Week in Review

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Week in Review

10/16/2021

For the week 10/11-10/15

[Posted 9:00 PM ET]

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Edition 1,174

There are two geopolitical issues that investors need to keep an eye on, if you aren’t already, and that is Iran and China, both of which I get into in great detail further below.

I’ve been writing of Iran for months now that ever since it was apparent it was rapidly moving ahead with its nuclear weapons efforts, despite the protestations of world powers, Israel would have to act, and soon.

This week it was as if the Biden administration finally got the picture, and no doubt behind the scenes planning is under way.  What to do when Israel attacks?  Their government has no choice but to do so.

This won’t be another assassination of a leading Iranian scientist…that hasn’t stopped Tehran in the past, nor has sabotaging various nuclear facilities.  It will be far more aggressive and reverberate around the world.  This is about Israel’s very existence.

The other issue, China and its threats against Taiwan, is a little different. 

I’ve gotten a kick out of the stories that have emerged in the Chinese press recently about the People’s Liberation Army’s war plans, and how China will be fully ready to strike the island in 2025!

2025?!  Try tomorrow.

I’ve been way early in talking of the risk to Taiwan, whose people you know I am very fond of, for years and years.  But there’s an important line in a Global Times editorial that I reference down below, the paper being a mouthpiece of the Communist Party.  China can take Taiwan with a single strike.

I’ve believed that for years.  The United States is not going to defend Taiwan.  And China knows that.  It also knows that after it takes out the Taiwanese military’s airfields, just how far will Taiwan go to risk the lives of tens of thousands in a battle of missiles being fired by both sides across the Straits?  Taiwan’s leadership would not do that.

At the same time, China doesn’t want to destroy Taiwan’s manufacturing base, especially its chip manufacturing capability, which China wants to control in the worst way, thus gaining power over large segments of the global economy, giving it the ability to influence policy in the likes of the United States.  [Such as ‘leave us alone in the South China Sea, or else….’]

But in the immediate term, we do have this issue of the Beijing Winter Olympics in February, which because of the pandemic and the inability to draw large foreign crowds (and money), I’m guessing at this point Chinese President Xi Jinping kind of wishes he didn’t have the hassle.  It certainly wasn’t good for the Japanese government to stage its delayed show amid a global health crisis.

Most China experts and observers of the geopolitical situation in the world today are worried about a “mistake” made by either China or Taiwan as Beijing continues to ratchet up the pressure with its incursions into Taiwan’s airspace with its fighter jets and nuclear-capable bombers.

I’m just of the opinion these days, however, it won’t be a mistake.  China will manufacture it to see just how far Taiwan, and the United States, will go in response.

Then we have a follow-up counter from the PLA and it could be over, despite the brave words today of Taiwan’s terrific leader, Tsai Ing-wen.

Years ago, I made my large, ill-fated investment in China, specifically in a chemical company in Fujian province, a big attraction for me being the fact the plant the company was building was at a new port facility that was also at the shortest point between the mainland and Taiwan.  I visited the beach and the port, as well as putting a hardhat on as I explored the plant, and this was at a time when relations between the two were very “businesslike,” and there was lots of cross-Strait commerce.

Of course, I knew that Fujian was also where the bulk of the missiles targeting Taiwan were based, and there were constant military drills in the area.  When you fly from Hong Kong to Fuzhou, as I did a number of times, your plane is sometimes put in a holding pattern while the PLA does its thing.  That happened to two of my flights.  How did I know?  Hell, the pilot the first time just came on and said so, in so many words.

So these are my overriding concerns for the coming months.  Maybe China doesn’t precipitate a response to a “mistake” until after the Olympics, but it’s coming. 

First, however, get ready for Israel’s move. 

Biden Agenda

In the short term, it’s about the Nov. 2 Virginia gubernatorial election and whether the Democrats’ candidate, former Gov. Terry McAuliffe, can hold on in a solid blue state (these days) as he faces a stiff challenge from Republican Glenn Youngkin.

It would be most helpful to McAuliffe if Democrats got their act together in Congress and passed the infrastructure bill…at least.

President Biden and his party need to stop the bleeding, which is self-inflicted.

Virginia Democratic Sen. Mark Warner, a moderate, said of the infrastructure bill and the broad safety net package, “If we don’t pass one of those before the election, it’s a huge, huge mistake. We’ve got two major wins – two major bipartisan wins. …Let’s get at least one if not both of those wins for the president on the board.”

But both wings of the Democratic party feel like they have already yielded too much, and the president is like a manatee, just kind of floating in coastal waters, not realizing a motor boat is coming up from behind, propellers ready to rip the agenda, and his presidency, to pieces.

--The House passed the Senate’s debt-ceiling bill, also along a party line vote, 219-206, on Wednesday, the president signed it yesterday, so we now move on to Dec. 3rd and the new deadline.

This time, Senate Minority Leader Mitch McConnell said he would not cooperate and that it was totally up to the Democrats to push legislation on their own if the debt ceiling is again to be raised.

McConnell has tried to link Biden’s big federal government spending boost with the nation’s rising debt load, even though they are separate and the debt ceiling will have to be increased or suspended regardless of whether Biden’s $3.5 trillion plan makes it into law.

“Your lieutenants on Capitol Hill now have the time they claimed they lacked to address the debt ceiling through standalone reconciliation, and all the tools to do it,” McConnell said in a letter to the president.  “They cannot invent another crisis and ask for my help.”

McConnell was one of 11 Republicans who sided with Democrats to advance the debt ceiling reprieve to a final vote. Subsequently, McConnell and his GOP colleagues voted against final passage.

House Majority Leader Steny Hoyer (D-Md.), who said he has now voted 50 times to extend the debt limit, dating back to President Reagan, said the Senate bill allowing only for a stopgap extension was a “lousy deal.”

“And then we’re going to play this game one more time, a despicable and irresponsible act for adults who know better.”

Rep. Chip Roy (R-Tex.), said he wanted to “thank” Hoyer for sharing that he had previously voted for raising the debt ceiling 49 times.

“When he came into this body, the debt was about a trillion dollars,” Roy said.  “Thank you, I guess, on behalf of the people of America who are staring at 28-and-a-half trillion dollars of debt.”

This is one of the single dumbest statements I have ever seen out of Congress!  But this is where we are.  A Capitol full of immense a-holes and idiots.

--An Axios/Ipsos survey shows that just 13% of U.S. adults expect to be able to get back to their normal, pre-Covid lives at some point within six months.  In June it was 36%.

Today, just 44% of those who think life will be normal again in six months say they trust Biden.

Most Democrats say they still have some degree of trust in Biden to provide them accurate information on Covid – but that trust has softened significantly.

81% of Democrats currently have at least a fair amount of trust in Biden, down from 88% in early June.

But the share of Democrats who say they have a “great deal” of trust in Biden has dropped sharply, from 45% to 33%.  Numbers among independents have deteriorated as well, which is critical.

--David Ignatius / Washington Post

“Traveling overseas the last few days, I kept hearing prominent foreigners asking the same question: What’s happening to politics in the United States?  And more specifically: Why isn’t President Biden a stronger leader at a time when his party controls the House and Senate?

“You can explain the nuances to these foreign political observers – the narrow Democratic majorities, the unyielding obstruction of the Republicans, the fractured internal politics of the Democratic Party.  But you get a shrug.  Biden won, so why is he a prisoner of those he defeated at the polls, not to mention members of his own party?

“The cartoon version of Biden’s plight is that he is becoming ‘the incredible shrinking president’ – a label that seems to be slapped on every modern chief executive, from Bill Clinton to Donald Trump.  Now, it’s Biden’s turn. If you look back to June, he seemed to be gaining stature and strength.  His trip to Europe was a resounding success; ‘America is back’ seemed more than a slogan.  On domestic politics, Biden helped craft a draft bipartisan infrastructure bill in June that embodied the promise on which he had been elected – the country can still be governed through policies that unite left and right.

“And then the stumbles began. Despite Biden’s pledge that the $1.2 trillion national infrastructure bill wouldn’t be held hostage to a $3.5 trillion social spending bill, that’s just what happened; the tensions within the party that had been largely suppressed during the summer boiled over come fall.  Despite Speaker Nancy Pelosi’s promise to bring the bipartisan bill to a House vote in September, it languished. Weirdly, it seemed as though progressive leaders such as Sen. Bernie Sanders and Rep. Pramila Jayapal suddenly had more clout than Biden and Pelosi.

“Politics is partly about momentum – and Biden should have known that.  When he was up this past summer, it was time to insist on pocketing a win, to show the country that the Biden project of national reconstruction was working, with a first installment on infrastructure. And then move on to the larger package of social reforms – important, but as initially floated, too fuzzy and too expensive.

“Instead, the president got caught in the Washington political wringer. He seemed a captive of his own party, not to mention the Halloween goblins on the Republican side. This acrimonious stalemate is part of what the nation detests about Washington, and it’s no wonder that Biden’s poll numbers have been in a free fall since the summer.  From a supposed master of the legislative process, the country expected more….

“Biden got elected as a centrist.  But he has been pulled left since Inauguration Day by the gravitational – and legislative – force of the progressives.  The White House blames Sen. Joe Manchin as an obstructionist – arguing that if he had just agreed to a one-page term sheet on social spending, a signing ceremony could have been held on the infrastructure bill in September.  Sorry, but I don’t buy it.  Progressive leaders until very recently have resisted any significant cuts in their $3.5 trillion smorgasbord.

“The time to compromise – toward a $1.5 to $2 trillion social spending package that can be enacted into law – is now, before any more air goes out of the Biden balloon….

“Bad things can happen to good countries. That’s what you remember when you travel to places such as Italy, which embraced fascism in the 1930s.  When strong leaders can no longer hold the center, extremists proliferate on the left and right.  Progressives argue that the center is dead and the time for compromise is past.  But that’s not the decision the Democrats – and the country – made in choosing Biden.

