizabeth Holmes was convicted Monday of duping investors into believing her startup Theranos had developed a revolutionary medical device that could detect a multitude of diseases and conditions from a few drops of blood.

A jury convicted Holmes, who was CEO throughout the company’s turbulent 15-year history, on two counts of wire fraud and two counts of conspiracy to commit fraud after seven days of deliberation.  The 37-year-old was acquitted on four other counts of fraud and conspiracy that alleged she deceived patients who paid for Theranos blood tests, too.

Holmes now faces up to 20 years in prison for each count, although legal experts say she is unlikely to receive the maximum sentence.

--Canada’s manufacturing PMI for December was a solid 56.5, down from 57.2 in November.  There has been growth (above 50) every month since July 2020.

Today, Statistics Canada reported that the economy added 54,700 jobs in December, better than forecast, as the jobless rate fell to 5.9%.

--Bitcoin, which hit an all-time of $69,000 on Nov. 9, touched $41,000 in trading early Friday and sits at about $41,800 Friday evening.

--The inflation rate in Turkey is at 36% these days, with consumer prices rising 13.6% in December alone, the Turkish Statistical Institute released this week.  Turkey’s lira shed 44% of its value in 2021 as the central bank slashed interest rates under a drive by President Tayyip Erdogan to prioritize credit and exports over currency stability.  On Monday, the lira fell a further 4% to 13.7 against the dollar.  The inflation rate here could reach 50% by the spring unless the direction of monetary policy is immediately reversed.

--Sales of electric cars in Norway rose last year by 48%, ensuring that almost two out of every three new automobiles were battery powered and making Tesla the top selling brand there.  Seeking to become the first nation to end the sale of petrol and diesel cars by 2025, oil-producing Norway exempts battery electric vehicles from taxes imposed on rivals using internal combustion engines.

But, remember, sports fans…if you’re thinking you want to go to Norway for clean air, beer is very expensive there. And at the end of the day….

--Tesla was criticized in the U.S. after opening a showroom in China’s controversial Xinjiang region.

The move was welcomed by some in China, but others, such as Republican Sen. Marco Rubio, who sponsored a bill signed into law by President Biden in December that requires firms to prove that goods imported from Xinjiang were not produced with forced labor, spoke out about Tesla’s decision.

Rubio tweeted: “Nationless corporations are helping the Chinese Communist Party cover up genocide and slave labor in the region.”

--Huawei Technologies Co. said revenue dropped by nearly a third in 2021, as the effects of U.S. export restrictions hammered the Chinese tech giant’s main business lines.

Huawei’s revenue fell 29% to about $99 billion for the year, the company said, an unusual decline in full-year revenue for the once booming tech firm.

Chairman Guo Ping said in a year-end letter to employees that Huawei would face another challenging year.

The far-reaching U.S. export controls, which blocked the company from obtaining critical chips and other components, have had the most pronounced impact on its smartphone business, the world’s largest in 2020 before sales all but dried up because of challenges in obtaining chips.

Huawei’s 5G telecom business was also blocked in a number of Western countries following pressure from the U.S., which regards Huawei equipment as vulnerable to espionage or disruption by the Chinese government.  Huawei denies its equipment is a threat and says it is owned by employees and operates independently of the government.

--Samsung Electronics on Friday said its October-December operating profit likely jumped 52% on-year to its highest fourth-quarter profit in four years, helped by solid demand for server memory chips and higher margins in chip contract manufacturing.

The world’s largest memory chip and smartphone maker estimated fourth-quarter profit at $11.5 billion.  Revenue likely rose 23% from the same period a year earlier.

Samsung will formally issue its earnings later in the month.

--Walgreens Boots Alliance raised its earnings guidance for the fiscal year following higher-than-expected results in the first quarter on Thursday, driven by growth across all its segments and higher levels of Covid-19 vaccinations and testing.

For the quarter ended November, Walgreens reported adjusted EPS of $1.68, up from $1.22 a year ago.  The Street called for $1.34.  Sales rose to $33.9 billion from $31.44 billion.  Wall Street was looking for $32.95 billion.

“This strong performance was underpinned by enhanced execution across all of our business segments and supported by ongoing contributions from vaccination and testing,” said CEO Rosalind Brewer on a call with analysts.

Walgreens has administered more than 56 million Covid-19 vaccinations, over 9 million boosters and 22.9 million tests to date, including 15.6 million vaccinations and 6.5 million tests in the first quarter.

U.S. comp store sales grew 7.9%.  Comparable pharmacy sales increased 6.8% due to higher prescriptions filled during the quarter, including vaccinations.

--Americans borrowed more than ever to buy homes in 2021, with mortgage lenders issuing $1.61 trillion in purchase loans last year, according to estimates by the Mortgage Bankers Association.  That is up slightly from $1.48 trillion in 2020 and above the previous record of $1.51 trillion in 2005.

The forces that pushed Americans into the housing market in the early months of the pandemic – low interest rates and a desire for bigger homes – continue to drive up prices and mortgage balances.  Many Americans also just have more cash and savings.  It eventually goes somewhere.

Rising mortgage rates have slowed the wave of refinances that drove the boom in mortgage lending since the spring of 2020, and now the Fed is going to be raising rates a number of times in 2022.

Already, the 30-year fixed rate is 3.22%, according to Freddie Mac, and that was before this week’s big spike in the 10-year.  A year ago, the 30-year stood at 2.65%.

