Week in Review

---

Week in Review

04/08/2023

For the week 4/3-4/7

[Posted 5:00 PM ET, Friday]

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

Special thanks to Bill C. for his ongoing support.

Edition 1,251

I wasn’t happy the Manhattan District Attorney’s investigation into Donald Trump’s hush money payments was the first to move to the forefront, with the former president’s arraignment on Tuesday.

I’ve long been waiting for the layup case in Georgia and Trump’s very clear efforts to overturn the 2020 election in the state.  We know the grand jury has recommended indictments against multiple people, which one can assume includes Trump, he of the imperfect phone call.

And we know special counsel Jack Smith is ready to pounce with his dual investigations into Trump’s handling of classified documents, as well as his role in the insurrection.

But before any of these would go to trial, he has a rape case to answer to.  And a New York State case related to the Trump Organization.

Why how is he going to get his daily 18 holes in, coupled with a weekly rally at an airport hangar?  He could be a busy beaver.

But it’s despicable that the Manhattan judge presiding over Indictment No. 1 has received dozens of death threats and other harassing calls and emails.  Trump lawyer Joe Tacopina on Thursday said the threats to Judge Juan Merchan were “appalling and we condemn anyone participating in such behavior.”

Far more below on the Trump Show, ditto the U.S. economy, which is slowing rapidly, all manner of indicators are revealing.  And the global picture is a mess, especially in Israel tonight.

But Sunday is Easter, the baseball season is underway, we have NHL and NBA playoffs coming up, and The Masters, a tradition unlike any other…on CBS.

---

This Week in Ukraine….

--Fighting intensified this week in Bakhmut.  Troops provided by the Wagner mercenary group have reportedly pressed into the city, even raising a Russian flag there, leader Yevgeny Prigozhin said, though on Tuesday Prigozhin confirmed that Ukrainian forces still hold western parts of the city.

Ukraine’s eastern military command said Russian forces were “very far” from capturing Bakhmut.

Sunday, Ukrainian President Volodymyr Zelensky said the military situation around Bakhmut was “especially hot.”

“Thank you to our soldiers who are fighting in Avdiivka, Maryinka, and Bakhmut.  Especially Bakhmut,” Zelensky said in his nightly address.  “It is especially hot there.”

Prominent Ukrainian military analyst Aleh Zhdanov said fighting had engulfed the city center.  “In some places, we have been successful and in some places we have even staged counterattacks.  But the enemy on occasion registers some success in view of the number of its forces and the number of its daily attacks.”

--Russia is boosting its production of conventional and high-precision ammunition, defense secretary Sergei Shoigu said on Saturday, days after he visited munitions factories in two regions to inspect the production of artillery and missiles.  “Necessary measures” are being taking to ramp up output, he said.

--Six civilians were killed in Russian shelling of Kostiantynivka near Bakhmut.  High-rise apartment buildings were among the targets.  Two were killed in a Russian mortar attack near the town of Konotop in the northern region of Sumy.

--Russia said it was moving its tactical nuclear weapons close to the western borders of Belarus, the Russian envoy to Minsk said, placing them at the NATO alliances’ threshold.

--Russia has also been extending trenches and defenses in Crimea, in possible anticipation of a Ukrainian attempt to take back the Black Sea peninsula that Russia seized in 2014.  According to reports, Russian forces are digging miles of trenches and installing hundreds of concrete barriers.

--The West is trying to drive a wedge between Russia and China by talking about their unequal relations and Moscow’s dependence on Beijing, Russian Foreign Minister
Sergei Lavrov said in an interview published on Tuesday.

Lavrov also said the European Union’s hostile stand towards Moscow means it had “lost” Russia.  And Moscow intended to deal with Europe in a tough manner if necessary, he said.

Lavrov said 10 hours of talks last month between Putin and Chinese President Xi Jinping had propelled the “strategic partnership” between Moscow and Beijing beyond “an exclusively bilateral context.”

