Week in Review

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Week in Review

11/27/2021

For the week 11/22-11/26

[Posted 9:30 PM ET, Friday]

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Edition 1,180

I started my column last Friday talking of how I presciently wrote the prior week of making a point to get a Covid booster, even though I technically didn’t qualify for one, and how many states and municipalities then issued their own booster guidelines, expanding the CDC’s existing parameters.

And I went on in my open last time, talking about how “it was also a depressing week on the Covid front.  Anyone following the numbers overseas knows another wave is well under way in some parts.”

I talked a lot about Europe and wrote: “The thing is, throughout the pandemic, what started in Europe found its way to our shores.

“I’ve been depressed because I’d love to travel overseas, including to Europe…but it’s hard to make long-term plans when you see what’s happening….”

And I went on, as I always do, to point out the gloomy statistics from across the pond.

So yesterday, Thursday, I’m working on this column and I have a good news ticker feed and I see a story that I start to write up:

South African scientists have detected a new Covid variant in small numbers and are working to understand its potential implications, they said on Thursday.

The variant has a “very unusual constellation” of mutations, which are concerning because they could help it evade the body’s immune response and make it more transmissible, scientists told reporters at a news conference.  Early signs from diagnostic laboratories suggest the variant has rapidly increased in the most populated province of Gauteng and may already be present in the country’s other eight provinces, they said.

The variant – B.1.1.529 – has also been found in Botswana and Hong Kong, with the Hong Kong case a traveler from South Africa.

Hours later, Britain said it was concerned with the news of this newly identified variant and slapped travel restrictions on six African countries, including South Africa.

That’s where we stood Thursday night. 

I’m checking the news at 4:00 a.m. these days and saw Friday morning that global markets were tanking.  Wall Street would follow, down 2% across the board, the broad-based Stoxx Europe 600 losing 3.7%.

As today then progressed, we were awaiting the conclusion of an emergency meeting of the World Health Organization, which declared the new variant to be one “of concern,” which is not what you want to hear, and because it was such, it was given a designation, “Omicron.”

The European Union tightened its border controls, and initiated its own flight ban for southern Africa nations, leaving South Africa feeling like they were being punished for their critical transparency…and they have a point.  Why would they be so forthcoming in the future?

But at the same time, the world is doing the right thing.  Yes, the cat is out of the bag, cases already identified in Israel and Belgium, for example, and no doubt here in the U.S., just yet to be identified, but you have to slow it down, even as the WHO’s Mike Ryan urged caution.

“Because we’ve seen in the past, the minute that there is any mention of any kind of variation, then everyone is closing borders and restricting travel.”

Well you can’t just do nothing.  South Africa’s Health Minister Joe Phaahla called the travel restrictions “unjustified” even as he admitted that preliminary studies suggested the new variant may be more transmissible, and it’s taking over his country in terms of those now testing positive in South Africa…as in it’s already the dominant strain of the coronavirus there.  Cases are still relatively low, after South Africa crushed the curve on its last wave, but the nation is spiking anew.  That’s the message to the rest of us.  Delta took time to become dominant.  [Time we wasted.]  Omicron appears to be spreading rapidly.

The U.K. Health Security Agency said that the variant has a spike protein that was dramatically different to the one in the original coronavirus that Covid-19 vaccines are based on.  It has mutations that are likely to evade the immune response generated both by prior infection and vaccination, and also mutations associated with increased infectivity.

“What we do know is there’s a significant number of mutations, perhaps double the number of mutations that we have seen in the Delta variant,” British Health Secretary Sajid Javid told broadcasters. “And that would suggest that it may well be more transmissible and the current vaccines that we have may well be less effective.”

“One of the lessons of this pandemic has been that we must move quickly and at the earliest possible moment,” Javid added today.

The U.S. then said this afternoon it will restrict travel to the United States from eight southern Africa countries, including South Africa, effective Monday, though as in prior travel bans, U.S. citizens will be able to travel home, meaning they could be carrying Omicron, though they are supposed to be tested prior to boarding.

Much is uncertain.  We have a good idea Omicron is highly transmissible, but we don’t know if it is more serious in terms of severe illness and death.  It will also take weeks for the likes of Pfizer, Moderna and AstraZeneca to determine if their existing vaccines and therapeutics remain largely effective against Omicron or if they will have to be drastically modified (or just moderately so).

In the meantime, the West, specifically the nations where the vaccines are being produced, is paying a price for not focusing on vaccination in Africa, where by some measures only six percent of the people are vaccinated.  Here in the United States, 40 percent of us are not fully vaccinated…and yet tens of millions of doses go unused.  It’s pathetic, and it’s a human tragedy.

I could point to scores of times the last year once vaccines became available when I wrote that we have to vaccinate Africa.  It’s so obvious.  And yet we still dropped the ball.

Omicron actually originated in Botswana.  Thankfully, for all of South Africa’s faults, it has a top-class medical and scientific community that has identified many of the Covid-19 variants. We not only owe them a very public debt of gratitude, we owe them a ton of support.  That’s the job of a president.  I’m not holding my breath.

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Prior to the warnings on Thursday, the director of the Pan American Health Organization said during a Wednesday briefing that spikes in Covid cases in Europe could be a “window into the future for the Americas.”

“Time and again, we’ve seen how the infection dynamics in Europe are mirrored here several weeks later,” Carissa F. Etienne, director of the organization, said.  “The future is unfolding before us, and it must be a wake-up call for our region because we are even more vulnerable.”

The same day, Wednesday, the head of the World Health Organization expressed concern about a “false sense of security that vaccines have ended the pandemic and that people who are vaccinated do not need to take any other precautions.”

“While Europe is again the epicenter of the pandemic, no country or region is out of the woods,” WHO Director General Tedros Adhanom Ghebreyesus said.

Then, 24 hours later, we had the news out of South Africa.

Biden Agenda

--The Biden administration announced Tuesday it would release millions of barrels of oil from strategic reserves in coordination with China, India, South Korea, Japan and Britain to cool prices after OPEC+ producers repeatedly ignored calls for more crude.

President Biden, facing low approval ratings amid rising inflation, is panicking; ditto Congressional Democrats, fearing a slaughter at the ballot box next November.

It was the first time Washington had coordinated such a move with some of the world’s largest oil consumers, but OPEC+ (including Russia) has rebuffed requests to pump more at its monthly meetings.  It meets again on Dec. 2 and there are signs, as of today, they may decide to pause their agreement to gradually increase production by 400,000 barrels per day each month – a pace Washington sees as too slow – as OPEC+ also remains worried that a resurgence of coronavirus cases could once again drive down demand.  And now we have Omicron, giving them more of a reason to pause.

Tuesday, Energy Secretary Jennifer Granholm chimed in, urging energy companies to increase oil supply amid “enormous profits,” noting the oil and gas industry had leases on 23 million acres of public lands on and offshore and thousands of permits were not being used.  “At the same time the energy industry is making enormous profits.  They’re back up…above where they were before the pandemic started. So they have taken advantage of that moment,” Granholm told reporters.

Granholm made clear the administration now wants domestic producers to do their part to add oil to the market, especially given high profits, which Granholm said the companies had used to engage in shareholder buybacks.  “We want to encourage them to increase supply. We want supply to be increased both inside the United States and around the world so that we can reduce the pressures at the pump,” she said.

Granholm said energy companies had not rehired people who were let go because of the pandemic, had not turned on rigs and failed to take advantage of permits at their disposal.

Of course it was the same administration that has done everything to discourage production, while at the same time, the industry until recently hasn’t been in a position to hire back workers after making the needed cuts when oil prices collapsed spring to 2020.

Editorial / Washington Post

“President Biden has now completed the two-step ritual that presidents perform to deflect voter anger over rising gasoline prices.  The first step is ordering an investigation into gas price gouging, which Mr. Biden did last week.  The second is releasing oil from the U.S. Strategic Petroleum Reserve, which Mr. Biden did Tuesday.  These moves accomplish one thing: making it appear that the president is doing something about gas prices.

“Gas prices reflect the underlying price of oil. The oil price, in turn, reflects global supply and demand patterns.  The Organization of Petroleum Exporting Countries (OPEC) and its allies regulate international oil supply to maximize benefits to oil producers such as Saudi Arabia and Russia.  OPEC nations have been wary about increasing production, because they fear more pandemic-related economic headwinds may drag down oil demand, and therefore the price they get for their oil.  But demand has surged 5 percent from a year ago, reflecting the economic reopening.  The result is higher oil prices.

“Mr. Biden pressured OPEC to boost its production faster than planned, but the cartel has not complied.  So the president coordinated a release from the Strategic Petroleum Reserve with releases from other oil-consuming nations’ oil stocks, bringing to market some stored-up supply.  Past coordinated releases came during times of stress in the oil supply chain, such as when war disrupted Libya’s production or Hurricane Katrina ravaged Gulf of Mexico oil refineries. This is because, in so much as they make any substantial difference, releases from oil reserves have only short-term effects.

“Indeed, the 50 million barrels the United States will release equates to about 2 ½ days of national consumption.  India pledged to release a little more than what it consumes in a day.  Mr. Biden’s hints that he would take action may have encouraged oil prices to level off in recent weeks.  But the market yawned at his announcement; oil prices actually rose.  His move may also elicit retaliation from OPEC, which could cancel planned production increases.  That could put upward pressure on prices down the road.