--Bed Bath & Beyond reported miserable earnings for the three months ended Nov. 27, losing $276.4 million, or $2.78 per share, though adjusted for restructuring costs and other items was 25 cents, much worse than the break-even quarter industry analysts had projected.  The company last year lost $75 million in the quarter.

Revenue was $1.88 billion, down sharply from $2.62 billion and also short of the $1.96 billion that Wall Street was looking for.

The company said it struggled to get everything on shelves that shoppers wanted amid ongoing issues tied to backups in the supply chain.

Comparable sales, which includes stores and digital, declined 7% in the third quarter.

For the current quarter ending in February, Bed Bath & Beyond said it now expects revenue in the range of $2.1 billion, also below expectations.

But instead of falling the company’s shares rose on the news as it has gained the attention of those investing in meme stocks.

--Speaking of meme stocks, GameStop Corp. shares soared Thursday after the company announced it is launching a division to develop a marketplace for nonfungible tokens (NFTs) and establish cryptocurrency partnerships, per various reports citing people familiar with the matter.

Chairman Ryan Cohen has been tapping executives from companies including Amazon.com to turn GameStop away from brick-and-mortar and towards e-commerce.

--Hollywood closed out 2021 with more fireworks at the box office for “Spider-Man: No Way Home,” which topped all films for the third straight week and already charts among the highest-grossing films ever.  But even with all the champagne popping for “No Way Home,” the film industry has both optimism and concern over ticket sales that while double those of 2020, are still well below the pre-pandemic pace.

--The New York Times announced it had agreed to buy subscription-based sports website The Athletic for $550 million in an all-cash deal, subject to closing adjustments, confirming earlier media reports.

The acquisition is expected to be immediately accretive to the Times’ revenue growth rate.  The Athletic will be a subsidiary of The Times Company and continue to operate separately.  The Athletic’s founders Alex Mather and Adam Hansmann will stay on in the company.

The Pandemic

The U.S. is urging that everyone 12 and older get a Covid-19 booster as soon as they’re eligible, to help fight the hugely contagious Omicron mutant that’s ripping through the country.

Boosters already were encouraged for all Americans 16 and older, but Wednesday the Centers for Disease Control and Prevention endorsed an extra Pfizer shot for younger teens – those 12 to 15 – and strengthened its recommendations that 16- and 17-year-olds get it, too.

While Omicron can slip past a layer of the vaccines’ protection to cause milder infections, studies show a booster dose at least temporarily revs up virus-fighting antibodies to levels that offer the best chance at avoiding symptomatic infection, even from Omicron.

The rate of Americans who are ending up in the hospital, however, has dropped 50 percent compared to the record highs seen a year ago, data shows.

While new Covid cases have more than tripled in the past few weeks, three percent of those cases are being admitted in hospitals, according to the CDC.

That rate is down from the 6.5 percent of cases hospitalized at the beginning of 2021.  The problem is in the large numbers of Omicron.

The CDC was forced to clarify its rationale behind its decision to shorten recommended isolation and quarantine guidance, and not back more testing to resume normal activities, following criticism that its shift wasn’t driven by current science.

In a posting on its website Tuesday, the CDC said it had opted to change the guidelines based on emerging scientific evidence concerning when and for how long a person is most likely to transmit the highly infectious Omicron variant.

“Infectiousness peaks around one day before symptom onset and declines within a week of symptom onset, with an average period of infectiousness and risk of transmission between 2-3 days before and 8 days after symptom onset,” the agency said.

Last week, the CDC reduced its recommended quarantine and isolation periods in most cases from 10 days to five, with a subsequent five days of masking when around other people.

Some public-health experts said that adding a requirement that people take a rapid antigen test before resuming contact with other people would help prevent the sick or the exposed from unwittingly transmitting the virus to others.

But the CDC didn’t alter its stance on testing in the revisions posted Tuesday.  The agency said that testing was an option for those who have access to at-home screening.

Yup, a giant mess and another black eye for Rochelle Walensky and Co.

Meanwhile, here in New Jersey, which once again is Ground Zero (along with New York), we are now up to over 5,700 hospitalizations, vs. 644 on Nov. 7.  At a certain point, while it’s a plus Omicron isn’t as severe, the sheer number of infections is beginning to overwhelm hospitals all over again as staff becomes infected (or quits).  And you’ve seen the issues with little kids, who aren’t eligible for vaccinations as yet.  What are their long-term side effects going to be?

But as I’ve written recently, we will look back on this period as the “final spasm.”  At the same time, I’m tired of pounding the table on vaccines.  I just ask, for those of you haven’t gotten the shots, and/or the booster, why would you want to be like those young soldiers in the cemetery up the road from Appomattox, some of the last to die in the war?

Covid-19 death tolls, as of early tonight….

World…5,496,795
USA…858,346
Brazil…619,878
India…483,193
Russia…314,604…s/b over 575,000
Mexico…299,933
Peru…202,934
UK…149,744
Indonesia…144,121
Italy…138,697
Iran…131,821
Colombia…130,250
France…125,206
Argentina…117,428
Germany…114,491
Poland…99,428
Ukraine…97,088
South Africa…92,252
Spain…89,934
Turkey…83,388
Romania…58,971
Philippines…51,871
Hungary…39,780
Chile…39,232
Czechia…36,507
Ecuador…33,699
Vietnam…33,877
Malaysia…31,644
Bulgaria…31,471
Canada…30,657
Pakistan…28,961
Belgium…28,446
Bangladesh…28,098
Tunisia…25,643
Iraq…24,198
Egypt…21,909
Thailand…21,799
Greece…21,263
Netherlands…21,065

[Source: worldometers.info]

U.S. daily death tolls…Mon. 767; Tues. 1,847; Wed. 1,802; Thurs. 2,143; Fri. 2,025.

