Week in Review

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Week in Review

05/28/2022

For the week 5/23-5/27

[Posted 8:30 PM ET, Friday]

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Edition 1,206

Tuesday’s assault at an elementary school in the heavily Latino town of Uvalde, Texas, carried out by another 18-year-old gunman, Salvador Ramos, armed with an AR-15 semi-automatic rifle, killed 19 children and two teachers.

It was the deadliest school shooting at a U.S. school since a gunman killed 20 children and six adults at Sandy Hook Elementary in Newtown, Conn., in Dec. 2012.

Families waited hours for word on their children.  The silence at the town civic center was punctuated with screams and wailing, “No! Please, no!”

Thursday, Lieut. Chris Olivarez of the Texas Department of Public Safety said in an interview with CNN that the officers were operating with the goal of ending the violence while preserving life.  He added that officers did not initially know where exactly Ramos was located when he started firing at them.

“At that point, if they proceeded any further not knowing where the suspect was at, they could’ve been shot, they could’ve been killed, and that gunman would have had an opportunity to kill other people inside that school,” Olivarez said.

Wednesday, Texas Gov. Greg Abbott (R) had claimed that a “quick response” by law enforcement had saved lives.  That was one of an extraordinary series of lies in the first 48 hours.

We then learned today from the director of the Texas Department of Public Safety, Col. Steven McCraw, that some 19 officers who were inside the school, waited around an hour to enter the classroom where the gunman had locked himself in because a commander on the scene incorrectly thought no lives were at risk.  For about 45 minutes in the interim, a student was calling 911 multiple times from inside the classroom, telling police in a whisper that there were multiple dead and that there were still “eight to nine” students alive, McCraw aid.

“Obviously, based upon the information we have, children in that classroom were at risk and it was in fact still an active shooter…It was the wrong decision. Period,” said McCraw.

The commander on scene believed with no lives at risk, it was better to wait until a tactical team could get keys to the classroom before entering, according to McCraw.  A Border Patrol tactical team ultimately did so and killed the shooter.

“The on-scene commander at that time believed it had transitioned from an active shooter to a barricaded subject,” McCraw said.

Children were bleeding to death.

We also learned a school security officer was off site when the gunman crashed a truck into a ditch outside Robb Elementary School and began shooting at people outside a funeral home across the street, according to McCraw. The officer arrived soon after hearing about the incident but mistakenly thought a different person was the gunman and bypassed Ramos, who was then in the school parking lot, intermittently shooting, McCraw said.  Ramos then walked into the school through an unlocked door…a door a teacher had propped open minutes before, McCraw said.

Yesterday, we had been told the school security officer had confronted Ramos. 

Ever since the 1999 mass shooting at Columbine High School, which left 13 people dead, police officers have been trained to immediately pursue and neutralize active threats.

What we saw Tuesday was egregious, gross incompetence.  The children did the right thing.  The adults didn’t.  Officials let the children and their families down.  That is inexcusable at this point in our history…a now decades-long history of gun violence.

I’m disgusted.  I’m also biting my tongue only because it is Memorial Day weekend.

I’ll leave it there for now.  Some outside commentary on the topic can be found below.

But having just watched former President Donald Trump’s speech at the NRA Convention, I can’t help but respond to his statement: “We all know what they want…total gun confiscation.”

I have never, ever, said anything against the Second Amendment.  And I am one of those “law and order conservatives” Trump likes to talk about.

But there is no Right to an assault weapon in the Constitution.  And don’t give me this slippery slope garbage. 

I have also made the decision that this column is ending in its current format next January.

---

We have entered a critical period, perhaps of just a few weeks, in Putin’s War against Ukraine, as Russia attempts to take full control of the eastern Donbas region, having literally obliterated much of it.

Ukraine’s President Volodymyr Zelensky accused the Kremlin of pursuing an “obvious policy of genocide.”  The mayor of the critical city of Sieverodonetsk said that 1,500 of its citizens have been killed and 60% of its residential buildings destroyed.  Russia renewed attacks on Kharkiv, leaving at least eight dead, as I go to post.

But the Donbas is still a relatively small part of Ukraine, and the concentrated attack in the region, now after more than 90 days of war, is also an example of shrinking Russian ambitions.  After all, Russian separatists already controlled roughly half of the Donbas before Putin’s full-blown invasion Feb. 24.

Last time, though, I talked of the fate of those Ukrainian soldiers from the Azovstal steelworks in Mariupol who were forced to surrender.  There is no doubt they are being executed.   There has been zero word on them, as I suspected.

But we are learning that up to one million Ukrainians, largely from the Donbas, have been sent to filtration camps in Russia…many of them then shipped 10,000 miles to the Far East…Sakhalin Island.

It is all part of Vlad the Impaler’s grand scheme to wipe out the Ukrainian people. 

And so, as the war unfolded this week….

--Last Saturday….

Turkey’s President Tayyip Erdogan told Finnish President Sauli Niinisto in a phone call that overlooking terrorist organizations that pose a threat to a NATO member is not in the spirit of the alliance. Erdogan also said Ankara expected respect and support for its fight against terrorist organizations that threaten its national security and people, according to a statement by the Turkish presidency.

--Ukrainian presidential advisor Mykhailo Podolyak said making concessions would backfire on Ukraine because Russia would hit back harder after any break in fighting.

“The war will not stop (after any concessions). It will just be put on pause for some time,” he told Reuters in an interview.  “After a while, with renewed intensity, the Russians will build up their weapons, manpower and work on their mistakes, modernize a little, fire many generals.  And they’ll start a new offensive, even more bloody and large-scale.”

Podolyak dismissed as “very strange” calls in the West for an urgent ceasefire that would involve Russian forces remaining in territory they have occupied in Ukraine’s south and east.  “The (Russian) forces must leave the country and after that the resumption of the peace process will be possible,” he said.

Both sides say peace talks have stagnated.

Podolyak said a ceasefire would play into the Kremlin’s hands.

“They want to lock in some kind of military successes.  There will definitely be no military successes given the help from our Western partners,” he said. “It would be good if the European and U.S. elites understand to the end: Russia can’t be left halfway because they will (develop) a ‘revanchist’ mood and be even more cruel… They must be defeated, be subjected to a painful defeat, as painful as possible.”

--Sunday….

“The war must end with the complete restoration of Ukraine’s territorial integrity and sovereignty,” said Ukrainian presidential advisor Andryi Yermak Sunday on Twitter.  “That is, our victory.  Our common victory with the civilized world,” he wrote.

Poland’s President Andrzej Duda told Ukrainian lawmakers in Kyiv on Sunday that “Half-measures should not be used when aggression should be stopped,” and “Only Ukraine has the right to decide about its future.”

Duda added: “Worrying voices have appeared, saying that Ukraine should give in to Putin’s demands.  Only Ukraine has the right to decide about its future…nothing about you without you,” he added, to a standing ovation in the chamber.

Duda said that the international community must demand that Russia completely withdraw from Ukrainian territory.

“If Ukraine is sacrificed for…economic reasons or political ambitions – even a centimeter of its territory – it will be a huge blow not only for the Ukrainian nation, but for the entire Western world,” Duda said.

Poland has been a tremendous ally of Ukraine. 

--The Kremlin continued threatening the West with potential nuclear strikes by boasting that Russia’s arsenal will soon include 50 new missiles, dubbed “Satan-2” by NATO.

Dmitry Rogozin, head of Russia’s state space agency, Roscosmos – and a staunch ally of President Putin – warned Sunday that the new Sarmat-2 intercontinental ballistic missiles, which measure 14 stories tall, will soon be combat-ready.

“I suggest that aggressors speak to us more politely,” Rogozin said.

--Monday….

Former U.S. secretary of state Henry Kissinger said Monday that Ukraine should cede territory to Russia to help end the invasion, suggesting a position that a vast majority of Ukrainians are against.

Speaking at the World Economic Forum in Davos, Switzerland, Kissinger urged the United States and the West to not seek an embarrassing defeat for Russia in Ukraine, warning it could worsen Europe’s long-term stability.

After saying that Western countries should remember Russia’s importance to Europe and not get swept up “in the mood of the moment,” Kissinger also pushed for the West to force Ukraine into accepting negotiations with a “status quo ante,” which means the previous state of affairs.

“Negotiations need to begin in the next two months before it creates upheavals and tensions that will not be easily overcome.  Ideally, the dividing line should be a return to the status quo ante,” said Kissinger, 98. “Pursuing the war beyond that point would not be about the freedom of Ukraine, but a new war against Russia itself.”

This “status quo ante” refers to restoring a situation in which Russia formally controlled Crimea and informally controlled Ukraine’s two easternmost regions of Luhansk and Donetsk.  Ukrainian President Zelensky has emphasized that part of his conditions for entering peace talks with Russia would include a restoration of preinvasion borders.

This comes as European Commission President Ursula von der Leyen told global leaders in Davos that the war is not only “a matter of Ukraine’s survival” or “an issue of European security” but also “a task for the entire global community.”  She lamented Putin’s “destructive fury” but said Russia could one day recover its place in Europe if it “finds its way back to democracy, the rule of law and respect for the international rules-based order…because Russia is our neighbor.”

A poll conducted by the Kyiv International Institute of Sociology this month found that 82 percent of Ukrainians are not prepared to give up any of Ukraine’s land, even if it means the war will drag on.  Only 10 percent believe that giving up land is worth it to end the invasion, while 8 percent were undecided.  [The sample did not include residents of territories that were not controlled by Ukrainian authorities before Feb. 24, including Crimea and some districts of the Donetsk and Luhansk regions.]

The New York Times had editorialized, prior to Kissinger’s remarks, that Ukraine would have to make “painful territorial decisions” to achieve peace.

“In the end, it is the Ukrainians who must make the hard decisions: They are the ones fighting, dying and losing their homes to Russian aggression, and it is they who must decide what an end to the war might look like….If the conflict does lead to real negotiations, it will be Ukrainian leaders who will have to make the painful territorial decisions that any compromise will demand.”

The editorial was met by a backlash from Zelensky adviser Mykhailo Podolyak, who said that “any concession to Russia is not a path to peace, but a war postponed for several years.”

Kissinger’s appalling comments were denounced as “truly shameful!” by Inna Sovsun, a member of the Ukrainian parliament.

“It’s a pity that the former U.S. Secretary of State believes that giving up on part of the sovereign territory is a way to peace for any country!” Sovsun tweeted.

Podolyak said: “As easy as Mr. #Kissinger proposes to give [Russia] part of [Ukraine] to stop the war, he would allow to take Poland or Lithuania away.  It’s good that Ukrainians in the trenches do not have time for listening to ‘Davos panickers.’  They’re a little bit busy defending Freedom and Democracy.” [Timothy Bella / Washington Post]

Illia Ponomarenko, a defense reporter with The Kyiv Independent, wrote: “With these supercilious, high-browed ‘strategists’ thinking of nothing past their elitist noses, Hitler would have destroyed the world.”

--In a late-night video address on Monday, President Zelensky said Russian forces have organized a “massacre” in Donbas, trying to destroy “everything living” in the region.

“Nobody destroyed Donbas as much as the Russian army does now,” he said.

In an address to global business and political leaders in Davos earlier on Monday, Zelensky noted that Russian troops had “20 times more hardware” in Donbas than Ukraine did.  He stressed that Ukraine needs long-range weapons to prevent losses.