“Long-term, there are only two ways to minimize the punishing effects of oil price volatility: increasing domestic oil production and decreasing domestic oil consumption.  Increasing U.S. oil production would bypass OPEC and limit the geopolitical clout of predatory nations such as Russia.  Yet this makes sense only as a transitional policy.  Over time, the country must cut its dependence by encouraging more fuel-efficient and electric cars, investing in public transit and better planning communities.  Hand-in-hand with boosted domestic oil production should come a higher gas tax, the proceeds of which could be rebated back to consumers to make all but the biggest gas-guzzlers whole.  A steadily increasing levy would raise prices slowly and predictably, giving the economy more time to adjust, and it would keep more fuel dollars in the United States, all while shifting consumption patterns away from a toxic addiction to the fossil fuels that are warming the climate.

“Republicans stress domestic oil production.  Democrats emphasize weaning off carbon-intensive fuels.  Both have a point.  If, years down the line, presidents are still performing the oil-price two-step, it will represent a massive national failure.”

Editorial / Wall Street Journal

“Crude prices rose Tuesday after the Biden Administration announced that the U.S. and other countries would tap their petroleum reserves.  Sorry, Mr. President.  Markets know that this political gesture won’t fix the supply shortage and could make it worse….

“So why did crude prices tick up?  One reason is the release was less than markets expected. For weeks the Administration has been hinting at a coordinated release, so traders overbaked it into prices.

“Some also expect the Organization of the Petroleum Exporting Countries and Russia to respond in kind at their next meeting in December by reducing supply.  OPEC+ has been steadily raising supply by about 400,000 barrels per day each month, though the Administration for months has been lambasting the cartel for not doing more.

“It’s true that the Saudis are content with crude averaging the current price of about $80 per barrel, which is about break-even for the Saudi budget. The Kingdom also worries that Iranian supply could increase if the Biden Administration renegotiates a nuclear agreement and lifts sanctions.

“For a decade the U.S. was the world’s swing oil producer.  But U.S. drillers have retreated amid a regulatory assault from Washington, pressure from progressive investors, and challenges obtaining capital.  Some say they are also struggling to find workers.  Output is set to hit a record in the Permian Basin, where the break-even costs are low and new production doesn’t require long-term investment.

“But U.S. production is still about 1.7 million barrels per day below its pre-pandemic peak and has been declining in other oil fields such as the Bakken Shale, where a shortage of pipeline capacity has raised costs.  The Democrats’ multi-trillion-dollar spending bill is chock-full of fees that would make U.S. producers less globally competitive.

“Meantime, the Biden Administration last week asked the Fifth Circuit Court of Appeals to reverse a lower judge’s injunction on its ban on oil and gas leases on federal land.  All of these policies discourage investment in future production, which means supply shortages and high gas prices may not be as temporary as the Administration claims.

“Mr. Biden’s SPR withdrawal is intended to give the appearance of doing something about prices while actually doing nothing.”

Sen. Joe Manchin (D-WV) shrugged at the release of 50 million barrels of oil from the SPR, describing it as a “Band-Aid” on a “self-inflicted wound” and calling on the president to revive the canceled Keystone XL pipeline.

Manchin, chairman of the Senate Energy and Natural Resources Committee, decried what he called the “shortsighted energy policy” of the White House.

“With an energy transition underway across the country, it is critical that Washington does not jeopardize America’s energy security in the near term and leave consumers vulnerable to rising prices,” Manchin said in a statement.  “Historic inflation taxes and the lack of a comprehensive all-of-the-above energy policy pose a clear and present threat to America’s economic and energy security that can no longer be ignored.

“I continue to call on President Biden to responsibly increase energy production here at home and to reverse course to allow the Keystone XL pipeline to be built which would have provided our country with up to 900,000 barrels of oil per day from Canada, one of our closest allies,” Manchin went on.  “To be clear, this is about American energy independence and the fact that hard working Americans should not depend on foreign actors, like OPEC+, for our energy security and instead focus on the real challenges facing our country’s future.”

Biden, in an incredibly stupid move in the first hours of his presidency, a la President Trump’s immensely dumb move to pull out of the Trans-Pacific Partnership trade agreement in his first hours, revoked the permit for the long-mooted Keystone XL pipeline, immediately halting construction on the project.

Sen. Manchin, whose vote is critical to passage of Biden’s Build Back Better Act, could use Keystone as leverage.

--The president did do one thing right this week, endorse Federal Reserve Chair Jerome Powell for another four-year term, ending weeks of speculation.  Lael Brainard, the other contender, got a boost to vice chair.  Powell needs to be confirmed by the Senate, but he has strong bipartisan support.

Biden said he’d chosen not to replace Powell, despite intense pressure from progressives, because “we need stability and independence” at the Fed.

In comments emailed to reporters, Biden said: “While there’s still more to be done, we’ve made remarkable progress over the last 10 months in getting Americans back to work and getting our economy moving again.

“That success is a testament to the economic agenda I’ve pursued and to the decisive action that the Federal Reserve has taken.”

In a White House ceremony after, Biden asked rhetorically: “Why am I not picking a Democrat?  Put directly, at this moment of both enormous potential and enormous uncertainty we need stability and independence at the Federal Reserve.”

The decision comes at a politically delicate time for the Fed.  Its reputation took a hit with the recent revelation that some policy makers had traded in financial securities while the Fed was aiding the markets and the economy.

And you have the tug of war between progressive Democrats, who want the Fed to fight income and racial inequality and climate change, and conservative Republicans who want the central bank to focus on its two traditional goals of price stability and full employment, with special emphasis on containing inflation.

Today, the choice for Powell is, does the Fed try to slow the economy down and rein in surging inflation, even at a time when millions of Americans remain out of work.  And, oh yeah, Covid-19 is still very much present.

David Ignatius / Washington Post

“The decision to retain Powell, a Republican, and appoint Democrat Lael Brainard, Powell’s chief rival for the top job, as vice chair, could refurbish Biden’s basic promise to make orderly government work again – despite the intensely partisan era.  It was, as a senior White House official put it to me shortly after the announcement, ‘a very Joe Biden decision.’….

“Powell isn’t perfect. He badly underestimated the inflationary impact of the more than $5 trillion in stimulus spending in 2020 and 2021 to deal with the pandemic.  But he has demonstrated the two qualities most essential as a Fed chair: He creatively used the central bank’s powers to maintain liquidity in global financial markets during the first crisis months of Covid-19; and he defied political pressure by President Donald Trump, who had appointed him in 2017, to cut interest rates to help Trump’s electoral prospects….

“Powell is a double-edged sword for the White House.  He’s respected on Wall Street… But in a second term at the Fed, he must check the inflationary pressures that built during his first term….

“Former treasury secretary Lawrence H. Summers, who has been warning for months that inflationary pressures weren’t as ‘transitory’ as Powell predicted, appeared content with Biden’s decision.  ‘The institution is in good hands,’ he said in a tweet….

“Biden’s standing with the public won’t be affected much, one way or another, by who runs the Federal Reserve.  But this week he seemed to recover a bit of authority to do what makes sense for the country, regardless of bickering on the left and right.”

--With Congress returning next week and President Biden’s Build Better Back Act assuming center stage, along with Covid (unfortunately), I’ll review what is actually in the legislation and the impact on the Biden presidency…both good and bad.

Wall Street and the Economy

We had a slew of economic data crammed into the first three days of the week. October existing home sales rose 0.8% to 6.34 million annualized, but were down 5.8% from October 2020 at the height of the pandemic buying.  The median existing home price for October was up 13.1% from a year ago to $353,900.  October new home sales were less than expected at 745,000.

October durable goods were disappointing, -0.5% when a gain was expected, though ex-transportation were up 0.5%.

October personal income rose a better than expected 0.5%, ditto consumption (consumer spending), up a strong 1.3%.

This report contains the key personal consumption expenditures index, the Federal Reserve’s preferred inflation barometer, and the core reading, ex-food and energy, is now 4.1% year-over-year, up from September’s 3.7% and well above the Fed’s preferred 2% target.

A second look at third-quarter GDP was 2.1%, with personal consumption just 1.7%, vs. the prior two quarters’ readings of 11.4% and 12.0%.  But remember, Q3 encompassed the height of the Delta variant and at least thus far in the fourth quarter, growth is once again robust, with the Atlanta Fed’s GDPNow barometer for Q4 currently at 8.6%.

In addition, this week’s initial jobless claims figure was not only a post-pandemic low, at 199,000 it was the lowest figure since Nov. 1969.  We’ll learn soon enough if this was an anomaly but this is what the Labor Department reported for now.

Add it all up and consumer demand remains strong and the economy is accelerating, witness the travel numbers I note below.

The National Retail Federation is calling for holiday sales, November and December, to soar 9.5% over last year (specifically, 8.5% to 10.5%).

But as for the inflation issue, more than three out of four Americans say surging prices are affecting their lives and more than half say President Biden deserves at least some blame, according to a new poll.

A Yahoo News/YouGov survey released Tuesday found that 77 percent of Americans say inflation has recently affected them to some extent, while 61 percent say the same about the ongoing supply chain crisis and the resulting shortage of goods and services.

The poll also found that more than half of Americans (51 percent) have expressed worry they “won’t be able to afford what they need during the holidays due to inflation,” while 45 percent fear they “won’t be able to get what they need” because of the supply chain disruption.

In terms of the midterm elections, 79 percent of independents say high prices have affected them “some” or “a great deal,” deadly for Democrats.

When asked whom they blame for the high prices caused by inflation, 80 percent of Americans pin at least some of the blame on Covid-19, while 57 percent say Biden bears “some” or “a great deal” of responsibility.