Covid Bytes

--The World Health Organization has warned against describing the Omicron variant as mild, saying it is killing people across the world.

Recent studies suggest that Omicron is less likely to make people seriously ill than previous Covid variants.

But the record number of people catching it has left health systems under severe pressure, said WHO chief Dr. Tedros Adhanom Ghebreyesus.

“In fact, the tsunami of cases is so huge and quick, that it is overwhelming health systems around the world.,” said Tedros.

On Monday, the U.S. recorded more than one million Covid cases in 24 hours.

The WHO said the number of global cases has increased by 71% in the last week, and in the Americas by 100%.  [Just look at the worldometers.info charts if you need convincing.]  The WHO added that 90% of the severe cases worldwide were with the unvaccinated.

Yes, if you are vaccinated, Omicron is less severe compared to Delta, but it is still hospitalizing and killing people.

--The CEO of Moderna, Stephane Bancel, said that he anticipates people will need a second Covid-19 booster shot this fall as the vaccine’s efficacy wanes over the next few months.

Bancel, speaking at a Goldman Sachs healthcare conference on Thursday, said Moderna is working on a booster shot focused on the Omicron variant, however it’s unlikely that it will be available in the next two months.

“I still believe we’re going to need boosters in the fall of ’22 and forward,” Bancel said.

A new study from Israel showed that a fourth dose of the vaccine boosts antibodies five-fold, Israeli Prime Minister Naftali Bennett announced on Tuesday.  The country has already begun dosing immunocompromised individuals.

--The Omicron variant is fueling a Covid-19 surge in India, with new cases climbing nearly 30 percent to 117,000 on Friday, the most since June last year at the tail-end of the deadly second wave of infections driven by the Delta variant.

Cases have risen 11-fold in just two weeks.

“The pandemic is expanding and the surge is exponential,” said Balram Bhargava, who heads the state-run Indian Council of Medical Research.

More than 80 percent of the cases sequenced in the Delhi capital region and financial center Mumbai now involve the Omicron variant.

The good news is that not many people falling sick are needing medical treatment and most are recovering more quickly than in previous waves.

In Mumbai, where the city hit a single-day pandemic record of 20,181 new infections on Friday, only five percent of these required medical help.

--One in 10 people in London had coronavirus last week as Omicron sweeps through Britain, according to official estimates published on Wednesday.  But Boris Johnson said Britain’s rollout of booster vaccines made new restrictions unnecessary as he eased rules on testing for travelers arriving into the country.

The Office for National Statistics estimated that almost 3.75 million people in Britain were infected with coronavirus last week, accounting for one in 15 people in England, one in 20 in Scotland and Wales and one in 25 in Northern Ireland.  The data is based on swabs collected from randomly selected households across the country.

--Italy has made Covid-19 vaccination mandatory for people aged 50 and above in an attempt to ease pressure on its health service and reduce fatalities.  Just look at Italy’s chart.

--French President Emmanuel Macron was accused of using divisive, vulgar language after he used a slang term to say he wanted to make life difficult for unvaccinated people.

“I really want to piss them off, and we’ll carry on doing this – to the end,” he told Le Parisien newspaper.

Three months ahead of a presidential election, opponents of Macron said his words were unworthy of a president.

MPs halted debate on a law barring the unvaccinated from much of public life.

--I was watching a report this week concerning Hong Kong and a traveler there who was about to start a new job but tested positive at the airport upon arrival.  So, he was forced into a quarantine hotel, with strange roommates, for four weeks!  That’s the very nightmare I’ve been writing of in trying to work on travel plans to various spots in Asia.

Two days after I saw the report, Hong Kong officials implemented the city’s strictest restrictions yet, including banning all passenger flights from eight countries (the U.S., Britain, Australia, and Canada among them), as it holds firm to a “zero-Covid” policy amid a growing outbreak of the Omicron variant.

Then today, it quarantined all 100 people, including local legislators, who attended an illegal party after one positive test result emerged from the group.

--In New York City’s courthouses, Omicron is so out of control that arraignments have turned into a hot zone where anyone present receives a Covid-19 exposure alert, public defenders said Wednesday.

“Everyone who is entering these spaces is getting sick,” Legal Aid Society union president Lisa Ohta said at a virtual news conference.

Ms. Ohta said members are testing positive after working a single shift.

--Novak Djokovic was left stranded at an Australian airport overnight, and then placed in a hotel for quarantined individuals, caught in a political maelstrom over whether to honor the World No. 1’s medical exemption from vaccine requirements or send him home due to a visa blunder.

Djokovic, who is seeking a record-breaking 21st Grand Slam win at the Australian Open, touched down in Melbourne Wednesday night after a 14-hour flight from Dubai.  But he was still awaiting permission early Thursday morning to enter the country after it emerged that his team had applied for a visa that does not allow for medical exemptions.

Australia, especially the state of Victoria, has endured the world’s longest cumulative lockdown and an outbreak of the Omicron variant has sent case numbers to record levels.

Prime Minister Scott Morrison said shortly before Djokovic’s arrival that there would be “no special rules” for him on his exemption.  “If that evidence is insufficient, then he won’t be treated any different to anyone else and he’ll be on the next plane home,” Morrison told a medical conference earlier.