--Russia’s Foreign Minister Sergei Lavrov said Monday that Moscow will consider offers of re-establishing ties with the West and think whether that is needed, but will focus on developing ties with China.

“If they (the West) want to offer something in terms of resuming relations, then we will seriously consider whether we will need it or not,” Lavrov said in a speech, a transcript of which was on the foreign ministry’s website.  He also said Moscow’s goal now is to further develop ties with China.  “Now that the West has taken a ‘dictator’s position,’ our economic ties with China will grow even faster,” Lavrov said.

Oh brother. 

--In a rare public show of dissent from a Russian diplomat, a counselor at Moscow’s mission to the UN in Geneva announced his resignation, saying that “never have I been so ashamed of my country as on February 24th of this year.”

Boris Bondarev wrote that Vladimir Putin’s war was “not only a crime against the Ukrainian people, but also, perhaps, the most serious crime against the people of Russia…crossing out all hopes and prospects for a prosperous free society in our country.”

--Turkey’s President Tayyip Erdogan said on Monday that Ankara would soon launch new military operations along its southern borders to create 30-km deep safe zones to combat terrorist threats from these regions.

“The main target of these operations will be areas which are centers of attacks to our country and safe zones,” Erdogan said, without elaborating.

The operations will likely target north of Syria, where Turkey has launched several military operations since 2016 to undermine the Kurdish People’s Defense Units (YPG), an armed Syrian offshoot of the Kurdistan Workers Party (PKK).  The YPG also helped form the Syrian Democratic Forces (SDF), the Kurdish-led coalition that the United States has greatly relied on to fight the Islamic State since 2014.

Erdogan’s statement came amid Turkey’s objections on Finland and Sweden becoming NATO members, accusing them of harboring individuals linked to the PKK group and followers of a cleric Turkey accuses of orchestrating a coup attempt in 2016.

--Tuesday….

Russian Defense Minister Sergei Shoigu said that Russia was deliberately slowing its offensive in Ukraine to allow civilians to evacuate, while a top security official said Moscow was not “chasing deadlines” in the three-month-old war.

The comments signaled that Russia sees no quick end to the fighting, while seeking to dispel any impression that the drawn out and costly “special military operation” has stalled.

Ukraine and its Western allies say the reality is that Russia has lost momentum after running into fierce Ukrainian resistance and suffering heavy losses in both men and equipment.

“Ceasefires are being declared and humanitarian corridors are being created in order to get people out of surrounded settlements,” Shoigu said in televised remarks on Day 90 of the war.

“Of course, this slows down the pace of the offensive, but this is done deliberately to avoid casualties among the civilian population,” he told defense ministers of the Collective Security Treaty Organization (CSTO), a military alliance of Russia and five other former Soviet republics.

President Zelensky dismissed Shoigu’s statement as “absolutely unreal,” given that Kyiv estimates Russia has lost nearly 30,000 soldiers and thousands of tanks and other armored vehicles.  “And they are trying to cover this up with lies about how they are supposedly not fighting at full strength?  How pathetic – and the time will come when they will recognize this themselves,” he said in a late-night address.

In separate comments, Nikolai Patrsushev, secretary of Vladimir Putin’s Security Council, said all of Putin’s goals in Ukraine would be met because truth was on Russia’s side.  “We are not chasing deadlines,” he said in a newspaper interview that restated Russia’s aim of “denazifying” Ukraine.  “Nazism must be 100% eradicated, or it will raise its head again in a few years, in an even uglier form,” Patrusev said.

--While the above statements were being issued, Russian forces were launching an all-out assault to encircle Ukrainian troops in twin cities straddling a river in eastern Ukraine on Tuesday, a battle which could determine the success or failure of Moscow’s main campaign in the east.

In the second-largest city, Kharkiv, the good thing was officials reopened the underground metro, where thousands of civilians had sheltered for months under relentless bombardment.  So this was evidence of Ukraine’s biggest military success over the past few weeks: pushing Russian forces largely out of artillery range of Kharkiv, as they did from the capital Kyiv in March.

But the decisive battles of the war are being waged in the south, as Moscow attempts to seize the Donbas region consisting of Donetsk and Luhansk, while trapping Ukrainian forces in pockets on the main eastern front.

Serhiy Gaidai, governor of Luhansk province, where two cities, Lysychansk and Sievierodonetsk, are among the last territory still held by Ukraine:

“The intensity of fire on Sievierodonetsk has increased by multiple times, they are simply destroying the city,” he said on TV, adding there were about 15,000 people in the city.

Ukraine Defense Ministry said the military campaign had entered its most active phase, in trying to encircle Ukrainian troops in the two cities.

But, 90 days into the war, Moscow’s gains have been limited vs. massive military losses, with much of Ukraine devastated.

--A Ukrainian intelligence chief, Kyrylo Budanov, chief of Ukraine’s Defense Intelligence, said he could “fully confirm” reports that Vladimir Putin, 69, is in failing health, but still has “years” to go before he arrives at death’s door.

“He has several serious illnesses, one of which is cancer,” he told Ukrayinka Pravda.

“But it is not worth hoping that Putin will die tomorrow. He has at least a few more years. Like it or not, but it’s true.”

The Kremlin has repeatedly dismissed assertions of Putin’s failing health and said he remains in firm control of Russia.

Budanov also claimed that an unsuccessful attempt was made on Putin’s life by “representatives of the Caucasus” region.

“It was about two months ago,” Budanov said.  “I repeat, this attempt was unsuccessful.  There was no publicity about this event, but it took place.”

--There is some sense of normalcy in Kyiv, with traffic and sidewalk cafes returning, but Mayor Vitali Klitschko, the former world heavyweight boxing champion, and his younger brother Wladimir, say the city still isn’t safe.  The 1.5 million people who have returned are doing so at their own risk.

“Everybody asks me, ‘can we come back now?’” Vitali said in an interview in Davos, Switzerland.  “I tell them, our priority is safety, and we can’t give guarantee safety for every citizen because every second, every minute a Russian rocket can land in an apartment building.  That’s why we say to everyone if you decide to come back it is at your own risk.”

About 1 million people remain displaced from Kyiv’s pre-war population of 3.5 million.

Public transportation remains spotty, a curfew is still in place and some neighborhoods are pocked with land mines planted by Russian forces.  Lines of cars at gas stations illustrate fuel shortages, while companies are struggling to restart businesses without employees who’ve fled, been drafted into the military, or suffered a worse fate.

--Russian opposition leader Alexei Navalny lost an appeal against a nine-year prison term, but not before launching a scathing attack on the war in Ukraine.

Condemning Putin’s war as stupid, Navalny said it was “like your courts, built entirely on lies.”

Navalny is already serving a jail term when he was convicted in a fraud case rejected by supporters as fabricated.  He addressed the court in Moscow via a video link at his penal colony.

Navalny said he despised the court and said the rulings against him were no different from the lies used by “madman” President Putin and state TV to justify the war.

“You will suffer a historic defeat in this stupid war that you started.  It has no purpose or meaning. Why are we fighting a war?” he said.

During Tuesday’s appeal hearing, Navalny told the court that the judge who gave him his initial jail term in February 2021, Natalya Repnikova, had later told his lawyers she regretted her decision.  Repnikova died months later of coronavirus “according to the official version,” he reportedly told the court.

Since Navalny was jailed last year, he has been held in a jail at Pokrov, east of Moscow, but he now faces being transferred to a penal colony with a far stricter regime and very limited rights to prison visits.  His colleagues say he is due to be moved to a facility in Melekhovo, where one former prisoner has made allegations of systematic torture.

--Russian and Chinese military planes conducted joint exercises to patrol the Asia-Pacific region, Russia’s defense ministry said on Tuesday.  The joint patrol lasted 13 hours over the Japanese and East China seas.  Planes from the Japanese and South Korean air force shadowed the Russian and Chinese jets for part of the exercise, the defense ministry said.

--Tuesday, Turkish President Erdogan said he’ll never again speak to the prime minister from Greece.  This comes after Greek Prime Minister Kyriakos Mitsotakis visited the U.S. amid Finland and Sweden’s bids to join NATO.  Mitsotakis warned U.S. lawmakers against inflaming “instability on NATO’s southeastern flank,” which was an understood reference to Turkish President Erdogan, who has courted Vladimir Putin for years, leading to Moscow selling Ankara its S-400 air-defense system against the wishes of Washington and other NATO allies like Greece.  “I ask you to take this into account when you make defense procurement decisions concerning the eastern Mediterranean,” Mitsotakis said in Washington last Tuesday, according to The Hill.

Erdogan and Greek leaders have been involved in a very public row over energy exploration in the eastern Mediterranean for years.

--Wednesday….

Anxiety about a looming global food crisis has been ratcheted up as spillovers from the war range from grain to sugar, while export restrictions are being imposed by many countries are expected to keep driving up prices.

The least developed countries are going to be hit hardest by higher sugar prices, as China’s sugar output is slated to be lower than expected, thus necessitating the need for more imports to meet domestic demand.

--Russian forces shelled more than 40 towns in the Donbas, Ukraine’s military said, threatening to shut off the last main escape route for civilians trapped in the path of their invasion.

President Zelensky said Russian troops “heavily outnumber us” in some parts of the east.

--The Russian parliament scrapped the upper age limit for contractual service in the military on Wednesday.  Commenting in his late-night video address, Zelensky said: “(They) no longer have enough young men, but they still have the will to fight.  It will still take time to crush this will.”

--The International Institute of Finance forecasts a GDP collapse of 30% in Russia by the end of the year.

--Thursday….

Thousands of Russian troops are attacking from three sides to try to encircle Ukrainian forces in Sievierodonetsk and Lysychansk.  If the two cities straddling the Siverskiy Donets river fall, nearly all of the Donbas province of Luhansk would be under Russian control.

--Moscow appears to have halted its retreat from Kharkiv towards the Russian border and is preventing Ukrainian troops from cutting Russian supply lines that run east of the city to the Donbas.

Ukraine’s Foreign Minister Dmytro Kuleba said during a Q&A that “without multiple launch rocket systems, we won’t be able to push them back.”  He said that if Russia were to request a ceasefire, “we will think twice, three times before agreeing to it.”

Kremlin spokesperson Dmitry Peskov said Moscow expects Ukraine to accept its demands at any future peace talks.  It wants Kyiv to recognize Russian sovereignty over the Crimean peninsula and the independence of separatist-claimed territory in the Donbas.

German Chancellor Olaf Scholz said Putin must not be permitted to impose peace terms.  “There will be no dictated peace,” Scholz said from Davos.

--Putin said he’s willing to smooth the way for grain and fertilizer exports as global shortages mount – but only if sanctions on his isolated nation are lifted.  Putin didn’t specify if he was referring to Russian exports or those from Ukraine that have been stopped, and stolen (per satellite imagery).  The White House swiftly rejected Putin’s quid pro quo.

--Turkey said it was in negotiations with Moscow and Kyiv to open a corridor via Turkey for gain exports from Ukraine.

--Friday….

The Ukrainian military has said it is outnumbered and outgunned by Moscow’s forces in the country’s eastern Luhansk region and needs more modern weapons from Western allies quickly, as Russia has started shelling Kharkiv all over again, killing at least eight on Thursday.

Defense analyst Michael Kofman, director of Russian studies at the U.S.-based CNA think-tank, tweeted: “Recent Russian gains offer a sobering check on expectations for the near term.”

Russian Foreign Minister Lavrov warned that any supplies of weapons that could reach Russian territory would be “a serious step towards unacceptable escalation.”

