Week in Review

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Week in Review

12/04/2021

For the week 11/29-12/3

[Posted 9:30 PM ET, Friday]

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Edition 1,181

As I went to post last time, the World Health Organization had just labeled the new Covid-19 Omicron variant “one of concern.”

This week cases were then discovered in at least 38 countries, including the United States, where as I go to post Omicron has been found in 11 states, including New York and New Jersey, two early Covid-19 hotbeds.  Even though I have a booster, I am back wearing masks indoors when I go to the grocery or drug store, after taking a little break from doing so now and again the last two months or so.

But we only have anecdotal evidence thus far on Omicron as far as symptoms, transmissibility, and the effectiveness of existing vaccines.  I have loads of such anecdotes below.

What we do know is that cases are skyrocketing in South Africa, while at the same time we can’t lose sight of the fact we are seeing new surges around the world, including in the United States, not because of Omicron, but rather Delta.

Speaking at a UN briefing in Geneva today, WHO spokesperson Christian Lindmeier said: “It will still take some time and let’s not rush into conclusions here,” as the body expects more information on transmissibility and severity of the Omicron variant “within days.”

“Preliminary data, and we have said that now for awhile, show that there is higher transmissibility.  But that’s all that we basically have so far,” Lindmeier said.  Delta remains the dominant variant globally, accounting for more than 90% of infections, he added.  “So Omicron may be on the rise, and we may come to a point where it takes over to be the dominant variant, but at this point the very dominant variant remains Delta.”

Lindmeier: “The restrictions that were put into place in many countries were the result of Delta.”

Cases in the United States have been averaging over 100,000 recently, including 120,000 on Wednesday, 146,000 on Thursday, and 147,000 today (highest in ten weeks).  Hospitalizations are ticking up.  Deaths are averaging over 1,000 a day.  And this is Delta.

I mean think about this.  Michigan and New Hampshire are two of the states hitting new daily case highs…that’s record highs since the pandemic started!

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On a totally unrelated issue, it is getting a little hairy, and scary, on the Russia-Ukraine border.  I get into great detail below on this, but Vladimir Putin is spending gobs of money to position 100,000 troops, with food, fuel, and medical teams to deal with the wounded, for what purpose?  This is going further than he has in previous such deployments and “exercises” in the arena.  It seems inconceivable he would not act at this point.  I’ve also told you he desperately needs a distraction from his nation’s Covid catastrophe.

But here’s what you won’t find anywhere else.  If Putin moves, and he would do so within 4-6 weeks, the only thing that keeps China from using this as a perfect time to take on Taiwan would be the Beijing Olympics.  It doesn’t have to be a full invasion.  I’ve said this before.  China merely has to take out Taiwan’s airfields and then force Taipei to sue for peace.  Taiwan’s government will not allow thousands, if not far more, of its people to die in an exchange of missiles across the Strait (China, on the other hand, couldn’t care less about the thousands of its own people who would die in Fujian province and elsewhere in such an exchange).

What would the U.S. and its allies do then (understanding there is this invasion going on in Eastern Europe at the same time)?  Nothing.  U.S. aircraft carriers are sitting ducks with China’s missile capability.  [Ditto our forces on Guam.]

Yes, the timeline, because of the February Winter Games, doesn’t totally line up.  But you know Presidents Xi and Putin are constantly talking to each other.

It is the ultimate nightmare scenario.  And so I’ll sleep with one eye open so you don’t have to.

[I’d introduce Iran-Israel into this equation, but this is enough for now.]

Biden Agenda

--The Senate passed a stopgap spending bill Thursday that avoids a short-term shutdown and funds the federal government through Feb. 18 after leaders defused a partisan standoff over federal vaccine mandates.

Earlier in the day, congressional leaders announced they had finally reached an agreement to keep the government running for 11 more weeks, generally at current spending levels, while adding $7 billion to aid Afghanistan evacuees.

The Senate approved the measure by a vote of 69-28. [The House passed it 221-212]

The stopgap bill allows Democrats to move forward on President Biden’s roughly $2 trillion economic agenda (Build Back Better) this month and to find a path to lifting the debt ceiling before the end of December in the face of solid Republican opposition.

[This week Treasury Secretary Janet Yellen flagged December 15 as the date the statutory debt limit will be breached, but it seems it could be stretched out a little further.]

But as for Build Back Better, Democratic Sen. Joe Manchin (W.Va.) said no way the legislation, in any form, is passing the Senate in December…too much to work on in the bill beforehand.  [Too much he’d like to see cut.]

--This week the Supreme Court began weighing Mississippi’s ban on abortion after 15 weeks of pregnancy.  Precedent says that states can’t impose an “undue burden” on abortion access until fetal viability, which was previously suggested to be 23-24 weeks.

But all six conservative justices indicated that they would let states start their bans far earlier than that.  “If it really is an issue about choice, why is 15 weeks not enough time?” Chief Justice John Roberts asked.

Amy Coney Barrett and Brett Kavanaugh hinted at overturning Roe v. Wade – and that could happen.

“If we think that the prior precedents are seriously wrong – if that – why then doesn’t the history of this court’s practice with respect to those cases tell us that the right answer is actually a return to the position of neutrality?” Kavanaugh asked.

Sonia Sotomayor was one of the three liberal justices worried about how such a decision would affect the court’s reputation and standing.

“Will this institution survive the stench that this creates in the public perception that the Constitution and its reading are just political acts?”  Such a move would wipe out abortion access in almost half the country.

Bottom line, this is the court’s most consequential reproductive-rights case in a generation. A decision upholding Mississippi’s law, even if the court doesn’t explicitly overturn Roe (and the 1992 Planned Parenthood v. Casey ruling), it would have a far-reaching impact, and would give states new license to curb abortion access.

The 7-2 Roe decision said abortion protections were covered by the “right to privacy,” though the Constitution doesn’t expressly use those words.

Peggy Noonan / Wall Street Journal

“The Supreme Court heard oral arguments Wednesday in Dobbs v. Jackson Women’s Health Organization.  On Friday, under the court’s usual procedure, the justices would meet to hold a preliminary vote on their decision.  A member of the majority will be assigned to write it.  The court will review and amend that document and is expected to hand down its decision at the end of its term, in late June or early July.

“This will be an intense and dramatic time for the court, which will likely decide one of two things.  It may overturn 1973’s Roe v. Wade decision.  That wouldn’t make abortion illegal in the U.S. but would revert the question to each state legislature.  Some, through legislation designed to be triggered at the overturning of Roe, will guarantee full abortion on demand, as New York and California already have. Some will apply limits – 15 weeks in the case of the Mississippi law the justices are considering.  Some will likely ban all or nearly all abortions within their boundaries.

“Overturning Roe would mean returning a furiously contested national issue of almost 50 years standing to the democratic process. This wouldn’t ‘solve’ the problem or ‘end’ the struggle. It would bring the responsibility for solving and ending it closer to the people.  In the short term it would cause new disruption and renewed argument, as Roe itself did when it negated abortion statutes in 46 states and the District of Columbia.  Deep-blue states will go deep blue, red ones will go red, and purple states will tend toward more moderate laws.  It will take time to play out.  Politicians who stray too far from true public opinion, as opposed to whatever got burped up in a recent poll, will fairly quickly face backlash at the polls.

“It won’t be settled for a few years.  But then it will settle.  This path – overturning – is the closest America will get to justice and democratic satisfaction on this issue.

“Or the court may vote not to overturn Roe but in effect to pare it back, allowing state limits such as Mississippi’s while letting stand some constitutional right to abortion.  The court would be saying, in effect: We cannot end the national abortion argument, but we can manage it.  This decision would be, in a court maintaining a conservative majority, a gradualist approach that will guarantee future cases.”

Whatever the court’s ultimate decision, it promises to shake up the political landscape as the nation heads to the polls next November, and beyond.

Wall Street and the Economy

Before I get to the comments of Federal Reserve Chairman Jerome Powell this week, a look at the economic data, which was plentiful.

A September S&P CoreLogic Case-Shiller report on U.S. home prices had the 20-city index up 1.0% over August, 19.1% from a year ago, a little less than expected.

The November Chicago manufacturing PMI came in far less than expected, though still a robust 61.8 (50 the dividing line between growth and contraction), while the national ISM reading on manufacturing for the month was 61.1, in line with expectations.

The ISM service sector reading for last month, however, was a record 69.1, the series going back to 1997.

Factory orders for October rose a better than expected 1.0%.

The weekly jobless claims figure was 222,000, vs. a revised prior week figure of 199,000, with both at post-pandemic lows.

So then we had today’s jobs report for November and the expectation was for an increase of 525,000, with an unemployment rate of 4.5%, and instead we had just 210,000 jobs created for the month*, but an unemployment rate of 4.2%, which is just above the 3.5% from Feb. 2020, prior to the coronavirus slamming our shores.