Finally, global supply-chain woes have begun to receded, but more normal operations are still a ways off.  It is encouraging that Trans-Pacific freight rates have cooled.

Europe and Asia

We had flash PMI readings for the month of November, courtesy of IHS Markit, and the composite figure was 55.8, with manufacturing output at 53.8 and the service sector 56.6 (50 the dividing line between growth and contraction).

Germany: mfg. 51.7, services 53.4
France: mfg. 48.0, services 58.2

The manufacturing readings are down largely because of lower production in the auto sector, and you can blame supply-chain issues for some of this.

UK: mfg. 52.9, services 58.6

Chris Williamson, IHS Markit

“A stronger expansion of business activity in November defied economists’ expectations of a slowdown, but is unlikely to prevent the eurozone from suffering slower growth in the fourth quarter, especially as rising virus cases look set to cause renewed disruptions to the economy in December.

“The manufacturing sector remains hamstrung by supply delays, restricting production growth to one of the lowest rates seen since the first lockdowns of 2020.  The service sector’s improved performance may meanwhile prove frustratingly short-lived if new virus fighting restrictions need to be imposed.  The travel and recreation sector has already seen growth deteriorate sharply since the summer.

“With supply delays remaining close to record highs and energy prices spiking higher, upward pressure on prices has meanwhile intensified far above anything previously witnessed by the surveys.

“Not surprisingly, given the mix of supply delays, soaring costs and renewed Covid-19 worries, business optimism has sunk to the lowest since January, adding to near-term downside risks for the eurozone economy.”

Brexit: U.K.-EU relations over Northern Ireland haven’t broken down yet, with Britain saying this week it will hold off suspending parts of the Brexit deal relating to the region as it continues negotiating with Brussels.

U.K. Trade Secretary Anne-Marie Trevelyan told the Daily Telegraph that Article 16 would “absolutely not” be invoked before Christmas.

So this is good.

But France and Britain are back at it over the fishing issue, and at week’s end were also trading blows over who’s to blame for the tragic deaths of at least 27 migrants after their boat capsized in the English Channel on Wednesday as the people tried to cross the dangerous shipping passage in rough autumn weather.  More than 25,000 people are estimated to have arrived in the U.K. from France in small boats this year, about three times as many as in 2020.

Friday, France’s interior minister cancelled talks with U.K. Home Secretary Priti Patel after Prime Minister Boris Johnson called on France to take back migrants who crossed the Channel.

Johnson set out five steps in his letter to President Emmanuel Macron to avoid a repeat of Wednesday’s tragedy.  But in typical Johnson fashion, he made the letter public when such matters are handled more diplomatically…leader to leader.

Germany: Social Democrat Olaf Scholz said on Wednesday he had reached a coalition deal to form a new government that will try to modernize Europe’s largest economy and bring the curtain down on the Angela Merkel era.

Scholz’s center-left Social Democrats (SPD), the ecologist Greens and the libertarian Free Democrats (FDP) want to accelerate the transition to a green economy and digitalization while maintaining fiscal discipline.  The alliance – named a traffic light coalition after the three parties’ respective colors – has a majority in the lower house of parliament and hopes the government will be sworn in early next month after the parties ratify the coalition pact.

The coalition will end 16 years of Merkel-led conservative government, marking a new era for relations with Europe and the rest of the world.

Merkel leaves big shoes to fill.  She has navigated Germany and Europe through multiple crises and been a champion of liberal democracy in the face of rising authoritarianism worldwide.  But critics say she has managed, rather than solved problems and leaves her successor with tough decisions on many fronts. Think Brexit, Belarus and surging Covid-19 cases for starters.

Scholz was a finance minister and vice chancellor in Merkel’s “grand coalition” of the SPD and conservatives.

Turning to Asia…nothing of import on the economic front from China this week.

Japan’s flash PMI readings for November showed a composite of 52.5, with manufacturing output at 53.5, services 52.1.

Street Bytes

--Stocks suffered their worst day of the year Friday on the South African variant news, and it was the worst Black Friday on record for equities, the major averages falling 2.2% to 2.5%.  Travel-related stocks such as cruise operators and airlines plunged (9%+ across the board).

On the holiday shortened week overall, the Dow Jones fell 2% to 34899, the S&P 500 lost 2.2% and Nasdaq declined 3.5%.

--U.S. Treasury Yields

6-mo. 0.08%  2-yr. 0.50%  10-yr. 1.47%  30-yr. 1.82%

The 10-year was trading with a yield of 1.644% prior to Thanksgiving, and then you see the impact of the South African variant story today.

Eurozone government bond yields also cratered on the news, though the German bund was essentially unchanged on the week.

--U.S. crude oil stocks, including those in the Strategic Petroleum Reserve, fell by 600,000 barrels in the week ended Nov. 19, following a decrease of 5.3 million barrels in the previous week.

The Energy Information Administration, though, said oil stockpiles rose 1 million barrels to 434 million barrels for the week if you take out the impact of the SPR.

Overall crude oil stocks were down 7.8% from a year earlier, and are about 7% below the five-year average for this time of the year.

But in the end, oil collapsed today with the Omicron news, down a whopping 13%, after shrugging off the release of oil from the SPR earlier…the price of West Texas Intermediate sitting at $68.17, down from a weekly close of $83.98 just five weeks ago.

--Bitcoin collapsed, like oil, and while it’s incredibly volatile and never stops trading, as I go to post, it sits at about $54,400, down 20% from its recent all-time high.

--JPMorgan Chase CEO Jamie Dimon said on Wednesday he regretted his remarks that the Wall Street bank would last longer than China’s Communist Party.

“I regret and should not have made that comment. I was trying to emphasize the strength and longevity of our company,” Dimon said in a statement issued by the bank.

Speaking at a Boston College series of CEO interviews on Tuesday, Dimon said: “I made a joke the other day that the Communist Party is celebrating its 100th year – so is JPMorgan.  I’d make a bet that we last longer.”

“I can’t say that in China. They are probably listening anyway,” he added.

Dimon knew as soon as he uttered those words he shouldn’t have and we learned later the company went into immediate damage control.  At first they wanted to see if China was indeed listening, but it was clear very quickly that the comments had gone global.

A JPM spokesperson said Dimon had acknowledged that he should “never speak lightly or disrespectfully about another country or its leadership.”

“During the discussion Jamie made clear China and its people are very smart and very thoughtful.”

This comes a week after Dimon was granted an exemption by the Hong Kong government to visit the Chinese-controlled financial hub without needing to quarantine.  Visitors to the city from most countries must stay in hotel quarantine for two to three weeks at their own cost.  Dimon was in Hong Kong for 32 hours after arriving by private jet.

JPMorgan has major ambitions in China and in August it received regulatory approval from Beijing to become the first full foreign owner of a securities brokerage in the country.

This is far from the first time Dimon has had to eat his words.  In September 2018, speaking at a conference, he said he could beat President Trump in a campaign because he was smarter than Trump.  And, Dimon added, he had earned his wealth and didn’t get it from his father.  Within an hour, he was walking that back.

--Staying on the China theme, last Saturday, the country’s market regulator said it was fining companies including Alibaba, Baidu and JD.com for failing to declare 43 deals that date as far back as 2012 to authorities, saying that they violated anti-monopoly legislation.

China has been tightening its grip on internet platforms, reversing a once laissez-faire approach and citing the risk of abusing market power to stifle competition, misuse of consumers’ data and violation of consumer rights.

Shares in Alibaba fell marginally on the news to $133, but are down from $244 back on April 12.

And then today, regulators asked Didi Global Inc.’s executives to devise a plan to delist from U.S. stock exchanges, an unprecedented request that’s reviving fears about Beijing’s intentions for its giant tech industry.

The country’s tech watchdog wants management to take the company off the New York Stock Exchange because of concerns about leakage of sensitive data, according to reports.  The Cyberspace Administration of China, the agency responsible for data security in the country, has directed Didi to work out details.

Didi, a ride-hailing mobile service, just went public at $14 on June 30 and was immediately under pressure from the Chinese government.  Any secondary listing in Hong Kong, prior to delisting on the NYSE, would probably be at a discount to the current share price…$7.90.

--As Americans set out for Thanksgiving travel, we finally hit a post-pandemic high in air travelers; first Friday, Nov. 19 (2,242,956) and then Wednesday, Nov. 24 (2,311,978) …exceeding the prior Aug. 1 high of 2,238,462.

The formal Thanksgiving holiday runs from Fri., Nov. 19 thru Sun. Nov. 28.  When you look at the numbers below, understand the holiday travel period for 2019 was 11/22-12/1…if you are looking for apples to apples comparisons.

--TSA checkpoint travel numbers vs. 2019….

11/25…87 percent of 2019 levels
11/24…88
11/23…91
11/22…92
11/21…95
11/20…91
11/19…88
11/18…84

Now we’ll see in a few weeks the impact, if any in a significant way, the new South African variant will have on future plans.

--Deere & Co. reported higher fiscal fourth-quarter earnings and revenue on Wednesday, beating analyst estimates, and raised its fiscal 2022 financial outlook.

Equipment operations sales increased to $10.28 billion from $8.66 billion, but shy of the Street’s view.  Total revenue rose 16% to $11.33 billion, helped by higher sales and prices.

“Our results reflect strong end-market demand and our ability to continue serving customers while managing supply-chain issues and conducting contract negotiations with our largest union,” said CEO John May in a statement.  “Last week’s ratification of a six-year agreement with the UAW brings our highly skilled employees back to work building the finest products in our industries.”