President Zelensky expressed deep frustration over the perceived failure of some Western states to give enough military help to Kyiv and the alleged eagerness of some European capitals to compromise with the Kremlin.

“The situation in the Luhansk region is difficult,” said Oleksiy Gromov, a senior officer in the general staff of Ukraine’s armed forces.

“Yes, the enemy still has an advantage in both aviation and artillery, but we are doing everything possible.  The supply of modern weapons from partner countries will speed up our victory,” he added.

“The enemy is acting according to the classical scheme – first using bomber aircraft, then attack aircraft, then artillery, and only then do ground forces directly enter battle.  But thanks to the resilience of our soldiers…the situation now is difficult, but stable.”

Kharkiv’s regional governor Oleh Sinehubov said: “The enemy is once more…terrorizing the civilian population.  Once again, I ask everyone not to be on the streets unnecessarily. …It is too soon to relax.”

--Russia has been dropping a terrifying rain of possible incendiary munitions, according to Defense One.  Human Rights Watch describes such munitions as “among the cruelest weapons used in contemporary armed conflict…Individuals who survive an initial attack often experience organ failure, lowered resistance to disease, lifelong disability, muscle weakness, and psychological trauma.”

--Putin, in a call with Austrian Chancellor Karl Nehammer today, accused Ukraine of “sabotaging” the negotiating process between the two countries, the Kremlin said.

--Ukraine has been receiving the most support from the U.S., Britain and several eastern members of NATO, namely Poland, Estonia, Latvia and Lithuania. Denmark has also been stepping up.

Some commentary….

Editorial / Wall Street Journal

“Vladimir Putin’s Ukraine war is spreading humanitarian and economic hardship far and wide, and on deck is a global food shortage.  The world needs a strategy to break Russia’s blockade of Ukrainian ports so it can export food and other goods, and that probably means a plan to use warships to escort merchant ships out of the Black Sea.

“Russia’s military is denying Ukrainians use of their own ports.  Mariupol on the Sea of Azov has been destroyed and is now in Russian hands. Ukraine still holds Odessa, but Kremlin warships won’t let commercial ships into or out of that Black Sea port.

“The consequences include shortages and higher food prices as prospects rise that Ukraine’s annual crop production won’t make it to world markets.  Ukraine exports about 14% of the world’s corn, 10% of its wheat, and 17% of barley, according to the U.S. Department of Agriculture.  Roughly 50 countries rely on Russia and Ukraine for at least 30% of wheat imports.

“ ‘There are an estimated 22 million tons of grain sitting in silos in Ukraine right now, food that could immediately go toward helping those in need if it can simply get out of the country,’ Secretary of State Antony Blinken said last week.  Ursula von der Leyen, president of the European Commission, added Tuesday that Russia ‘is using hunger and grain to wield power.’

“The commission has been trying to help move goods faster, but Ukraine and the rest of Europe rely on different railway infrastructure.  In normal times, Black Sea ports account for 90% of Ukraine’s grain and oilseed exports, the commission says.

“The civilized world will have to act soon to prevent this from becoming an even larger humanitarian crisis.  United Nations Secretary-General Antonio Guterres has been trying to strike a deal to free up exports, and he visited Moscow in April to ask Mr. Putin to help.  That would be the best solution.

“But asking the Russian for mercy or restraint has proven to be a fool’s errand, as French President Emmanuel Macron has shown to a fare-thee-well.  Mr. Putin doesn’t mind inflicting more pain on Ukraine, and he probably views the global food pressure as a way to get NATO and other nations to coerce Ukraine to settle the war on his terms.  The world will have to do more to prevent hunger and the risk of unrest that soaring food prices could trigger.  Recall how the Arab Spring began in Tunisia….

“The U.S. has marshalled allies for such a mission twice in recent decades.  In the late 1980s the U.S. reflagged and protected Kuwaiti oil tankers as they sailed out of the Persian Gulf during the Iran-Iraq tanker wars.  The Trump Administration led a similar if more modest coalition in 2019 to protect oil tankers moving through the Strait of Hormuz.

“Mr. Putin’s invasion is now entering its fourth month and may go on for many more.  The economic suffering will increase, and food shortages will turn into political stress around the world.  If Mr. Putin won’t yield, the civilized world, led by the U.S., will have to find a way to break his Ukraine food blockade.”

Editorial / Washington Post

“Wars end. Many, if not most, end with negotiation.  That might be what happens with the war Russia launched against Ukraine on Feb. 24, too, though one former Moscow regime member warns against urging Ukraine to negotiate while President Vladimir Putin is still bent on more conquest.  ‘You just can’t make peace now,’ Boris Bondarev, who recently resigned from his mid-level Russian Foreign Ministry post to protest the war, said in an interview with Puck.  ‘If you do, it will be seen as a Russian victory.’  That would just encourage the Putin regime to exploit a cease-fire to rearm, then resume the war, Mr. Bondarev argued: ‘Only a total and clear defeat that is obvious to everyone will teach them.’

“Mr. Bondarev makes a compelling point.  It would be a disaster – both moral and strategic – if Mr. Putin were invited to talks before his major war objectives had been thwarted.  Clear enough to a junior practitioner of international affairs, this wisdom seems to escape ostensibly more seasoned figures.  Former U.S. secretary of state Henry A. Kissinger said at the World Economic Forum in Davos, Switzerland, that Western governments should push Ukraine into talks with Mr. Putin in the next 60 days, as well as support permanent Ukrainian territorial concessions, lest the conflict turn into a destabilizing ‘new war against Russia itself.’  Similar thinking seems to be at work in Italy and Hungary, which are reportedly urging the European Union to advocate a cease-fire and peace talks at its summit next week.  Our colleagues on the New York Times’ editorial board have called on President Biden to counsel Kyiv not to ‘chase after an illusory ‘win.’’

“This remains a minority view within the Western alliance, and it should be.  As European Commission President Ursula von der Leyen made clear at Davos: ‘Ukraine must win this war, and Putin’s aggression must be a strategic failure.’ ….

“Perhaps Ukraine’s counteroffensive will fail, and the military situation will eventually reach such an impasse that a negotiated settlement becomes inevitable.  For now, though, the best way for Ukraine’s friends to help is to accelerate shipments of vital weaponry – and stop negotiating with themselves.”

Biden Agenda

--A staggering 83% of Americans think the U.S. has gone off the rails amid record high inflation, shortages of baby formula, sky-high gas prices and mass shootings, according to a sobering Gallup poll.  Only 16% of adults surveyed said they are satisfied with the way things are going in the country at this time.

Not a good sign for President Biden and the Democrats come the fall.

Democrats’ satisfaction plummeted 14 points since April to just 245.  Only 18% of independents are happy with the status quo (4% of Republicans).

--According to a CBS News/YouGov poll, 77% of Americans say things are going “somewhat” or “very” badly, and 69% think the economy is “fairly” or “very” bad.  I have Biden’s approval ratings from this survey down below.

Only 36% approve of Biden’s handling of the economy; 30% inflation; 40% immigration; 40% crime; and 36% on gun policy.

On the issue of Russia and Ukraine, 47% of Americans approve of the president’s handling of the war.

And now there is lots of talks from experts on the nation’s power grid that we could see widespread failures in the system with excessive temperatures this summer.

--The Biden administration, contrary to reports today, has not made a final decision on student loan cancellation, a White House spokesperson said, after the Washington Post reported, citing three people familiar with the plan, that it was planning to cancel $10,000 in student debt per borrower.  According to two of the sources, the $10,000 debt forgiveness would apply to Americans who earned less than $150,000 in the previous year, or less than $300,000 for married couples filing jointly.

According to a study by the New York Federal Reserve economists, forgiving $10,000 per student would amount to $321 billion of federal student loans and eliminate the entire balance for 11.8 million borrowers, or 31 percent.

The federal government has let 43 million borrowers stop paying on a total of $1.6 trillion in student loans since the onset of the pandemic in 2020.

--In Tokyo on Monday, President Biden promised “concrete benefits” for the people of the Indo-Pacific region from a new trade pact he was set to launch, designed to signal U.S. dedication to the contested economic sphere and address the need for stability in commerce after disruptions caused by the pandemic and Russia’s invasion of Ukraine.

The White House said the framework will help the United States and Asian economies work more closely on issues including supply chains, digital trade, clean energy, worker protections and anticorruption efforts. 

But there are few real details and I’ll be long dead before anything comes of this.

What we do know about the “Indo-Pacific Economic Framework,” or IPEF, is it is nothing like the Trans-Pacific Partership, TPP, that Donald Trump idiotically pulled out of.  TPP went on without the U.S., and now China is looking to join.

For starters, the IPEF doesn’t offer incentives to prospective partners by lowering tariffs or provide signatories with greater access to U.S. markets.

As my first boss in the business world used to say, as she walked past my clerk-typist desk (think Bob Cratchit), “Whatever.”

Wall Street and the Economy

After historically ugly losing streaks among the major market indexes, Wall Street rallied this week, details of which are below.

But the story remains the Federal Reserve and how far, and how big, it is going to go in combatting inflation.  The yield on the 30-year Treasury, a key determinant of mortgage rates, has taken a breather, from a high of 3.13% three weeks ago to 2.74% today, with a 30-year fixed rate mortgage falling from 5.35% to 5.10%, though this is still compared to a yearend figure of 3.11%.  Nonetheless, some prospective buyers who couldn’t pull the trigger on that entry level home at 5.35%, may decide to do so at 5.10% (which will decline a little bit further next week if we hang out at around 2.75% on the 10-year).

The Fed next meets June 14-15 and Wall Street is guessing, at least this week, that it will raise rates 50 basis points in both June and July, but now, instead of another 50 bps in September, will opt for 25.  That’s the main reason why stocks rallied.  Some of the earnings news wasn’t that great, and the situation in Ukraine obviously isn’t getting better, but, hey, it’s a holiday weekend.

This week we had a release of the minutes from the Fed’s May 3-4 meeting and it showed officials discussed the possibility that they would raise interest rates to levels high enough to slow economic growth deliberately.

Officials “noted that a restrictive stance of policy may well become appropriate,” the minutes said.

A few regional Fed presidents have said they would support pressing ahead with an aggressive pace of rate increases in September if monthly inflation readings remain elevated.

“I will need to see several months of sustained downward monthly readings of inflation before I conclude that inflation has peaked,” Cleveland Fed President Loretta Mester said in a recent speech.  If by September, “inflation has failed to moderate, then a faster pace of rate increases may be necessary.”

As it always is, it’s about the data.

World Bank President David Malpass on Wednesday suggested that Russia’s war in Ukraine and its impact on food and energy prices, as well as the availability of fertilizer, could trigger a global recession.  Malpass told an event hosted by the U.S. Chamber of Commerce that Germany, the world’s fourth largest economy, has already seen a substantial economic slowdown due to higher energy prices, and said limited access to fertilizer would worsen conditions elsewhere.  “As we look at the global GDP…it’s hard right now to see how we avoid a recession.”

So on the economic data front, April new home sales were abysmal, a 591,000 annual rate from a downwardly revised 709,000 pace in March, and well below the 749,000 rate expected.  The figure was down almost 27% from April 2021, and the lowest level since April 2020, the Commerce Department said Tuesday.  The 16.6% drop from March to April was the biggest monthly decline since 2013.

Rising mortgage rates have been a killer, with the recent described decline not helping last month.

April durable goods were less than expected, 0.4%, 0.3% ex-transportation.