Service sector employment growth decelerated noticeably in November compared to October;  the leisure and hospitality industries adding just 23,000 jobs after October’s increase of 170,000, for example.

*October was revised up to 546,000 from 531,000 previously reported, while September was revised upward to 379,000 from 312,000. 

As of November, the civilian labor force was still down by about 2.4 million participants, compared to Feb. 2020.

Average hourly earnings rose 0.3% in the month, 4.8% year-over-year (though some sectors of the economy are showing double-digit wage growth), while U6, the underemployment rate, skidded from 8.3% to 7.8%.

Add it all up and the Atlanta Fed’s GDPNow barometer for fourth-quarter growth is a whopping 9.7%.

As for Black Friday sales, RetailNext, a firm that tracks shopper counts in thousands of stores with cameras and sensors, said store traffic rose 61% this year compared with last, but was down 27% from 2019.  Sensormatic Solutions, another firm that tracks store traffic, said Black Friday traffic rose 48% from last year, but was 28% lower than in 2019.

Online Black Friday sales fell to $8.9 billion from $9 billion last year, according to Adobe Inc., while Thanksgiving Day online sales were roughly flat at $5.1 billion, the first time sales didn’t increase since Adobe started tracking the figures in 2012.

Overall sales on Black Friday were up 29.8% compared with the same period last year, with sales in stores rising 42.9%, according to Mastercard Spending Pulse.

As I’ve noted, the National Retail Federation expects U.S. retail sales during November and December to rise by a record 8.5% to 10.5% from a year ago to as much as $859 billion.  The average increase was 4.4% over the past five years.

As for Cyber Monday, according to Adobe, U.S. online sales were flat, with total Cyber Monday sales expected to be between $10.4 billion and $11.1 billion, vs. $10.8 billion last year.

So moving along…

The International Monetary Fund on Friday warned of intensifying inflationary pressures, especially in the United States, and new uncertainties created by the Omicron variant, and said U.S. central bankers should focus more on inflation risks.

In a blog published today, IMF chief economist Gita Gopinath and Tobias Adrian, head of the fund’s monetary and capital markets division, warned that the resurgence of the pandemic and Omicron had sharply increased uncertainty around global economic prospects.

But they said the strength of the recovery and the magnitude of underlying inflationary pressures varied widely across countries, and policy responses could be calibrated to the unique circumstances of individual economies.

In the United States, where consumer prices hit a 31-year high in October, the two said, there were grounds for monetary policy to put greater weight on inflation risks, compared to other advanced economies, including the euro area.

“It would be appropriate for the Federal Reserve to accelerate the taper of asset purchases and bring forward the path for policy rate increases,” they wrote.

Well, this echoed comments made earlier by Fed Chair Powell, who on Tuesday said the Fed will consider acting more quickly to dial back its ultra-low-interest rate policies to counter higher inflation, which Powell now acknowledges will persist well into next year.  His comments were described as “surprisingly hawkish.”

The Fed is in the process of reducing its monthly bond purchase at a pace that would end such purchases in June.  But Powell made clear the Fed will discuss paring those purchases more quickly when it next meets in two weeks (Dec. 14-15).

Doing so would put the Fed on a path to begin raising interest rates before June.

“The economy is very strong and inflationary pressure high,” Powell said at a Senate Banking Committee hearing.  “It is therefore appropriate in my view to consider wrapping up the taper of our asset purchases…perhaps a few months sooner.”

Powell is hoping the Fed has more knowledge on the potential impact of the Omicron variant on the economy when it convenes.  But he added that Omicron hasn’t affected the Fed’s economic outlook for now.

The recent increase in Delta cases and the emergence of Omicron “pose downside risks to employment and economic activity and increased uncertainty for inflation,” Powell said in his prepared remarks.  Omicron could of course worsen supply chain disruptions.

But the uncertainty created by Omicron could complicate the Fed’s next steps.

“Greater concerns about the virus could reduce people’s willingness to work in person, which would slow progress in the labor market and intensify supply-chain disruptions,” Powell said.

Powell acknowledged that inflation “imposes significant burdens, especially on those less able to meet the higher costs of essentials like food, housing, and transportation.”

At a hearing before the House Financial Services Committee on Wednesday, Powell said policy will need to adapt as officials seek to bring millions of Americans back to work while also ensuring that the recent surge in inflation does not become entrenched.

“Almost all forecasters do expect that inflation will be coming down meaningfully in the second half of next year,” Powell said.  “The point is, we can’t act as though we are sure of that… We have to use our policy to address the range of plausible outcomes, not just the most likely one.”

Powell acknowledged the Fed is monitoring the evolving economic landscape and they might face “tension” as they pursue their dual mandate of achieving maximum employment and price stability.

“While wages are rising, particularly for low-wage workers, the increases are not happening at a pace that could spark higher inflation,” Powell said.  “We have seen wages moving up significantly.  We don’t see them moving up at a troubling rate that would tend to spark higher inflation, but that’s something we’re watching very carefully.”

Europe and Asia

It was PMI week, data courtesy of IHS Markit, for the globe and in the eurozone, the final composite reading for November was 55.4 vs. October’s 54.2.  The final manufacturing number was 58.4 vs. October’s 58.3; services 55.9 vs. 54.6.

Germany 57.4 mfg., 52.7 services
France 55.9 mfg., 57.4 services
Italy 62.8 mfg., 55.9 services
Spain 57.1 mfg., 59.8 services
Ireland 59.9 mfg., 55.9 services
Netherlands 60.7 mfg.
Greece 58.8 mfg.

U.K. 58.1 mfg., 58.6 services

Chris Williamson / IHS Markit

“An improvement in the rate of economic growth signaled by the eurozone PMI looks likely to be short-lived.  Not only did demand growth weaken, but firms’ expectations of future growth also sank lower as worries about the pandemic intensified again.  With the data collected prior to news of the Omicron variant, sentiment about near-term prospects will inevitably have been knocked even further.

“Growth is looking especially subdued in Germany and France, where supply shortages have had a notably stronger knock-on effect from manufacturing through to services.  More resilient expansions are being recorded in Spain and Italy, though even here recent gains are at risk if social distancing restrictions need to be stepped up.

“Prices have meanwhile continued their relentless rise, with rates of inflation in both firms’ costs and average selling prices for goods and services hitting new highs in November.

“While growth risks have shifted to the downside, risks to the inflation outlook seem tilted to the upside if virus case numbers continue to rise and new restrictions are introduced. Supply chains will be further hit, staff availability will deteriorate and spending could shift from services to goods again, further exacerbating the imbalance of supply and demand.”

Separately, Eurostat reported euro area unemployment for October was 7.3%, down from 7.4% in September and from 8.4% in October 2020.

Germany 3.3%, France 7.6%, Italy 9.4%, Spain 14.5%, Netherlands 2.9%, Ireland 5.2%, Austria 5.8%, Greece 12.9% (down from 16.4% a year ago).

Industrial producer prices rose by 5.4% in the eurozone for October compared with September…up 21.9% vs. October 2020.

Needless to say this is a bit disconcerting.

So we had a flash estimate for euro area annual inflation in November, as reported by Eurostat, and it came in at 4.9%, far higher than expected, up from 4.1% in October. Ex-food and energy, the rate is 2.6%, way up from 0.4% in Nov. 2020.  Energy prices were running at a 27.4% annualized level.

Germany 6.0% (again, estimated), France 3.4%, Italy 4.0%, Spain 5.6%, Netherlands 5.6%, Ireland 5.4%.

Brexit: British Prime Minister Boris Johnson appears to be stepping back from conflict with the EU on issues causing the most friction in the relationship.  The move probably has to do with the government needing to focus on the new Omicron variant, which has cases in the U.K. at their highest levels since July.

On fishing, Britain granted a new batch of licenses for French ships seeking to work in British waters, which the EU hailed as a sign of progress on the broader trade agreement that officials hope to wrap up by Dec. 10.

On immigration, tempers have cooled at least for now, with the government of French President Emmanuel Macron working on an agreement with the EU that would help block the flow of people illegally crossing the English Channel.

On Northern Ireland, Britain’s Brexit Minister David Frost says triggering Article 16, which would allow the nation to suspend parts of the Brexit accord, is still an option, but the two sides continue to talk about how to manage trade flows between the U.K. mainland, Northern Ireland and the republic of Ireland.

Part of the reason for Britain stepping back from the brink, for now, is no doubt tied to the U.S. decision to delay its deal to remove tariffs on U.K. steel and aluminum because of the post-Brexit trade rules affecting Northern Ireland. [The U.K. denies this is a factor.  I beg to differ.]

The Trump administration had imposed 25% and 10% tariffs on steel and aluminum imports on the EU in 2018.  The tariffs were then withdrawn in October, but they remain in place for Britain due to its exit from the EU.