Deere said it is anticipating fiscal 2022 earnings of $6.5 billion to $7 billion, which it said reflects healthy demand for its products.  The company reported net income of $5.96 billion for fiscal 2021.

The company added that fiscal 2022 revenue will largely be driven by sales of its production and precision agricultural equipment, which are expected to climb up to 25% along with price hikes of around 9%.

“We expect demand for farm and construction equipment to continue benefiting from positive fundamentals, including favorable crop prices, economic growth, and increased investment in infrastructure,” said May.  “At the same time, we anticipate supply-chain pressures will continue to pose challenges in our industries.”

--Best Buy Co. posted a decline in e-commerce sales during the quarter ended Oct. 30, after such sales nearly tripled last year.  Dick’s Sporting Goods Inc. reported that online sales in the same quarter were mostly flat, after they had nearly doubled a year earlier.  Both chains reported higher overall sales than in 2019.

Best Buy expects a strong holiday season but a slowdown in sales growth versus earlier in the year, said Best Buy chief financial officer Matt Bilunas on a call with analysts.

In addition, “some sales probably got pulled into October, similar to last year,” as the narrative around supply-chain snarls worried consumers, Bilunas said. “We still feel really confident about our inventory levels and positioning for the holidays,” he said.

Consumers spent nearly $640 billion in U.S. retail stores and restaurants in October, compared with about $520 billion in October 2019, according to government data.

And that extra money is flowing across the retail landscape, with giants such as Walmart and Home Depot reporting strong quarterly results and saying they have stocked up ahead of Black Friday.

But despite the strong demand, some retail executives say they are missing out on sales because the flow of goods has been disrupted by supply-chain issues and profits have been squeezed by higher transportation costs.

Best Buy reported higher sales of appliances, home-theater equipment and mobile phones but lower sales of computing items, which accounted for about 45% of the company’s revenue in the quarter.

Best Buy said U.S. comparable sales rose 2% in the quarter ended Oct. 30 compared with last year, when they jumped 22.6%.

U.S. e-commerce sales fell 10.1% from a year earlier, when they surged 174% as temporary store closures during the pandemic shifted many customers to shop online.  Online sales accounted for about a third of Best Buy’s $11 billion in domestic revenue in the latest quarter.

So the company then raised its forecast for comparable sales for the full fiscal year but warned that the metric could decline in the fourth quarter and the shares cratered on Tuesday and Wednesday, down over 15%, as a result of this last statement.

Dick’s comp sales rose 12.2% in the quarter ended Oct. 30, compared with a 23% rise in the same quarter last year. 

E-commerce sales accounted for 19% of the company’s $2.75 billion in quarterly revenue this year, compared with 21% in last year’s third quarter.  The $2.75 billion was up nearly 14% from a year ago.

Shares in Dick’s fell 9% Tuesday and Wednesday.

--Nordstrom shares plummeted nearly 29% on Wednesday after the company reported Q3 earnings and net sales that missed consensus estimates.

The department store chain posted Q3 earnings of $0.39 per share, up from $0.34 per share a year earlier, but analysts expected $0.56…a big miss.

Net sales rose to $3.53 billion from $3 billion, slightly below expectations.  A slew of analysts then downgraded the stock and it was ‘look out below.’

--Gap shares nosedived 24% after the clothing chain said supply chain problems crimped its third-quarter earnings and revenue.

--HP Inc. reported strong earnings and gave an upbeat outlook, aided by office re-openings and an expectation for healthy consumer demand through the holiday season despite the supply shortages.

The PC and printer maker on Tuesday said it generated quarterly sales of $16.7 billion, up 9.3% from the year-ago period, and $3.1 billion in net income, including a one-time $1.78 billion legal settlement. The results beat the Street’s expectations.

HP also guided higher for the fiscal year ending Oct. 31, 2022.

--Dell Technologies Inc. also posted strong results Tuesday, with the company reporting its strongest-ever third quarter, with sales of $26.4 billion and net income of $3.9 billion.  Commercial PC and high-end consumer devices saw strong growth, the company said.

Demand shot up for computers during the pandemic as people scrambled to secure devices for tasks such as remote working and distance learning and, according to International Data Corp., the global PC market has grown for six consecutive quarters.  But the world-wide chip shortage and global supply chain problems have stopped sales from taking off even more.

Dell said it expects revenue in the current quarter to increase at least 12% from the year-ago period and reach $27 billion to $28 billion, beating expectations.

HP ranked second in world-wide PC shipments, close behind Lenovo Group Ltd. and beating out Apple Inc. and Dell, according to IDC.

Both Dell and HP expected supply constraints to continue at least into the first half of 2022.

Chip makers are pouring money into trying to alleviate the processor shortages. Taiwan Semiconductor, Samsung, and Intel all have unveiled big chip factory plans to boost manufacturing capacity in the coming years.

--Speaking of chipmakers and expansion plans, Samsung confirmed it will build a $17 billion semiconductor factory in Taylor, Texas, giving a big boost to a bipartisan effort in Washington to persuade chip makers to build more of the components in the United States.

The company’s decision came after months of deliberations over possible locations in the U.S. and South Korea.  The company had considered a location in Austin, about forty minutes from Taylor, as well as locations in Arizona and New York.

Taylor and the surrounding county promised the company hundreds of millions of dollars in tax breaks.  Semiconductor plants require abundant water and reliable power, so they reached a deal to transport water from the adjacent county for the facility.

The company plans to create around 1,800 jobs, though chip production isn’t expected to start until the end of 2024, according to documents Samsung filed with Texas authorities…to give you an idea of the long lead-time for chip plants.

Samsung’s decision comes during a major shortage of semiconductors, which are critical to everything from Ford’s F-150 truck to medical devices and iPhones.

--Shares in Zoom Video Communications fell after the company reported sales growth slowed last quarter as the extra demand for remote work and the company’s videoconferencing application eased, along with a pullback in the pandemic.

The company said its sales rose 35% from a year earlier to $1.05 billion for the three months ended Oct. 31.  In the previous quarter, the company’s sales rose 54%.  A year earlier, its sales jumped more than 360%.

Zoom’s net income for the quarter rose more than 70% to $340 million, while the company is expecting sales in the current quarter ending in January to be basically the same as Q3.

Zoom shares are down to $208 from $276 on Oct. 19, and $444 Feb. 16 of this year, but rose $12 (nearly 6%) today to $220 on the South African variant news.

--I was at my local Dollar Tree Monday and wondering when it was going to raise prices to $1.25 as previously announced, but everything was still a buck.

Then Tuesday, in a statement by the company, it said it has begun rolling out the $1.25 price for many of its items. 

“Lifting the one-dollar constraint represents a monumental step for our organization and we are enthusiastic about the opportunity to meaningfully improve our shoppers’ experience and unlock value for our stakeholders,” said DLTR president and CEO Michael Witynski.

Dollar Tree said the shift to $1.25 pricing will allow them to introduce new products and bring back previous products discontinued because of the $1 price constraint.

Well, I only go for like six items…including dishwashing liquid, toothpaste, envelopes, and Campbell’s chicken soup…so we’ll see what they do with my favorites.  The price changes are to roll out to all stores by the end of the first quarter.

In its fiscal third quarter, revenue rose nearly 4% to $6.42 billion, in line with expectations.  Freight and supply disruptions “continue to be our biggest challenge in the near term,” Witnyski said.

Same-store sales increased 1.6%, a bit above forecasts.  The company raised guidance for the full year and the shares rose in response.

--Nebraska has the lowest unemployment rate of any state as of October, a mere 1.9%, well below the national jobless rate of 4.6%, according to Labor Department data.

Nebraska had fewer government-imposed restrictions on business, helping it avoid steep job losses some states experienced earlier in the pandemic.  The state’s industry mix includes agriculture and food-processing jobs that were deemed essential, as well as some service-sector roles in finance and insurance that were more resilient to the hit from the pandemic.

Utah recorded the second lowest jobless rate in October at 2.2%, followed by Idaho, South Dakota and Oklahoma, all below 3%.

--Finally, I can’t help but note the recent passing of Peter Buck, 90, a low-profile billionaire and former physicist who worked on designs for nuclear power plants.

Well you don’t become a billionaire doing this, as noble as it is, but it was in 1965 that Dr. Buck lent a 17-year-old son of a friend, Fred DeLuca, $1,000 after DeLuca asked him for advice on how to pay for college.  The two decided to become partners in a sandwich shop called Pete’s in Bridgeport, Conn.

And before you knew it, through aggressive franchising, it grew into today’s Subway chain, with nearly 40,000 locations world-wide.  Buck once told the Wall Street Journal it took 15 years before they were profitable.

Buck would become a major philanthropist, much of it done quietly.  Among the great things he has done is establish the Tall Timbers Trust, which held more than 1.2 million acres of timberland in Maine.

When asked whether he was a billionaire, Dr. Buck replied, “Yeah, I guess so.” Even so, he said, “I can go any place in Danbury (Ct.) and nobody recognizes me.”

The Pandemic

Eric J. Topol and Michael Osterholm / Washington Post…prior to today’s news on the South African variant.

“Even though the United States is experiencing a new surge of Covid-19, the Centers for Disease Control and Prevention’s Advisory Committee on Immunization Practices recommended last week that all adults be made eligible for booster shots but only urged shots for people older than 50.

“That was a big mistake.  It should have urged all adults to get them.