April personal income came in lighter than forecast, 0.4%, while consumption beat expectations, up 0.9%.

Importantly, the core personal consumption expenditures figure for April was 0.3%, as forecast, and up 4.9% year-over-year, also as expected and down from the prior month’s 5.2%.  So this is a start, this being the Fed’s preferred inflation barometer.

Lastly, a second look at first quarter GDP was worse than estimated at -1.5% vs. the first reading of -1.4%.

The Atlanta Fed’s GDPNow barometer for second quarter growth is at 1.9%.

Europe and Asia

We had flash PMI readings for May from S&P Global, and the eurozone manufacturing figure was 51.2, while services came in at 56.3. [50 the dividing line between growth and contraction.]

Germany’s flash manufacturing number was 51.0, vs. 47.7 in April; services 56.3.

France had a manufacturing figure of 51.4, services 58.7.

Final figures will be reported out next week.

Chris Williamson / S&P Global

“The eurozone economy retained encouragingly resilient growth in May, as a beleaguered manufacturing sector was offset by a buoyant service sector.  Although factories continue to report widespread supply constraints and diminished demand for goods amid elevated price pressures, the economy is being boosted by pent-up demand for services as pandemic-related restrictions are wound down.  May saw a further surge in spending on tourism and recreation in particular.

“Thanks to buoyant demand for services, particularly from households, the PMI data are consistent with the economy growing at a solid quarterly rate of 0.6% so far in the second quarter.  However, it remains to be seen how long this service sector rebound can persist for, especially given the rising cost of living, and the weakness of manufacturing remains a concern, as the factory malaise is already showing signs of spilling over to some parts of the service economy.

“Although there are signs that inflationary pressures could be peaking, with input cost inflation down for a second successive month and supply constraints starting to be less widely reported, inflationary pressures remain elevated at previously unprecedented levels.

“Such high price pressures, accompanied by the reassuringly resilient GDP growth signaled by the surveys, looks set to tilt policymakers at the ECB towards a more hawkish stance.”

Speaking of the European Central Bank, President Christine Lagarde gained support among ECB officials for her plan to raise rates out of negative territory in steady increments this summer, though the Dutch central bank chief advocated for a 50 basis points rate hike in July.

Recent comments from Lagarde confirm expectations about future rate hikes, including a 25 bps move in July.

Britain: Meanwhile, in the UK, the flash May manufacturing PMI came in at 51.8 vs. 54.3 in April, with the services reading down to 51.8 from 58.9, a 15-month low, amid escalating inflationary pressures.

The government announced a 25% windfall tax on oil and gas producers’ profits on Thursday, alongside an $18.9 billion package of support for households struggling to meet soaring energy bills.  Previously, Prime Minister Boris Johnson had resisted windfall taxes, calling them a deterrent to investment.

As I’ve been writing, the UK is facing a cost-of-living crisis largely because of the way energy pricing is handled, which is different from many other nations.  On Tuesday the UK energy regulator said that a cap on gas and electricity bills was set to rise by another 40% in October, caused by a surge in global energy prices.

Inflation reached a 40-year peak of 9% in April and is projected to rise further, while cost-of-living standards were set to see their biggest fall since records began in the late 1950s.

Meanwhile, Johnson is dealing with another damning report detailing a series of illegal lockdown parties at his Downing Street office.

Turning to Asia…no economic data worth reporting on from China, but we did have a significant statement from Premier Li Keqiang, who is supposed to be in charge of the economy.

Li conceded that the economy is stalling at a dangerous rate and faces critical risks, as he instructed an army of officials from across the country to exhaust all measures to stabilize it.

And for the first time, Li admitted China may miss the “around 5.5 percent” economic growth bar that Beijing laid out earlier.

Li was speaking via teleconference to more than 100,000 bureaucrats – from the State Council to county-level authorities.  He said a realistic target for the year’s second quarter is simply to get the economy back on a growth trajectory.

“We should take efforts to ensure positive economic growth for the second quarter. The target is not high, and it falls far short of the 5.5 growth target set out earlier this year,” Li said, according to the transcript.

Li admitted the economic impact of Covid restrictions “has already begun to hit our fiscal revenue,” acknowledging the pressure provincial-level governments are now under.  For example, Li revealed some parts of the Yangtze River Delta region – the growth engine of China that remains affected by lockdowns in Shanghai – reported a fall of 32 percent in government revenue in April, while the average decline nationwide was nearly 6 percent.

China’s economy grew by 4.8 percent in the first quarter.

An official statement following the Wednesday meeting quoted Li as saying: “Economic indicators such as employment, industrial production, power consumption and freight have fallen significantly. The difficulties in some aspects, and to a certain extent, are greater than those experienced in 2020 when the epidemic hit the country severely.”

In Japan, the flash May manufacturing reading was 50.8, services 51.7.

Street Bytes

--After an historic slide, including the longest losing streak in the Dow Jones since 1932, it was time for a bounce, and stocks rallied bigly, the three major indexes all up 6%+, the best week since Nov. 2020 for all three…Dow Jones +6.2% to 33212, S&P 500 +6.6%, Nasdaq +6.8%.

Yes, we might have another up week or two, but there is no real reason for it, unless you tell me inflation is coming down significantly.  I keep saying, we are going to reset at much higher prices, the economy will slow significantly, wages won’t keep rising, and you have this global food crisis…which is part of the inflation equation.

So I shorted the market at today’s close.

--U.S. Treasury Yields

6-mo. 1.49%  2-yr. 2.48%  10-yr. 2.74%  30-yr. 2.96%

Bonds were little changed on the week, save for the 2-year, seen as the best barometer for the Fed on the yield curve, which saw its yield drop 10 basis points on the feeling the Fed may not have to hike interest rates as much as first expected.

--Oil prices edged higher, with refiners running facilities at full-tilt to deal with heavy demand, especially from overseas.  High exports and a reduction in refining capacity means gasoline stocks have dwindled in the U.S.  This weekend’s Memorial Day travel is expected to be the busiest in two years.

The EU hopes to be able to agree on sanctions that would phase out Russian oil imports before the next meeting of the European Council. Even without a legal ban, self-sanctioning by numerous European companies has led to a record amount of Russia’s Urals crude oil sitting in vessels at sea as it struggles to find buyers.

On the flip side is China’s ongoing Covid restrictions from the world’s biggest oil importer.

Gasoline prices stabilized this week at $4.60 for regular, but still way up from last year’s $3.04 as folks drove off for the holiday.  Diesel is also stabilizing, $5.53, down a few cents, but still way too high for comfort (for corporate profits…and the prices we all pay on everything).

--Investors signaled on Wednesday that they want more information from big oil and gas producers about how they are combating climate change.

Exxon Mobil and Chevron investors supported climate-related proposals at the companies’ annual meetings, asking their managements to look more closely at some key issues related to greenhouse gases.  While the meetings weren’t as contentious as last year’s, when three of Exxon’s candidates for board seats were defeated, they show that the pressure on Big Oil isn’t going away.

Among the proposals that passed was one at Exxon asking the company to prepare a report showing how the International Energy Agency’s “Net Zero by 2050” scenario “would affect the assumptions, costs, estimates, and valuations underlying its financial statements.”

Exxon argued against the proposal, noting it already published such a report, i.e., you’re talking “duplication and incremental costs,” the company said.

So much of this is just stupid.

--Toll Brothers’ fiscal second quarter was terrific, but the momentum won’t continue amid worsening economic conditions, particularly on the housing front.

The nation’s largest luxury-home builder posted earnings of $1.85 a share with sales of $2.3 billion, handing 2,407 homes to buyers.  Both sales and deliveries for the second quarter were records and above expectations.

But on a call with analysts, the builder cautioned investors that over the past month it has seen demand moderate as buyers’ sentiment is hurt by rising home prices and mortgage rates.  Volatility in the stock market is adding to the troubles, management said.

The company issued earnings and delivery guidance that fell short of analysts’ predictions for the year ending October.  The stock rose on the news, because it wasn’t as bad as some feared, after falling about 35% this year.

--Electronics retailer Best Buy Co. reported falling sales and profits for the latest quarter and said its results for the current fiscal year will be worse than it had previously predicted amid increased promotions and tighter supply-chain expenses.

CEO Corie Barry said the company expects lower sales this year than it did in March as people shift spending to travel or cut back because of inflationary pressures.  “It’s fair to say that we’re factoring in elements of softer demand, but we are not planning for a full recession,” Barry said in a call with analysts.

Best Buy reported earnings of $341 million for the quarter ended April 30, compared with $595 million a year earlier.  The company’s revenue for the quarter fell roughly $1 billion from the previous year to $10.6 billion.  Comparable sales dropped 8%, compared with a rise of 37% in the quarter a year ago.

On Tuesday, Best Buy said revenue for the year would now be between $48.3 billion and $49.9 billion, cut from its March forecast of $49.3 billion to $50.8 billion.  Comp sales are now expected to decline 3% to 6%, vs. prior guidance of a decline of 1% to 4%.

The shares were pretty flat on the news, having fallen 35% so far this year, and then rebounded Wednesday.

--Nordstrom Inc. shares rose after the department-store chain said the return of in-person social events and a travel rebound have boosted demand for clothing.  The company raised its sales and profit targets for the year.

--Shares in Macy’s Inc. surged 16% Thursday after the company raised its annual profit forecast, echoing Nordstrom’s comments on strong demand for high-margin apparel from consumers returning to weddings and other social events.

Macy’s, which was hit hard by store closures during the pandemic, has seen sales rebound sharply with the reopening of offices, while the resumption of social events has led to demand for expensive dresses, formal wear and shoes.

“While macroeconomic pressures on consumer spending increased during the quarter, our customers continued to shop,” CEO Jeff Genette said.  “We saw a notable shift back to occasion-backed apparel and in-store shopping, as well as continued strength in sales of luxury goods.”

High-end fashion has been relatively insulated from the effects of inflation so far this year and companies including Nordstrom and Ralph Lauren Corp. see consumers continuing to spend despite even more planned price increases.

For the quarter ended April 30, adjusted earnings came in at $1.08 per share, up from $0.39 a year earlier.  Net sales were $5.35 billion, compared with $4.71 billion a year ago.  Comp sales grew 12.8% in the period.

Macy’s said it expects fiscal 2022 adjusted earnings per share of $4.53 to $4.95, compared with its previous forecast of $4.13 to $4.52.

--Monday I went into a local Dick’s Sporting Goods store for the first time in at least a year.  I needed to buy a basketball…yes, your 64-year-old editor bought a basketball because the local park just repaved the courts in rather stunning fashion and basketball is good for keeping up coordination…or so I hope.

Anyway, I was impressed how crowded the store was at noon, but I knew the shares had been tanking ahead of Wednesday’s earnings report.

So Dick’s slashed its fiscal 2022 profit outlook, rather significantly, from a previous guidance of $11.70 to $13.10 per share to $9.15 to $11.70.  Same-store sales are anticipated to fall 2% to 8%, versus prior guidance of flat to a decline of 4%.

The shares sank, but then rallied strongly.

“Over the past two years, we have demonstrated our ability to adeptly manage through the pandemic and other challenges – and we are confident in our continued ability to adapt quickly and execute through uncertain macroeconomic conditions,” CEO Lauren Hobart said in a statement.  “We remain confident in our strategies and our ability to deliver long-term sales and earnings growth.”