Foreign Affairs

Russia/Ukraine/Kazakhstan: Sudden unrest in Kazakhstan this week presented an unneeded distraction for Russian President Vladimir Putin, as he was forced to send paratroopers, with other regional allies contributing forces (part of the Collective Security Treaty Organization), to help Kazakh President Kassym-Jomart Tokayev put down major unrest that swept his country.

Tokayev said today that constitutional order had mostly been restored in the central Asian country.

The Kazakh interior ministry said that 26 “armed criminals” had been “liquidated” and more than 3,000 of them detained, while 18 police and national guard servicemen had been killed since the start of the protest (two found decapitated).

“An anti-terrorist operation has been launched.  The forces of law and order are working hard.  Constitutional order has largely been restored in all regions of the country,” Tokayev said.

Reuters reported seeing armored personnel carriers and troops in the main square of Almaty, Kazakhstan’s largest city, where soldiers fired at protesters a day before.

The announced casualty figures are way understated as there has been heavy fighting.

The violence has been unprecedented in a state ruled firmly since Soviet times by leader Nursultan Nazarbayev (81), who had held on to the reins despite stepping down three years ago as president.

The uprising, which began as protests against a New Year’s Day fuel price hike, swelled Wednesday, when protesters chanting slogans against Nazarbayev stormed and torched public building in Almaty and other cities.  Protesters accused Nazarbayev’s family and allies of amassing vast wealth while the nation of 19 million remained poor.

The unrest has seen the internet and banks mostly shut down across the country.

Tokayev, Nazarbayev’s hand-picked successor, blamed the unrest on foreign-trained terrorists.

The Russian deployment is a gamble by the Kremlin that rapid military force could secure its interests in the oil and uranium-producing nation.

Meanwhile, next week sees critical meetings between the United States, Russia and NATO, with 100,000 Russian troops poised on the border of Ukraine, ready to invade at a moment’s notice.

Putin has issued his demands: he wants the alliance to forswear all further expansion – everywhere, and not just in Ukraine and Georgia, two former Soviet states.  He wants America to stop protecting its allies with tactical nuclear weapons and short- and medium-range missiles. And Putin wants a veto over troop deployments and exercises in the eastern parts of NATO territory and over military cooperation with all former Soviet countries.

Putin, knowing these demands are way over the top and that the U.S. and NATO would never accept them, could be creating a pretext for invading Ukraine.

But given what follows, Vlad the Impaler has to have second thoughts.

David Ignatius / Washington Post

“How can the United States and its allies help Ukraine become a porcupine – a prickly, stubborn nation that would be hard for an invading Russian army to digest?  Top U.S. officials are mulling this question as they prepare for a crucial meeting with Russia on Monday.

“Russia is heading to Geneva with what amounts to an ultimatum: Unless President Vladimir Putin gets security guarantees from the West, he’s prepared to invade. Biden administration officials say they want a diplomatic solution, but they’ve also been delivering warnings through public and private channels that an invasion would be bloody, protracted and extremely damaging for Russia.

“ ‘What you’re seeing is a concerted effort by the administration and its allies to make it clear to Putin that an invasion of Ukraine would be a very bad idea,’ Air Force  Secretary Frank Kendall said in an interview Thursday. The Air Force has flown B-52 bombers and RC-135 reconnaissance planes over eastern Ukraine in recent weeks, as part of its effort to deter Russia.

“Ukraine was a pushover for Russia in its 2014 seizure of Crimea, but a lot has changed since then. The Ukrainian army is better trained and equipped; the population is more united against Russian interference; and the United States and NATO allies are ready to provide weapons and training for a long battle of resistance if Russian forces move across the border toward Kyiv.

“U.S. officials view Ukraine as potentially similar to Iraq, a country that the United States tried and failed to transform through military power after invading in 2003.  The populations and land areas of the two nations are roughly equal; both are about 70 percent urbanized. Both have ethnic fractures and a streak of independence.

“The United States and its allies have begun thinking carefully about how they would support a Ukrainian insurgency with training and weapons, including Stinger antiaircraft missiles….

“To stiffen Ukraine’s ability to resist, the United States and NATO have dispatched teams in recent weeks to survey air defenses, logistic, communications and other essentials.  The United States likely has also bolstered Ukraine’s defenses against Russian cyberattacks and electronic warfare.  Once the terrain is frozen in February, Russia’s far larger army could surge toward Kyiv from the north, east and south.  But the aftermath would probably be a long, arduous campaign….

“Putin is telling Russians that an invasion may be necessary to stop NATO’s encroachment. The paradox is that a Russian attack would probably produce the very outcome Putin wants to avoid.  NATO has discussed plans to move troops forward after an invasion, which would make Russia less secure.

“A protracted war in Eastern Europe would have other consequences that are hard to predict. As in the Syrian civil war, millions of refugees would stream across the border, straining the European Union.  But a war would stress Russia, too, as body bags arrive home in Moscow, adding to Putin’s domestic political problems.  Ukrainian insurgents might seek havens in Poland and Romania, further complicating the situation.

“This showdown is a test of resolve, and Putin probably thinks he has a big advantage over President Biden, who is relatively unpopular and leads a sharply divided country.  But stung by criticism of the chaotic U.S. withdrawal from Afghanistan, Biden will resist any repeat in Ukraine.  Another plus for Biden: His team has skillfully shared intelligence and conducted joint planning with NATO allies.