“Public health officials have always expected that mRNA coronavirus vaccines (Moderna and Fizer/BioNTech) were to be a three-shot regimen. The only question was when the third shot would be necessary.  Originally, the hope was that it would be after one or two years.  It turns out, it is necessary at about six months.

“More than 10 large reports have shown that the reduced protection from infections, including symptomatic infections, across all age groups, wanes from 90 to 95 percent at two months down to about 60 percent for Pfizer and 70 percent for Moderna after five to six months.  There is further substantial waning after six months.

“The good news is that a booster dose can restore that initial efficacy, as data makes abundantly clear….

“Israel offers more evidence of the booster’s benefits. Its largest health system tracked more than 700,000 people who had received a booster shot and found that the third shot had a striking 91 percent effectiveness against symptomatic infection. It also had a 93 percent effectiveness against hospitalization and 81 percent effectiveness against Covid-related deaths.

“But the CDC’s advisory committee didn’t review this important observational study and many other relevant data sources.  If it had, perhaps it would have more forcefully advocated boosters for all adults.  Our recommendation is fully consistent with messaging from the White House and President Biden that all vaccinated adults should get boosters.

“Its failure to do so has substantial implications.  Only 59 percent of the U.S. population is fully vaccinated, meaning the United States ranks below the top 50 most-vaccinated countries. Countries throughout Europe, such as Denmark and Belgium, have vaccination rates of around 75 percent, and even they are experiencing record-setting surges in cases.

“Like Britain and Israel, the United States was a first mover with early vaccination campaigns, so it has a much higher proportion of people with waning immunity. Forty percent of Americans (more than 120 million people) were fully vaccinated by June 1 and have diminished protection.  Each day in the United States, the number of people with waning immunity greatly exceeds those who are getting newly vaccinated.  Accordingly, rather than building our wall of population immunity, the United States is suffering attrition.

“It has been estimated that more than 90 percent of Americans need to be fully vaccinated to contain the hyper-contagious Delta variant. Not only are we far from that goal, but also we are moving in the wrong direction.  While we continue to press ahead to reach unvaccinated Americans, we must concurrently maintain protection for those who have received the shot.

“This is especially concerning amid the new surge, which has been labeled a ‘pandemic of the unvaccinated.’ This is misleading; it is critical to recognize the category of ‘vaccinated but waned.’  Multiple studies have shown that fully vaccinated people can spread the Delta variant.  This is more likely when the vaccine-induced immune response has faded. Since booster shots strongly reduce symptomatic infections, they could help stem the increased spread that we are experiencing.

“Israel used booster shots for all adult as its principal – and highly effective – strategy to manage its worst surge of the pandemic.  There, the status of ‘fully vaccinated’ is defined as having received three shots.  Indeed, the United States has consistently ignored critical lessons from Israel and Europe throughout the pandemic.

“By not strongly urging all fully vaccinated adults to get a third shot, the CDC has failed its responsibility to protect the public, fundamentally missing a strategy that would limit the surge in cases – not to mention the toll it will have in terms of long Covid-19 and hospitalizations. It has also engendered confusion by not keeping its recommendation simple, suggesting an illusion that there is a sharp age gradient for the benefit of boosters, which is clearly not the case.

“Now, as we confront yet another surge, it is not the time to withhold a vital and validated means of boosting our efforts to contain the virus.”

Covid-19 death tolls, as of tonight….

World …5,205,981
USA…799,137
Brazil…614,000
India…467,468
Mexico…293,449
Russia…270,292
Peru…200,987
UK…144,593
Indonesia…143,796
Italy…133,537
Iran…129,462
Colombia…128,343
France…118,837
Argentina…116,505
Germany…101,170
South Africa…89,783
Spain…87,955
Ukraine…84,149
Poland…82,607
Turkey…76,041
Romania…55,989
Philippines…48,017
Chile…38,245
Hungary…33,866
Ecuador…33,128
Czechia…32,643
Malaysia…30,240
Canada…29,618
Pakistan…28,697
Bulgaria…27,996
Bangladesh…27,973
Belgium…26,793
Tunisia…25,362
Vietnam…24,544
Iraq…23,755
Thailand…20,643

[Source: worldometers.info]

U.S. daily death tolls…Mon. 553; Tues. 1,237; Wed. 1,594; Thurs. 306;* Fri. 337*

*skewed by lack of reporting during the holiday.

[I eliminated Sunday.  When the pandemic started, I was the first person to talk of “catch-up Tues.,” when the states would make up for a lack of reporting on cases and deaths over the weekend.  Sunday’s data means nothing now.  Just want you to see the most accurate “midweek” patterns.  We need Tues.-Thurs. death tolls well under 1,000.]

Covid Bytes

--The number of U.S. Covid-19 deaths recorded in 2021 has surpassed the toll in 2020, as first calculated by Johns Hopkins University.

The total number of reported deaths linked to the disease topped 770,800 on Saturday, per Johns Hopkins.  [Worldometers.info data is higher as you can see.]  This puts the pandemic-long total at more than twice the 385,343 Covid-19 deaths recorded last year, according to the most recent death-certificate data from the Centers for Disease Control and Prevention.

The 2021 death toll caught some doctors by surprise.  They had expected vaccinations and precautionary measures like social distancing and scaled-down public events to curb the spread of infections and minimize severe cases. But lower-than-expected immunization rates as well as fatigue with precautionary measures like masks allowed the highly contagious Delta variant to spread, largely among the unvaccinated, epidemiologists say.

“Heading into this year, we knew what we needed to do, but it was a failure of getting it done,” said Abraar Karan, an infectious-diseases doctor at Stanford University.

Editorial / Wall Street Journal

“President Biden may not recall what he said during a 2020 campaign debate last fall, but Americans should: ‘Anyone who is responsible for that many deaths should not remain as President of the United States of America.’  At the time the U.S. had recorded 200,000 Covid deaths….

“It would seem that Mr. Biden has done no better than Donald Trump in defeating Covid despite the benefit of vaccines, better therapies, and more clinical experience.  The left politicized Covid by holding Mr. Trump responsible for a disease that was always going to be hard to defeat.

“ ‘If the president had done his job, had done his job from the beginning, all the people would still be alive,’ Mr. Biden said last fall. That was as false as anything Mr. Trump ever said, but most journalists and experts agreed with the basic premise: Mr. Trump had blood on his hands. The world’s top medical journals called for Mr. Trump’s defeat….

“Mr. Biden famously promised ‘to shut down the virus, not the country,’ and he accused Mr. Trump of having ‘no plan.’  Mr. Trump did downplay the virus in the early part of 2020, and he needlessly put himself in the middle of almost every debate over the disease and possible treatments.  Politically, he played into Mr. Biden’s hands.  But his Administration accelerated the vaccines and therapies that Mr. Biden later took credit for….

“Because of the Trump Administration’s preparation, the U.S. led most of the world in vaccinations this spring.  Yet Mr. Biden had no plan to deal with the large numbers of vaccine holdouts, other than to deride them.  He missed his goal of getting 70% of adults vaccinated by July 4 but proclaimed victory nonetheless.

“Then came the more transmissible Delta variant, which Mr. Biden also had no plan to deal with though it had been spreading around the world for months.  He needlessly injected himself into fights in GOP states over mask mandates.  By late September, daily deaths exceeded 2,000 – more than twice as many as a year earlier.

“Mr. Biden blamed GOP governors and unvaccinated conservatives. Yet blacks and young people have also shown reluctance to get vaccinated, and they don’t tend to be Republican.  See Nicki Minaj and Kyrie Irving.  Meantime, Mr. Biden’s vaccine mandates have further polarized the country.

“Virus cases this fall have plunged in the South but are now rising in the Northeast and Midwest states with relatively high vaccination rates.  Vaccines are helpful in preventing severe illness but aren’t as effective at preventing infections and transmission as health experts hoped.  Booster shots will be needed to keep the virus at bay this winter, especially for seniors and people at high risk.  Yet the Administration’s messaging on boosters has been inconsistent and often confusing.

“We recount all this not to blame Mr. Biden for this year’s Covid deaths. The truth last year and this year is that the virus is impossible for any politician to control, much less eliminate.  Mr. Biden used the illusion he could vanquish the virus to win election, and he is now paying a political price because he hasn’t.”

--More Covid case records were set in Europe this week. Slovakia, the Czech Republic and Hungary were among those reporting new highs in daily infections as winter takes its grip on Europe and more people gather indoors in the run-up to Christmas, providing the perfect breeding ground for Covid-19.

The World Health Organization said on Tuesday a further 700,000 people could die from Covid-19 in Europe by March, taking the total to above 2.2 million, as it urged people to get vaccinated and then have booster shots.

The WHO’s message was the same…a high number of unvaccinated people as well as “reduced vaccine-induced protection” were among the factors stoking high transmission in Europe alongside the dominance of the Delta variant and the relaxation of restrictions and mask mandates.

--The Netherlands saw massive, violent protests this week (ditto Belgium) against the government’s “heavy measures” to slow the current record wave of Covid cases in the country. 

Dutch Prime Minster Mark Rutte lashed out at the “idiot” rioters.

“This was pure violence disguised as protest,” Rutte said in response to the worst disturbances since a full lockdown led to widespread disorder in January.

--Tens of thousands protested in Vienna over renewed curbs in Austria.

--Italy on Wednesday tightened the screws on people unwilling to take a Covid vaccine, sharply restricting access to an array of services and making vaccines mandatory for a wider group of public sector workers.

Under the Italian measures, which go into force on Dec. 6, unvaccinated people will not be able to enter venues such as cinemas, restaurants and sports events.