For the quarter ended April 30, Dick’s posted adjusted EPS of $2.85, down from $3.79 a year earlier, but better than consensus. Sales dropped 7.5% to $2.7 billion, but came in ahead of the Street’s view for $2.63 billion.

Comp store sales declined 8.4%, compared with growth of 117% in the prior-year period.  The Street expected same-store sales to fall 11%.

But so much of the bad news was already priced in, especially after prior retail earnings disasters from the likes of Walmart and Target.  Plus comparisons with last year weren’t fair, as that was when we had a resumption of team sports and students’ return to school.

That said, Dick’s soaring costs are dampening margins and as inflation continues to be at 4-decade highs, Dick’s is loaded with highly discretionary goods.  [I also bought a pump to inflate ‘said’ ball.]

--Dollar Tree, Inc. reported financial results for its quarter ended April 30, with sales up 6.5% to $6.90 billion, and comp-store sales at the Dollar Tree franchise rising 11.2%.  [Family Dollar same-store sales fell 2.8%, due to 400 of the stores being closed for a spell as a result of a product recall.]

Gross profit increased 19.2% to $2.34 billion from $1.96 billion in the prior year’s first quarter.  Gross margin improved 360 basis points to 33.9%.  Operating income increased 40.7% to $731.5 million compared with $519.9 million.

As a proud Dollar Tree shopper, the increase in prices from $1.00 to $1.25 sure hasn’t impacted my purchases.  It’s worked.  Still difficult to find a large can of Campbell’s chicken noodle soup for $1.25 like you can get there.  Or paper goods, toothpaste, dishwashing liquid…those kinds of items that I’ve always purchased at DLTR.

--Gap Inc. slashed its annual results forecast on Thursday, sending shares 13% lower after hours as the clothing retailer blamed poor fashion choices at its Old Navy line and weak demand in the face of inflation.  The Banana Republic parent also posted a much wider-than-expected quarterly loss, slammed by surging costs of air freight and deeper discounts.

Gap is reeling from execution issues at Old Navy, its biggest brand. With shoppers now ditching casuals and athleisure for formals and partywear, product assortment at Old Navy “continues to be out of sync” with the shift in preference, Gap executives said on an earnings call.

Gap now expects fiscal 2022 per-share profit between 30 and 60 cents on an adjusted basis, compared with $1.85 to $2.05 earlier.  Yikes.

--Costco Wholesale traded lower in the aftermarket Thursday after announcing it had earned $3.04 a share, on revenue that rose 18.5% year over year to $52.6 billion.  Analysts were looking for EPS of $3.04 on revenue of $51.56 billion.  That’s an increase from the year-ago period, when Costco earned $2.75 a share on revenue of $45.3 billion.

Comparable sales, ex-gasoline and foreign exchange, were up 10.8% in the quarter.

--Delta Air Lines said it plans to trim some flights through August to improve operational reliability amid soaring travel demand, according to an email sent to employers.  It’s all about staffing, and lack thereof, including with vendors.

Delta said it plans “to reduce flights in the coming days, weeks, and in our July and August schedules by a few percentage points.”  Ahead of the holiday weekend, Delta said it will work to “relieve pressure by proactively thinning the schedule over Memorial Day and through the balance of June.”

--Airlines stocks rallied Thursday after Southwest Airlines and JetBlue Airways said revenue from summer travel will be stronger than previously expected.

The comments, which the airlines made in regulatory filings, point to their ability to charge higher fares and still fill their planes because of strong demand from travelers.

Southwest said second-quarter revenue will rise by between 12% and 15% compared with 2019 because of accelerating bookings for summer travel.

JetBlue sees second-quarter sales rising 16% or more.

--TSA checkpoint travel numbers vs. 2019

5/26…96 percent of 2019 levels
5/25…95
5/24…82
5/23…93
5/22…113…quirk in the numbers
5/21…94
5/20…84
5/19…88

--Twitter was fined $150 million by the Federal Trade Commission and the Justice Department on Wednesday, as part of a settlement for misleading users about how it treated their personal data.

Twitter had told users it was collecting their email addresses and phone numbers to protect their accounts, but did not do enough to say that the information was also used to help marketers target ads, the agencies said.  The misleading behavior lasted for at least six years, from 2013 to 2019.

“The $150 million penalty reflects the seriousness of the allegations against Twitter, and the substantial new compliance measures to be imposed as a result of today’s proposed settlement will help prevent further misleading tactics that threaten users’ privacy,” Vanita Gupta, the associate attorney general, said in a statement.

As for Elon Musk’s takeover of Twitter, the company having long accepted his $44 billion bid and Musk then waffling, Wednesday, Musk disclosed in a filing that he had boosted his personal financial commitment to the Twitter deal, and was now planning to contribute $33.5 billion – either from his own funds or in partnership with other Twitter shareholders – toward the acquisition price.

The initial financing plan included $21 billion in equity from Musk, plus a $12.5 billion bank loan that was to be secured by Musk’s stock in Tesla.

The fact that Musk would be relying more heavily on additional equity was seen as a sign that Musk wasn’t about to walk away from the deal, but the shares only rose a few $dollars in response and at $40, still sit well below the $54.20 Musk, and Twitter, agreed to as the purchase price.

--Mark Zuckerberg said he plans to invest heavily in his company’s metaverse ambitions and that will mean losing “significant” amounts of money on the project in the next three to five years.

Speaking at the Meta Platforms Inc.’s annual shareholder meeting Wednesday, Zuckerberg said the immersive digital world will eventually make money from a creator economy, as people build businesses selling virtual goods and services.

“We want to get the hardware to be as affordable as possible for everyone, and make sure the digital economy grows,” Zuckerberg said.

In the meantime, the company is betting on revenue growth from an investment in its Reels short-form video services, he said.

--Nvidia Corp. on Wednesday reported fiscal first-quarter profit of $1.62 billion, 64 cents per share on a net basis, $1.36 adjusted, which beat the Street.

The maker of graphics chips for gaming and artificial intelligence posted record revenue of $8.29 billion in the period, up 46%, also topping forecasts.

But the shares fell* as the company braced for supply chain snags and slowing demand for its chips used in its gaming devices.  The stock has fallen about 40%, in tandem with a wider selloff in growth stocks over concerns of aggressive rate increases.  So it forecast second-quarter revenue below Wall Street’s estimates.

The forecast included an estimated reduction of about $500 million of revenue relating to Russia and the Covid lockdowns in China.  Weaker graphics chips prices and lower discretionary spending amid high inflation are likely to pressure Nvidia’s gaming business.

The company forecast second-quarter revenue of $8.10 billion, with analysts at $8.45 billion.

*By the end of the week all was forgiven and the shares had risen sharply from Wednesday’s low of $163 to $189.

--Broadcom Inc. announced Thursday it had clinched a deal to pay $61 billion for VMware Inc. in what would be one of the largest takeover deals of the year.

Market declines have made acquisition targets more affordable and because sellers in some cases are more willing to accept stock as currency, in the hopes that they will benefit when it rebounds.  Private-equity firms, meanwhile, remain flush with cash.

The deal discussions come roughly six months after Dell Technologies Inc. spun off its 81% equity stake in VMware.  The software company has a strong position in the market for “hybrid” cloud, where large companies mix public cloud services like those of Amazon.com and Microsoft with their own private networks.

Broadcom is a semiconductor-software conglomerate that has grown largely through acquisitions and has been on the hunt for a deal to beef up its presence in the corporate-software market.

Dell founder Michael Dell remains chairman of VMware.  He and private-equity firm Silver Lake, which helped take Dell private in 2013, together control a more-than-50% stake in VMware.

--Speaking of Dell, Dell Technologies that is, the company posted strong results for its fiscal first quarter, driven primarily by better-than-expected demand for enterprise computing hardware, and continued healthy sales of business PCs.

The company also significantly increased its full-year guidance, and the shares surged in late trading Thursday.

Dell did say it “experienced a wide range of semiconductor shortages” in the quarter and that “the Covid lockdowns in China caused temporary supply chain interruptions.”

For the quarter Dell posted revenue of $26.1 billion, up 16% from a year ago and better than the company’s forecasted range.  The company also increased its outlook.

--Starbucks announced it is pulling out of the Russian market.  In a memo to employees Monday, the coffee giant said it will continue to pay its nearly 2,000 Russian employees for six months and help them transition to new jobs.

Starbucks’ move follows McDonald’s exit from the Russian market last week.

Starbucks entered the Russian market in 2007.  In early March, after the Russian invasion of Ukraine, Starbucks announced it would keep its Russian stores open but donate any profits to humanitarian relief efforts in Ukraine.

But a few days later – after Coca-Cola, PepsiCo, McDonald’s and others temporarily halted their business in Russia – Starbucks changed course and did the same.

--Zoom Video Communications Inc. on Monday raised its full-year adjusted profit forecast, signaling robust demand for its video-conferencing tools in a hybrid work environment, the severely beaten down shares rallying some on the news.

Zoom said full-year adjusted profit is expected to between $3.70 and $3.77 per share, compared with earlier expectations of between $3.45 and $3.51.

The company also said revenue rose 12% to $1.07 billion in the quarter ended April 30, in lines with expectations.  Net income fell to $113.6 million from $227.4 million.

--As one who for decades has been leasing a new Honda vehicle every three years, I was surprised by the latest research from S&P Global Mobility that has the average age of vehicles on U.S. highways hitting a record 12.2 years in 2021, as Americans are challenged by high car prices and slim pickings on dealer lots.  It was the fifth straight year the average vehicle age in the U.S. has increased.  No wonder Car Shield advertises as heavily as it does.

Of course the supply chain issues when it comes to the computer-chip shortage that has curbed factory output and left dealership lots bare is a huge factor.

“You can’t find a replacement for a reasonable cost,” said Todd Campau of S&P Global Mobility.

--Hyundai is recalling 239,000 cars in the U.S. because the seat belt pretensioners can explode and injure vehicle occupants. Three injuries have been reported, two in the U.S. and one in Singapore.

Pretensioners tighten the belts in preparation for a crash.  The recall includes 2019-2022 Accents and 2021-2023 Elantras, including Elantra hybrid vehicles.

The fix is simple…so go to your dealership.

--Finally, the senseless killing of a Goldman Sachs researcher on a Manhattan-bound subway train further rattled a city, where officials, and companies, are seeking to reopen but employees see an incident like this and say ‘no.’

Daniel Enriquez, 48, was heading to brunch with friends on Sunday morning, sitting in the last car of a Q train as it approached the Canal Street station, when he was shot.  The suspect was walking back and forth in the same train car, according to witnesses, and as the NYPD said after, “And without provocation, pulled out a gun and fired it at the victim at close range….”

There was no prior interaction between the gunman and Enriquez.  The suspect, Andrew Abdullah, then turned himself in two days later.

Weeks before, we would learn, Abdullah was released without bail on charges of stealing a car by a criminal court judge.

The prosecutor noted that Abdullah had a criminal record, and that he had charges pending on several other criminal cases, including assault and weapons possession.

But Brooklyn Criminal Court Judge Leigh Cheng denied prosecutors’ request, saying that Abdullah’s history of showing up to court – he’d never missed a court appearance – meant he should be released, according to a transcript obtained by the New York Daily News.

Abdullah now faces a murder charge.

The crime came after he had been released three times in other cases since 2020.

This is so typical of New York and its judicial system that some have been screaming about for years.  Throw the bastards in jail and keep them there…and build more prisons.