“Russia’s border worries aren’t limited to Ukraine.  Moscow and its allies from the former Soviet Union sent troops Thursday to quell an uprising in Kazakhstan.  Post-Soviet life is getting messier, in Belarus, Ukraine and now Kazakhstan. Quelling rebellions on Russia’s periphery will stretch Putin’s resources.

“Putin’s biggest disadvantage in Ukraine may be that he has lost the element of surprise that was so effective in 2014.  The whole world is watching.  When you try to make a ‘net assessment’ of the Ukraine confrontation, an invasion looks very costly.  But history is a recurring story of overconfident leaders making foolish mistakes.”

One side item…former heavyweight boxing champ Vitali Klitschko threw a verbal jab at President Putin as he began training with Ukraine military reservists amid the growing tensions between the two countries.

Klitschko, now mayor of Kyiv, described Putin as a “gangrene” afflicting Europe.

“Many of us served in the army and those skills had to be restored,” Klitschko said in comments to the Daily Telegraph.  “I think that such training is essential for top and middle-level officials of a country that has been at war for almost eight years.”

The 6’7” PhD dubbed “Dr. Ironfist,” reportedly said his pugnacious background would serve Ukraine’s largest city well in the event of a conflict.

“I think it is more about character traits that all professional athletes share. Self-discipline, meticulousness, persistence and a strong sense of focus are key principles that help you succeed, no matter what you are doing,” he told the Telegraph.

“As for my celebrity status, my connections are very helpful and give me a big advantage,” he added.  “Because Ukraine cannot overcome the tough challenges it faces without friends and reliable partners.”

Don’t underestimate Klitschko’s leadership value.

China/Taiwan: Taipei’s air force staged drills to intercept Chinese planes, simulating a war scenario, as it sought to show its combat readiness amid heightened tensions with China, which claims the island as its own.

The exercises were part of a three-day drill to show Taiwan’s battle readiness ahead of the Lunar New Year holiday at the end of this month.

Taiwan has termed China’s military activities as “grey zone” warfare, designed to both wear out Taiwan’s forces by making them repeatedly scramble, and also to test its response.

In a new year message for China last week, Taiwan President Tsai Ing-Wen said military conflict is not the answer.  Beijing responded with a stern warning that if Taiwan crossed any red line it would lead to “profound catastrophe.”

Seth Cropsey / Wall Street Journal…Cropsey former deputy undersecretary of the Navy and a former naval officer…

“A crisis may be imminent in Ukraine as Vladimir Putin gathers troops on the Russian border for a possible invasion.  American policy makers have also begun focusing on a potential conflict in Taiwan, one that is coming to a boil more slowly.  But American statesmen ought to understand: These events can’t be viewed in isolation; they are connected and part of a larger political competition for Eurasia.”

[Cropsey then covers much of what David Ignatius does when it comes to Russia and Ukraine.]

“Although separated by geography, Ukraine and Taiwan occupy similar positions in the Russian and Chinese strategic experience and historical imagination.  Capturing each is essential to all other strategic objectives. …For the Chinese Communist Party, seizing Taiwan would allow the country to break out of the First Island Chain and conduct offensive operations against Japan, the Philippines and even U.S. territories in the Central Pacific….

“Taiwan is proof that Chinese-speaking peoples are fully capable of governing themselves.  The modern Communist Party stems from a brutal revolutionary regime that savaged the Chinese people, murdering millions through its messianic ambitions and sheer incompetence.  Only by consuming Taiwan can China confirm its superiority.  Given the political capital the Communist Party has invested in subduing Taiwan, it may no longer have a way to de-escalate even if it wanted to.

“The clearest obstacle to Russian and Chinese escalation is Ukraine’s and Taiwan’s affiliations with the U.S. and its allies.  Mr. Putin understands that a spiraling conflict with NATO would overwhelm the Russian military.  Unable to hide casualty counts as he did in Syria, Libya and Ukraine in 2014, he would face domestic opposition.  Mr. Putin has an incentive to isolate Ukraine militarily and separate the issue from NATO, striking only when the time is right.

“Similarly, a Sino-American conflict involving a broader Pacific coalition would prove dangerous for the Communist Party’s survival: A blockade against Chinese Middle Eastern resource imports could destroy the regime in weeks to months.

“Yet a fait accompli against Taiwan is more viable than a similar strike against Ukraine.  Russia’s likely strategic objective would be the capture of a land corridor between Donbas and Crimea.  Yet in 2014, the Ukrainian armed forces, reeling from Russia’s annexation of Crimea and relying upon paramilitaries for additional combat power, repulsed a Russian offensive against Mariupol and drove Russian and separatist forces back to their current salient.

“Seven years of warfare have given the Ukrainian military valuable combat experience.  Ukrainian society, even in the east, is increasingly hostile to Russia. The Ukrainian public seems willing to accept casualties….

“By contrast, Taiwan is small and densely populated.  Its military isn’t equipped to sustain air and sea control around the island, a prerequisite for defending against amphibious invasion. And it is highly likely that the Communist Party has positioned intelligence assets on Taiwan ready to sow discord throughout Taiwanese society and disrupt civilian communications.  The question for the People’s Liberation Army is less whether it can take Taiwan, but whether it can succeed before a potential American and allied coalition can respond.