Commerce Department officials are apparently pointing directly to British threats to trigger Article 16, as the administration has said since day one protecting the Belfast (Good Friday) Agreement and Northern Ireland’s place in the U.K. internal market is paramount.

Turning to Asia…China reported its PMI figures for November and the official government reading for manufacturing was 50.1 vs. October’s 49.2 (barely growth), with services at 52.3 vs. 52.4.

The private Caixin reading for manufacturing last month was 49.9, down from October’s 50.6, with services down to 52.1 from 53.8.

In Japan, the manufacturing PMI for November was 54.5, services 53.0.

Retail sales in October came in up just 0.9% year-over-year, with October industrial production -4.7% Y/Y.   The October unemployment rate was 2.7%.

South Korea’s manufacturing PMI for November came in at 50.9; Taiwan’s was 54.9.

Street Bytes

--Stocks fell anew in a volatile week as fears of the Omicron variant and the sudden hawkishness of Fed Chair Powell spooked markets around the world.   The Dow Jones lost 0.9% to 34580, while the S&P 500 was down 1.2% and Nasdaq declined 2.6%, after losing 3.5% the week prior.

--U.S. Treasury Yields

6-mo. 0.09%  2-yr. 0.59%  10-yr. 1.36%  30-yr. 1.68%

Yields on the short end of the curve rose sharply on Jerome Powell’s strong hint the Fed will be raising rates sooner than later, once a quickened taper is over.

But yields on the long end fell steeply, the 10-year falling 11 basis points (0.11%), and the 30-year 14 bps on the potential impact of Omicron and the effect on the global economy.

--OPEC and its allies bowed to consumer pressure and agreed to proceed with their scheduled oil-production hike of 400,000 barrels a day of crude to global markets in January, a move that pleased nations worried about high prices – notably the U.S.

However, the cartel left open the possibility of changing plans on short notice due to the Omicron variant and a Washington-led release of emergency fuel stockpiles.

Oil, as measured by West Texas Intermediate, fell a sixth straight week to close at $66.22.

And not for nothing, but natural gas, which was at $6.20 on Oct. 27, has crashed to $4.13 as far warmer than normal weather has predominated thus far late fall.

Snow cover across the nation, by the way, is only at 6 percent – the lowest since records began in 2003.

--Exxon Mobil Corp. said it will maintain a conservative budget for the next five years, amid the murky outlook for oil and gas demand and coronavirus-led economic risks.

The oil giant slashed its spending in 2020 as the world contended with waves of Covid-19, and said it is sticking to its decreased spending levels for years to come; specifically between $20 billion and $25 billion a year on capital investments through 2027, a 17% to 33% decrease from its pre-pandemic plans.

In 2018, CEO Darren Woods had laid out a plan to spend more than $30 billion a year through 2025.  Spending in 2021 will only amount to about $16 billion.

The company’s board of directors is also debating whether to continue with several major oil and gas projects, including a $30 billion liquefied natural gas development in Mozambique.   This reflects the pressure the company is facing from investors to restrain fossil-fuel investment to limit carbon emissions and return more cash to shareholders.

On Wednesday, the company did say it would invest in projects in Guyana, Brazil and the Permian Basin in West Texas and New Mexico, but made no mention of Mozambique.

Exxon said it is ahead of schedule on targets to cut the carbon intensity, or emissions as a proportion of total energy produced, from its oil and gas production.

Rival Chevron Corp. said on Wednesday that it too would maintain a conservative budget, spending $15 billion in capital expenditures in 2022 and invest at similar levels through 2025; a 25% cut from pre-pandemic plans to spend $20 billion on cap-ex.

--General Motors expects full year adjusted pre-tax profits will reach $14 billion, higher than the previous forecast of $11.5 billion to $13.5 billion.

GM’s Chief Financial Officer Paul Jacobson said during a presentation Wednesday that the company is benefiting from strong consumer demand, high prices for new vehicles and more stability in supplies of semiconductors.

However, GM’s vehicle production and inventories won’t get back to normal until late 2022, Jacobson cautioned.  GM and its rivals are still working to find a balance between stocking too many vehicles, as in the past, and too few for a U.S. market where many consumers still buy what is on a dealer lot.

GM is also wrestling with rising costs for commodities used in its vehicles.  “We see inflation everywhere,” Jacobson said.  He also said GM will be aggressive in investing in electric vehicles and other technology.  “There’s money in the account and the checkbook is open,” the CFO said.

GM’s $87 billion market value remains a fraction of Tesla’s $1 trillion value, let alone newly-public, and much smaller, electric truck and van maker Rivian.   “We have some clear advantages over startups,” Jacobson said.  “Not every startup is Tesla.”

--Nissan Motor Co. said Monday it plans to spend $17.6 billion over the next five years as it adds 20 new battery-powered vehicles to its lineup.

The company hopes to recapture a degree of the prominence it held in the electric-vehicle race after its pioneering introduction of the Leaf EV more than a decade ago.

“We have a 10-year head start over our competitors in electrification,” said Nissan CEO Makoto Uchida.

Nissan said nine of the 20 new vehicles to be introduced by 2026 would be purely battery-powered EVs.  The others would include Nissan’s version of gasoline-electric hybrids, vehicles powered by electric motors but equipped with a small gasoline engine to recharge the battery while driving.

--Shares in Boeing rose on Thursday on word the company’s 737 MAX airplane had received an airworthiness directive from the Civil Aviation Administration of China (CAAC).

“After conducting sufficient assessment, CAAC considers the corrective actions are adequate to address this unsafe condition,” the regulator said, according to Reuters.

The directive details revisions needed before the MAX returns to service, which could be by the end of this year or early 2022, the CAAC said.

New MAX aircraft will start being introduced around the same time, the agency said, marking a key moment for Boeing, which has already convinced most major global regulators about the jet’s safety following extensive fixes.

China’s domestic airlines must now complete any aircraft modification, pilot training and other work before the 737 MAX is brought back into service.

--Airlines are warning of lower bookings, executives in Europe are tweaking business travel plans and a handful of organizations have canceled or downscaled events across the continent amid new government-mandated restrictions and uncertainty over the spread of the Omicron variant.

EasyJet PLC, one of Europe’s largest, said it was seeing some softening in bookings as customers defer flights.  CEO Johan Lundgren said in a conference call to discuss the airline’s latest earnings that the discounter is seeing customers pushing back flights and holidays instead of outright cancellations.  “When they are taking action, they are rebooking to the early part of next year,” he said.

The British discount carrier said it had trimmed its flying plans for the three months to Dec. 31, with quarterly capacity now expected to be 65% of 2019 levels, down from earlier plans to operate at 70% of pre-Covid-19 capacity.

“There’s a period of uncertainty right now.  We need to get more certainty over the effectiveness of the current vaccinations,” Lundgren said.  “We always said the recovery through the winter will not be straightforward.”

While domestic travel in the U.S. and intra-continental flying in Europe have returned strongly in recent months, long-haul international travel was only just starting to rebound.  Tim Clark, president of Dubai-based Emirates Airline, said he believed the current rise in international travel would continue despite the new travel restrictions.

“It’s likely to arrest, inhibit, but not stall the uptick in demand that we’ve all had the benefit of in the last month or two,” Clark told a Reuters conference in Dubai on Tuesday.

--TSA checkpoint travel numbers vs. 2019….

12/2…82 percent of 2019 levels
12/1…81
11/30…79
11/29…86
11/28…85…new post-pandemic high of 2,451,300 travelers
11/27…83
11/26…90
11/25…87

--Twitter’s Jack Dorsey stepped down Monday as CEO of Twitter, which he co-founded in 2006.  He’ll be replaced by Parag Agrawal, who has been chief technology officer.

Dorsey’s exit marks a significant shift at the company, which has navigated years of pressure from investors who thought it did not make enough money and criticism from Washington, particularly from Republican lawmakers who have complained Twitter has helped stifle conservative voices in social media.  [See Donald Trump]

Dorsey, 45, had been fired from the top job at Twitter in 2008 but returned in 2015.  He remains CEO of the payments company Square, which on Thursday he then renamed “Block.”

While Twitter is dwarfed in size by Facebook, in many respects Dorsey has had as much an impact on social media as Mark Zuckerberg at Facebook.

In Twitter’s most recent quarter, the company said revenue grew 37% from a year ago to $1.28 billion, but it lost $537 million.

Agrawal, 37, has been with the company over a decade and worked his way up. 

--Apple Inc. has told its parts suppliers that demand for the iPhone 13 lineup has slowed, Bloomberg News reported, citing people familiar with the matter, signaling that some consumers have decided against acquiring the hard-to-find item.  The company had cut production of iPhone 13 by as many as 10 million units, down from a target of 90 million, due to the global chip shortage, but now it has informed vendors that even those orders may not materialize, the report said.