“As it happens, Pelosi was in Italy over the weekend, too. She told her colleagues that she had met with Pope Francis and asked him ‘to pray for us’ as the decisive votes approach.  Divine intervention would be a blessing, but for now we must depend on Pelosi’s whip count.”

--Gerald F. Seib / Wall Street Journal

“It’s funny how August, which is supposed to be a quiet month, so often turns into a disastrous one for presidents. And so it was for President Biden this year, bringing about a slide from which he has yet to recover.

“The disastrous withdrawal from Afghanistan, the resulting tensions with allies, a surge in the coronavirus Delta variant, a stall-out in his domestic agenda amid nasty intraparty fighting, the continuation of a summertime surge in illegal border crossings – all merged into a kind of toxic brew.  The president’s job approval rating in the RealClearPolitics average of national polls fell from 513% on the first day of August to 46.3% on its last, and has slid further since, to 43.3% this week.

“This particular set of late-summer woes was so damaging because it attacked the core rationales for the Biden presidency.  He was to be the decent and respectful president, competent, capable of conquering the virus, able to work effectively across the aisle, well equipped to re-establish smooth relations with allies. The decent and respectful part remains intact, but all the rest were called into question….

“So the question for Mr. Biden is: How does he regain the narrative of his presidency?  A few steps seem essential:

“Take back control of messaging from his party’s progressive wing….

“Get back in front of the Covid-19 problem….

“Use the opportunities just ahead to re-establish competence on the world stage.

“A coming meeting of the Group of 20 industrialized nations, a virtual summit meeting with Chinese President Xi Jinping, a global conference on climate change: All represent a chance for Mr. Biden to not only lead, but to explain to voters why he considered it important to put the fight in Afghanistan behind, to focus on some bigger problems ahead.

“Establish control of the immigration crisis.

“Democrats probably underestimate the damage being done to them by the series of migrant surges at the southern border this year….”

--Editorial / Wall Street Journal

“Washington has had an excellent pandemic.  If you doubt it, look no further than the Congressional Budget Office’s summary for revenues and outlays for fiscal 2021, which ended on Sept. 30.  The federal government has never had it so good – literally.

“The budget gnomes estimate that federal receipts rolled in at a record $4.05 trillion for the year, the first time annual revenues have exceeded $4 trillion.  This is not a record to be proud of – like breaking the four-minute mile.  Receipts rose 18%, or a remarkable $627 billion, in one year….

“As CBO’s monthly budget summary dryly observes, ‘that increase most likely reflects higher total wages and salaries, particularly among the relatively high-income workers who are subject to higher tax rates on earnings.’

“Translation: The rich had a good year, but they also paid a huge fiscal dividend in taxes.  Question for President Biden: Does $2 trillion qualify as a ‘fair share’? ….

“For readers who still care about budget deficits…the revenue boom was swamped by another record spending increase.  Outlays rose 4% in the fiscal year, or $265 billion, to $6.82 trillion. That’s 30% of GDP in federal spending alone.  Some of that will ebb as pandemic emergency payments expire – that is, unless Democrats succeed in making them permanent or adding new benefits as part of Mr. Biden’s $5 trillion entitlement plan.

“All of this raises the question: With tax revenues coming like a gusher, and the economy slowing from supply-side shortages, why raise taxes at all?  In particular, why raise tax rates when the current rates seem to be capturing the profits of companies and the income of individuals well enough?

“There’s no fiscal or economic logic to it, so the likely answer is simply to punish Americans who make more than what Mr. Biden thinks is ‘fair.’”

Wall Street and the Economy

Everyone is talking about supply chain issues, congestion at the ports, and such, so it’s a reminder that 90% of the world’s global trade is shipped by sea, with 70% in containers.  And with much of it, in the case of the United States, coming from Asia, it’s why I harp on the Covid-19 numbers, globally, as I do each week, and remind everyone why it’s not a good thing when cases are spiking in the likes of Vietnam, Malaysia and Thailand, for example, as local authorities then shut the factories making the goods consumers, and corporations, depend on.

So we’ve got to squash the virus, around the world, but while the developed world is doing a good job with the vaccines, the developing world is just not getting the supply of shots it needs, and, to beat a dead horse, this is why Covid-19 can just percolate for years across the globe, though with booster shots and therapeutics, those of us in the Western World will learn to get on with it.

But back to the ports, 36% of U.S. imports come into Long Beach-Los Angeles, where record amounts of cargo are being unloaded these days.  It’s also where the traffic jams are worst.

So the Biden administration announced it had reached an agreement with the Port of Los Angeles, and the labor unions, to operate around the clock in an effort to ease cargo bottlenecks, especially ahead of the holidays.

To which I was thinking, along with I’m sure all of you, I just assumed the Port of Los Angeles (and Long Beach) always operated 24/7.  It turns out Long Beach just went to that last month.

As in, if you thought that, yes, major ports in Asia and Europe have operated around the clock for years!

Meanwhile, on the energy front, you have serious issues in China, where electricity is being rationed, and Europe, which is deathly afraid of the coming winter and shortages of natural gas, and while we don’t have shortages in the United States, it’s all one global market when it comes to pricing, so consumers aren’t real happy with what they’re paying at the pump, for instance.

The economic recovery from the pandemic, and now supply not meeting demand, is killing us after a year of retrenchment in coal, oil and gas extraction.  There are other factors, including an unusually cold winter in Europe last season that drained reserves and now a lack of wind over the North Sea that has sharply curtailed the output of electricity-generating wind turbines.

Longtime energy expert Daniel Yergin told the Washington Post: “It radiates from one energy market to another.  Governments are scrambling to get subsidies in place to avoid a tremendous political backlash.  There’s a pervasive anxiety about what may or may not happen this winter, because of something we have no control over, which is the weather.”

Well, that’s what I wrote in this space, WIR 9/25:

“Speaking of Europe, it is not going to be a good winter across the pond.  There will be serious energy shortages, particularly in natural gas…and the natives will be riled up.  There will be mass demonstrations and more than a bit of unrest and it’s going to be ugly.”

I’ll get into the whole Nordstream 2 pipeline issue next time, but this is obviously going to be a big deal in the coming weeks, much to the chagrin of Ukraine, for starters.

Meanwhile, the International Monetary Fund, as part of its latest global growth forecast for 2021, and beyond, lowered its forecast this year to 5.9%, with advanced economies at 5.2%.  Global growth in 2022 is now forecast to be at the 4.9% level.

The U.S. is pegged at 6% for 2021, China 8%.

The IMF’s food-and-beverage price index, incidentally, rose 11.1% between February and August, with prices of meat and coffee rising 30% and 29%, respectively, a huge issue particularly in the developing economies

Going back to last week’s September jobs report, I didn’t have the time to go over it as closely last Friday and upon further analysis, and we had one striking number…309,000 women over age 20 dropped out of the labor force last month, meaning they quit work or halted their job searches.  By contrast, the Labor Department data showed 182,000 men joining the labor force.  Clearly, in the case of women, a lot of this has to do with unstable school and child-care situations, as much as conservatives are loath to admit this.

But as I noted last week, the survey for which the September numbers are calculated is from mid-month (a few days before, actually), and that is when the Delta variant was still raging.  It has fallen off in many parts of the country since so we’ll see what October and November show.

Separately, the Labor Department reported this week that a record 4.3 million Americans quit their jobs in August, up from 4 million in July.  The number of jobs available fell to 10.4 million, from a record high of 11.1 million the previous month.  You can blame the Delta variant here as well.

Also on the data front this week, the September consumer price index rose 0.4% from August, 5.4% from a year ago, matching the highest rate since 2008, while the core figure, ex-food and energy, rose 0.2% and 4.0% year over year.

Higher prices for food and energy are the prime reasons for the surge in inflation this year, but the CPI also reflects big increases in new and used cars, hotel rooms, clothing and furniture, among other goods and services.

Then Thursday we had the readings on producer prices, up 0.5%, but just 0.2% on core; 8.6% year-on-year on headline, 6.8% ex-food and energy…both obviously way too high.

September’s retail sales report was stronger than expected, up 0.7%, and 0.8% ex-autos.

Jobless claims for the week at 293,000 represented the lowest level since the pandemic began.  This is good.

But the Atlanta Fed’s GDPNow barometer for third-quarter growth is down to 1.2%.

Europe and Asia

Eurostat reported August industrial production for the euro area was down 1.6% over July, though up 5.1% vs. August 2020.

Brexit: The EU and UK are braced for another round of talks over the Northern Ireland ‘protocol’ and trade barriers, after the bloc unveiled a proposed set of adjustments to the part of the Brexit deal governing the movement of goods into and out of N.I.  Inspections on many goods would be cut by 80%.

But Britain’s Brexit minister David Frost has warned that his government could not accept any proposals that retained the European Court of Justice (ECJ) oversight of the EU regulations that apply to Northern Ireland.

It is a demand seen as impossible for Brussels to concede, as it underpins the EU’s legal order.

At the same time, France warned if Britain doesn’t comply with its commitments on fishing rights, it will retaliate by the end of next week, which might include threatening Britain’s electricity supplies.

Meanwhile the severe trucker shortage in the UK has forced the world’s biggest shipping line, A.P. Moller-Maersk A/S, to divert some ships from Felixstowe, the UK’s largest container port, owing to congestion.

Again, the UK’s port problems and trucker shortage are part of a global disruption, but Brexit made it worse by choking off Britain’s key source of drivers who live in the EU.

Turning to Asia…Sunday evening, 9:00 p.m. ET, as I watch the baseball playoffs and Sunday Night Football, I’ll have an eye on my ticker, awaiting China’s third-quarter GDP number, which was 7.9% annualized for the second quarter, but is expected to come in around 5% for Q3.  The property slump, energy crisis, weak consumer sentiment and soaring raw material costs will all be causes of the sliding figure.