“With China and Russia in strategic cooperation, this is a very dangerous situation.  The margin of force between potential enemies in the Western Pacific is far thinner than in Easter Europe, given China’s increasingly capable military.  Russia wouldn’t have to deploy major ground or naval units to the Asia-Pacific, nor time its offensives with China’s.  The Russian Pacific Fleet has enough submarines to bog down Japanese and U.S. units needed to defend Taiwan in shielding the Japanese home islands.  That would make China’s mission much more likely to succeed.

“Roughly concurrent offensive operations in two hemispheres would overstress American and allied resources.  Taiwan must become capable of defending itself.  But more broadly, the U.S. must begin thinking about its strategic challenges globally, not in regional segments. This is a contest for Eurasia – and thus for the world.”

David Satter / Wall Street Journal

“Thirty years (after the fall of the Soviet Union), we no longer face an adversary like (the U.S.S.R.), which threatened to overrun Europe and was capable of making its influence felt in every corner of the globe.  Yet the perseverance and sense of honor that defeated the Soviet Union are still needed today.

“The U.S. withdrawal from Afghanistan is a painful reminder of how far we have come.  Communism and radical Islam are ideologies that divide the world into the elect and the profane, deny individuality and suppress free will.  Both treat man-made dogma as infallible truth and seek to impose it by force.

“Against this background, the Afghan war was lost the minute Americans began repeating ‘no more endless wars’ and cynically disregarding those we would leave behind, announced we were heading for the exits.

“The Soviet Union is part of our past, but our task is to draw the proper lessons from its demise.  Instead, the U.S. has turned inward. The defense of universal values has been replaced with internal political fights over such issues as climate change and gender identity. This is a tragic and dangerous situation.  Soviet communism was defeated, but history moves in cycles.  It is foolish to think we will never face an ideological challenge again.”

North Korea: Pyongyang said it test fired a “hypersonic missile” this week that successfully hit a target, state news agency KCNA reported on Thursday, as the country pursues new military capabilities amid stalled denuclearization talks.

The launch on Wednesday was the first by North Korea since October and was detected by several militaries in the region, drawing criticism from the United States, Japan and South Korea.

North Korea first tested a hypersonic missile in September, joining a race headed by major military powers to deploy the advanced weapons system.

Unlike ballistic missiles that fly into outer space before returning on steep trajectories, hypersonic weapons fly toward targets at lower altitudes and can achieve more than five times the speed of sound – or about 3,850 mph.

KCNA claims that in Wednesday’s test, the “hypersonic gliding warhead” detached from its rocket booster and maneuvered 75 miles laterally before it “precisely hit” a target 430 miles away.

More maneuverable missiles and warheads are aimed at being able to overcome missile defenses like those wielded by South Korea and the United States, analysts have said.

Did the North actually pull this off as claimed.  There are serious doubts, but no doubt they are making progress on the program.

Earlier, leader Kim Jong Un called for solutions to economic hardships and development of military prowess in a speech at a major policy meeting, state media reported on Saturday.

Food shortages and other domestic hardships were put in the foreground as Kim laid out plans for 2022 at the plenary meeting of the ruling Worker’s Party’s central committee.  He also vowed to build up North Korea’s military in light of the “destabilizing” situation on the Korean Peninsula and international politics.

And Kim pledged to “boost agricultural production to completely resolve the country’s food problems,” according to the state media report.

The 37-year-old Kim recently wrapped up his first decade in power.  And, boy, what a great track record he’s put together, right, boys and girls?

Iran: Progress has been made regarding the Iran nuclear talks although time is running out, France’s foreign minister said on Friday.  Indirect talks between Iran and the United States on salvaging the 2015 Iran nuclear deal resumed on Monday.

Western diplomats have indicated they are hoping to have a breakthrough by the end of January or early February, but sharp differences remain with the toughest issues still unresolved.  Iran has rejected any deadline imposed by Western powers.

“I remain convinced we can reach a deal.  Bits of progress have been made in the last few days,” Jean-Yves Le Drian told French media.  “We have been heading in a positive direction in the last few days, but time is of the essence, because if we don’t get an accord quickly there will be nothing to negotiate.”

In an interview on Thursday, Iran’s foreign minister also suggested the situation was positive, but repeated Tehran’s position that all sanctions must be lifted and that Washington should provide guarantees that it will not pull out again.

This week saw the arrival in Vienna of South Korea’s Vice Foreign Minister to discuss with Iran, the United States and other parties the possible release of $7 billion of frozen Iranian assets held in the Asian country because of U.S. sanctions.  Any release would need to be approved by Washington.  The ministry said in a statement that the vice minister had agreed with the Iranians that the release of the frozen assets “should take place in an urgent manner.”

Western powers have said progress was too slow and negotiators had “weeks not months” left before the 2015 deal becomes meaningless.

After Donald Trump pulled Washington out of the deal in 2018, re-imposing U.S. sanctions, Iran breached many of the deal’s nuclear restrictions and has kept plowing ahead, well beyond them, since.

Random Musings

--Presidential approval ratings….

Gallup: 43% approve of President Biden’s job performance, 51% disapprove; 40% of independents approve (Dec. 1-16).

Rasmussen: 41% approve, 58% disapprove (Jan.7)

--A new USA TODAY/Suffolk University poll raises a red flag for Republicans on the midterm elections, while offering mixed advice for President Biden on whether he should fight or fold on his big domestic initiative.