CEO Tim Cook warned in October that the impact of supply constraints, which cost the company $6 billion in sales in the fourth quarter and was affecting most of the company’s products, will be worse during the holiday quarter even as demand for the new lineup was robust.

Apple shares initially fell sharply Thursday on the news but largely rallied back.

--Microsoft Corp. CEO Satya Nadella sold about half of his shares in the company last week, according to a securities filing with the SEC.   Nadella sold 838,584 shares over two days, down from close to 1.7 million shares.

The transaction yielded more than $285 million for the lad.

“Satya sold approximately 840,000 shares of his holdings of Microsoft stock for personal financial planning and diversification reasons,” a company spokesman said in a written statement.  “He is committed to the continued success of the company and his holdings significantly exceed the holding requirements set by the Microsoft Board of Directors.”

Analysts said the move could be related to Washington state instituting a 7% tax for long-term capital gains beginning at the start of next year for anything exceeding $250,000 a year.

Good for him.  Nadella has transformed the company he took in 2014 and the market cap is up about 780% since he was appointed CEO.  Pretty, pretty good.

--Shares in Kroger Co. had their best day, at least intraday, in 28 years on Thursday after the company raised full-year sales and profit forecasts on Thursday, boosted by a sustained demand for groceries as the pandemic-induced boom in at-home cooking persists, sending the retailer’s shares up 11% at the close.

The pandemic-led trend of cooking at home continues even as virus restrictions have eased, keeping sales at grocery chains that benefited during last year’s lockdowns elevated. A rise in Covid cases during the third quarter also boosted sales at grocers, with some like Costco forced to reinstate limits on purchases of items including tissues, roll towels and bottled water, as consumers resumed hoarding goods.

[Not moi…I’m on a kick to use up what I hoarded before, particularly soup.]

Kroger’s third-quarter sales rose 7.2% to $31.86 billion, beating analysts’ estimates.  The company has been spending heavily on increasing shipping capacity and ramping up manufacturing at factories that produce its private-label products to overcome global supply-chain disruptions and avoid a shortage of products on its shelves during the holiday season. Those expenses, along with an increase in wages, led to a 41-basis point decline in the company’s adjusted gross margin rate, a la results from peers Walmart and Target, which have also seen profit margins squeezed due to higher labor and freight costs.

Kroger said it expects full-year adjusted earnings per share of $3.40 to $3.50, above prior forecasts, as well as a better than expected same-store sales outlook, basically flat compared with a prior forecast of a 1%+ decline.

--Didi Global said it would commence the process of removing its stock from the New York Stock Exchange for a listing in Hong Kong, as China’s dominant ride-hailing service operator makes an unprecedented exit from the world’s largest capital market five months after Chinese regulators opened a probe into the company.

Didi said the plan includes converting the American depositary shares from the NYSE “into freely tradeable shares” on another exchange, expected to be Hong Kong.

The company did not state a reason for the delisting, but the announcement comes after the Cyberspace Administration of China opened a cybersecurity review of the company on July 2, two days after its $4.4 billion IPO on the NYSE.

--Macau’s casino stocks plummeted after the arrest of junket operator Alvin Chau, chairman and a controlling shareholder of Macau’s largest such company.  Chau and 10 others were charged by mainland police with organizing a cross-border illegal gambling syndicate with operations in mainland China, the Philippines and elsewhere.

The Chinese enclave has seen revenue plummet during the pandemic, though it was recovering modestly as China contained Covid-19 outbreaks.

Junket operators such as Chau’s Suncity form a core part of Macau’s casino industry, attracting high rollers from mainland China by lending them money and handling the collection of any debts. Goldman Sachs estimates that around 70% of Macau’s VIP volume is related to such junkets.

Macau’s gambling revenue in the first 10 months of 2021 stood at about 29% of pre-pandemic levels.

According to a spokesman for Macau’s Judiciary Police, Chau led a criminal group that used a VIP gambling business in the city to establish gambling platforms overseas and solicited residents in mainland China to engage in illicit gambling activities online.  The group used VIP accounts and underground banks to transfer and hide their unlawful gains, police said.

Macau, the former Portuguese colony, is the only place in China where casino gambling is legal, so you can imagine the Judiciary Police’s intelligence operation.

--Over the Thanksgiving holiday weekend, “Encanto,” an original Disney animated musical about a gifted family in Colombia, took in $40.3 million at 3,980 theaters in North America between Wednesday and Sunday.  That total, which was enough for No. 1, equated to about 3.7 million patrons, or about 35 percent of the available seats, according to EntTelligence, a research firm.  Ticket buyers gave the film an A in CinemaScore exit polls.

But Disney spent roughly $175 million to make “Encanto,” not including tens of millions in marketing costs, and the fact is, audiences just aren’t returning to theaters in the numbers the studios hoped for.

This particular film, when revenue from Disney+ is ultimately added, is going to inform Disney’s release plans for future animated films.  Theatrical exhibition has always been a key to success in this sector of the industry.

--Adele is going to be performing a four-month long residency in Las Vegas early next year.

Called “Weekends With Adele,” the residency will run for 24 shows.  She will perform every Friday and Saturday from Jan. 21 through April 16.

Once a spot for washed-up performers, Las Vegas has attracted major acts in recent years, including Britney Spears, Mariah Carey and Lady Gaga.

The shows will be at the Colosseum inside Caesars Palace, a 4,300-seat theater that has hosted residencies for Celine Dion, Usher and Mariah Carey.

Tickets go on sale through Ticketmaster on Dec. 7, formally, though there is some kind of pre-sale routine I am not familiar with, and the only price range I’ve seen is $85 to $650.

Which is why I placed this story in this space.  This is big money and a boon to Vegas, which may be losing some convention business over Omicron.

The Pandemic

President Biden kicked off a more urgent campaign for Americans to get Covid-19 booster shots Thursday as he unveiled his winter plans for combating the coronavirus and the Omicron variant with enhanced availability of shots and vaccines but without major new restrictions.

The plan includes a requirement for private insurers to cover the cost of at-home Covid-19 tests and a tightening of testing requirements for people entering the U.S. regardless of their vaccination status. But Biden didn’t move to impose additional restrictions beyond his recommendation that Americans wear masks indoors in public settings.

“My plan I’m announcing today pulls no punches in the fight against Covid-19,” the president said Thursday. “It’s a plan that I think should unite us.”

Biden emphasized that he was not expanding or adding vaccination requirements as the federal courts review his previously announced rules for health care workers and employees of larger companies.

The components of the plan include:

Requiring travelers entering the country by air to test negative for the coronavirus within a day of departure, regardless of vaccination status or nationality, instead of within three days.

Extending through March 18 the requirement that masks be worn on airplanes, trains and public transportation.

Requiring private health insurance companies to cover 100% of the cost of at-home tests for the coronavirus.  Details, such as when this will start, must be worked out.

According to a Kaiser Family Foundation poll released Thursday, more than half of adults (58%) say they are “frustrated” with the status of vaccinations, an increase from the 50% who said they felt that way as the initial vaccination effort began in January.  The share of the country that expressed optimism about the status of vaccinations has dropped from 66% to 48%.

The higher frustration and lower optimism are driven mostly by Republicans and, to a lesser extent, by independents.

The public overall is split on Biden’s vaccination requirement for workers.  Slightly more say they support (52%) than oppose (45%) it.

The public is also divided over Biden’s handling of the pandemic: 44% approve, and 48% disapprove.

Biden’s new strategy includes launching hundreds of one-stop-shop sites for entire families – children through grandparents – to get vaccinated or boosted.  Medicare is going to be contacting 63 million seniors to encourage booster shots.

Though nearly all Americans age 65 and older have received at least one dose of vaccine, less than half have gotten a booster, according to the CDC.

Among all Americans, 70% have had at least one shot, and 21% have been boosted.

But going back to the requirement that private health insurance companies pick up the costs of a rapid Covid test, because the government isn’t just buying the tests for everyone, as it should, you’ll have to submit a receipt to your insurance company.  This will be a freakin’ mess.  The administration did say it would make 50 million free tests available for uninsured Americans, to be distributed through health clinics and other sites in rural and underserved communities.

Meanwhile, South Africa is entering its fourth wave of Covid-19 infections due to the Omicron variant, South African health minister Joe Phaahla has said.

Mr. Phaahla told a media briefing that infections with the new variant were now present in seven out of the country’s nine provinces, and hoped that the variant could be managed without causing too many deaths.

But Omicron is already by far the dominant form of the virus in South Africa, and could be the dominant form in Europe within a few months.

Early anecdotal evidence is also showing that a past coronavirus infection appears to give little immunity to the new Omicron variant, i.e., get familiar with the term “reinfection” as a key metric going forward. And this is most worrisome.