This week, China did report solid exports for September, up 28.1% year-over-year, and up 24% for the first nine months, though this has to be weighted against pandemic-level activity in the corresponding months of 2020.  September imports rose 17.1%.

Exports to the U.S. rose 30.6% Y/Y, and 28.6% to the European Union.  Imports from the U.S. increased 16.6% Y/Y.

Separately, September consumer prices rose 0.7% annualized, but producer, or factory gate prices soared 10.7% Y/Y, the highest on record.  [Inflation data courtesy of National Bureau of Statistics]

Premier Li Keqiang, nominally in charge of the economy, said on Thursday China has “adequate tools” to tackle the economic challenges facing the country, including the nation’s current power crisis and high commodity prices.

In Japan, we had a report on September prices there, up 6.3% annualized.  August industrial production rose 8.8% year-on-year.

Street Bytes

--Stocks rose a second week, and in the case of the S&P 500 it was the best week since July, up 1.8%, as earnings reports were better than expected, ditto much of the economic news.  The Dow added 1.6% to 35294, and Nasdaq 2.2%.

But we have the bulk of the big earnings reports the next two weeks, including all the tech heavyweights, so we’ll see.

--U.S. Treasury Yields

6-mo. 0.05%  2-yr. 0.39%  10-yr. 1.57%  30-yr. 2.05%

A placid week in the bond pits.  It’s all about the upcoming November Federal Open Market Committee meeting, Nov. 2-3, and an expected announcement on the beginning of tapering the Fed’s bond-buying program, a necessary prelude to actually raising interest rates.

--The International Energy Agency said investment in renewable energy needs to triple by the end of the decade if the world hopes to effectively fight climate change and keep volatile energy markets under control.

The Paris-based watchdog released its annual World Energy Outlook early this year to guide the United Nations COP26 climate change conference, now less than a month away.

It called the Glasgow, Scotland meeting the “first test of the readiness of countries to submit new and more ambitious commitments under the 2015 Paris Agreement” and “an opportunity to provide an ‘unmistakable signal’ that accelerates the transition to clean energy worldwide.”

The IEA warned that renewables like solar, wind and hydropower along with bioenergy need to form a far bigger share in the rebound in energy investment after the pandemic.  Renewables will account for more than two-thirds of investment in new power capacity this year, the IEA noted, yet a sizable gain in coal and oil use have caused the second largest annual increase in climate change-causing CO2 emissions.

In the here and now, the IEA said on Thursday that a global energy crunch is expected to boost oil demand by 500,000 barrels per day and could stoke inflation further and slow the world’s recovery.

Oil and natural gas prices have soared to multi-year highs recently as widespread shortages hit Asia and Europe. West Texas Intermediate closed the week at $82.66.

An upsurge in demand in the past quarter led to the biggest draw on oil products stocks in eight years, the IEA said, while storage levels in OECD countries were at their lowest since early 2015.

The IEA also estimates that OPEC+ (including Russia) is set to pump 700,000 barrels per day below the estimated demand for its crude in the fourth quarter of this year, meaning demand will outpace supply at least until the end of 2021.

--It was bank earnings week and JPMorgan Chase reported better-than-expected third-quarter results on Wednesday as the financial services giant got a boost from a credit reserve release that came with the continuing economic recovery from Covid-19.

Net revenue rose 1% to $29.65 billion, just ahead of consensus.  Per-share earnings rose to $3.74  a share from $2.92 previously, above the Street’s view as well.

The credit reserve release of $2.1 billion in the quarter was a boost of $0.52 to earnings, with CEO Jamie Dimon saying the funds were released as the outlook for the economy improved.

“JPMorgan Chase delivered strong results as the economy continues to show good growth – despite the dampening effect of the Delta variant and supply chain disruptions,” he said in a statement.  ‘We are making important investments, including strategic, add-on acquisitions that will drive our firm’s future prospects and position it to grow and prosper for decades.”

Revenue in the consumer and community banking unit was down 3% to $12.52 billion as gains in the consumer and business banking segment were offset by a decline in home lending as well as card and auto loans.  Dimon said JPM is “more than halfway” through its plan to open 400 branches in new markets by the end of next year.

Corporate and investment banking rose 7% to $12.4 billion.

Asset and wealth management revenue jumped 21% to $4.3 billion, with fees as well as deposit and loan balance growth adding to the gains.  Assets under management rose 17% to $3 trillion.

--Morgan Stanley reported that advisory revenues amid the M&A and IPO frenzy soared 256% vs a year ago in the third quarter to a record $1.27 billion.  Complementing the burst in Merger transactions, equity underwriting revenue increased by 16% yr./yr. to $1.01 billion,  Altogether, the investment banking segment generated impressive growth of 67%.

About one year ago, Morgan Stanley completed its game-changing acquisition of E*TRADE, transforming the company into a powerhouse in the retail investor market.  The concept behind the acquisition was two-fold: 1) to elevate its Wealth Management business while becoming a leader in institutional securities, investment management, and wealth management, and 2) to lessen its dependence on the more volatile trading segment by adding a more consistent fee-generating business.

So far, it looks like the acquisition is paying off, as Wealth Management net revenues climbed by 26% yr./yr. to $5.9 billion.  During the quarter, MS added record net new assets of $135bn, buoyed by market appreciation.

--Bank of America on Thursday reported third-quarter results that grew year-on-year as the lending giant saw customer activity reach pre-pandemic momentum with revenue bolstered by higher deposit growth.

Revenue rose 12% to $22.77 billion from $20.34 billion a year earlier, beating consensus.  Net income increased to $0.85 a share from $0.51 previously, also exceeding the Street’s forecasts.

The bank released $1.1 billion of the reserves it had set aside for pandemic loan defaults, helping boost profit.

Average deposits in the consumer banking unit topped $1 trillion, up 16% from a year earlier.  The segment’s overall revenue rose to $8.84 billion from $8.04bn, bolstered by “improved” net interest income and higher earnings from fees.

Global wealth and investment management revenue climbed to a record $5.31 billion in the quarter from $4.55 billion last year.  Assets under management saw flows of $14.8 billion compared with just $1.4 billion the year before.

--Citigroup on Thursday announced better-than-expected third-quarter results, saying they would have been higher if the pretax loss related to the sale of its Australian consumer business was excluded.

Earnings rose to $2.15 per share, up from $1.36 a year earlier, reflecting the growth in net income, as well as a 3% decline in shares outstanding.

Excluding the Australia business sales impact, the earnings would have been $2.44 per share, the company said on a conference call with analysts.

Revenue for the September quarter was $17.15 billion, down from $17.3 billion last year.  The bank’s investment banking and equity markets segments were both up approximately 40% year over year.

Citi said it has returned close to $11 billion to shareholders so far in 2021 through a healthy dividend and share repurchases.

Meanwhile, North America credit card purchase volume rose 24% year over year during the quarter, compared with a 40.2% increase in Q2.

--Wells Fargo reported higher-than-expected financial results for the third quarter, buoyed by a reserve release as economic conditions improved while the banking giant said the risk of potential litigation remains.

Earnings rose to $1.17 per diluted share from $0.70 a year ago, topping consensus, while revenue fell to $18.83 billion from $19.32 billion.

“The actions we’re taking to improve operating effectiveness and financial returns are coming through in our results, in addition to the benefits we’re experiencing from the economic recovery,” CEO Charlie Scharf said.

The lender logged a $1.7 billion reduction in the allowance for credit losses as the economic environment continued to improve.

The bank said its average loans fell 8% to $854 billion, driven by a 14% decline in average consumer banking loans and a 12% fall in commercial lending.

--Last but far from least, today Goldman Sachs Group Inc. reported a surge in its third-quarter earnings, as Wall Street’s biggest investment bank rode a record wave of dealmaking activity that has boosted profits at other large U.S. banks too.

Net earnings rose to $5.28 billion, from $3.23 billion a year ago.  Earnings per share rose to $14.93 from $9.68 a year earlier, far better than expected.

Investment banking revenue advanced 88% to $3.7 billion, reflecting a record quarter for financial advisory as the number of completed merger an acquisition deals increased.

Global market sales added 23% to 45.61 billion on the back of a 51% jump in equities while revenue from the fixed income, currency and commodities group was flat year on year.  The consumer and wealth management segment reported a 355 rise to $2.02 billion.

Goldman shares surged nearly 4% on the super report.

--A federal grand jury in Texas indicted a former Boeing Co. pilot for allegedly deceiving federal regulators during the plane maker’s development of the 737 MAX before two of the jets crashed, killing 346 people, the U.S. Department of Justice said.

Mark A. Forkner, 49, was charged with deceiving the Federal Aviation Administration regarding training materials related to a flight-control system that was later blamed for playing a large role in the crashes, the Justice Department said.

Prosecutors alleged Forkner provided the agency with “materially false, inaccurate, and incomplete information” about the flight-control system known as MCAS.

As a result of the alleged deception, the FAA’s training specialists and airline pilot manuals and training materials lacked any reference to the system, prosecutors said.

The case against Forkner marks the first indictment since the two MAX crashes, the first of which occurred three years ago this month.

The automated MCAS system has been blamed for putting the two Boeing 737 MAX jets into fatal nosedives. Accident investigators also cited airline and crew missteps.

The MCAS system was initially designed to activate during certain flight conditions that airline pilots wouldn’t normally encounter. During the aircraft’s development, Boeing engineers expanded the system’s authority and the conditions that would trigger it.

Boeing also said it is dealing with a new defect on its 787 Dreamliner, the latest in a series of production screwups that have delayed aircraft deliveries and drawn increased U.S. government scrutiny.

The new problem involves certain titanium parts that are weaker than they should be on 787s built over the past three years, people familiar with the matter said.  Boeing is stuck with more than $25 billion of the jets in delivery.