Prime Minister Mario Draghi told reporters after the cabinet approved the new rules: “We are seeing the situation in bordering countries is very serious and we also see that the situation in Italy is gradually but constantly getting worse.  We want to be very prudent to try to safeguard what Italians have achieved in the last year.”

Draghi said Italy needs to avoid a full-blown lockdown that in 2020 caused Italy’s steepest post-war recession.

Booster shots are now being made available to everyone over age 18.

--Germany hit the 100,000 Covid death mark this week.  A “Teutonic” discipline, terrific health care system, and the rollout of multiple vaccines – one of them homegrown (BioNTech) were supposed to stave off a winter surge of the kind that hit Germany last year.

But complacency and a national election, followed by a drawn-out government transition, saw senior politicians dangle the prospect of further lifting restrictions even as Germany’s infection rate rose steadily this fall.

“Nobody had the guts to take the lead and announce unpopular measures,” said Uwe Janssens, who heads the intensive care department at the St. Anthonius hospital in Eschweiler, west of Cologne. 

“This lack of leadership is the reason we are here now,” he said.  [Associated Press]

Vaccination rates have stalled at 68% of the population in Germany.

“We’ve increasingly got younger people in intensive care,” said Janssens. “The amount of time they’re treated is significantly longer and it blocks intensive care beds for a longer period.”

The U.S. CDC has now raised its travel advisory for Denmark and Germany to the highest level in response to surges in infections. Americans should avoid all travel there, and make sure they are fully vaccinated if they do visit.

--Residents of European Union countries will need to have Covid-19 booster jabs if they want to travel to another country in the bloc next summer, as the European Commission attempts to harmonize rules across the 27 EU nations to allow free movement.

However, the commission is facing new restrictions as cases break records in Europe and many EU countries roll out booster doses.

An EU official told Reuters that accepting that immunity wanes over time, the executive Commission is proposing that people should be considered covered if their most recent dose was within the last nine months.

Given most EU residents who were vaccinated received their final doses in the second and third quarters of 2021, their coverage would mostly expire by the middle of next year.

--Ukraine’s Ministry of Health said only 21% of the 41 million people in the country are fully vaccinated, despite having access to four vaccines – Pfizer, Moderna, AstraZeneca and Sinovac.  The ministry also reported that 96% of patients with severe Covid-19 weren’t vaccinated.

Doctors complain that vaccine falsehoods about containing microchips or that they cause infertility and disease is driving the Covid surge.

“People believe in the most absurd rumors about chips, infertility and the dangers of vaccines, elderly people from risk groups massively refuse to be vaccinated, and this is very harmful and increases the burden on doctors,” said one physician.  “People trust their neighbors more than doctors.”

--Covid-19 cases are spiking anew in the likes of Peru, Ecuador and Colombia, which is disconcerting.  The uptick across South America comes after the region experienced a brief but sharp drop in cases following a dramatic surge in the summer.

--Merck & Co. said today that updated data from the study of its experimental Covid-19 pill showed lower efficacy in reducing the risk of hospitalization and deaths than an earlier interim analysis, cutting them by 30% in the study. The drugmaker had released interim data in October showing a roughly 50% reduction in hospitalizations and deaths in 775 patients.  The updated rate on Friday is based on data from over 1,400 patients.

Merck’s shares fell nearly 4% in response.

--I was watching an interview CNN’s Dana Bash was conducting last Sunday on “State of the Union” with Virginia Republican lieutenant governor-elect Winsome Sears, the first woman ever, not to mention the first woman of color, to serve in that role, and the topic of vaccines came up.

BASH: Before I let you go on this topic, during the campaign, you said you’re encouraging people to get vaccinated, but you’re not saying whether you are vaccinated. Do you want to say now?

SEARS: As I said, America, if it’s nothing else, it’s about liberty. It’s about being able to live your  life free from the government telling you what to do.

And so we understand this thing about slippery slopes.  The minute that I start telling you about my vaccine status, we’re going to be down the bottom of the mountain trying to figure out how we got there, because now you want to know what’s in my DNA.  You’re going to want to know this, that and the other.

In New York, you see, we have people, waiters, waiters, asking people their vaccination status.  And, by the way, do you know what else they require?  A photo I.D. to determine if this vaccine card you’re presenting is really you.

Who are we fooling?  Come on.  Let’s say you get the vaccine.  Go ahead and get the vaccine.  If that’s what you want to do, get the vaccine.  Don’t force it on anybody else. We know – and, by the way, media, they’re not telling us that people are suffering as a result of getting the vaccine, that they have all kinds of problems.

I understand it might be minuscule.  But when you’re the one out of 30,000 that gets it, it’s important to you.  So we need to tell the good, the bad and the ugly about the vaccine.

---

Oh, brother.  I’ll bite my tongue, except to say, good luck, Virginians, with this woman.

Foreign Affairs

Iran: The United States threatened on Thursday to confront Iran at the International Atomic Energy Agency next month if it does not cooperate more with the watchdog – an escalation that could undermine talks on reviving the 2015 nuclear accord with the big powers.  Tehran is locked in several standoffs with the IAEA.

After then-President Trump pulled Washington out of the Iran deal in 2018, he reimposed debilitating sanctions, after which Tehran progressively expanded its nuclear work and reduced cooperation with the IAEA.  Iran is denying the IAEA access to reinstall surveillance cameras at a workshop at the TESA Karaj complex.

The IAEA also wants answers on the origin of uranium particles found at apparently old but undeclared sites, and says Iran keeps subjecting its inspectors to “excessively invasive physical searches.”

“If Iran’s non-cooperation is not immediately remedied…the Board will have no choice but to reconvene in extraordinary session before the end of this year in order to address the crisis,” a U.S. statement to the IAEA Board of Governors said.  It said it was referring “especially” to reinstalling IAEA cameras at the Karaj workshop, which makes parts for advanced centrifuges that enrich uranium.

The head of the IAEA, Rafael Grossi, told his board of governors in Geneva on Wednesday:

“We are close to the point where I would not be able to guarantee continuity of knowledge” of activities at the workshop, he said, adding that the information is “widely recognized as essential in relation to a return” to the 2015 nuclear deal that put tough limits on Iran’s nuclear enrichment and other activities.

Iran has refused to offer the agency access to Karaj unless it dropped parts of a long-running inquiry into the discovery of undeclared nuclear material in Iran, raising concerns that Tehran is hiding past or current nuclear military activities.

Iran’s recently elected conservative president, Ebrahim Raisi, has expressed deep skepticism about the value of the negotiations unless the United States immediately lifts all punitive sanctions against Iran and commits to never leaving the deal again.  U.S. officials say those conditions are impossible to meet.

Today, Russia’s ambassador to the IAEA Mikhail Ulyanov, at a news conference with his Chinese counterpart, said the U.S. statement was not helpful.

“The U.S. did not negotiate with the Iranians for a very long time and forgot that Iranians don’t do anything under pressure.  If they are under pressure, they resist,” Ulyanov said.

Afghanistan: The Taliban has expanded its war against the Islamic State branch in the country, deploying hundreds more fighters to eastern Afghanistan in a critical test of the group’s counterterrorism abilities after the U.S. withdrawal.

Taliban raids against suspected Islamic State-Khorasan have resulted in hundreds of arrests, many of whom “disappear” or turn up dead, according to Jalalabad residents and Taliban fighters.

But Islamic State’s ranks continue to grow, the group using the Taliban offensive as a recruiting tool.

At the same time the Taliban’s limited resources are being stretched thin, further alienating Afghans.

The Taliban has been stringing up bodies along main roads to show the people the consequences of cooperating and/or fighting with IS.

China: The state-backed Global Times said in an editorial that the Winter Olympics in Beijing will be a “rite of passage” for China to become a mature major power, the newspaper alleging that anti-Chinese forces were trying to make trouble.

Referring to comments made by the United States that it might consider a diplomatic boycott of the Games in February to protest China’s human rights practices, the Global Times said it was “not worthy” for China to expend energy on the matter, or “even attempt to reverse their negative thoughts towards China.”

“The ideological conflicts between China and the West will escalate before the Beijing Winter Olympics in 2022 as anti-Chinese forces will converge to make trouble for China,” said the Global Times.

“This event will not only be a comprehensive stress test for China’s ability to respond to various crises, but also a catalyst for China’s growth in mentality as a major power.”

The Winter Olympics run from Feb. 4-20.  The case of Chinese tennis star Peng Shuai, whose whereabouts and well-being are still a matter of international concern, despite some manipulated video appearances, isn’t helping Beijing’s cause.

Separately, China has been warned to stay alert to the possibility Japan will intervene militarily in the event of an attack on Taiwan.

A research paper said recent gestures of support for the island indicate that Japan and the United States have been discussing the scenario and are making plans to deter Beijing from using force to take the island.

“Japan has not only released signals through official and individual levels, but also tried to carry out practical response actions through the Japan-U.S. alliance or partially acted alone under the existing legal framework,” said the paper published recently in the journal Asia-Pacific Security and Maritime Affairs.

Although the Japanese constitution renounces the right to wage war, and the public may be reluctant to get involved in a conflict, the paper said there were at least three scenarios where a 2015 national security law authorized the Japanese Self Defense Forces to get involved – either by providing logistical support to the U.S., invoking a “collective defense” clause to join the U.S. in defending the island or U.S. bases in Japan coming under attack.

North Korea: According to Radio Free Asia, a smuggler who sold copies of Netflix’s smash hit series “Squid Game” in North Korea has been sentenced to death by firing squad.  You read that right.