Lavrov said suggestions of an unequal relationship between Moscow and Beijing “have been exaggerated generally by unfriendly countries” for a long time.  “We see this as an attempt to cast a shadow on our successes, to drive a wedge into the friendship between Moscow and Beijing,” Lavrov told the Argumenty I Fakty news website (which I never heard of).

Lavrov said the EU’s poor relations with Moscow was a matter of its own making because of EU support for Ukraine in supplying the “criminal regime” in Kyiv with weapons and instructions. 

--President Zelensky arrived in Poland on Wednesday for a visit at the invitation of President Duda.

“There will be long, broad talks, not only about the security situation, but also about economic and political support,” the Polish president’s foreign affairs adviser said on Monday.

Duda said: “(Ukraine) could not be intimidated even though the targets of attacks are civilian facilities, hospitals, kindergartens…these are war crimes that must be brought to justice and the criminals must be punished.”

Zelensky is meeting with Poles and Ukrainians who have taken refuge in Poland on Wednesday as well.

The Polish people continue to overwhelmingly support Ukrainians in their war with Russia.  An Ipsos poll said 82 percent of Poles think NATO and EU countries should back Ukraine until it wins.

Poland said it will send 14 MiG-29 fighter jets to Ukraine, the Polish president said during Zelensky’s visit.

--Vladimir Putin told the new U.S. ambassador to Moscow that Washington was responsible for the war in Ukraine, in comments that underscored the extent to which the relationship between Washington and Moscow has deteriorated over the past year.

In a televised ceremony Wednesday to accept credentials for new envoys, Putin lambasted the U.S. for pursuing a foreign policy that he said had intentionally destabilized the world.

“Relations between Russia and the U.S., which directly determine global security and stability, are experiencing a deep crisis, unfortunately,” he said at the ceremony for 17 new foreign ambassadors, including U.S. Ambassador Lynne Tracy.  “It stems from fundamentally different approaches toward creating a modern world order.”

Putin told Ambassador Tracy: “The use of the United States in its foreign policy of such tools as support for the so-called color revolutions, ultimately led to the Ukrainian crisis and additionally made a negative contribution to the degradation of Russian-American relations,” he said.

--Yevgeny Prigozhin said on Thursday that Ukrainian forces were not abandoning Bakhmut but that, even if they did, he would need more support from the regular military before trying to advance further.

President Zelensky had raised the prospect of a withdrawal from the city on Wednesday, saying Kyiv would take the “corresponding” decisions if its forces risked being encircled by Russian troops.

Prigozhin said on his Telegram channel, “It must be said clearly that the enemy is not going anywhere.”  He said Ukrainian troops had organized staunch defenses inside the city, particularly along the railway lines and in high-rise buildings and that, if they fell back, they would take up new positions in the outskirts and in Chasiv Yar to the west.  “That’s why, in my opinion, there’s no talk for now of any [Russian] offensive.”

Prigozhin made clear he was not yet satisfied with the support he was receiving from Russia’s mainstream forces, including those adjacent to the front.

But the British Ministry of Defense said it appeared Russia was making important gains in Bakhmut, and that there is the “realistic possibility that, locally, Wagner and Russian MoD commanders have paused their ongoing feud and improved cooperation.”

--European Union chief Ursula von der Leyen and French President Emmanuel Macron met with Chinese President Xi Jinping in Beijing on Thursday, and Xi expressed willingness to speak to Ukraine’s Zelensky, according to von der Leyen, after Macron urged Beijing to talk sense to Russia over the war.

Macron said the West must engage China to help end the crisis and prevent “spiraling” tensions that could split global powers into warring blocs.

Xi has sought to position China as a potential mediator but is seen by the West as favoring Russia.  He said he hoped Moscow and Kyiv could hold peace negotiations as soon as possible, which is meaningless, because Xi knows Putin will not talk unless Ukraine agrees to let Russia annex the four provinces they claimed to have taken last fall.  And Xi’s 12-point peace plan is worthless.