It’s just another example of how the plane maker has failed to fix its manufacturing operations, despite a two-year push by CEO David Calhoun to restore Boeing’s reputation for building quality jets.  In addition, the FAA is investigating Boeing’s quality controls.

--Delta Air Lines swung to a profit for the third quarter, with results topping analysts’ estimates as the carrier issued a fourth-quarter revenue outlook that anticipates an uptick in holiday and corporate travel even as fuel-price rises add pressure.

Adjusted profit came in at $0.30 a share, compared with an adjusted loss of $3.30 for the 2020 period. Operating revenue was $9.15 billion, up from $3.06 billion the year prior, which was severely impacted by the pandemic.

CEO Ed Bastian said the just-ended period is the first profitable quarter for the company since the start of the coronavirus emergency.

Delta also compared its results to those of the same quarter in 2019, before the pandemic, and operating revenue dropped 27% from the 2019 period, while passenger revenue tumbled 37%.

The company added that total passenger revenue had recovered by 63% relative to the 2019 quarter.  Latin American passenger revenue saw the greatest rebound, with 84% restored, followed by domestic travel with 72% and transatlantic with 35%.  Pacific passenger revenue has rebounded by only 20%.

But the share price fell as Bastian noted: “While demand continues to improve, the recent rise in fuel prices will pressure our ability to remain profitable for the December quarter.”

Delta said it expects fourth-quarter revenue to be in the low 70s percentage range compared with the 2019 period, when it reported revenue of $11.4 billion.

--American Airlines said it expects its adjusted net loss per share to range from $0.96 to $1.04 in Q3, narrower than a loss of $5.54 a year earlier.

Revenue is expected to decline by 25% from 2019 pre-pandemic levels. American reports next week.

--Southwest Airlines canceled up to 2,500 flights over Saturday, Sunday and Monday as the company blamed severe weather in Florida and air-traffic control issues that started Friday night, triggering a cascading series of cancellations that left hundreds of planes and crew members out of place.

Southwest CEO Gary Kelly, in an interview on CNBC on Tuesday, said, “When an airline gets behind it’s hard to catch up.”

Southwest Airlines Co. pilots said the airline’s weekend meltdown reflected longer-running fatigue and frustration among its crew, leaving it vulnerable to further outages.

By Tuesday, Southwest’s troubles were easing as the carrier worked to reset itself. 

The Southwest Airlines Pilots Association, which represents Southwest’s 9,000 pilots, has blamed the airline’s management and what it describes as poor planning for the trouble. The union raised alarms over the summer that pilots were being stretched thin by frequent reassignments that have led to longer work days and extended trips.  Without changes, problems like this weekend’s could crop up again, union president Capt. Casey Murray said in an interview Monday.

“We’re going to see it next weekend or the holidays or whenever a thunderstorm pops up in Mexico,” he said.

In interviews with the Wall Street Journal, some Southwest pilots have said the constant prospect of being rerouted and uncertainty about the length of their trips could be contributing to pilots’ reluctance to pick up extra flights.  The union said Monday evening that pilots did cover the majority of the trips that were left open due to staffing issues over the weekend.

--TSA checkpoint travel numbers vs. 2019…

10/14…79 percent of 2019 level
10/13…71
10/12…73
10/11…80
10/10…82
10/9…79
10/8…81
10/7…79

--Apple Inc. is likely to cut production of the iPhone 13 by as many as 10 million units due to the global chip shortage, Bloomberg reported, citing people familiar with the matter.  The company was expected to produce 90 million units of the new iPhone models by the end of this year.

Analysts have warned that Apple’s customers will have to wait for longer to lay their hands on the new iPhone 13, with supply chain bottlenecks and strong demand leading to one of the longest waiting times for the phone in recent years.

--Taiwan chip giant TSMC posted a 13.8% jump in third-quarter profit on Thursday on the back of booming demand for semiconductors to power smartphones and other gadgets during the pandemic.

TSMC, the world’s largest contract chipmaker and a key supplier to Apple, posted a net profit of $5.56 billion in July-September, well above analyst estimates.

The company lifted its revenue growth forecast for 2021 to about 24%, versus an earlier forecast of above 20%, citing an “industry megatrend” of strong chip demand.

--General Motors Co. said it would recover from supplier LG Electronics Inc. nearly all of the $2 billion cost of recalling Chevrolet Bolt electric models for the risk of battery fires.

GM said Tuesday that LG would reimburse the car maker because of manufacturing defects in battery modules supplied by the Korean company.  GM in August expanded a previous recall to include all of the roughly 142,000 Bolts that the auto maker has produced since 2016, citing a likely manufacturing flaw that has been linked to at least 13 fires.

--China’s car sales declined in the third quarter from a year earlier, the first such drop in more than a year, as the global chip shortage continues to hold back the world’s largest auto market.

Sales of passenger cars in September fell 17% from a year earlier to 1.58 million vehicles, the China Passenger Car Association said Tuesday, the worst decline since March last year.  Sales from July to September declined 13% from a year earlier.

The shortfall intensified in the third quarter as Covid-19 cases surged in Southeast Asia – including in Malaysia, where semiconductors are sent for testing and packaging.

--LinkedIn said it was shutting down its professional networking service in China later this year, citing “a significantly more challenging operating environment and greater compliance requirements,” in a move that furthers the exit of American social networks from China.

LinkedIn, owned by Microsoft, said it would offer a new app for the Chinese market focused solely on job postings. It will not have social networking features such as sharing posts and commenting, which have been critical to its success elsewhere.

Twitter and Facebook have been blocked in China for years, and Google left more than a decade ago.  China’s internet is heavily censored.

--The Social Security Administration announced Wednesday that retirement benefits will increase by 5.9% in 2022, the largest cost-of-living adjustment in 40 years.

Over the past 12 years, Social Security COLAs have averaged a meager 1.4%, including a 1.3% boost in 2021.  The 5.9% COLA that will apply to benefits starting in January is the largest increase since the 7.4% COLA in 1982.

The 5.9% COLA will boost the average monthly Social Security retirement benefit to $1,657, up $92 per month from this year’s $1,565 average benefit.

Of course the significant increase is because costs are rising rapidly.

--Big brands like Coca-Cola, P&G and Intel face a big dilemma with their sponsorship of the 2022 Beijing Olympics. There’s pressure to use the platform to condemn the treatment of ethnic minorities in Xinjiang, which the U.S. says is genocide.

Human rights advocates say the companies that support the Beijing Games are helping China use sports to distract from what’s happening in Xinjiang.

--Alibaba Group founder Jack Ma, largely out of public view since a regulatory clampdown started on his business empire late last year, is currently in Hong Kong and has met business associates in recent days, as first reported by Reuters.

The Chinese billionaire has been keeping a low profile since delivering a speech in October last year in Shanghai criticizing China’s financial regulators. That triggered a chain of events that resulted in the shelving of his Ant Group mega IPO.

--Amazon said Monday that it will allow many tech and corporate workers to continue working remotely indefinitely, as long as they can commute to the office when necessary.

The new policy is a change from Amazon’s previous expectation that most employees would need to be in the office at least three days a week when offices reopen from the Covid-19 pandemic in January.

--Even with the surge this summer in restaurant patronage, more than half of 4,000 restaurant operators surveyed in September by the National Restaurant Association say that business conditions are worse now than three months ago.  They cite higher food and utility costs and supply-chain problems, but the biggest issue, restaurateurs say, is lack of staff.

--Same-store sales at Domino’s Pizza Inc.’s U.S. stores fell 1.9% in the three months through early September compared with the same period last year, the company said this week.  It is the company’s first U.S. same-store sales decline in more than a decade.

Domino’s and rival chains Pizza Hut and Papa John’s benefited last year from a flood of delivery and takeout orders as restaurants closed dining rooms during the pandemic.  Now, most restaurants have reopened their dining rooms, slowing the growth in delivery sales.  Nearly 30% of U.S. diners said they expected to order delivery less from restaurants in the future, according to research from Revenue Management Solutions.

In Domino’s case, ongoing staffing problems also resulted in stores shortening hours and service, depressing sales, the Ann Arbor, Mich.-based company said.

The company said it is trying to steer more customers to its carryout business, due to a shortage of delivery drivers.

--Bitcoin surged Friday following media reports that the Securities and Exchange Commission would let the first bitcoin futures exchange-traded funds begin trading next week.

So the price passed the $62,000 mark today, up from $41,000 on Sept. 21.

--Shares in Virgin Galactic Holdings plunged 17% today after the company announced the delay of its commercial space flight service.

The firm said that while commercial operations are still expected to begin by the end of 2022, they “are uncertain about the company’s ability to forecast such a future and unknown event after the recent failure to call the timing right on a relatively-known short-term event.”

In making enhancements on two models of its space planes, a recent laboratory-based test identified a “possible reduction in the strength margins of certain materials used to modify specific joints” which prompted further physical inspection.

[Boeing would just say, ‘who cares…it’s good enough.’]

--Two Honda models top the list of the 100 most stolen vehicles in New Jersey…the Accord and the Civic, according to the National Insurance Crime Bureau. I just get a kick out of this, the only two models I’ve owned the last 30+ years.

--The Nobel Prize in Economic Sciences was awarded to David Card, Joshua D. Angrist and Guido W. Imbens for their work on natural experiments, in particular their contributions to better understanding how the job market works.

For example, in one paper, Card and his co-author, Alan Krueger, looked at an increase in new Jersey’s minimum wage to $5.05 an hour from $4.25.

The two economists compared restaurants in the state and neighboring eastern Pennsylvania, and found that there was no fall in employment in the New Jersey restaurants subject to the higher minimum wage.

Imbens looked at people who win the lottery and whether they are more likely to stop working than those who don’t.

“It didn’t change how much they worked all that much,” he said.