The man allegedly smuggled copies of the Korean-language show on USB drives from China into North Korea, where seven high school students were caught watching the footage, sources said.

A student who bought one of the flash drives received a life sentence, while six others who watched the footage have been sentenced to five years of hard labor.  Sources told Radio Free Asia that in addition, teachers and administrators at the school were also fired or face forced labor in remote mines.

The show about 456 debt-ridden South Koreans playing a series of life-or-death children’s games for a chance to win $38 million resonates with North Koreans, as you can imagine.

Russia/Ukraine/Belarus: Russian-controlled forces in eastern Ukraine are increasing their combat readiness and have carried out largescale exercises, the intelligence directorate of Ukraine’s defense ministry said in a statement on Tuesday.  Ukraine and NATO countries have expressed growing concern at Russian troop movements near Ukraine’s borders.

Russia has accused Ukraine and the United States of fueling tensions in the region, which is a total crock of s---, to be frank.  Ukrainian troops have been battling Russia-backed forces in eastern Ukraine in a conflict that Kyiv says has killed 14,000 since 2014.

The U.S. has shared intelligence including maps with European allies that shows the buildup of Russian troops and artillery could be in preparation for a push into Ukraine from multiple locations if Vladimir Putin decided to invade.

Remember, Russian forces could not only cross into Ukraine from Crimea, as well as the Russian border, but also via ally Belarus to the north.  Russian and Belarusian fighter jets jointly patrolled Belarus’ border on Thursday, in the latest sign of Moscow’s support in the standoff with the EU over the migrants.

Speaking of which, the border crisis between Belarus and Poland, which last weekend looked to be easing as Belarus began flying some migrants back to their homes, such as Iraqi Kurdistan, was ramped up anew, with Polish Prime Minister Mateusz Morawiecki warning the crisis on the border may be a prelude to “something much worse,” as Belarusian forces resumed ferrying migrants to the frontier.  The prime minister made his comments during a tour of Estonia, Lithuania and Latvia.

Today, the Kremlin said it had no plans to take part in an alleged coup plot against Ukrainian President Volodymyr Zelensky, who said Ukraine had uncovered a plot for an attempted coup due to take place next week.  Zelensky did not give many details of the plot, other than to say that individuals from Russia were caught on tape talking about roping Ukraine’s richest businessman, Rinat Akhmetov, into backing a coup and that it would take place Dec. 1-2.  Akhmetov said such a claim was an “outright lie” and that he was outraged Zelensky spread the lie. 

In an hours-long press conference, Zelensky added, “We are in full control of our borders and are fully prepared for any escalation.”

Earlier in the week, the Washington Post reported that CIA Director Williams Burns had delivered a confidential warning to Russia’s top intelligence service that they will face “consequences” if they are behind the string of mysterious health incidents known as “Havana Syndrome” afflicting U.S. diplomats and spies around the world.

During a visit to Moscow earlier this month, Burns raised the issue with the leadership of Russia’s Federal Security Service, the FSB, and the country’s Foreign Intelligence Service, the SVR.  He told them that causing U.S. personnel and their family members to suffer severe brain damage and other debilitating ailments would go beyond the bounds of acceptable behavior for a “professional intelligence service,” said the officials.

The main purpose of Burns’ trip to Moscow was to put the Kremlin on notice that Washington was watching its troop buildup on the border of Ukraine and would not tolerate a military attack on the country.

Lastly, a gas buildup and explosion in a Siberian coal mine killed at least 52 people on Thursday, including six rescuers, in the country’s worst mining disaster in over a decade, officials said.

The mine operated at a depth of 1,300 feet and authorities said they had been forced to suspend rescue operations because of a high concentration of methane in the mine.  Some of the workers suffocated in the dust and ashes.

Sudan: The military reinstated Prime Minister Abdalla Hamdok on Sunday and announced the release of all political detainees after weeks of deadly unrest triggered by a coup.

Under an agreement signed with military leader General Abdel Fattah al-Burhan, Hamdok will lead a civilian government of technocrats for a transitional period.

Not everyone was happy, believing Hamdok had sold out his revolution.  Hamdok countered he had agreed to the deal to stop the bloodshed.

But the civilian coalition that shared power with the military previously said it opposed any talks with the “putschists” and called for protests to continue.

Random Musings

Gallup: 42% approve of President Biden’s job performance, 55% disapprove; 37% of independents approve (Nov. 1-16).

Rasmussen: 41% approve of Biden’s performance, 58% disapprove (Nov. 25)

A CBS News/YouGov poll pegs Biden’s approval rating at 44% (56% disapproval), higher than some recent surveys, though he gets negative scores for his handling of inflation (67%), immigration (64%), the economy (61%), foreign policy (58%), and race relations (56%).

Biden is in positive territory for his distribution of the coronavirus vaccine – 53%.

Asked how they thought things were going in America, 70% say “somewhat” or “very badly,” while only 30% opt for “very” or “somewhat well.”

The aforementioned Yahoo News/YouGov survey found that Biden has an approval rating of 43%, 52% disapprove.

--Just as the jury did the right thing in the trial of Kyle Rittenhouse, given the facts and the poor job by the prosecution, and seeming bias of the judge, a jury of 11 white people and one black in Brunswick, Georgia convicted three white men (Travis and Greg McMichael, and William “Roddie” Bryan), of chasing and killing Ahmaud Arbery last year.

The prosecution team, specifically Linda Dunikoski, as well as the judge, Timothy Walmsley, were everything their counterparts in Kenosha weren’t, and while it is but one case, and one test of our justice system in America, at least there is some hope.

“This is a very consequential day, not just for Ahmaud Arbery but for families all over America,” said Ben Crump, a prominent civil rights lawyer for Arbery’s family who also represented the family of George Floyd.  “We have to show that America must be better than what we saw in that video.”

“This isn’t the Wild West,” Dunikoski told jurors, saying that the accused jumped to assumptions about a “Black man running down the street.”

Kathleen Parker / Washington Post

“Two recent vigilante killing trials, one in Georgia, the other in Wisconsin, have exposed a terrifying trend of armed citizens who, in the name of justice, only make America less safe and portend a future of fear, intimidation and increasing violence.

“They also raise a question that haunts me: How the hell did we get here?  When did we start permitting Americans to take the law into their own hands?

“In the first trial, teen shooter Kyle Rittenhouse was found not guilty of murdering two men he shot to death during a racial-justice protest in Kenosha, Wis., in August 2020.  Rittenhouse shot a third man as well, but he survived….

“Defense lawyers made a convincing-enough case that jurors found that Rittenhouse met the legal definition of self-defense.  Though reactions to the verdict have varied, almost everyone would agree that Rittenhouse had no business wielding a weapon of such deadly force. Who would think to do such a thing?

“Oh, lots of people, especially the Young Guns in our country who’ve marinated in tough talk and rough politics for most of their lives.

“In Georgia, jury deliberations began Tuesday in the trial of three men accused of murdering 25-year-old Ahmaud Arbery, for basically Jogging While Black.  Somewhat like Rittenhouse, the three men were armed [Ed. Bryan was not], they said, because of recent burglaries in their community and they thought Arbery looked like he could be the culprit.  In a word, they hunted Arbery – and they killed him….

“More trials for similar behavior are, unfortunately, inevitable in our hyped-up, trigger-happy, madder-than-hell country.  It’s getting harder to pinpoint what everyone is so angry about – an extended pandemic, inflation, supply-chain problems, our politics – but a certain percentage of disgruntled people seem ready to go to war.

“This is not normal – or, for a people, sustainable. If once we fought a Civil War to end slavery, today we’ll fight over just about any little provocation. Cut off in traffic?  Shoot the bastard.  I am not joking: Between June 2020 and May 2021, an average of 42 people per month were killed or wounded in road-rage shootings, according to Everytown for Gun Safety, a gun violence prevention organization.  Other local officials report that disagreements that were once routinely settled with words or at worst police intervention, now often end in violence.

“How did we come unglued?....

“In common law, going back centuries, there has been a long tradition against carrying weapons in a manner that bred fears among the public. What has happened to that way of thinking?

“Something.  What we see today has been a long time coming, perhaps beneath our notice.  I compare the phenomenon to being so mesmerized by the sight of a far-off tidal wave that it paralyzes nearly until the wall of water is upon us.

“People who were once political rivals now talk about each other as if they are enemies.  We see ever-growing numbers of extremists on the right, where white supremacists have been validated by a former president of the United States.  They also feel vindicated by Rittenhouse’s verdict and see him as a hero, just as those men down in Georgia likely see themselves.

“With each stance of an armed vigilante, with each bullet he loads and locks into some gun’s chamber, we lose a bit more of our security and, therefore, our freedom. The truth is, a vigilante who attempts to take justice into his own hands is usually a coward with an inflated ego used as a beard to conceal his deficiencies.

“The challenge for the rest of us is to resist these posers and demand real justice lest we become victims of our own inertia.”

--For his part, Kyle Rittenhouse went from staring at possible life behind bars to red-hot star of the right, garnering an exclusive interview with Tucker Carlson and a visit with Donald Trump at Mar-a-Lago…a photo of both men smiling and snapping a thumbs-up.

In an appearance that spiked Carlson’s ratings by some 40%, Rittenhouse said that he hoped to become a nurse or maybe even a lawyer. He planned to “lay low” but would for sure leave the Midwest.  He is also going to attend Arizona State, preferably on campus.