Mayor Eric Adams called an emergency meeting with the Big Apple’s top business leaders in the wake of the shooting, understanding the further negative reverberations.  [Chicago business leaders are up in arms over the Windy City’s awful crime issues as well.]

Partnership for New York City CEO Kathy Wylde said public safety is an even bigger concern than Covid for employers, and for good reason.

I said a few weeks ago I hadn’t been in Gotham since the pandemic began and I’m highly unlikely to do so for at least another few months.

The Pandemic

--The White House on Thursday announced more steps to make the antiviral treatment Paxlovid more accessible across the U.S. as it projects Covid-19 infections will continue to spread over the summer travel season.

The nation’s first federally backed test-to-treat site opened this week in Rhode Island, providing patients with immediate access to the drug once they test positive.  More federally supported sites are set to open in the coming weeks in Massachusetts and New York City, both hit by a marked rise in infections.

--But despite the surge in cases, deaths have remained largely stable over the past eight weeks, as vaccine booster shots and widely accessible treatments have helped to delink infections and mortality.

Confirmed infections have quadrupled since late March, from about 25,000 to more than 105,000 daily, but deaths tend to lag infections by three to four weeks.

Due to the prevalence of at-home rapid tests, whose results often go unreported to public health officials, the true number of daily infections is likely 200,000 or more, according to White House Covid coordinator Dr. Ashish Jha.

Jha said about 25,000 to 30,000 courses of Paxlovid are being prescribed each day.  When administered within five days of symptoms appearing, the drug has been proven to bring about a 90% reduction in hospitalizations and deaths among patients most likely to get severe disease.

--Three doses of Pfizer’s Covid-19 vaccine offer strong protection for children younger than 5, the company announced Monday.  Pfizer plans to give the data to U.S. regulators in a step toward letting the littlest kids get the shots.  The 18 million tots under 5 are the only group in the U.S. not yet eligible for Covid vaccination.

The Food and Drug Administration has been evaluating data from rival Moderna, which hopes to begin offering two kid-sized shots by summer.

--North Korea continues to report 100,000+ people daily showing “fever symptoms,” but few deaths, according to state media. The North said it was expanding the production of essential medicine supplies, though it did not elaborate exactly what types were being produced.

North Korea has no testing supplies, and thus has not confirmed the number of people testing positive for the coronavirus. 

President Biden said the North hasn’t taken the U.S. up on an offer to provide Covid vaccines.

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

World…6,309,291
USA…1,031,170
Brazil…666,319
India…524,539
Russia…378,784
Mexico…324,768
Peru…213,145
UK…178,313
Italy…166,476
Indonesia…156,565
France…148,129
Iran…141,302
Colombia…139,854
Germany…139,132
Argentina…128,825
Poland…116,305
Ukraine…108,538
Spain…106,341
South Africa…101,128

Canada…40,962

[Source: worldometers.info]

U.S. daily death tolls…Mon. 143; Tues. 403; Wed. 325; Thurs. 262; Fri. 246.

Foreign Affairs

China: Editorial / The Economist

“After nearly two months the lockdown of Shanghai is easing, but China is far from being Covid-free, with fresh outbreaks in Beijing and Tianjin. More than 200 million people have been living under restrictions and the economy is reeling.  Retail sales in April were 11% lower than a year earlier and purchases of KFC, cars and Cartier are weak. Although some workers are living on factory floors, industrial output and export volumes have dipped.  For the full year China may struggle to grow much faster than America for the first time since 1990, in the aftermath of the massacre near Tiananmen Square.  For Mr. Xi the timing is awful: after the 20th Party Congress later this year, he intends to be confirmed for a third term as president, breaking the recent norm that leaders bow out after two….

“For the first time in 40 years no major sector of the economy is undergoing liberalizing reforms.  Without them, growth will suffer.

“Mr. Xi’s ideological economy has big implications for the world.  Though stimulus could gin up demand, more lockdowns are likely, imperiling a global economy flirting with recession.  In business, China’s size and sophistication make it impossible for multinationals to ignore.  But more will rebalance supply chains away from China, as Apple is reportedly doing.  Chinese champions may dominate some industries of the 2030s, but the West is likely to become a warier importer of Chinese products. In diplomacy, a less ambitious and independent private sector means China’s presence abroad will be more state-led and political. It may become more malign, but also less effective….

“(As for Xi, 68), there is no rival… Yet in the run-up to a party congress that may see him secure power until at least 2027, the shortcomings of one-man rule in the world’s second-largest economy are glaring.”

I am watching Li Keqiang.  His remarks on the economy this week were highly significant.  I believe Li is attempting behind the scenes to dissuade the Party from giving Xi a third term.  Li doesn’t want it himself, he’s just too smart a guy to recognize the dangers in a third term for Xi.

Just my opinion.  I could be very wrong.

Meanwhile, Chinese Foreign Minister Wang Yi said Pacific island nations were not anyone’s “backyard” and that Beijing had no plans to set up a military base in the Solomon Islands.

Wang made the remarks in the Solomon Islands late on Thursday as he kick-started his trip to seven Pacific island nations and East Timor for a 10-day tour which is being watched closely by Australia and the United States.

Following a meeting with his Solomon Islands counterpart Jeremiah Manele, Wang said all Pacific island nations had the right to decide what deals to sign.

Wang added that any smear attack on the security cooperation between China and Solomon Islands would not succeed.

But Beijing wants a military presence in the region, we all know that, and China has already sealed a security pact with the Solomons but there have been no details and for good reason there are concerns the pact would permit a Chinese naval deployment.

Wang lied: “The security cooperation between China and the Solomon Islands does not target third parties, and there is no intention of establishing military bases.”

He said China supported Pacific island nations to strengthen security cooperation, and China would launch law enforcement cooperation with the Solomons.

The U.S. and its allies are pushing back, with the president of one island country warning that China’s aim is to gain control of a region that has been at the center of competition between Washington and Beijing in recent years.

China plans to press Pacific nations at a summit in Fiji in the next few days to sign on to an agreement that would expand cooperation on law enforcement and cybersecurity, and explore the creation of a free-trade zone between China and the Pacific, according to a draft seen by the Wall Street Journal.

But thank God for David Panuelo, president of the Federated States of Micronesia, who wrote of the document that it represents the “single-most game-changing proposed agreement in the Pacific in any of our lifetimes,” cautioning other Pacific nations not to sign on. 

Micronesia is where my beloved island state of Yap is, between Guam and Palau, and it’s where I have my church.  I know a FSM senator and ages ago we talked about this issue.  It’s scary. One of China’s goals is to move military assets closer to Guam.

But Panuelo said that getting involved in great-power competition between the U.S. and China threatens to take away the focus from addressing climate change, which is FSM’s biggest security risk.  He also said giving China control over Pacific countries’ communications infrastructure, ocean territory and security increases the chances that China would get into a military conflict with the U.S. and its allies if China invades Taiwan, and that Pacific nations would be collateral damage.

Panuelo said Chinese research vessels are already following Micronesia’s fiber-optic cable infrastructure and that he’d concerned the proposed language in the regional agreement would open up Pacific countries to have phone calls and emails intercepted and overheard.

Panuelo added that he was worried that adopting the agreement could also make it easier for China to obtain bio-data and keep track of people traveling to and from Pacific nations.  He added that he is concerned free-trade agreements could give China control of fisheries and resource sectors in the region.

All terrific points.  All legitimate fears. 

The U.S. said this week that Fiji would become the 14th country to join President Biden’s Indo-Pacific Economic Framework, a pact to counter China’s growing influence in the region.

On a different topic, the United States heavily criticized a trip taken by UN human rights chief Michelle Bachelet to China because it was so heavily censored, Covid being the easy excuse, and her access to places like Xinjiang was severely limited.

President Xi spoke to her by video conference in the middle of the six-day visit and he told her China would not accept any “patronizing” lectures, according to state news agency Xinhua.

“When it comes to human rights issues, there is no such thing as a flawless utopia; countries do not need patronizing lectures; still less should human rights issues be politicized and used as a tool to apply double standards, or as a pretext to interfere in the internal affairs of other countries,” Xi said.

In a speech on China Thursday, as Wang Yi was touring the Pacific islands, Secretary of State Antony Blinken said that Washington will not block China from growing its economy or try to change Beijing’s political system, but it will defend international law and institutions that maintain peace and security and make it possible for countries, including the United States and China, to coexist, he said.

“We are not looking for conflict or a new Cold War.  To the contrary, we’re determined to avoid both,” Blinken said in a speech at George Washington University.

Washington remains focused on China, which poses “the most serious long-term challenge to the international order,” Blinken said.

While Blinken credited the hard work of the Chinese people for their country’s historic economic transformation in the last four decades, he assailed China’s leader Xi Jinping.

“Under President Xi, the ruling Chinese Communist Party has become more repressive at home and more aggressive abroad,” he said, adding that the party was using its power to undermine the principles and institutions that enabled its success.

In the speech, he laid out the contours of a strategy to invest in U.S. competitiveness and align with allies and partners to compete with China, calling that competition “ours to lose.”

Blinken said the Biden administration stood ready to increase direct communication with Beijing across a full range of issues and would “respond positively” if Chinese officials take action to address concerns.  “But we cannot rely on Beijing to change its trajectory. So we will shape the strategic environment around Beijing to advance our vision for an open and inclusive international system,” he said.

On Taiwan, Blinken said: “What has changed is Beijing’s growing coercion, like trying to cut off Taiwan’s relations with countries around the world, and blocking it from participating in international organizations,” adding that the Chinese military’s nearly daily activity near the island was “deeply destabilizing.”

Whether or not intentional, President Biden earlier provoked China with the vow to defend Taiwan militarily.  After saying that U.S. policy on Taiwan “had not changed at all” during a news conference in Tokyo, he then answered “yes” when asked if the U.S. would act “militarily” to defend the island.  “It’s a commitment we made,” Biden added.

White House officials later walked back the remark, saying the president was only promising U.S. aid to help Taiwan defend itself in the event of hostilities.  Ergo, like what the U.S. is doing in Ukraine, where the U.S. has sent no troops.

“The policy has not changed at all, and I stated that when I made my statement,” Biden said Tuesday when pressed by reporters to clarify the U.S. position.

The president’s remark roiled his first trip to Asia since taking office and upstaged his roll-out of a new strategic framework for the region.

Washington has had a decades-old approach of “strategic ambiguity” about whether U.S. forces would defend Taiwan against China, while also adopting a “One China” policy under which Taiwan isn’t recognized as an independent country.

This was Biden’s third gaffe on Taiwan…or was it?

Senator Tom Cotton (R-Ark.) said that Biden’s’ comments represented a shift toward “strategic clarity” on Taiwan and that the president should outline a clear U.S. commitment to defend the island “in clear, deliberate remarks from a prepared text.”

“Otherwise, the continued ambiguity and uncertainty will likely provoke the Chinese communists without deterring them – the worst of both worlds,” he said.

Republican Senator Lindsey Graham (S.C.) tweeted: “President Biden’s statement that if push came to shove the U.S. would defend Taiwan against communist China was the right thing to say and the right thing to do.

“Abandoning Taiwan to communist China would be abandoning democracy itself. It would lead to major cracks in world order and world security that would take generations to recover from.

“Our military capabilities in the region must be enhanced along with that of our partners like Taiwan.”

Editorial / Wall Street Journal

“The President is a master of the verbal muddle, but perhaps he is doing this intentionally.  Knowing the U.S. is likely to intervene – and if it does, that the U.K., Australia and Japan are likely to join – may give Chinese President Xi Jinping some pause about the costs of an invasion.