For that he won a Nobel Prize. 

--Nobel Peace Prize winner Maria Ressa has used her new prominence to criticize Facebook as a threat to democracy, saying the social media giant fails to protect against the spread of hate and disinformation and is “biased against facts.”

The veteran journalist and head of Philippine news site Rappler told Reuters in an interview after winning the award that Facebook’s algorithms “prioritize the spread of lies laced with anger and hate over facts.”

--We note the passing of Brian Goldner, 58, the CEO and chairman of Hasbro who spearheaded the company’s transformation from a toy company to an entertainment force.  Just two days before the announcement of his death, he had taken a medical leave of absence.  Goldner disclosed in August 2020 that he had been undergoing treatment for cancer since 2014.

Under his stewardship, Hasbro expanded beyond toys and games into television, movies, digital gaming and other areas.

The Pandemic

--U.S. health advisers said Thursday that some Americans who received Moderna’s Covid-19 vaccine (including moi) should get a half-dose booster to bolster protection against the virus.

The panel of advisers to the Food and Drug Administration voted unanimously to recommend a booster shot for seniors (65 and over), adults with other health problems, jobs or living situations that put them at increased risk for Covid.

As for the dose, initial Moderna vaccination consists of two 100-microgram shots.  But Moderna says a single 50-microgram shot should be enough for a booster.

The FDA is expected to sign off on the panel’s recommendation shortly, and then the Centers for Disease Control and Prevention will make specific requirements on who should get the shots.

Friday, the FDA advisory panel met on Johnson & Johnson’s application for a booster and they voted unanimously to recommend regulators authorize a second shot of J&J’s vaccine, it initially being a single-shot dose.  It also backed the shots for all J&J recipients aged 18 and older at least two months after their first dose.

The panel also said the J&J single shot produced lower levels of virus neutralizing antibodies compared to the mRNA vaccines, and that there is “a public health imperative” to get a second J&J dose,” according to Dr. Arnold Monto, who chaired the panel.

A study by the National Institutes of Health showed that people who got the J&J vaccine had a stronger immune response when boosted with vaccines from Pfizer or Moderna.  The study also showed that “mixing and matching” booster shots of different types is safe in adults.

Moderna’s and Pfizer’s vaccines are based on messenger RNA while J&J’s uses viral vector technology.

Meanwhile, Merck and its partner Ridgeback Biotherapeutics announced they have asked the FDA for emergency approval of its Covid-19 pill after the experimental drug showed “compelling results” in clinical trials.

The pill, molnupiravir, cut the risk of hospitalization or death in patients with mild to moderate Covid-19 by about 50 percent in a late-stage trial.

The  FDA is supposed to look at the application next week..

Covid-19 death tolls, as of tonight….

World…4,904,085
USA…743,880
Brazil…602,727
India…452,008
Mexico…283,574
Russia…221,313
Peru…199,775
Indonesia…142,889
UK…138,379
Italy…131,503
Colombia…126,796
Iran…123,695
France…117,245
Argentina…115,660
Germany…95,416
South Africa…88,562
Spain…86,974
Poland…76,067
Turkey…67,225
Ukraine…60,137
Romania…41,130
Philippines…40,424
Chile…37,594
Ecuador…32,899
Czechia…30,528
Hungary…30,351
Canada…28,468
Pakistan…28,228
Malaysia…27,770
Bangladesh…27,746
Belgium…25,732
Tunisia…25,082
Iraq…22,713
Bulgaria…22,188
Vietnam…21,043

[Source: worldometers.info]

U.S. daily death tolls…Sun. 568; Mon. 406; Tues. 1,476; Wed. 1,819; Thurs. 1,654; Fri. 1,705.

Covid Bytes

--Russia, Ukraine and Romania are still in a major state of distress, hitting new case and/or death highs seemingly daily after all this time.  Russia called on pension-age doctors who quit for safety reasons to return to their jobs on Thursday as the authorities reported a record one-day tally of cases as well as a record number of deaths.

The Kremlin has blamed the rising roll on Russia’s slow vaccination campaign and has appealed to people to get the shot.  Take-up has been slow, with many Russians citing distrust of the authorities and fear of new medical products.

“In a situation where infections are growing, it is necessary to continue to explain to people that they must get vaccinated,” Kremlin spokesman Dmitry Peskov told reporters.  “It is really irresponsible not to get vaccinated. It kills,” he said.

--The Biden administration is lifting travel restrictions at the borders with Canada and Mexico starting in November for fully vaccinated travelers, reopening the door of the United States to tourists and separated family members who had been sealed out of the country during the pandemic.

Foreign travelers who provide proof of vaccination and are looking to visit families or friends or shop in the United States will be allowed to enter, senior administration officials said on Tuesday, just weeks after the administration said it would soon lift a similar sweeping restriction on foreigners looking to travel to the country from overseas.

--The World Health Organization established a new panel of scientists whose mandate will include attempting to revive a stalled inquiry into the origins of the coronavirus.

The 26-member team, drawn from countries including the U.S., China, India, Nigeria and Cambodia, is larger than a 10-member international group of scientists sent earlier this year to Wuhan, the Chinese city that was the site of the first confirmed Covid-19 outbreak in December 2019.  The team will also have a broader mandate to lead investigations of future epidemics as well as Covid.

But it no doubt will encounter some of the same difficulties that hampered the first team’s efforts, including blocked access to data on possible early Covid-19 cases and other potential evidence. WHO officials have said that time is running out to examine blood samples and other important clues in China regarding when, how and where the pandemic started.

“This is our best chance and it may be our last chance to understand the origins of this virus,” at least in a collective and cooperative way, Mike Ryan, executive director of the WHO’s health emergencies program, told reporters on Wednesday.  “We are at a very important moment.”

But China has said for months that its contribution to the WHO’s effort is complete and has called on the UN agency to dispatch a team into other countries, especially the U.S., to investigate whether a lab accident there could have caused the pandemic.  Beijing has tightened restrictions governing what research its scientists can conduct on the matter, frustrating the WHO’s efforts.

--Sailors who refuse to be vaccinated against the coronavirus could face the removal of their professional qualifications, relief from their position, and dismissal from the Navy, according to a new Navy administrative message.

“Sailors must be prepared to execute their mission at all times, in places throughout the world, including where vaccination rates are low and disease transmission is high.  Immunizations are of paramount importance to protecting the health of the force and the warfighting readiness of the Fleet,” said a Navy statement Thursday.

The vast majority of sailors have been partially or fully vaccinated. As of Wednesday, 94% of active-duty sailors are fully immunized and 99% have received at least one vaccine dose, according to the Navy.  The deadline for these sailors to be fully vaccinated is Nov. 28, meaning they must get their second dose by Nov. 14.

Foreign Affairs

Iran: U.S. Special Envoy for Iran Robert Malley said on Wednesday that the United States is ready to consider “all options” if Iran is unwilling to return to the 2015 nuclear deal, a reflection of a tougher stance toward Tehran’s new government.   “All options” typically includes the possibility – even if remote – of military action.

Malley, in consultation with Israel, which has previously struck nuclear sites in Iraq and Syria, said he would travel to Saudi Arabia, the United Arab Emirates and Qatar to coordinate with our Gulf allies.

“We will be prepared to adjust to a different reality in which we have to deal with all options to address Iran’s nuclear program if it’s not prepared to come back into the constraints” of Tehran’s 2015 nuclear deal with six major power, he said in a virtual appearance at a Washington think tank.

The European Union coordinator on Iran, Enrique Mora, held talks in Tehran this week and it couldn’t be considered “business as usual” given the worsening nuclear situation.

Israeli Foreign Minister Yair Lapid said Wednesday. “Israel reserves the right to act at any given moment, in any way.  That is not only our right, it is also our responsibility.  Iran has publicly stated it wants to wipe us out; we have no intention of letting that happen.”

Lapid warned that the Iranians are “dragging their heels” in order to enrich uranium and develop its ballistic missile program while the world waits for them to return to negotiations.

Editorial / New York Post

“President Joe Biden’s top people are finally starting to face reality on one front, as they admit Iran is unlikely to return to the nuclear agreement, despite their months of pleading.

“Tehran, in fact, has made a mockery of the administration as its strung along a team desperate to make a deal, heading off Western action as it bought time to move ever closer to a nuclear weapon. Biden needs to drop his failed ‘diplomacy first’ strategy and immediately up all possible pressure – even looking at what military action may be useful or necessary to keep the murderous mullahs from getting the bomb.

“Robert Malley, Biden’s special representative for Iran, reluctantly admitted Wednesday that ‘we have to prepare for a world’ where ‘Iran doesn’t have constraints on its nuclear program.’  Tehran has shown no interest in renewing the Vienna talks aimed at resurrecting the 2015 accord President Donald Trump ended, even after, Malley whined, the Bidenites said, ‘We are prepared to remove all of the sanctions that were imposed by the Trump administration that were inconsistent with the deal.’

“In other words, Team Biden got played and just now realizes it.

“So desperate has Biden been to restore the deal, he lifted some sanctions on the oil-rich country’s energy industry and other sectors before Iran even agreed to direct talks.  In return, the Islamic Republic upped its uranium-enrichment levels from 3.67 percent to more than 60 percent, built more advanced centrifuges and started work to produce uranium metal – which has no peaceful use – even as it blocked the International Atomic Energy Agency from agreed-upon monitoring.  It likely has enough weapons-grade uranium for a bomb.

“Israeli Defense Minister Benny Gantz urged Western countries counting on diplomacy to develop a Plan B two months ago.  Team Biden is only now taking his advice, after first trying to talk China into cutting purchases of Iranian oil to give America more leverage; China, of course, said shove it.

“After meeting Wednesday with Israeli and Emerati diplomats, Secretary of State Antony Blinken said his team will finally examine ‘other options if Iran doesn’t change course.’….