Republicans have become increasingly confident they will regain control of the House and perhaps the Senate but the party has lost the 8-point advantage it had on the generic congressional ballot in November’s poll.  Now, unnamed Democratic candidates narrowly lead unnamed Republicans by 39%-37%.

That’s a big shift from November, when Republicans led 46%-38%.  Democrats haven’t gained as much as Republicans lost some voters to the ranks of the undecided, up to 24% from 16%.

At the same time, Biden’s job approval is just 40% vs. 54% disapproval.  One reason, by 62%-33%, those surveyed say Biden isn’t a strong leader.

Kamala Harris’ approval rating is 32%, which is actually an improvement over November’s 28%.

As for Build Back Better, 38% say the president should move on to other initiatives, 34% say he should keep fighting for it and 21% say he should scale it back in an effort to get it passed.

--Donald Trump abruptly canceled his plans to hold a press conference on the first anniversary of the Capitol riot, as I told you last week was supposed to be the case.

“In light of the total bias and dishonesty of the January 6th Unselect Committee of Democrats, two failed Republicans, and the Fake News Media, I am cancelling the January 6th Press Conference at Mar-a-Lago on Thursday,” Trump said in a statement on Tuesday.

“What has become more and more obvious to ALL is that the Lamestream Media will not report the facts that Nancy Pelosi and the Capitol Sergeant-at-Arms denied requests for the D.C. National Guard or Military to be present at the Capitol. Their emails and correspondence with the Department of Defense exist, but the media won’t ask for this evidence, or report the truth!” Trump added.

The story is that Trump canceled because he realized the networks weren’t going to cover it, including Fox News.

Republican Sen. Lindsey Graham (S.C.), a Trump confidante, said he told the former president over a weekend golf game at Mar-a-Lago “that the upside of a news conference is pretty small.  You’re in the driver’s seat.  It will be an event that won’t penetrate the way you would like and focus on election reform.  With every passing day your hand gets stronger.  And I didn’t think a news conference advanced the ball.”

The House Select Committee said this week it wanted to talk to Fox News host Sean Hannity because he had relevant communications with the president and his staff while the riot was under way and in the days following it.  The panel’s leaders pointed to excerpts of Mr. Hannity’s text messages, such as one Jan. 5, 2021, in which the committee said he wrote to then-White House chief of staff Mark Meadows that “I do NOT see January 6 happening the way he is being told,” referring to Trump.

The committee also disclosed a note Hannity sent to Meadows and Rep. Jim Jordan – before the Jan. 20 inauguration of Biden – in which he wrote: “He can’t mention the election again. Ever.”

Hannity added, in what the committee said was an apparent reference to Trump, “I did not have a good call with him today.  And worse, I’m not sure what is left to do or say, and I don’t like not knowing if it’s truly understood.  Ideas?”

--A new Reuters/Ipsos poll has Donald Trump holding a commanding lead over other potential Republican candidates in the 2024 presidential election, leading Fla. Gov. Ron DeSantis by 43 percentage points.

Asked who they would support in 2024, 54 percent of Republicans picked Trump, while 11 percent chose DeSantis and 8 percent selected former Vice President Mike Pence.

--New York Attorney General Letitia James recently subpoenaed former president Trump and his two eldest children, demanding their testimony in connection with an ongoing civil investigation into the family’s business practices, according to a court filing made public Monday.

The subpoenas for Trump, his son Donald Jr. and his daughter Ivanka stem from an investigation “into the valuation of properties owned or controlled” by Trump and his company, the Trump Organization, the filing said.

The Trumps are expected to file court papers seeking to quash the subpoenas.

Trump sued James last month, seeking to end the investigation after she requested that he sit for a Jan. 7 deposition.

--Albany County, New York, prosecutors said Tuesday that they wouldn’t move forward with a misdemeanor sex crime charge against former Gov. Andrew Cuomo, removing the most immediate legal threat to the embattled Democrat.

Cuomo was charged last October with forcibly touching his assistant Brittany Commisso during a 2020 encounter at the Executive Mansion in Albany.  Ms. Commisso spoke to investigators working for Albany County Sheriff Craig Apple, whose office filed the charge against Cuomo without coordinating with the district attorney, P. David Soares, officials said.  Cuomo had been scheduled to be arraigned Friday in Albany City Court.

Soares, a Democrat, said that his office found Ms. Commisso cooperative and credible, but it was dropping the charge because “after review of all the available evidence we have concluded that we cannot meet our burden at trial.”

Soares said he remained “deeply troubled by allegations like the ones at issue here.  Although avenues for criminal prosecution in these cases are sometimes limited, I encourage victims of workplace harassment and abuse to continue to come forward and bring these issues to light so that these important discussions can continue.”

Cuomo is also being investigated for the potential misuse of state resources in the production of his pandemic memoir as well as the state’s Covid-19 policies in nursing homes.  He has denied wrongdoing on both fronts.

--Twitter said it banned the personal account of far-right Rep. Marjorie Taylor Greene for multiple violations of the platform’s Covid-19 misinformation policy.

The Georgia Republicans’ account was permanently suspended under the “strike” system Twitter launched in March, which uses artificial intelligence to identify posts about the coronavirus that are misleading enough to cause harm to people.

In a statement on the messaging app Telegram, Greene blasted Twitter’s move as un-American.

The ban applies to her personal account, but does not affect her official Twitter account, @RepMTG.