“The problem is that no one can be sure what the U.S. policy now is. The constant White House walk-backs of the President’s statements undermine his personal credibility with allies and adversaries.  We’d support more clarity in defense of Taiwan, but it ought to be announced in more considered fashion – with support lined up at home and abroad.

“It would also require a larger and more rapid plan to arm Taiwan and build up U.S. defenses.  One lesson of the Ukraine war is not to wait until the invasion begins to start sending enough weapons.  Send them now to make deterrence more credible.

“China has built its military to be able to overwhelm Taiwan’s defenses with an amphibious and aerial invasion. But it has also built a force to prevent the U.S. from rapidly reinforcing Taiwan with air and naval assets.  China has a long-range missile force that could cripple U.S. bases and airfields in the region.  Those missiles would also attack U.S. warships, including aircraft carriers, if they move within range to deploy U.S. fighters to defend the island.

“Mr. Biden’s’ budget sets the Navy on a path to shrink to 280 ships in 2027 from 298 today even as China greatly expands its fleet.  A credible defense of Taiwan and U.S. territories and allies in Asia is going to require a much bigger military budget.”

North Korea: Pyongyang waited until President Biden left the region before firing three missiles, including one thought to be an intercontinental ballistic missile (ICBM) on Wednesday.  The three missiles were fired in less than an hour from the Sunan area of the capital, where its international airport has become the hub for such missile tests.

In response the U.S. and South Korea held combined live-fire drills. The U.S. and Japan flew joint missions as well at the same time in another sign to the North to be careful.

Iran:  Iran’s Revolutionary Guards said on Sunday that one of its officers, Colonel Sayad Khodai, was killed in a rare assassination in Tehran.

Khodai was “one of the defenders of the shrines,” the semi-official Tasnim news agency reported, referring to military personnel or advisers who Iran says fight on its behalf to protect Shiite sites in Iraq or Syria against groups such as ISIS.  Two people on a motorcycle opened fire on Khodai, Tasnim reported.

The Guards blamed the killing on “anti-revolutionary” opponents of the Islamic government, but the attack was a reminder of killings of Iranian nuclear scientists which Iran blamed Israel for in most of them.

Khodai was later identified as being a leader of the Revolutionary Guards Corps’ efforts to assassinate opponents of Iran around the world, including recent failed plots to kill an Israeli diplomat, an American general and a French intellectual.

No one as yet that I have seen has claimed responsibility.

And this late development Friday…Iran seized two Greek tankers in the Gulf, shortly after Tehran warned it would take “punitive action” against Athens over the confiscation of Iranian oil by the United States from a tanker held off the Greek coast.

There are few details, except the Iranian tanker, Pegas, was impounded last month, with 19 Russian crew members on board.  The Pegas was among five vessels designated by Washington days before the invasion of Ukraine back in February.  The U.S. confiscated the oil onboard and released the vessel.

There are reports the two Greek vessels were carrying oil from Qatar and Iraq.

Russia, according to the U.S., has been smuggling oil and money laundering for the Revolutionary Guards’ Quds Force.

Australia: Prime Minister Scott Morrison conceded defeat after an election on Saturday and the opposition Labor Party was set to end almost a decade of conservative rule, possibly with the support of pro-environment independents.

Morrison’s Liberal-National coalition had been punished by voters in Western Australia and affluent urban seats in particular.

So we’re talking Prime Minister Anthony Albanese.  How this impacts U.S.-Australia relations, specifically on security in the Pacific, is yet to be determined.  Climate change is the major issue now for the new government.  I can’t blame Australians for that.  But the Aussies support is critical for the U.S., and the likes of Japan and South Korea, and India, in neutralizing China’s growing threats.

Labor has in the past proposed to establish a Pacific defense school to train neighboring armies in response to China’s potential military presence on the Solomon Islands on Australia’s doorstep.

Random Musings

--Presidential approval ratings….

Gallup: [New numbers] 41% approve of President Biden’s job performance, 54% disapprove; 39% of independents approve.  [May 2-22]  The prior split was 41-56.  The percentage of independents approving has risen from a low of 33% (Jan. 3-16).

Rasmussen: 43% approve of Biden’s performance, 55% disapprove (May 27).

The aforementioned CBS News/YouGov survey gives Biden a 44% approval rating, 56% disapproval.

A new Reuters/Ipsos national poll has Biden with an approval rating of 36%, lowest yet, with 59% disapproving of his job performance.

Biden’s approval rating with his own party fell to 72% from 76% the prior week.

--In the two key races in Georgia’s GOP primary, Donald Trump got his butt kicked.

Gov. Brian Kemp 73.7%...Trump stooge David Perdue 21.8%

For secretary of state…

Brad Raffensperger 52.3%...Jody Tice 33.4%

And in Alabama’s GOP primary for the Senate…

Mo Brooks, who Trump disowned, survived to make a runoff with 29.1% and will face the retiring Sen. Richard Shelby’s aide, Katie Britt (44.7%).

These developments were good for the country.  Recall, I publicly said I contributed to the Kemp campaign, mainly as a protest against Trump.

In the final days, former Vice President Mike Pence campaigned for Kemp, which Trump then blasted.

--Karl Rove / Wall Street Journal

“Some primaries matter more than others. Georgia’s on Tuesday mattered a lot.

“The Peach Tree State’s incumbent Gov. Brian Kemp walloped former Sen. David Perdue 74% to 22% despite Mr. Perdue’s endorsement from former President Donald Trump, backed with $3.1 million from his PAC. In a huge turnout, Mr. Kemp carried all the state’s 159 counties, even taking Mr. Perdue’s home county of Glynn by 40 points.

“Attorney General Chris Carr, Secretary of State Brad Raffensperger and Insurance Commissioner John King also overcame Trump-endorsed challengers – and in Mr. Raffensperger’s case, an unrelenting barrage of slashing personal attacks from the former president.

“Mr. Kemp’s win provides valuable lessons for other Republican candidates, in both primaries and general elections.  The governor played down the importance of Mr. Trump’s opposition, saying, ‘He’s mad at me.  I’m not mad at him.’  Mr. Kemp never allowed the race to be about the former president or Mr. Trump’s criticism of him for failing to overturn Georgia’s 2020 election results.

“Instead, Mr. Kemp made the contest about his own record, highlighting his handling of the Covid pandemic, economic development initiatives, and leadership in passing essential reforms to improve education, cut taxes, crack down on crime, make it easier to vote and harder to cheat, and limit abortions.  By emphasizing how successfully he had governed as a conservative, the governor reminded Republicans why they liked him in the first place….

“There are also lessons Tuesday for Democrats. Despite White House protestations that President Joe Biden will indeed seek a second term, more and more Democrats have realized that nominating an 81-year-old in 2024 would be a terrible error – and that this particular octogenarian will likely bring a poor approval rating with him.  There’s a growing sense that things won’t miraculously get better for the Democratic president, especially on the economy with persistent inflation and growing threats of a recession. Another Democrat will have to step forward, and Mr. Kemp’s race gives a good model of how to do it.

“Members of Congress and Mr. Biden’s cabinet can’t so easily distance themselves from president and party, but Democratic governors are in a better position to.  Just as Mr. Kemp handled Mr. Trump by rising above him, so could Democratic governors transcend Mr. Biden by using their records to outline a new Democratic vision.

“There are ambitious Democratic governors who sure seem like they want to run in 2024, including North Carolina’s Roy Cooper, New Jersey’s Phil Murphy, California’s Gavin Newsom, Colorado’s Jared Polis, Illinois’ J.B. Pritzker and Michigan’s Gretchen Whitmer. Even Ms. Abrams, still a candidate, is interested in a White House bid…

“Speaking of Ms. Abrams, Tuesday’s Georgia results also provided her food for thought on the coming general election. With some scattered votes to be tallied, GOP turnout is 1,196,065 and Democratic turnout 717,433.  While Democratic turnout increased 30% over the last midterm in 2018, Republican turnout increased 96% over 2018 and there were 66% more GOP voters than Democrats this year.

“Also, Ms. Abrams may not be the skilled candidate some thought. Tuesday’s primary was the first run under Georgia’s new election law, which she has previously denounced as ‘voter suppression.’ Yet turnout hit a record high, lines were few and the count quick and smooth. It’s clear Ms. Abrams’ claims were utterly false.  Still, she now says high turnout was ‘causation without correlation’ and that ‘increased turnout has nothing to do with voter suppression.’ If her statements strike you as nonsense, you’re not alone.”

Stacey Abrams is a walking clown-car.

--Trump did have a few ‘wins’ in his column, namely former football great Herschel Walker, the GOP pick for the Senate in Georgia, who will run against incumbent Democratic Raphael Warnock.

And Rep. Marjorie Taylor Greene survived her Republican primary, so she’ll no doubt remain in Congress after defeating her Democratic challenger in the fall.  Some of us just shake our heads.

--Trump’s favored candidate in the Pennsylvania GOP primary for Senate, Dr. Mehmet Oz, is facing a recount in his race against Dave McCormick.  Any margin less than half a percentage point triggers a recount, and the margin was more like 0.1%.

The eventual winner goes up against Democratic Lt. Gov. John Fetterman, who has had rather major recent health issues.

--The Uvalde killer, 18-year-old Salvador Ramos, spent more than 40 minutes inside, killing 19 children and two teachers, as witnesses desperately urged police to charge into the building.

Ramos barricaded himself inside a classroom before opening fire on students and teachers.  Border Patrol agents finally breached the door about an hour later when a staff member gave them a key.

As noted above, we learned it was gross incompetence and much more that officers didn’t immediately charge in.

Javier Cazares, father of 10-year-old victim Jackie Cazares, told ABC News that he watched as the officers stood outside his daughter’s school.

“There were at least 40 lawmen armed to the teeth but didn’t do a darn thing [until] it was far too late.”

A witness who lived across the street from the school, said onlookers begged officers to do something as bullets rang inside the building.

As if the tragedy wasn’t already horrible beyond belief, Joe Garcia, whose wife, Irma, was one of the two teachers killed, died of a heart attack two days later.  The two were married for 24 years.

Editorial / Wall Street Journal

“The massacre at Robb Elementary School in Uvalde, Texas, on Tuesday has produced the usual demands to ‘do something.’ We share the impulse and the anger, but what specifically to do?  The reason there are more demands than solutions is because the problem of how to stop mass shootings by disturbed young men is one of the hardest in a democratic society.

“The profile emerging of Salvador Ramos…is depressingly familiar.  A teenage loner with a disruptive family life.  Bullied as a child because of a speech impediment.  Immersed in video games and other virtual reality. Ramos, who was killed amid his massacre, had fought with is mother and hinted at violent ambitions.  He shot his grandmother before he drove to the school and murdered children with a rifle in a fourth-grade classroom.

“This is achingly similar to the profile of other young mass killers from Sandy Hook to Aurora, Parkland, Tucson, Virginia Tech and Buffalo.  They suffer from mental illness or profound social alienation.  The societal challenge is anticipating when such a young man – and it is nearly always a young man – will snap, and how and when to deny him access to firearms….

“We aren’t opposed to sensible gun regulation if it is politically possible and might prevent such killings. So-called red-flag laws that give police the ability to deny guns to people who may pose a risk to the community have been useful in some cases.  But they are hard to enforce, as we recently learned in Buffalo.  New York state has a red-flag statute, and Payton Gendron was even referred for mental counseling. He still got a gun.