Scientists in South Africa have reported a sudden, sharp rise in November in coronavirus cases among people in that country who had already been infected, though the study has not been reviewed and published in a scientific journal.  The authors noted that there was no such upswing when the Beta and Delta variants emerged.

He said hospitals were under threat at this stage but urged South Africans to be fully vaccinated, saying that was the best protection against Omicron.

The number of new cases in South Africa was averaging about 260 a day in early November.  On Tuesday, the figure was over 4,300, the highest in months. It jumped to more than 8,600 on Wednesday, 11,500 on Thursday, and 16,000+ today.  Yikes.

In the United States, New York has confirmed five cases of the Omicron variant, with 10 reported infections nationwide.

Covid-19 death tolls, as of tonight….

World…5,257,445
USA…808,116
Brazil…615,454
India…470,254
Mexico…294,715
Russia…278,857*
Peru…201,282
UK…145,424
Indonesia…143,858
Italy…134,077
Iran…130,066
Colombia…128,695
France…119,457
Argentina…116,639
Germany…103,308
South Africa…89,940
Spain…88,159
Ukraine…87,566
Poland…85,126
Turkey…77,417
Romania…56,890
Philippines…48,987
Chile…38,439
Hungary…35,122
Czechia…33,450
Ecuador…33,250
Malaysia…30,538
Canada…29,757
Bulgaria…28,769
Pakistan…28,753
Bangladesh…27,989
Belgium…27,120
Vietnam…25,658
Tunisia…25,390
Iraq…23,867
Thailand…20,878
Egypt…20,643

[Source: worldometers.info]

*Just as was the case with Ecuador and Peru, where it took awhile for the true death toll to catch up with daily and weekly totals released by the health ministries, the figure you see above for Russia is about to change drastically.

Today, the country’s Federal Statistics Service published data that reveals Russia really has over 575,00 deaths linked to Covid-19, not the 278,000 you see above.  Worldometers will eventually change their figures to reflect this.

Russia reports its full data on pandemic fatalities with a substantial lag versus the official Covid-19 task force’s daily calculations, which I’ve long told you are almost a joke.

And like I also said long ago, everyone knew Russia was drastically undercounting Covid deaths.

U.S. daily death tolls…Mon. 505; Tues. 1,438; Wed. 1,653; Thurs. 1,520; Fri. 1,352.

Covid Bytes

--The Centers for Disease Control and Prevention strengthened its Covid-19 booster-shot recommendations, reflecting the potential threat the new Omicron variant poses to the pandemic response in the U.S. and worldwide.

The CDC on Monday recommended that everyone 18 and older get an additional shot after completing a first course of Covid-19 vaccination.

--Pfizer CEO Dr. Albert Bourla said yearly vaccinations could boost population immunity, adding that the company is already working on a new jab for the Omicron variant.

He told the BBC: “Based on everything I have seen so far, I would say that annual vaccinations…are likely to be needed to maintain a very robust and very high level of protection.”

It is not yet clear whether the vaccines will need to be tweaked every year for new variants, as happens with the annual flu jab.

The Food and Drug Administration approved the Pfizer jab back in October for five to 11 year olds.

Dr. Bourla said immunizing that age group in the U.S. and Europe would be a very good idea. “Covid in schools is thriving,” he said.  “This is disturbing, significantly, the educational system, and there are kids that will have severe symptoms.

“So there is no doubt in my mind that the benefits, completely, are in favor of doing it.”

At the same time, Pfizer and its partner BioNTech were telling anyone who would listen, “Speed up the administration of a third booster shot” to help in the fight against Omicron, let alone the ongoing Delta variant onslaught.

But Moderna’s chief executive predicted that existing vaccines would be much less effective against Omicron.

Stephane Bancel told the Financial Times that it would take months for pharmaceutical companies to manufacture new variant-specific doses to address Omicron.

“There is no world, I think, where [the effectiveness] is the same level…we had with Delta,” Bancel said, referring to the highly contagious variant that was first detected in India in late 2020.

Bancel said his initial talks with scientists indicate what could be “a material drop” in vaccine effectiveness against Omicron.

--A spokesman for the World Health Organization said at a UN briefing in Geneva on Friday that makers of Covid-19 vaccines should gear up for the “likelihood” of needing to adjust their products to protect against Omicron.

--Germany announced tough new restrictions on Thursday to exclude vaccinated people from much of public life, seeking to break a soaring fourth wave and blunt the Omicron variant.

Under the new rules, those wishing to go to bars and restaurants, or shop anywhere but in stores carrying basic necessities, have to present proof of vaccination or documentation of recovery from a recent coronavirus infection. 

Germany plans to introduce a law making vaccinations mandatory, a la Austria, which recently mandated that all adults be inoculated by February.  It comes as both countries contend with a strident anti-vaccination sentiment in their populations that has kept vaccination rates lower than other western European nations.

--The South African doctor who first sounded the alarm on the Omicron variant said that its symptoms are “unusual but mild” in healthy patients – but she’s worried the strain could cause complications in the elderly and unvaccinated.

In the two dozen patients Dr. Angelique Coetzee (chair of the South African Medical Association) has examined thus far, half were unvaccinated, and they were mostly young men.

“It presents mild disease with symptoms being sore muscles and tiredness for a day or two not feeling well,” Coetzee told The Telegraph.

But she emphasized that all of her patients had been healthy, and expressed worry that elderly or unvaccinated patients could be hit by the Omicron variant much harder.

--At least 13 people in Oslo have been infected with the Omicron variant following a corporate Christmas party described as a “superspreader event,” and their numbers could rise to over 60 cases, authorities said today.

The outbreak took place at a Christmas party on Nov. 26 organized by renewable energy company Scatec, which has operations in South Africa.

A senior physician at the Norwegian Institute of Public Health, told Reuters by email, “Our working hypothesis is that at least half of the 120 participants were infected with the Omicron variant during the party.”

Of those infected, none have been hospitalized as yet, but they are also all younger individuals.

--Britain recorded its highest number of Covid cases since July 17 on Thursday, 53,945 as the dominant Delta variant spreads.  Prime Minister Boris Johnson reintroduced mandatory mask-wearing in shops and on transport out of concern over Omicron.

--South Korea’s daily record of coronavirus cases reached a fresh high on Thursday…5,266, a day after the daily tally rose above 5,000 for the first time amid concerns over a sharp rise in patients with severe symptoms. 

--Japan on Thursday reversed a ban on inbound flight reservations, revealing confusion between government agencies and the public over Prime Minister Fumio Kishida’s strategy to keep out the Omicron variant.  On Monday, Japan’s aviation bureau told airlines not to accept new reservations for December because of Omicron, but the abrupt announcement provoked worries among those aiming to return for year-end holidays.

For now, airlines may take new reservations as long as the number of arrivals stays below a daily limit of 3,500, down from last month’s 5,000.

--Israel should consider all options to fight the Covid-19 pandemic, including making the vaccine mandatory, Coronavirus Commissioner Prof. Salman Zarka said Wednesday.

Also Wednesday, the Knesset Health Committee approved the two weeks ban on foreign nationals to enter the country and the requirement on vaccinated inbound travelers to quarantine for at least three days – the latter group needing to undergo a PCR test on the third day in addition to the one taken upon arrival and if both come out negative they are free to leave isolation.

--The World Health Organization on Tuesday warned that people over age 60 or with underlying health conditions should not travel internationally because of Omicron, citing the early evidence that the new variant posed “an increased risk of reinfection.”

--The emergence of the Omicron variant and the world’s desperate and likely futile attempts to keep it at bay are reminders of what scientists have warned for months: The coronavirus will thrive as long as vast parts of the world lack vaccines.

“The virus is a ruthless opportunist, and the inequity that has characterized the global response has now come home to roost,” said Dr. Richard Hatchett, CEO of CEPI, one of the groups behind the UN-backed COVAX shot-sharing initiative.

Nowhere is the inequality more evident than in Africa, where under 7% of the population is vaccinated.  COVAX was supposed to avoid such inequality – but instead the initiative is woefully short of shots and has already abandoned its initial goal of 2 billion doses.

Even to reach its scaled-back target of distributing 1.4 billion doses by the end of 2021, it must ship more than 25 million doses every day.  Instead, it has averaged just over 4 million a day since the beginning of October, with some days slipping below 1 million, according to an Associated Press analysis of the shipments.

--Alphabet Inc.’s Google said on Thursday it is indefinitely pushing back its January return-to-office plan in Europe, the Middle East and Africa due to concerns over the Omicron variant.  Google in August extended its voluntary return-to-office policy until Jan. 10.

U.S. and North America employees have not yet received any guidance regarding changes in office return plans, the company saying Thursday it will delay making any announcements until the new year.

--Some Republican lawmakers have pitched their opposition to vaccine mandates as looking out for constituents being forced to choose between a shot and a job, though the administration’s latest order offers a test-out alternative for most private sector employees.