Many experts say the kid could score a seven-figure book contract and “monetize his brand.”

On the speakers’ circuit, he could command anywhere from $2,500 to $25,000, experts in that business estimate.

Some of the most conservative members of Congress – Reps. Madison Cawthorn, Paul Gosar, Lauren Boebert and Matt Gaetz – took to social media to dangle internship offers for Rittenhouse, though it’s not clear if they were really serious, while Rep. Marjorie Taylor Greene introduced a bill to award him the Congressional Medal of Honor, at which point I (got sick to my stomach).

--The Wall Street Journal’s Michael Bender, Alexa Corse and Joshua Jamerson had a depressing piece this week that started thusly.

“Former President Donald Trump’s yearlong campaign falsely claiming he won the 2020 election and demanding redress is turning voter fraud into a litmus test for Republicans seeking office as the party seeks to reclaim the House and Senate in 2022.

“Mr. Trump has told advisers the issue will help the party win control of Congress next year and win back the White House in 2024. He has privately floated the possibility of an early presidential campaign announcement to underscore the message to conservative voters.

“Many Republican candidates have fallen in line.  Some have refused to concede defeats from 2020 – and, like Mr. Trump, used fraud claims to raise money.  Others seeking office have tailored their campaign messages to echo Mr. Trump’s claim that he won to avoid facing a backlash from his supporters….

“On the local level, some election chiefs have been harassed and subject to intimidation for refusing to say the vote counting isn’t secure. A wave of election officials and longtime professional staff have left their jobs under pressure.

“The message appears to be contributing to eroding confidence in the nation’s election systems – similar to the long-running decline of faith in civic institutions such as the government, the criminal justice system and the media. In October, a Grinnell College poll found that 58% of Americans were very or somewhat confident that the 2022 vote will be counted fairly. Confidence among Republicans was at just 38%, down from 85% in March 2020.”

85 percent down to 38 percent!  All because of one pathetically narcissistic blowhard!

--Meanwhile, the House committee investing the Jan. 6 Capitol insurrection issued a slew of new subpoenas this week, including to Roger Stone and conspiracy theorist Alex Jones.

“The Select Committee is seeking information about the rallies and subsequent march to the Capitol that escalated into a violent mob attacking the Capitol and threatening our democracy,” said Mississippi Rep. Bennie Thompson, the Democratic chairman of the panel.  “We need to know who organized, planned, paid for, and received funds related to those events, as well as what communications organizers had with officials in the White House and Congress.”

Reminder: The results of the election were confirmed by state officials and upheld by the courts. Trump’s own attorney general, William Barr, had said the Justice Department found no evidence of widespread fraud that could have overturned the results.

--Two long-time conservative mainstays of Fox News, Jonah Goldberg and Stephen Hayes, long two of my favorite conservative pundits, quit Fox over Tucker Carlson’s special about the Jan. 6 mob at the Capitol, though as Goldberg later explained, this has been building up a long time.

When the two close friends first saw the trailer for Carlson’s special, Goldberg sent a text to Hayes, who is also his business partner: “I’m tempted just to quit Fox over this.”

Hayes replied: “I’m game. Totally outrageous.  It will lead to violence.  Not sure how we can stay.”  [Ben Smith / New York Times]

Hayes, in an interview with Ben Smith, said he was particularly concerned about Fox lending support to the idea “that there’s a domestic war on terror and it’s coming for half of the country.  That’s not true.”

Particularly disturbing in ‘Patriot Purge,’ he added, “was the imagery of waterboarding and suggestions that half the country is going to be subject to this kind of treatment, that’s the same kind of treatment that the federal government used when it went after Al Qaeda.”

Mr. Carlson “pumped that stuff out into society, and all you need is one person out of every 50,000 people who watch it to believe it’s literally the story about what happened, that it’s true in all of its particulars and all of its insinuations.  And that’s truly dangerous in a way that the usual hyperbole that you get on a lot of cable news isn’t.”

Hayes said he’d been particularly disturbed recently when a man at a conference of the pro-Trump group Turning Point USA asked its leader, “When do we get to use the guns?”

Jonah Goldberg:

“I quit Fox news after more than a decade as a contributor.  So did my business partner and friend Steve Hayes.

“We explained our reasons on the Dispatch, a media company we founded.  But the decision was a long time in coming.  Like Ernest Hemingway’s description of bankruptcy, it came gradually and then suddenly.

“The sudden part came thanks to Fox host Tucker Carlson’s streaming special ‘Patriot Purge.’ It’s a perfect example of propaganda that weaves half-truths into a whole lie.  It insinuates that the Jan. 6 riot at the Capitol might have been a ‘false flag operation,’ orchestrated by the FBI or the Deep State.  Worse, it suggests the Biden administration is coming for the real patriots – i.e. Trump voters.  ‘The domestic war on terror is here,’ says one of the ‘experts’ in ‘Patriot Purge.’  ‘It’s coming after half of the country.’

“This dangerous nonsense was the last straw for me (and Steve). It was an unhappy decision for us.  We have many friends at the network, and there are many people, particularly on the news side, that do good, honest journalism.

“People keep asking me, ‘Why’d it take you so long?’  The short answer is we hoped – and had reason to believe – that Fox would get back on course, and we wanted to help get it there. If your view is that Fox News was always irredeemably bad, that explanation will fall flat.  I can’t help you there.  But for us, the release of ‘Patriot Purge’ was proof that waiting for Fox to get back on track would be like waiting for Godot.

“I also have a broader point to make.  As a fairly prominent critic of Donald Trump from the political right, one of my chief frustrations with Fox, and with cable news generally, is what you might call manufactured consensus.

“Liberals are expected to be loyal Democrats and to criticize Republicans, and vice versa for conservatives.  Superficially, that’s understandable, even though it erases the fact that most of the interesting debates in America are intra-partisan.  But here’s the real problem.  Opinion journalists are treated as interchangeable with partisan flacks who are literally paid to defend a party and its positions.

“Over time, if you’re not careful, it’s easy to internalize the idea that our job as an opinion journalist is to carry water for your party, at least on TV. The last thing a producer wants is some pundit offering nuanced criticism of his own side.  Everything has to be a fight between the extremes. This dynamic has always existed at MSNBC and CNN as well as at Fox.

“But Trump’s ascendency made things much worse at Fox.  Because Trump is a thin-skinned narcissist, he has no tolerance for criticism, and neither do his very vocal fans among the viewers and the punditocracy.   This is why he was a leading champion of ‘cancel culture,’ attacking conservative critics like Charles Krauthammer, George Will, Hayes and me….

“I’ve talked to scores of elected Republicans and conservative pundits, with opinions ranging from principled disagreement to outright contempt for Trump.  But good luck getting many of them to say it publicly. The message, amplified constantly by Trump and his boosters, is that all ‘true’ conservatives love Trump in every regard.

“In the wake of the Jan. 6 riot, it became routine for Trump partisans to claim that criticism of his effort to steal the election amounted to an insult to everyone who voted for Trump, as if 74 million people voted for the riot and the lies that led to it.

“That’s the propagandistic mindset behind that new ‘war on terror’ nonsense.  The government is not coming for ‘half the country’ – it’s lawfully prosecuting a few hundred people who broke the law on Jan. 6.  But we’re supposed to believe that the Trump base is not merely indivisible but defined by a tiny sliver of the worst actors on the right.  That’s the real insult to the 74 million.”

--Those thugs in the flash mobs targeting luxury stores all deserve 20 years without parole.

--Darrell Brooks, 39, was arraigned in court in Waukesha, Wis., with five counts of intentional homicide (soon to be six) after he rammed a car into a Christmas parade, killing five at the scene, and another, a child, later, with others still in critical condition.

Bail was set at $5 million due to his extensive criminal background.

There are some wondering why Judge Kevin Costello even set bail, as Brooks has an “extraordinary” (in Costello’s words) criminal history and because he had fled previous charges in Wisconsin and Nevada.

The outrage is compounded by the fact that he was currently out on an “inappropriately low” bail of $1,000, Milwaukee County District Attorney John Chisholm later said, after he was charged with recklessly endangering safety, bail jumping, battery and disorderly conduct in a local incident.

--A new survey from the Pew Research Center shows a growing share of U.S. adults who aren’t already parents say they probably won’t have children, citing reasons such as apathy, financial instability or the lack of a partner.

Forty-four percent of non-parents ages 18 to 49 (beyond the Wonder Bread years) say its not too likely, or not at all likely, that they will have children someday, an increase of 7 percentage points from the 37% who said the same in 2018.

The fertility rate in the U.S. was already dropping, hammered by the public health and economic crises caused by the pandemic.  The number of babies born in the country fell 4% to about 3.6 million in 2020, the largest decline since 1973, according to a report from the Centers for Disease Control and Prevention.

Interestingly, President Biden’s signature social-spending bill, Build Back Better, marks a dramatic shift toward boosting support for families with children.

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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 $1792
Oil $68.17…lowest since Aug., and down a fifth week in a row

Returns for the week 11/22-11/26

Dow Jones -2.0%  [34899]
S&P 500  -2.2%  [4594]
S&P MidCap  -3.2%
Russell 2000  -4.2%
Nasdaq  3.5%  [15491]

Returns for the period 1/1/21-11/26/21

Dow Jones  +14.0%
S&P 500  +22.3%
S&P MidCap  +20.5%
Russell 2000  +13.7%
Nasdaq  +20.2%

Bulls 57.2
Bears 21.4…Nov. 16

Travel safe.

Brian Trumbore

 

 

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