“Wake up: Iran isn’t going to change course….

“At Blinken’s side, Yair Lapid, Israel’s top diplomat, put it right: ‘There are moments when nations must use force to protect the world from evil.’”

Josh Rogin / Washington Post

“A flurry of diplomatic activity in Washington last week revealed that the Iran nuclear deal is likely dead for good, despite the Biden administration’s best efforts to revive it.  But if the Biden team has a follow-up plan to prevent Iran from going nuclear, it’s a well-kept secret. And time is not on America’s side….

“The Biden administration’s Iran gambit was always a long shot. Since President Donald Trump withdrew America from the deal in 2018, Iran has increased its enrichment levels, built more advanced centrifuges, done work on uranium metal and put up new obstacles to access for international inspectors.  All of these moves violate the deal.  Getting Tehran to roll them back in exchange for limited sanctions relief might never have been a realistic goal….

“With no clear diplomatic option or any real prospect of returning to a pressure-based strategy, the Biden administration doesn’t appear to have any realistic alternatives ready.  Meanwhile, Iran’s nuclear and missile programs advance apace.

“ ‘Biden’s caught between a commitment not to let Iran acquire a nuclear weapon and the reality that Iran is already a nuclear threshold state,’ Carnegie Senior Fellow Aaron David Miller, who interviewed (Robert) Malley, told me.

“The Biden team now belatedly seems to realize that Iran is in no hurry to return to the deal. Politically, that saves President Biden the cost of selling the outcome to a skeptical Congress.  But security-wise, the outlook is grim.  Telling the world that you are working on ‘options’ and having meetings with allies are not sufficient.

“The Biden team must quickly decide – and then announce – what it actually intends to do to prevent Iran from ramping up its nuclear program.  The United States needs to act before Iran reaches the point where Israel responds and draws the United States into a conflict. This new strategy will surely have diplomatic components, require European buy-in, necessitate security adjustments and include measures to enhance regional deterrence.  All these things take time and can’t wait any longer.

“One hopes the Iranian regime will suddenly realize that abandoning its nuclear ambitions and its regional mischief is in its own interest – and come back to the negotiating table.  But hope is not a strategy.”

Iraq: They held parliamentary elections in Iraq last weekend and the formation of a new government could be subject to weeks of wrangling with no clear leader emerging as yet.

But Shiite cleric Moqtada al-Sadr, the onetime leader of a rebellion against U.S. forces following the invasion of Iraq in 2003, appears to be the key power broker after his movement won the largest share of seats.

With the most seats comes the ability to choose who becomes prime minister, but with a fractured field this will take time to settle on a majority coalition, who gets the top jobs, etc.

Sadr’s movement won 73 seats in the 329-seat Parliament, up from 54 won by an alliance he led in 2018.

In a surprise, the Tehran-backed Fatah Alliance, which has been calling for the withdrawal of U.S. forces, lost ground.  [2,500 American troops are still in Iraq, and while President Biden has agreed to remove all combat forces by the end of the year, many are expected to remain in training and support roles.]

The United Nations which deployed observers to monitor the election throughout the country, said the vote “proceeded smoothly and featured significant technical and procedural improvements.”

And for this, we credit Iraqis.  This is progress.

Afghanistan: The United States held its first face-to-face meeting between senior U.S. and Taliban officials since the hardline group retook power in Afghanistan and it was “candid and professional,” the U.S. side reiterating that the Taliban would be judged on their actions, not just their words.

U.S. officials said the weekend meeting in Doha, Qatar, was “not about granting recognition or conferring legitimacy” to the group.

But Washington and other Western countries are grappling with difficult choices as a severe humanitarian crisis looms large in Afghanistan.  They are trying to work out how to engage with the Taliban to ensure humanitarian aid gets in without granting the group legitimacy.

And the fact is, the Taliban said last weekend it would not cooperate with the U.S. to contain extremist groups in the country, including ISIS.

And then we had another big suicide bombing attack on a Shiite mosque today, this time in Kandahar, killing about 40, a week after ISIS carried out a similar attack in northern Afghanistan that killed 46.  It is suspected Islamic State was responsible again.

Lebanon: In a very worrisome sign, shooting between Shiites and Christians broke out Thursday in Beirut, with at least seven killed, all supporters of Hezbollah and its ally who were gathering to demand the removal of the judge investigating the explosion that ripped through the city’s port last year.

The shooting, which took place on a frontline of Lebanon’s 1975-90 civil war and evoked scenes of that conflict, marks the deadliest civil violence in Beirut since 2008.

It also highlights a deepening crisis over the probe into the catastrophic Aug. 2020 explosion that is undermining government efforts to tackle one of the most dramatic economic meltdowns in history.

The Iran-backed Hezbollah and its ally, the Shiite Amal Movement, accused the Lebanese Forces (LF), a Christian party that has close ties to Saudi Arabia, of mounting the attack.  Interior Minister Bassam Mawlawi said snipers had opened fire and aimed at people’s heads.  The LF denied any involvement and condemned the violence, which it blamed on Hezbollah “incitement” against Judge Tarek Bitar, the lead investigator into the port blast, which killed 200 people, wounded thousands and devastated large swathes of Beirut.

Hezbollah and its allies had warned that continuing the investigation would split the country, and maybe the violence creates a pretext to shut it down, or shelve further investigation.

The United States and France said the Lebanese judiciary needed to be allowed to investigate the port explosion in an independent and impartial manner.

Here’s the key…Judge Bitar has sought to question a number of senior politicians and security officials, including Hezbollah allies, suspected of negligence that led to the port explosion, caused by a huge quantity of ammonium nitrate, which resulted in one of the biggest non-nuclear blasts on record.  All have denied wrongdoing.  Hezbollah had led calls for Bitar’s removal.

I saw the violence and recognized many of the neighborhoods.  Recall, when I first went to Beirut in 2005, I told you of seeing bullet holes in buildings across from my hotel room that were there from the 1975-90 civil war.  Now there are new ones.

China/Taiwan: In a speech Saturday at Beijing’s Great Hall of the People that focused largely on the need for the ruling Communist Party to continue to lead China as the country rises in power and influence, President Xi Jinping said that a “peaceful” reunification of Taiwan with China’s mainland was in Beijing’s interests, despite ratcheted up military threats against the self-governing island.

“Reunification of the nation must be realized, and will definitely be realized,” Xi vowed before an audience of politicians, military personnel and others gathered in the chamber that serves as the seat of China’s ceremonial legislature.

“Reunification through a peaceful manner is the most in line with the overall interest of the Chinese nation, including Taiwan compatriots,” Xi added.  He urged Taiwan to “stand on the right side of history jointly to create the glorious cause of the full reunification and the great rejuvenation of the Chinese nation.”

Xi also added that secessionists were “the biggest obstacle to the reunification of the motherland and a serious hidden risk to national rejuvenation.”

“Those who forget their ancestors, betray the motherland, or split the country are doomed. They will definitely be spurned by the people and judged by history.”

Without naming any country directly, Xi also warned of foreign interference.  “The Taiwan issue is entirely China’s internal affair, and no external interference can be condoned,” he said.

“No one should underestimate the Chinese people’s determination, and strong ability to defend national sovereignty and territorial integrity. The historical task of the complete reunification of the motherland must be fulfilled, and it will definitely be fulfilled.”

The Chinese military warned of its determination to crush any attempt to separate Taiwan from mainland China on Tuesday, after it carried out beach landing and assault drills in Fujian province, directly across the sea from the island.

A PLA Daily commentary said the Chinese military was confident and capable of “thwarting all external interference and separatist acts of ‘Taiwan independence.’”

“If the ‘Taiwan independence’ separatist forces dared to split Taiwan from China in any name and by any means, the People’s Liberation Army will resolutely crush it at all costs,” it said.

For their part, Taiwan will keep bolstering its defenses to ensure nobody can force the island to accept the path China has laid down that offers neither freedom nor democracy, President Tsai Ing-wen said on Sunday, in a strong riposte to Beijing.

Addressing a National Day rally, Ms. Tsai said she hoped for an easing of tensions across the Taiwan Strait, and reiterated Taiwan will not “act rashly.”

“But there should be absolutely no illusions that the Taiwanese people will bow to pressure,” she said in a speech.

“We will continue to bolster our national defense and demonstrate our determination to defend ourselves in order to ensure that nobody can force Taiwan to take the path China has laid out for us,” Tsai added.

“This is because the path that China has laid out offers neither a free and democratic way of life for Taiwan, nor sovereignty for our 23 million people.”

Ms. Tsai repeated an offer to talk to China on the basis of parity, but Beijing has refused to deal with her, calling her a separatist who refuses to acknowledge Taiwan is part of “one China,” and does not recognize Taiwan’s government.

Tsai says Taiwan is an independent country called the Republic of China, its formal name, and that she will not compromise on defending its sovereignty or freedom.

Taiwan stands on the frontlines of defending democracy, Ms. Tsai added.

“The more we achieve, the greater the pressure we face from China.  So I want to remind all my fellow citizens that we do not have the privilege of letting down our guard.”

Walter Russell Mead / Wall Street Journal

“Xi Jinping stunned the world over the weekend. The Chinese leader’s Oct. 9 speech left no doubt about his commitment to the ultimate incorporation of Taiwan into the People’s Republic of China. But it was what President Xi didn’t say, and the context in which he didn’t say it, that mattered most.

“Tension over Taiwan has been mounting for months.  In a major speech commemorating the 100th anniversary of the founding of the Chinese Communist Party, delivered in Tiananmen Square in July, Mr. Xi promised to ‘utterly defeat’ any attempt toward Taiwanese independence.  In a letter congratulating Eric Chu on his election as leader of Taiwan’s main opposition party, Mr. Xi called the situation on the island ‘complex and grim.’  Over the weekend of China’s Oct. 1 National Day, a record 149 Beijing military aircraft crossed into the island’s air-defense identification zone.