“I have heard from hundreds of Utahns, in recent days, who are concerned about losing their jobs – losing their jobs not just in general, not just in the abstract, but specifically due to these mandates,” said Sen. Mike Lee, R-Utah.

I just shake my head. Just get the shot…or go the testing route if available.

--A federal advisory committee on Tuesday voted to recommend that the government for the first time authorize the use of an antiviral pill to combat the worst effects of Covid-19.

In a surprisingly narrow 13-10 vote, the advisory committee endorsed the pill from Merck, known as molnupiravir, which has been shown to modestly reduce the risk of hospitalization and death from Covid.  The pill could be authorized for use in the U.S. within days.

In the coming weeks, the FDA may also authorize a similar pill from Pfizer that appears to be significantly more effective than Merck’s.

Some of those who voted against authorization of the Merck pill said the risk of widespread effects on potential birth defects had not been adequately studied.

Foreign Affairs

Iran: Israel on Thursday called on world powers to halt their nuclear negotiations with Iran immediately, citing a UN watchdog’s announcement that Tehran has started producing enriched uranium with more advanced centrifuges.

“Iran is carrying out nuclear blackmail as a negotiating tactic, and this should be answered by the immediate halt to negotiations and the implementation of tough steps by the world powers,” Prime Minister Naftali Bennett’s office quoted him as saying in a call with Secretary of State Antony Blinken.

The International Atomic Energy Agency (IAEA) said on Wednesday that Iran had started the process of enriching uranium to up to 20% purity with one cascade, or cluster, of 166 advanced IR-6 machines at its Fordow plant, dug into a mountain.  Iran and major powers are trying to revive a 2015 deal under which Tehran limited its nuclear program in exchange for relief from U.S., EU and UN economic sanctions.

Israeli officials, including Foreign Minister Yair Lapid in meetings with U.K. Prime Minister Boris Johnson and French President Emmanuel Macron this week, have warned that Iran is trying to stall so that it can continue to advance its uranium enrichment to the point at which an agreement restricting it would be irrelevant.

In that vein, an Iranian diplomat said on Wednesday that his team will not work under “artificial deadlines” in nuclear talks even as Europeans have pressed for the Islamic Republic to demonstrate its seriousness in the coming days.

Iran “stands prepared to continue intensive talks as long as needed, [but] it will not be ready to sacrifice its principled demands and the Iranian nation’s rights for mere artificial deadlines or time tables,” a source on Iran’s negotiating team source told Iranian state media Press TV on Wednesday.

“The Islamic Republic has come to Vienna with full seriousness and is negotiating with transparent demands and proposals,” the source stated.

Diplomats from the E3 – France, Britain and Germany – briefed reporters that there will be a problem if Iran does not show that it is taking the negotiations seriously this week.

However, the diplomats also said that they did not want to impose an artificial deadline.

Israeli officials warned that if the U.S. lifts sanctions in some sort of interim agreement – along with international sanctions soon to be lifted under the terms of the 2015 nuclear deal – Iran could reach the nuclear threshold within six months.

Tuesday, Lapid called for the world to have a plan B if negotiations fail.

Israeli Defense Minister Benny Gantz will be in Washington next week to discuss the nuclear threat with U.S. officials.

Russia/Ukraine: Thursday, Secretary of State Antony Blinken and Russian Foreign Minister Sergei Lavrov had a “serious, sober and business-like” meeting in Stockholm, in which Blinken conveyed Washington’s desire to avoid conflict with Russia over Ukraine.

But Blinken also warned that Moscow would face “serious consequences” and severe sanctions in case of an invasion, and there was no concrete breakthrough in the talks to ease tensions between the West and Russia over troop deployments on Ukraine’s borders.

The day before, Blinken declared that Washington was ready to respond resolutely, including with hard-hitting sanctions, in the event of an attack.

“The best way to avert the crisis is through diplomacy, and that’s what I look forward to discussing with Sergei,” Blinken told reporters before going into talks with Lavrov.  “If Russia decides to pursue confrontation, there will be serious consequences.”

Kyiv says Russia has amassed more than 90,000 troops near their long, shared border.  Moscow accuses Kyiv of pursuing its own military buildup and, as always, dismisses as inflammatory suggestions it is preparing for an attack on Ukraine, while defending its right to deploy troops on its own territory as it sees fit.

But Vladimir Putin has also said Russia would be forced to act if NATO placed missiles in Ukraine that could strike Moscow within minutes.  The Kremlin said on Thursday that the probability of a new conflict in eastern Ukraine remained high and that Moscow was concerned by “aggressive” rhetoric from Kyiv and an increase in what it called provocative actions along the line of contact between government forces and pro-Russian separatists.

Last week, Ukrainian President Zelensky said Kyiv had thwarted a Russian-backed coup plot, which the Kremlin denied.

Sergei Lavrov, in a speech to the Organization for Security and Cooperation in Europe, said military tensions were rising on the continent and he hoped that Russia’s proposals on a new European security pact would be carefully considered.

“The architecture of strategic stability is rapidly being destroyed. NATO refuses to constructively examine our proposals to de-escalate tensions and avoid dangerous incidents,” Lavor said. “On the contrary, the alliance’s military infrastructure is drawing closer to Russia’s borders. The nightmare scenario of military confrontation is returning.”

The bottom line is, Putin will not allow Ukraine to join NATO.  If it ever did, Russia would attack.

David Ignatius / Washington Post…prior to Sec. of State Blinken’s meeting with Foreign Minister Lavrov.

“The CIA discovered something scary in October: Russia was moving troops toward the Ukrainian border – and, unlike in previous border thrusts, was making secret plans about how to use them.

“The agency also worried that the potential conflict zone didn’t appear to be just the eastern sliver of Ukraine occupied by Russian-backed separatists, which Russian troops had approached the previous April, but a much broader swath of the country. Alarm bells rang at the agency, and then across the U.S. government.

“Reports of the Russian buildup couldn’t have come at a worse time.  President Biden was seeking improved relations with Moscow after his June summit meeting with Russian President Vladimir Putin in Geneva.  The Russians seemed to be reciprocating with dialogue on cybersecurity and strategic stability.  And the administration had signaled support for an eventual diplomatic deal on Ukraine that would give Putin much of what he wanted.

“The tension mounted through November. CIA Director William J. Burns rushed to Moscow at the beginning of the month to warn the Russians that an invasion of Ukraine would shatter the Russian economy and void any hope of rapprochement with the West.  But Putin didn’t seem to be listening. The Russian buildup continued, accompanied by defiant rhetoric.

“As the Ukrainian crisis enters December, the Biden administration is pursuing what policymakers like to call a ‘dual strategy.’  To deter a Russian invasion, Secretary of State Antony Blinken will meet Wednesday with NATO allies in Latvia to share U.S. intelligence and discuss joint military plans to raise the cost of any Russian invasion.  At the same time, the White House has continued high-level conversations with Moscow that could lead to a meeting between Biden and Putin, virtual or in person, before year end.

“Russia isn’t backing down.  It has nearly 100,000 troops close to the border, and administration officials expect that number could increase soon.  As NATO plans for contingencies, Russia is boasting of its ‘unbreakable’ military alliance with Beijing. Putin speaks of Moscow’s eternal bond with Kyiv in nearly the same way that Chinese leaders demand reunification with Taiwan. He offered a rationale for war in an emotional essay in July arguing that Ukraine and Russia were inseparable.

“Putin loves to play mind games with the West.  He dials confrontation up and down, sending troops to the front and then blaming America for provoking him; his agents float rumors of coup plots in Kyiv.  He invites concessions from Ukrainian President Volodymyr Zelensky and then, when Zelensky enlists Israeli and French leaders to argue his case, spurns him as weak.  A former CIA officer who knows Ukraine well explains that Putin is ‘softening the target, increasing fatigue, distracting the government.’

“Blinken is likely to warn NATO allies Wednesday that Putin may be preparing a ploy in which he falsely claims that Russian-backed forces have been attacked by Ukraine, as a pretext for taking action. Blinken said last month that Putin made such false claims when he invaded Ukraine in 2014, and that they’re part of his ‘playbook.’

“The Russian leader wants to be taken seriously by America, but beyond that, he wants payback for Russia’s humiliation after the collapse of communism. ‘Putin actually has a malign attitude toward the United States,’ explains William B. Taylor Jr., a former ambassador to Kyiv.  ‘He wants to stick it to America in whatever ways he can.’”

China: U.S. Defense Secretary Lloyd Austin said Thursday that China’s pursuit of hypersonic weapons “increases tensions in the region” and vowed the U.S. would maintain its capability to deter potential threats posed by China.

Austin made the remarks in Seoul following annual security talks with his South Korean counterpart that focused on challenges from China and North Korea and other issues facing the allies.