--A 2009 settlement agreement between late financier Jeffrey Epstein and Virginia Giuffre provided a release from liability for “any other person or entity” who could have been a defendant against claims by Giuffre, a court filing showed on Monday.  The deal, which provided for Giuffre to be paid $500,000, was made public as part of Giuffre’s civil lawsuit accusing Britain’s Prince Andrew of sexual abuse.

Giuffre’s lawsuit accuses Andrew of forcing her to have sex more than two decades ago when she was under 18 at the London home of former Epstein associate Ghislaine Maxwell, and abusing her at two of Epstein’s homes.

So it was up to New York City federal District Judge Lewis Kaplan to determine whether the clause in the 2009 settlement shields others from liability should Giuffre sue them.

Rebutting Andrew’s lawyers that claim Giuffre failed to “articulate what happened to her at the hands” of the prince, on Tuesday, Judge Kaplan forcefully disagreed.

“It was sexual intercourse, involuntary sexual intercourse,” Kaplan told defense attorney Andrew Brettler.  “There isn’t any doubt about what that means.”

Kaplan closed the virtual hearing by saying he would decide “pretty soon” whether the lawsuit will proceed.

[At week’s end, there is a chance Maxwell’s conviction could be overturned and a new trial declared.  Not likely, but a possibility due to a juror who works as an executive assistant at Carlyle.  In video and newspaper interviews since the Dec. 29 verdict, Scotty David said he was a victim of sex abuse as a child and that his story helped sway other members of the panel who questioned the credibility of Maxwell’s accusers.  A big issue will be just how truthful he was on his juror questionnaire.]

--Poor South Africa can’t catch a break.  A day after the funeral for the beloved Desmond Tutu, a large fire at the Houses of Parliament gutted many of the buildings, doing untold damage to historic structures, archives, and artwork.

The National Assembly building, where the Parliament meets, was gutted. 

--Twelve people, including eight children, died in a tragic apartment building fire in Philadelphia on Wednesday morning.

The fire is among the city’s deadliest ever and officials do not as yet have an official cause, though a child may have lit a Xmas tree.

Eight people managed to escape the building through one of the two exits.

There were four smoke detectors in the building and fire investigators said none were operational, though the building had been inspected in May, according to the Philadelphia Housing Authority, which also said there were six, not four, detectors.  The question will be, did the inspector(s) actually check the detectors?

[Having recently been through a home inspection in my town of Summit, I can tell you the inspector checked each one of them.]

--Five Americans died of rabies last year – the largest number in a decade – and health officials said Thursday that some of the people didn’t realize they had been infected or refused life-saving shots.

The CDC said three of the deaths, all stemming from contact with bats, could have been prevented.

--Several U.S. cities set new records for murders last year. Philadelphia, Portland, Ore., Louisville, Ky., and Albuquerque, N.M., had their deadliest years on record.  Philadelphia, the nation’s sixth-largest city, had 562 homicides, surpassing its previous high of 500 set in 1990.

Criminologists and local law-enforcement officials don’t agree on the reasons for the surge in violent crime. Some cite stress from the pandemic.  Some point to frayed relations between law enforcement and Black communities after police killings, and others blame bail reform and moves in some cities to bring fewer prosecutions.

Homicides rose by 4% in 22 major American cities through the third quarter of 2021, according to a study by the Council on Criminal Justice, a think tank focusing on criminal-justice policy and research.

In 2020, murders in the U.S. rose nearly 30% from the prior year to 21,570, the largest single-year increase ever recorded by the FBI.

New York City, which recorded a nearly 45% increase in 2020, had a 4% murder rise through Dec. 26, 2021, when compared with the same period the prior year.  Chicago, which had a 55% increase in 2020, had a 3% rise in 2021.

And in Dallas, murders were down 13% in 2021 after the city had its highest murder total in more than 15 years in 2020.

--The three white men convicted of murdering Ahmaud Arbery nearly two years ago were sentenced today to life in prison, two of them, Travis and Greg McMichael, without the possibility of parole.

--After one of the driest years in recent memory, Los Angeles – and California – is off to a good start on the water front.  The state received more precipitation in the final three months of 2021 than in the previous 12 months, the National Weather Service reported.

The three-month tally of 33.9 trillion gallons of water since the start of the water year (Oct. 1 thru Sept. 30) compares with Lake Tahoe, which holds about 40 trillion gallons.

But as the 2021 water year was California’s driest in a century, the state still needs a lot more.

“Not getting paid for three months and then getting a normal paycheck doesn’t put you back to normal in your bank account,” said Noah Diffenbaugh, a climate scientist at Stanford University.

--As alluded to above in my remarks on Tesla, we had a little situation on Interstate 95 in Virginia on Monday night into Tuesday.  Thousands of cars and tractor trailers stranded as the result of a heavy snowstorm that fell on top of rain that had frozen over, overwhelming the road crews.

Even Virginia Sen. Tim Kaine was stranded in his car for 27 hours, a commute from his home to the Capitol that typically takes two hours.

Then yesterday we had a similar situation in Kentucky as a result of another storm and a 75-car pileup on the interstate.

---

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

God bless America.

---

Gold $1796
Oil $78.91

Returns for the week 1/3-1/7

Dow Jones  -0.3%  [36231]
S&P 500  -1.9%  [4677]
S&P MidCap  -1.7%
Russell 2000  -2.9%
Nasdaq  -4.5%  [14935]

Bulls 50.5
Bears
23.5…splits the prior two weeks…42.2/24.1 (12/21); 46.4/23.8 (12/28)

Hang in there.

Brian Trumbore