“The reasons for Beijing’s ire aren’t hard to find.  Weeks after Australia helped form the Aukus partnership, former Australian Prime Minister Tony Abbott paid a visit to Taiwan. A French senator visiting the island called Taiwan a country.  Japan’s incoming prime minister announced that longtime pro-Taiwan politician Nobuo Kishi will keep the defense portfolio in the new government.  This month, a large Taiwanese delegation is scheduled to visit Eastern and Central Europe, where Lithuania has drawn Beijing’s ire by allowing Taiwan to open a diplomatic office.  A recent six-nation joint naval exercise in the Philippine Sea was intended to signal growing allied resolve.

“More striking still, last week this newspaper broke the news that U.S. Marines and special forces have been rotating through training missions on the island for more than a year.  Beijing hawks, speaking through the Global Times newspaper, have called the presence of U.S. troops on Taiwan ‘a red-line that cannot be crossed’ and warned that in the event of war in the Taiwan Straits, ‘those U.S. military personnel will be the first to be eliminated.’

“Given all this, the relative restraint in Mr. Xi’s latest speech was remarkable….

“So why the mixed signals? Why escalate the intrusions into airspace near Taiwan while dialing the rhetoric down?

“The answer has everything to do with politics at home. China is facing disruptive conditions.  As the giant property developer Evergrande stumbles toward collapse, crackdowns on tech and other businesses have wiped out more than $1 trillion in asset values and made businesses jittery about the Communist Party’s next moves. At the same time a massive energy crisis has imposed widespread blackouts across much of China, while the more transmissible Delta variant presents the Chinese method of pandemic control with its harshest test yet.

“The Chinese Communist Party is supposed to be bringing China to a new age of ease and plenty.  That is not how things look to a middle-class family who invested their savings in Evergrande investment products, and who must walk up the stairs to their overpriced 10th-floor apartment because the power is out.

“To keep the economy running, China must stroke its neighbors rather than slap them.  It is all very well to threaten and insult Australia, but when your power stations across the Chinese Rust Belt have run out of fuel, you need Australian coal to keep the lights on.  From Beijing’s point of view, this would be a terrible time for a major Taiwan crisis.

“But the party also needs to keep nationalist opinion stoked at home… Beijing can’t afford to look as if it’s tamely accepting foreign encroachments on Taiwan….

“This is a pause, not a change of direction. There are no signs that Beijing is reconsidering the basic assumptions of the Xi Jinping era that China is rising while America sinks.  Before any serious rethinking of Beijing’s current policies of repression at home and aggressive competition abroad, China’s leaders would need to see evidence that the U.S. is more resilient than thought and that the Chinese domestic economic model is less robust than believed.”

Mr. Mead is way too sanguine on Xi’s speech.  I instead would focus on these passages from the aforementioned editorial in the Communist Party mouthpiece, Global Times:

“The U.S. and Taiwan island are most worried that the mainland is completing its military preparations for attacking Taiwan and is likely to resolve the Taiwan question by force or force Taiwan authorities to surrender in a few years or even a shorter period of time. Then we must clearly tell them that any act to strengthen the U.S.-Taiwan collusion will further reinforce the mainland’s resolve to realize reunification by force.  It will also accelerate overall preparations for military actions and lead the critical moment to come earlier.

“Second, we must resolutely define the deployment of U.S. troops in Taiwan as an ‘invasion.’  The mainland has the right to carry out military strikes against them at any time. We will not make any promises over their safety.  Once a war breaks out in the Taiwan Straits, those U.S. military personnel will be the first to be eliminated.  Through such a declaration, we must make Washington understand that it is playing a dangerous game that is destined to draw fire onto itself and it is risking the lives of young U.S. soldiers….

“The absolute military advantage that the mainland has formed over Taiwan is sufficient to enable the former to take over the latter in one strike.  If the U.S. military participates in the war, it will be severely hit by the People’s Liberation Army and suffer unbearable losses….

“The secessionist authority in Taiwan overestimated itself, claiming to act as an outpost of the U.S. to contain the mainland.  But once the PLA launches a general offensive against the authorities on the other side of the Taiwan Straits, or even if it issues an ultimatum before launching the attack, the world will see how weak and coward the Taiwan secessionists are.”

One final note: After two years of upheaval, between the pandemic and a sweeping political crackdown from Beijing, the population of Hong Kong has fallen 1.2 percent, the biggest decline since the government began keeping records in the 1960s.  The number is going to grow significantly over the next few years.  It’s not like families of means want to raise their kids there anymore.

North Korea: Kim Jong Un reviewed powerful missiles developed to launch nuclear strikes on the U.S. mainland, as he vowed to build an “invincible” military to cope with what he called persistent U.S. hostility, state media reported Tuesday.

In an apparent continued effort to drive a wedge between Washington and Seoul, Kim also used his speech at a rare exhibition of weapons systems Monday to stress that his military might isn’t targeted at South Korea and that there shouldn’t be another war pitting Korean people against each other.

“The U.S. has frequently signaled it’s not hostile to our state, but there is no action-based evidence to make us believe that they are not hostile,” Kim said Monday, according to the official Korean Central News Agency.  “The U.S. is continuing to create tensions in the region with its wrong judgments and actions.”

Calling the United States a “source” of instability on the Korean Peninsula, Kim said his country’s most important objective is possessing an “invincible military capability” that no one can dare challenge.

Among the weapons displayed was a new ICBM that North Korea disclosed during a military parade last year but hasn’t test-fired, according to weapons experts who analyzed the photos.

Czech Republic: Well, I was wrong about this election.  Prime Minister Andrej Babis centrist ANO party narrowly lost the parliamentary election held on Friday and Saturday to the center-right Together coalition and appears to have no chance of forming a ruling majority.

But while Babis has conceded that Together won more votes as a coalition, he did not signal a move into opposition, saying “If the president authorizes me to do so, I will lead talks on forming a cabinet.”

But then Czech President Milos Zeman was admitted to hospital and is in intensive care, right after meeting Babis, creating uncertainty at a time when he is due to lead political talks about forming a new government.

Under the constitution, the president can appoint anyone as prime minister and instruct them to nominate a cabinet.  A new cabinet must face a vote of confidence in the lower house within a month of its appointment.

Zeman had said prior to the election that he would appoint the leader of the biggest winning individual party, not a coalition, to try to form a government.  This would be Babis, since ANO won the most votes of any party.

Forming a government usually takes weeks or months, and no appointments are possible before the new lower house convenes, some time within a month after the election.

As for the impact of the “Pandora Papers” on the vote and stories that Babis hid his wealth from tax collectors, along with other powerful world figures, it’s unclear if it had an impact on the vote, the story breaking days before the election. All the polls had favored Babis’ party prior to the balloting.

Tonight, as I go to post, Zeman remains in the hospital and clearly is not in great shape.

Austria: Chancellor Sebastian Kurz was forced to step down amid a sweeping investigation into both his actions and those of nine others, including senior aides, on suspicion of varying degrees of breach of trust, corruption and bribery.

Kurz, who denies any wrongdoing, remains the undisputed head of his right-wing party, and Austria’s new chancellor, Alexander Schallenberg, promised to work closely with his predecessor.

The Greens, the junior party to Kurz’s conservatives, had demanded his head after he was placed under investigation. Critics say Schallenberg, a political novice, will simply do Kurz’s bidding.

Norway: A man armed with a bow and arrow killed five people in the town of Kongsberg on Wednesday and officials said the 37-year-old had converted to Islam and been radicalized.  All the victims were between the ages of 50 and 70.  What an awful, scary tragedy.

Britain: Conservative lawmaker David Amess was stabbed to death while at a townhall meeting with constituents at a church in eastern England today.  A 25-year-old man was arrested and a knife recovered.

Amess, 69, had been a member of Parliament for Southend West since 1997, but has been a lawmaker since 1983.  He was well-liked, it’s clear, seeing all the condolences pour in from across the country.

While violence against British politicians is rare, in 2016 Labour Party lawmaker Jo Cox was fatally stabbed and shot in her northern England constituency.  A far-right extremist was convicted of her murder.

Random Musings

--Presidential approval ratings….

Gallup: New poll next week.

Rasmussen: 43% approve of President Biden’s job performance, 56% disapprove (Oct. 15), virtually unchanged the last month or so.

A new CNN/SSRS poll was clearly an outlier as it has Biden with a 50% approval rating, 49% disapproving, largely unchanged from surveys conducted in August and September.  The public also splits over whether Biden has done more during his time in office to unite the country (51%) or divide it (49%).

27% approve of the way Congress is handling its job, with 73% disapproving.

--In a Gallup poll, on security matters and protecting the country from international threats: 54% prefer the Republican Party and 39% prefer the Democratic Party, the largest GOP advantage since 2015.

On ensuring the nation remains prosperous: 50% prefer the Republicans and 41% the Democratic Party.

--Fiona Hill, the former Russia expert on the National Security Council and witness at the first Trump impeachment hearing, said on CBS News on Sunday that the U.S. is in a dangerous place, and that the Jan. 6 insurrection was not a one-off, but rather “a dress rehearsal for something that could be happening near term in 2022, and 2024.”

Also Sunday, the second-ranking House Republican, Steve Scalise, was pushed repeatedly by Fox News’ Chris Wallace about whether the 2020 election was legitimate and Scalise refused to say “yes.”

“I’ve been very clear from the beginning,” Scalise said.  “If you look at a number of states, they didn’t follow their state-passed laws that govern the election for president. That is what the United States Constitution says.  They don’t say the states determine what the rules are. They say the state legislatures determine the rules.”

As in, this is becoming the main view of Trump-backing Republicans; that legislatures, not voters, should select presidents.

Then you had 88-year-old Sen. Chuck Grassley of Iowa, who is running for reelection in 2022, called up by Donald Trump at a rally in the state Saturday.