“We have concern about the military capabilities that the PRC continues to pursue. Again, the pursuit of those capabilities increases tensions in the region,” Austin said referring to China’s latest hypersonic weapons test in July and using the abbreviation of the People’s Republic of China.

“It just underscores why we consider the PRC to be our pacing challenge,” Austin said.  “We’ll continue to maintain the capabilities to defend and deter against a range of potential threats from the PRC to ourselves and to our allies.”

Tuesday, in an interview with Reuters, U.S. Air Force Secretary Frank Kendall said: “There is an arms race, not necessarily for increased numbers, but for increased quality. It’s an arms race that has been going on for quite some time.  The Chinese have been at it very aggressively.”

In October, the top U.S. military officer, General Mark Milley, confirmed a Chinese hypersonic weapons test that military experts say appears to show Beijing’s pursuit of an Earth-orbiting system designed to evade American missile defenses.

This year the Pentagon has held several hypersonic weapons tests with mixed success.

Hypersonic weapons travel in the upper atmosphere at speeds of more than five times the speed of sound, or about 3,853 miles per hour.

Kendall noted that while the U.S. military has focused funds on Iraq and Afghanistan, it has taken its eye off the ball in terms of hypersonic weapons.  “This isn’t saying we’ve done nothing, but we haven’t done enough,” he said.

China’s foreign ministry summoned Japan’s ambassador in Beijing for an “emergency meeting” on Wednesday evening after former Japanese Prime Minister Shinzo Abe said neither his country nor the United States could stand by if China attacked Taiwan.

Chinese Assistant Foreign Minister Hua Chunying called Abe’s remarks “erroneous” and a violation of basic norms of relations between China and Japan, according to a statement from the China’s Foreign Ministry.  Abe’s comments “openly challenged China’s sovereignty and gave brazen support to Taiwan independence forces,” it cited Hua as saying.  “China is resolutely opposed to this,” it said.

Abe said that an armed invasion of Taiwan would pose a grave danger to Japan.  Abe, who stepped down as prime minister last year for health reasons, is head of the largest faction of the ruling Liberal Democratic Party and remains influential within the party.

Last Sunday, Taiwan’s air force scrambled again to warn away 27 Chinese aircraft that entered its air defense zone.  The latest Chinese mission included 18 fighter jets plus five nuclear-capable H-6 bombers.

Lastly, the Women’s Tennis Association announced Wednesday it is immediately suspending its tournaments in China in response to ongoing concerns about the safety and well-being of Peng Shuai.

The announcement was made by WTA chairman and CEO Steve Simon, who noted the decision, which will represent millions in lost revenue, had the full support of the WTA board.

The decision makes good on a threat Simon issued Nov. 19 to pull its events from the country after questioning the authenticity of an email circulated by state media and attributed to Peng.  Simon also called for an investigation into her Nov. 2 allegation in a social media post that she had been sexually assaulted by Zhang Gaoli, a former vice premier of China.  The message was removed from the Internet and discussion of the topic has been censored by China.

While Chinese officials shared footage of Peng in recent days and on Nov. 21 arranged a video call with International Olympic Committee chief Thomas Bach, it remains unclear, Simon noted, that Peng is free and able to speak without interference or intimidation.

“In good conscience, I don’t see how I can ask our athletes to compete there when Peng Shuai is not allowed to communicate freely and has seemingly been pressured to contradict her allegation of sexual assault,” Simon wrote.  “Given the current state of affairs, I am also greatly concerned about the risks that all of our players and staff could face if we were to hold events in China in 2022.”

In an editorial in the Global Times newspaper, a Chinese Communist Party mouthpiece, the paper said the WTA was betraying the Olympic spirit and bringing politics into tennis.

“Some forces in the West are instigating a boycott against the Beijing 2022 Winter Olympics,” it added, referring to the February event which some rights groups want boycotted over China’s human rights record.

The IOC then said it held a second video call with the 35-year-old Peng on Wednesday, offering her support, and telling Peng it would stay in regular touch, and had agreed to a personal meeting in January.  She appeared to be “safe and well, given the difficult situation she is in,” it added in a statement on Thursday.

China hosted just two WTA events in 2008, but local interest was fueled when Li Na won the 2011 French Open.  Eleven years later, China was staging nine events – including the WTA Tour finals – though the pandemic forced the cancellation of all but one this year and last.

Lastly, Americans listed China as the nation’s top foe, according to the first major national-security survey conducted since the U.S. withdrawal from Afghanistan.

For the first time since the Ronald Reagan Presidential Foundation and Institute began surveying Americans about national security four years ago, a majority of Americans – 52% – named China as the nation posing the greatest threat to the U.S.   That is up from 21 percent four years ago.  Russia came in a distant second at 14% - a shift from three years ago when 30% of Americans considered that country to be the biggest risk, while China came in second place at 21%.

Thirty-seven percent of Americans polled listed East Asia as the region where the U.S. should dedicate most of its military forces, while the Middle East came in second with 17%, the survey found.

Random Musings

--Presidential approval ratings….

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

Rasmussen: 42% approve, 57% disapprove (Dec. 3).

--In a surprising move, Oregon Democratic Rep. Peter DeFazio announced Wed. that he was not running in next year’s midterm election, another senior member of the party to bow out.

What’s surprising is that DeFazio is chairman of the powerful Transportation and Infrastructure Committee and he could have served in that role as long as he wanted, but, that’s assuming Democrats stayed in the majority.

So DeFazio is saying he sees the handwriting on the wall, and doesn’t want to be in the minority come 2023.

Earlier this year, Kentucky Democratic Rep. John Yarmouth, chair of the Budget Committee, also said he would step aside at the end of 2022.

DeFazio is the 19th Democrat to announce plans to leave the House.  Just 11 Republicans have done the same.  Two years ago, only eight Democrats had announced they would leave by this time in the cycle.

--The House Select Committee probing the Jan. 6 assault on the capitol voted unanimously on Wednesday in favor of contempt of Congress charges against Jeffrey Clark, a senior Justice Department official under former President Donald Trump.  The seven Democrats and two Republican members approved a report recommending the criminal charge 9-0, after Clark appeared before the committee in early November but declined to answer questions or hand over documents.  The committee’s approval of the report paved the way for the entire House to vote on whether to recommend contempt charges, although it gave him a last chance to cooperate.

“We will not allow anyone to run out the clock, and we will insist that he must appear,” Committee Chairman Rep. Bennie Thompson said.  Republican Rep. Liz Cheney, the committee’s vice chair, said the panel would not finalize the contempt process if Clark “genuinely cures his failure to comply” by Saturday.

Approval by the full House would send the matter to the Department of Justice for a decision on whether to prosecute Clark.

Clark, the former acting head of the Justice Department’s civil division, was a proponent of Trump’s false claim that his defeat in the election was the result of fraud.

--Meanwhile, former Trump chief of staff Mark Meadows, who held the position at the time of the Jan. 6 attack on the Capitol, is cooperating with the House committee, Rep. Thompson said Tuesday.

“He has produced records to the committee and will soon appear for an initial deposition.”

Meadows is the highest-profile member of Trump’s inner circle who is known to be cooperating or who the committee has publicly acknowledged is cooperating.

The actual extent of the cooperation is unknown.

At the time Rep. Thompson was making his statement on Meadows, federal judges were questioning whether Trump has the power to go to court to keep White House documents secret from the congressional committee.  A three-judge panel of the U.S. Court of Appeals for the D.C. Circuit expressed skepticism about the role of the courts in settling disputes between a former president and the sitting president over the release of White House records.

--Republican House members Marjorie Taylor Greene and Nancy Mace were going at each other this week, basically because Greene doesn’t think Mace is conservative enough and criticized her condemnation of fellow Republican Lauren Boebert’s incendiary remarks concerning Democratic Rep. Ilhan Omar.

Boebert called Omar to, ostensibly, apologize for suggesting that simply because Omar is a Muslim, she is a potential terrorist.

But the call didn’t go well, Omar demanding Boebert apologize publicly and when Boebert refused, Omar hung up on her.

Whereupon Boebert took to social media to declare:

“I will fearlessly continue to put America first, never sympathizing with terrorists,” she wrote on Twitter. “Unfortunately Ilhan can’t say the same thing and our country is worse off for it.”

Greene then went after Mace, denouncing her colleague as “the trash in the GOP conference.”

Greene wrote on Twitter Tuesday that Mace is never attacked by Democrats or moderate Republicans “because she is not conservative, she’s pro-abort.”

Mace, a rape survivor, supports restrictions on abortion, but as a state representative, Mace championed exceptions to an abortion ban for victims of rape and incest.

To which Mace replied in various forums, “I didn’t come to Congress to throw bombs, say crazy things to raise dollars, or be a comedian; I’ll leave comedy to Dave Chappelle.  I’ve always been vocal about rhetoric in both parties and will continue to do so.  I’m here to represent my district, my state, and my country.”