“Would background checks beyond those that already exist help?  Unlikely, since these young men rarely have a criminal record.  A six-day waiting period to receive a gun after it’s purchased?  Not for someone who is determined to kill. A ban on purchasing a rifle until the age of 21?  As Gov. Greg Abbott pointed out Wednesday, 18-year-olds have been able to buy long guns in Texas for more than 60 years.  Yet for decades mass shootings were rare.

“A ban on some or all long guns would still leave handguns available, and good luck enforcing a ban….

“The recent proliferation of mass shootings suggests a deeper malady than gun laws can fix.  Firearm laws were few and weak before the 1970s.  Yet only in recent decades have young men entered schools and supermarkets for the purpose of killing the innocent….

“The modern welfare state is adept at writing checks, but not much ese. Today’s young killers aren’t motivated by material deprivation.  They are typically from middle-class families with access to smartphone and X-boxes. Their deficit is social and spiritual. The rise of family dysfunction and the decline of mediating institutions such as churches and social clubs have consequences.

“This cultural erosion will take years to repair, but a good start would be to admit that it plays a role in the increasing acts of insensate violence. It would also help if someone brave enough to mention the problem – recall Joe Lieberman and Tipper Gore – isn’t derided as a cultural dinosaur.

“We are fated to have another debate on gun control because half of American politics will insist on it. By all means have at it.  But anyone who thinks gun laws will end mass shootings in America isn’t paying attention to the much larger issue of mental illness and the collapse of cultural guardrails.”

I do not necessarily agree with all the above.

Peggy Noonan / Wall Street Journal

“Gov. Greg Abbott of Texas said Wednesday that Texas has a long history of letting 18-year-olds have long guns.  That is true.  He also said cops, after the shooting, told him they’re seeing a crisis in mental health in young people. That’s true too, it’s all around them, all around all of us.

“But Mr. Abbott should listen to himself more closely. It is one thing to let an 18-year-old have a rifle to shoot rattlers in 1962.  It is another thing to allow an 18-year-old in the middle of a mental-health crisis to buy an AR-15, which is what the sick Uvalde shooter bought on his 18th birthday.

“Republicans, you are saying every day that there’s a mental-health crisis and, at the same time, that we shouldn’t stop putting long guns in the hands of young men.  Policies must evolve to meet circumstances.  You must evolve.

“I end here.

“I continue in a kind of puzzled awe at my friends who proceed through life without faith, who get up and go forward without it. How do you do that?  I tell the young: I have been alive for some years and this is the only true thing, that there is a God and he is good and you are here to know him, love him and show your feeling through your work and how you live. That is the whole mysterious point.  And the ridiculous story, the father, the virgin, the husband, the baby – it is all, amazingly, true, and the only true thing.

“Uvalde is a town of about 16,000 people and if I’m counting right about 40 places of Christian worship, all kinds, Evangelical, Catholic, Mainline.  I keep seeing the pictures – a group of four middle-aged men in jeans and T-shirts, standing near the school, arms around each other, heads bent in prayer.  And the women sitting on the curb near the school and sobbing, a minister in a gray suit hunched down with them, ministering.  And the local Catholic church the night of the shootings – people came that night, especially women, because they know it’s the only true thing and they know they are loved, regarded, part of something, not alone. I don’t mean here ‘the consolations of faith,’ I mean the truth is its own support. Consolation is not why you believe but is a fact of belief and helps all who have it live in the world and withstand it. I am so glad for the people of Uvalde this weekend for only one thing, that so many have that.

“Once I saw a painting – outsider art, crude, acrylic, made by some madman.  There were splayed bodies and ghost-blots above each body, which depicted their souls. They were shooting upward – happy, free of gravity, rising toward Heaven.

“Haven’t seen the painting since, think of it a lot, want it to be how it was in that classroom, all the children’s souls free to go home.”

With Ms. Noonan’s thoughts on a painting, I can’t help but think of a painting of a peasant woman by Camille Pissarro I once saw at the National Gallery of Art that reminded me of how I envisioned my relatives living in Czechoslovakia, who grew up that way.  Now that painting comes to mind when I see the pitiful scenes from Ukraine of the struggling elderly, forced to stay in the villages because they don’t have the resources to leave.  And now they’re being slaughtered by Russia.

--Of course, sickeningly, there are all kinds of crazy conspiracy theories online after an event like Uvalde, and it’s amazing a large percentage of Americans, and people around the world, believe them.

Arizona Republican Rep. Paul Gosar blamed the school massacre on a “transsexual leftist illegal alien” in a tweet that was then deleted.  Gosar reportedly made his claim in response to a tweet that the shooter was probably a racist who would have supported a congressman such as Gosar.  News sites including his home state’s AZ Central took a screen shot of Gosar’s reply before it was apparently deleted.

“We know already fool,” Gosar responded. “It’s a transsexual leftist illegal alien named Salvatore Ramos. It’s apparently your kind of trash.”

--Good for Lee Greenwood, and other musicians, for bailing on their scheduled concerts at the National Rifle Association’s convention in Houston, citing Uvalde.

Greenwood, in a statement, said after “thoughtful consideration” his band decided to cancel its appearance for Saturday’s event.

“As a father, I join the rest of America in being absolutely heartbroken by the horrific event that transpired this week in Texas….

“After thoughtful consideration, we have decided to cancel the appearance out of respect for those mourning the loss of those innocent children and teachers in Uvalde.”

Other singers such as Don McLean, Larry Gatlin and Larry Stewart also pulled out.

--Former Trump adviser Kellyanne Conway trashes one-time presidential son-in-law Jared Kushner as a “shrewd and calculating” power-hungry backstabber in a new White House memoir.

The ex-White House communications director pulls no punches regarding Ivanka Trump’s husband, saying he was a master of White House office politics who constantly sought to add to his portfolio without accepting any accountability.

“There was no subject he considered beyond his expertise. If Martian attacks had come across the radar, he would have happily added them to his ever-bulging portfolio,” she writes.  “He’d have made sure you knew he’d exiled the Martians to Uranus.”

Conway writes in the forthcoming book, “Here’s the Deal”: “He misread the Constitution in one crucial respect, thinking that all power not given to the federal government was reserved to him,” she added.

“No matter how disastrous a personnel change or legislative attempt may be, (Kushner knew) he was unlikely to be held accountable for it,” Conway writes.

This is exactly how I viewed Kushner.  But as I said from day one, the apple didn’t fall far from the tree…which is for New Jerseyans, who knew all about Jared’s corrupt father.

Conway stirs clear of criticizing Donald Trump in her book, but concedes her marriage to conservative lawyer, and NeverTrumper, George Conway, was controversial, and uneasy.

--Two years after George Floyd’s murder, nearly 8 in 10 Black Americans say there has been little or no improvement in how police treat Black People, according to a nationwide Washington Post-Ipsos poll conducted after a gunman killed 10 people at a Buffalo supermarket, targeting members of the mostly Black neighborhood.

After the attack, only 10 percent think the problem of racism will improve in their lifetimes, while a 53 percent majority think it will get worse.

What I find sad in the survey is that 7 in 10 Black Americans think at least half of White people hold white supremacist beliefs.

--U.S. births increased last year for the first time in seven years, according to federal figures released Tuesday that offer the latest indication the pandemic baby bust was smaller than expected.

American women had about 3.66 million babies in 2021, up 1% from the prior year, according to provisional data from the CDC; the first increase since 2014.

Births still remain at historically low levels after peaking in 2007 and then plummeting during the recession that began the end of that year.

--The latest hurricane season predictions are out, and various forecasters are pointing to another active storm season in the Atlantic this summer (and early fall).

None of them believe 2022 will be as busy as 2020’s record-breaking season – when 30 named storms formed – but forecasters from the National Oceanic and Atmospheric Administration are expecting the overall number of storms to be higher than average.

NOAA predicted a 65% chance of an above-normal season, calling for anywhere form 14 to as many as 21 named storms to develop in the Atlantic basin during the upcoming season which officially runs from June 1 to Nov. 30.

Of the named storms, NOAA is predicting six to 10 will strengthen into hurricanes and three to six will likely become major hurricanes, with top sustained winds of 111 mph or stronger. [Cat 3]

Based on data from the past 30 years, an average hurricane season has 14 named storms, seven of which strengthen into hurricanes, and three of those becoming major ones.

The main factors contributing to an active hurricane season, NOAA said, are warmer-than-average sea surface temperatures in the tropic Atlantic Ocean and Caribbean Sea, the ongoing La Nina climate pattern, weaker tropical Atlantic trade winds and an enhanced west African monsoon.

“An enhanced west African monsoon supports stronger African easterly waves, which seed many of the strongest and longest-lived hurricanes during most seasons,” the agency noted.

Earlier….

AccuWeather predicted 16 to 20 names storms, including six to eight that will intensify into hurricanes, with three to five become major ones.

Colorado State University researchers have predicted 19 named storms, saying nine are likely to intensify into hurricanes, four being major ones.

The Weather Channel is predicting 20 names storms, eight hurricanes and four major ones.

I glanced at the names for 2022 and I was disappointed not to see “Cricket,” your editor just being ornery.

--According to autopsy and toxicology reports, carbon Monoxide poisoning was determined to be the cause of death for three Americans found dead at a Sandals resort in the Bahamas.

It makes sense. The victims were found unresponsive in their rooms after seeking medical help for feeling ill the prior night.

--Among the recommendations for changing the name of military bases with Confederate ties is one that stands out to me…Fort Benning, Ga., to become Fort Moore, after Hal Moore, a retired lieutenant general, and Julia Moore.  Hal received the Distinguished Service Cross for actions during the Vietnam War; and his wife Julia changed how the military notifies family members of casualties to deliver the news in a more compassionate way.

Hal Moore was in command of the 1st Battalion, 7th Cavalry Regiment (as in air cavalry) at the Battle of Ia Drang in Vietnam, 1965, the first major battle of the war that was brilliantly chronicled in the book “We Were Soldiers Once…and Young,” co-authored by Moore and war journalist Joseph L. Galloway, which was then adapted for the 2002 movie “We Were Soldiers” starring Mel Gibson as Moore.

Fort Gordon, Ga., is to become Fort Eisenhower after the president and supreme commander.

I like that Fort Rucker, Ala., is to become Fort Novosel for Chief Warrant Officer 4 Michael Novosel Sr., who earned the Medal of Honor during Vietnam for flying aircraft through enemy fire to save 29 men.

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

Pray for Ukraine…and now, Uvalde.

God bless America.

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Gold $1850
Oil $115.02

Returns for the week 5/23-5/27

Dow Jones  +6.2%  [33212]
S&P 500  +6.6%  [4158]
S&P MidCap  +6.5%
Russell 2000  +6.5%
Nasdaq  +6.8%  [12131]

Returns for the period 1/1/22-5/27/22

Dow Jones  -8.6%
S&P 500  -12.8%
S&P MidCap  -10.6%
Russell 2000  -15.9%
Nasdaq  -22.5%

Bulls 28.2
Bears 40.8

Hang in there.

Happy Memorial Day…travel safe.

For those who have been to Normandy, you know of the inscription in one of the chapels there.

Think not only of their passing
Remember the glory of their spirit

***Next week I will post an abbreviated WIR, roughly, by early afternoon Thursday.  I will fill in just a few items, such as weekly returns, by Saturday morning.  I’m taking a brief break to be with some old friends.

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