“I was born at night, but not last night,” Grassley said.  “So if I didn’t accept the endorsement of a person who’s got 91% of the Republican voters in Iowa, I wouldn’t be too smart.  I’m smart enough to accept that endorsement.”

Back in January, Grassley offered a stinging condemnation of Trump’s behavior in the aftermath of the election.

“The reality is, he lost. He brought over 60 lawsuits and lost all but one of them.  He was not able to challenge enough votes to overcome President Biden’s significant margins in key states,” Grassley said in a statement offered after voting against Trump’s second impeachment.  “He belittled and harassed elected officials across the country to get his way.  He encouraged his own, loyal vice president, Mike Pence, to take extraordinary and unconstitutional actions during the Electoral College count.”

But look at Grassley now.

At the same rally, Trump said of Mitch McConnell:

“Mitch McConnell should have challenged (the 2020) election, because even back then we had plenty of material to challenge that election.  He should have challenged the election,” Trump said.  “He’s only a leader because he raises a lot of money and he gives it to senators, that’s the only thing he’s got.  That’s his only form of leadership.”

But the main focus for Trump at the Des Moines rally was of course himself; the bulk of his speech devoted to his baseless claim that the election was stolen, supported by the crowd, who broke out into chants of “Trump won! Trump won!  Trump won!”

“Sir, think to the future, don’t go back to the past,” Trump said some Republican members of Congress have advised him.

“I’m telling you the single biggest issue, as bad as the border is and it’s horrible, horrible what they’re doing, they’re destroying our country, but as bad as that is the single biggest issue, the issue that gets the most pull, the most respect, the biggest cheers is talking about the election fraud of the 2020 presidential election,” Trump said.

--Liz Cheney (R-Wy.) in a tweet: “Millions of Americans have been sold a fraud that the election was stolen. Republicans have a duty to tell the American people that this is not true.  Perpetuating the Big Lie is an attack on the core of our constitutional republic.”

--Editorial / Wall Street Journal

“When Democrats complain that Donald Trump is plotting to suppress votes, they have a point – but fortunately for them, the votes he is plotting to suppress are those of his own supporters.

“That was evident in January this year in the two Georgia Senate runoffs. Turnout in Republican strongholds fell because Mr. Trump told his voters the election in November had been stolen and the state’s GOP officials were corrupt. Democrats narrowly won both seats in the conservative state, handing the party unified control of Congress and paving the way for an ideologically unleashed Biden Administration.

“Now the former President is threatening aloud that he might repeat this act of electoral sabotage in the next national elections.  ‘If we don’t solve the Presidential Election Fraud of 2020 (which we have thoroughly and conclusively documented),’ Mr. Trump said in a statement Wednesday, ‘Republicans will not be voting in ’22 or ’24.  It is the single most important thing for Republicans to do.’

“What’s notable isn’t that Mr. Trump continues to deny his election defeat and push for increasingly futile ‘audits’ that will go nowhere.  Mr. Trump will never admit he lost.  Democrats have already used Mr. Trump’s election denial against the GOP to great effect in their California gubernatorial recall rout and are now wielding it in what has become a tight Virginia Governor’s race.

“Mr. Trump’s escalation is that he is now explicitly tying Republican acceptance of his election fantasy to a threat of electing Democrats as retribution.  The message to Republicans is that if they don’t loudly pretend that he won the last election, Mr. Trump will make sure the GOP loses the next one, too.

“Refusal to accept election outcomes in modern American politics is not unique to Mr. Trump.  Much of the Democratic Party and intellectual class did not accept the legitimacy of Mr. Trump’s 2016 victory.  Stacey Abrams, the celebrated Georgia gubernatorial candidate, has still refused to concede that she lost in 2018.  In 2021 congressional Democrats initiated an effort to overturn a certified Iowa House race before thinking better of it.

“One crucial difference between Mr. Trump and those Democrats is that Democrats would never be self-defeating enough to try to leverage their election gripes against the interests of their own voters….

“Mr. Trump’s calculus works differently.  When his ego is on the line, his voters’ interests are secondary.  He might not like it if progressives control government and choke off American energy production or bludgeon social-media companies to censor conservatives.  But his priority is that GOP candidates show obeisance to his claims that he was robbed in November.  And he’s willing to help Democrats if Republicans refuse or even stay silent.

“We wrote after the Georgia runoffs: ‘We hope Republicans keep Mr. Trump’s contribution to these defeats in mind over the next two years as their taxes and energy costs rise, as woke cultural mandates rain down from Washington, and as more of the economy comes under political control.’

“All of that is happening.  With the Biden Administration’s polarizing overreach, the 2022 elections are an opportunity for the GOP to retake Congress and check the divisive progressive assault on the U.S. economy and law.  But that was also true of the 2021 Georgia races.  Mr. Trump may not be finished making his supporters pay for his narcissism.”

--The House select committee investigating the Jan. 6 attack on the Capitol will vote next Tuesday to hold Trump political adviser Steve Bannon in contempt of Congress for not complying with a subpoena.

Bannon had been instructed to appear for a deposition Thursday, but former President Trump’s counsel advised former aides not to cooperate with the committee.

Once the committee adopts the contempt report next week, it will refer the report to the House for a vote.  Assuming that the Democratic-controlled House adopts it, it is then referred to the U.S. Attorney for the District of Columbia “to bring the matter before the grand jury for its action.”

Bannon is one of the truly awful people on the planet.

--The FBI is seeing evidence of Americans being inspired to potential violence by the Taliban’s recent victory, an agency official said Tuesday.

Charles Spencer, the assistant director of the FBI’s international operations division, said he is seeing more chatter online and on social media from Americans who have not traveled to the Middle East, yet are influenced by the rapid seizure of Afghanistan over the summer.

Spencer said al-Qaeda, which has maintained a close relationship with the Taliban, is not prepared today to launch large-scale attacks like that against the mainland United States.  But it will likely be able to target American personnel or facilities in the region around Afghanistan soon, he predicted.

--After years of recommending that middle-aged and older Americans consider taking low-dose aspirin to prevent a first heart attack or stroke, an influential medical task force is planning to overhaul its guidelines, based on new studies that show that the risks may greatly reduce or cancel out the benefits.

“Our message…is if you don’t have a history of heart attack and stroke, you shouldn’t be starting on aspirin just because you reach a certain age,” said Chien-Wen Tseng, a member of the U.S. Preventive Services Task Force (USPSTF), an independent panel composed of experts in disease prevention and evidence-based medicine whose recommendations can influence medical practices and insurance coverage related to preventive measures.

“Every year, an estimated 1.2 million people experience a first heart attack or stroke, so we’re talking about something pretty serious,” Tseng said.

According to the task force’s draft recommendation, a review of the latest scientific evidence found that regularly taking low-dose aspirin – 81 milligrams to 100 milligrams – to prevent a first heart attack or stroke may have only a ‘small net benefit’ for people ages 40 to 59 who are at risk for cardiovascular disease.  The task force emphasized that patients should make decisions about taking aspirin only in consultation with their health-care provider.

While aspirin is a blood thinner and can help head off heart attacks and strokes by preventing clots from forming in blood vessels that lead to the heart or brain, taking aspirin can also cause major bleeding that can be fatal, especially in older people, said Tseng.

Which is why the task force is now saying adults 60 or older shouldn’t start taking aspirin daily to lower the chances of a first heart attack or stroke, as there is “no net benefit” in doing so.

--A study out of NYU’s Grossman School of Medicine that looked at the effects of exposure to the so-called “hormone disruptor” chemical on more than 5,000 adults between the ages of 55 and 64, estimates that daily exposure to the synthetic chemicals, called phthalates, may lead to around 100,000 premature deaths every year in older adults.

The chemicals are used in the manufacturing of plastic food containers and cosmetics and the study found that those with the highest concentrations of phthalates in their urine were more likely to die of heart disease than those with lesser exposure.

Dr. Leonardo Trasande said in a statement: “Until now, we have understood that the chemicals connect to heart disease, and heart disease in turn is a leading cause of death, but we had not yet tied the chemicals themselves to death.”

--California is set to become the first state in the country to phase out gas-powered lawn equipment.

Gov. Gavin Newsom (D) signed a bill Saturday that would require new small off-road engines, used primarily for landscaping, to be zero-emissions by 2024.  The legislation comes with $30 million in funding to help aid the transition.

These devices are “super polluters.”  Good for California. I wish we would do this here in New Jersey.

--I was right.  Did you see anything about the Orange County, California, oil spill on the national news this week?  Nope.  Upon further assessment, thankfully, it wasn’t even as bad as first projected in terms of the amount spilled, which was infinitesimally smaller than the highest-profile disasters of the last 50 years.

--William Shatner, aka Captain Kirk, was incredibly emotional after his 11-minute voyage on Jeff Bezos’ Blue Origin, saying of the experience: “The covering of blue, this blanket, this comforter of blue we have around us.  We think, ‘Oh, that’s blue sky,’ and all of a sudden you shoot through it and you whip the sheet off you and you’re looking into blackness, into black nothingness.

“As you look down, there’s your blue down there with the black up there.  There is Mother Earth and comfort and there is – is there death?  I don’t know.  Is that the way death is?” he asked.

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

God bless America.

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Gold $1768
Oil $82.66

Returns for the week 10/11-10/15

Dow Jones  +1.6%  [35294]
S&P 500  +1.8%  [4471]
S&P MidCap  +2.2%
Russell 2000  +1.5%
Nasdaq  +2.2%  [14897]

Returns for the period 1/1/21-10/15/21

Dow Jones  +15.3%
S&P 500  +19.0%
S&P MidCap  +19.2%
Russell 2000  +14.7%
Nasdaq  +15.6%

Bulls 42.1
Bears 22.7

Hang in there.

Brian Trumbore

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