And to reporters: “All I can say to Marjorie Taylor Greene is ‘bless her f--king heart.’”

--And there’s Texas Republican Rep. Ronny Jackson, formerly Donald Trump’s White House physician, who tweeted that Omicron is just the latest Deep State plot to distract America.

Jackson claimed the variant is a hoax that Democrats will use to impose new Covid-19 mail-in ballot rules.

“Here comes the MEV – the Midterm Election Variant!  They NEED a reason to push unsolicited nationwide mail-in ballots.”

And: “Democrats will do anything to CHEAT during an election – but we’re not going to let them!”

Oh brother.

--Speaking of amazing a-holes, former Trump senior adviser Stephen Miller baselessly claimed that if Trump were still president, he would have already developed a vaccine for the Omicron variant.

“If President Trump was still in office, by the way, we’d already have modified vaccines to deal with the new variant,” Miller said on Sean Hannity’s Fox News show.

--Editorial / Washington Post

“President Donald Trump willfully deceived the American people about the pandemic, the gravest public health catastrophe in a century.  He knew the coronavirus was highly transmissible early on, but concealed it. He wrongly claimed that rising case numbers resulted from more diagnostic testing.  He made a false assertion that doctors were inflating the death toll from Covid-19 to ‘get more money.’ There were so many other deceptions.

“Now we learn he was hiding one more big and dangerous secret. Three days before a presidential debate, Mr. Trump knew but did not say he had tested positive for the coronavirus.  Instead, he carried on his campaign and presidential schedule, endangering all those with whom he came in contact.

“The disclosure is in a new book by Mr. Trump’s then-chief of staff, Mark Meadow.  According to the Guardian newspaper’s summary of the book and multiple former Trump aides, as reported by The Post, Mr. Trump tested positive just before departing for a campaign event in Pennsylvania on Sept. 26, six days before he was hospitalized at Walter Reed National Military Medical Center for Covid-19.  The White House decided to retest Mr. Trump’s sample using Abbott’s rapid antigen test, Binax, which produced a negative result.  A spokesman for Mr. Meadows said the first test was a false positive, but what kind of test was carried out initially has not been disclosed. Mr. Trump called Meadows’ claim ‘Fake News.’

“Mr. Meadows wrote that he ‘instructed everyone’ in Mr. Trump’s immediate circle ‘to treat him as if he were positive.’  If Mr. Trump even thought it possible he might be positive – and he should have – he had a clear obligation to tell those around him, not to mention the American people who have an interest in his health as chief executive.  But Mr. Meadows wrote that after the second test Mr. Trump thought he had ‘full permission to press on as if nothing had happened.’  At least six people who had close interactions with him starting Sept. 26 later tested positive, including first lady Melania Trump.

“It is not known exactly when the first test was done, but on Sept. 26, Mr. Trump hosted a Rose Garden ceremony for his nominee to the Supreme Court, Amy Coney Barrett, including a largely maskless indoor reception.  On Sept. 27, Mr. Trump attended a White House event with Gold Star families, later noting they often wanted to embrace him, and suggesting that one of them may have infected him.  On Sept. 29, Mr. Trump faced off against Democratic nominee Joe Biden in a debate at the Health Education Campus of Case Western Reserve University and Cleveland Clinic, which had relied on a honor system that both candidates and their teams had tested negative.  Mr. Trump appears to have abused their trust, and potentially endangered Mr. Biden, moderator Chris Wallace and others.  Mr. Trump announced that he had tested positive on Twitter at 1 a.m. on Oct. 2 and he was hospitalized later that day.

“When recovering from Covid, Mr. Trump reportedly said that he wanted to emerge from the hospital wearing a Superman T-shirt.  Perfect: a big ‘S’ for superspreader.”

--CNN said Tuesday it was suspending anchor Chris Cuomo indefinitely after details emerged about how he helped his brother, former New York Gov. Andrew Cuomo, as he faced charges of sexual harassment.

The network said documents released by New York’s attorney general Monday indicated a greater level in his brother’s efforts than the network previously knew.

“As a result, we have suspended Chris indefinitely, pending further evaluation,” the network said.

“Cuomo Prime Time” is often CNN’s most-watched show of the day.

Chris Cuomo had pressed sources for information on his brother’s accusers and reported back to the governor’s staff, and was active helping craft their response to the charges, according to emails and a transcript of his testimony to investigators working for New York’s attorney general.

Chris Cuomo had previously acknowledged talking to his brother and offering advice when the governor faced the harassment charges that led to his resignation.  But the latest information revealed far more details than previously known about what he did.

Wednesday, on his SiriusXM radio show, Cuomo said, “It’s embarrassing, but I understand (the move to suspend him).”

--Jeffrey Epstein’s pilot testified this week in the trial of Ghislaine Maxwell about meeting Bill Clinton, Donald Trump, Prince Andrew, and other household names during 30 years of flying the financier’s private planes.

The pilot, Larry Visoski, mentioned Clinton during testimony about an earlier meeting with a female singer in the burgundy-carpeted cockpit of Epstein’s jet before taking off from Palm Beach airport.  The singer, identified in court by a pseudonym, Jane, didn’t appear especially young to Visoki.

“You’ll forgive the question, Mr. Visoski, but I think you’ll remember that at the time you saw her, you also remembered she had large breasts.  Isn’t that right?” Assistant U.S. Attorney Maureen Comey said.

“Uh.  She was a mature woman,” the pilot replied.

Prosecutors say Jane was 14 years old when Maxwell first approached her at a summer camp in 1994.

Visoski said he recalled meeting the actors Kevin Spacey and Christ Tucker, and world-renowned violinist Itzhak Perlman on separate trips to Epstein’s mansions around the world.

Ghislaine Maxwell has pleaded not guilty to six felony counts alleging she lured teen girls to Epstein’s properties worldwide to have unwanted and illegal sex with the multimillionaire.

--In an exclusive with ABC’s George Stephanopoulos, actor Alec Baldwin claims he didn’t pull the trigger of the gun that killed cinematographer Halyna Hutchins on the set of “Rust.”  A teary-eyed Baldwin said he doesn’t know how the prop gun went off, firing the fatal bullet.

“The trigger wasn’t pulled.  I didn’t pull the trigger,” the 63-year-old insisted.  “I would never point a gun at someone and pull the trigger on them, never.”

Baldwin says he still has no idea what happened, or how live bullets ended up on set, let alone in the antique revolver his character was using in the flick.

“Someone put a live bullet in a gun,” he said.  “A bullet that wasn’t even supposed to be on the property.”

But he said it could not have been sabotage.  “To attack who?  To discredit who?  To harm me? The production?  What was their motive in doing that, if somebody did that?”

Baldwin said he does not expect to be criminally charged in the matter, though he expects Hutchins’ husband to file a civil suit over her death.  “He’s entitled to something as far as I’m concerned,” he said.

Two crew members have already filed civil suits against the producers, including Baldwin, accusing them of negligence.

--As I go to post, police are currently searching for Michigan school shooting suspect Ethan Crumbley’s parents, who failed to show for a scheduled arraignment on involuntary manslaughter charges.

The county prosecutor had said earlier in the day that the father bought the gun four day before it was used in the shooting which claimed four lives (all students at Oxford High School) and injured seven others.

The suspect had posted on social media about the gun, calling it “my new beauty.”

Oakland County Prosecutor Karen McDonald said she is angry.

“I am angry.  I’m angry as a mother, as the prosecutor, I’m angry as a person that lives in this county,” she said.

McDonald added that looking at the evidence uncovered in the investigation thus far, it’s the prosecution’s position that “it’s impossible not to conclude that there was a reason to believe that he was going to hurt somebody.”

McDonald noted that officials at Oxford High School first raised concerns about Ethan Crumbley’s behavior on Nov. 29, when a teacher noticed him using his cellphone to search for information on firearm ammunition.  Jennifer Crumbley did not respond when the school contacted her via voice mail about Ethan’s “inappropriate” search.

Instead, she exchanged a text message with her son that read, “LOL, I’m not mad at you. You have to learn not to get caught.”

I’m biting my tongue for now.

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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 $1783
Oil $66.22

Returns for the week 11/29-12/3

Dow Jones  -0.9%  [34580]
S&P 500  -1.2%  [4538]
S&P MidCap  -2.8%
Russell 2000  -3.9%
Nasdaq  -2.6% [15085]

Returns for the period 1/1/21-12/3/21

Dow Jones  +13.0%
S&P 500  +20.8%
S&P MidCap  +17.2%
Russell 2000  +9.3%
Nasdaq  +17.1%

Bulls 49.4
Bears 24.7…caught up…prior week 56.6 / 21.7

Travel safe.  Get your booster.

Brian Trumbore 

 

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