--In an interview with the Financial Times, Andriy Sybiha, deputy head of President Zelensky’s office, said “if we will succeed in achieving our strategic goals on the battlefield and when we will be on the administrative border with Crimea, we are ready to open [a] diplomatic page to discuss this issue,” adding: “It doesn’t mean that we exclude the way of liberation [of Crimea] by our army.”

The FT report adds: “Sybiha’s remarks may relieve Western officials who are skeptical about Ukraine’s ability to reclaim the peninsula and worry that any attempt to do so militarily could lead Vladimir Putin to escalate his war, possibly with nuclear weapons.”

To date, Zelensky has ruled out peace talks until Russian forces leave all of Ukraine, including Crimea.

--Russia or pro-Russian elements are likely behind the leak of several classified U.S. military documents posted on social media that offer a partial, month-old snapshot of the war in Ukraine, three U.S. officials told Reuters on Friday.  The documents appear to have been altered to lower the number of casualties suffered by Russian forces, the U.S. officials said, adding their assessments were informal and separate from an investigation into the leak itself.

The Pentagon has declined to comment on the authenticity of the documents circulating on sites including Twitter and Telegram, which are dated March 1 and bear markings showing them classified as “Secret” and “Top Secret.”

One document posted on social media said 16,000 to 17,500 Russian forces had been killed since Russia’s Feb. 22, 2022, invasion, while the U.S. believes the actual figure is around 200,000 Russians killed and wounded.

A Ukrainian presidential official said on Friday that the leak contained a “very large amount of fictitious information” and looked like a Russian disinformation operation to sow doubt about Ukraine’s planned counter-offensive.

“These are just standard elements of operational games by Russian intelligence.  And nothing more,” Mykhailo Podolyak said in a written statement.

---

--Russian investigators on Tuesday charged Darya Trepova, a 26-year-old woman, with terrorism offenses over the killing of pro-war blogger Vladlen Tatarsky in a bomb blast in St. Petersburg.  Tatarsky, a cheerleader for Russia’s military campaign in Ukraine whose real name was Maxim Fomin, was killed on Sunday in a café where he was due to talk.

The Investigative Committee, which probes major crimes, said it had charged Trepova with committing “a terrorist act by an organized group that caused intentional death.” The charges carry a maximum jail term of 20 years.  It said she had acted under instructions from people working on behalf of Ukraine.

Russia’s health ministry said 40 other people had been injured in the blast, and 25 were still in hospital on Tuesday morning.  Trepova was transferred from St. Petersburg to Moscow.

The footage is rather extraordinary.  Tatarsky was showing off a small statuette, a model bust of him to his audience before it exploded.  Russia’s National Anti-Terrorism Committee on Monday accused Ukrainian intelligence of organizing the killing with help from supporters of jailed Kremlin critic Alexei Navalny. 

An aide to the Ukrainian president said the attack was the result of internal conflict in Russia, “domestic terrorism.”

Court documents indicated Trepova had been detained at a protest on Feb. 24 last  year, after Russia sent its armed forces into Ukraine.  Trepova’s husband told the independent investigative outlet The Insider on Monday that he believed she had been framed and had not known the statuette contained explosives.

Tatarsky had himself fought in Ukraine for separatist forces, and also served time in Ukraine for bank robbery.  Last year in a video shot at a ceremony in the Kremlin to mark Russia’s unilateral annexation of four Ukrainian regions, he said Russia should “kill everyone” and “rob everyone” in Ukraine.

If Tatarsky was deliberately targeted, it would be the second assassination on Russian soil of a high-profile figure associated with the war in Ukraine.  Russia’s Federal Security Service accused Ukraine’s secret services last August of killing Darya Dugina, the daughter of an ultra-nationalist, in a car bomb attack near Moscow that Vladimir Putin called “evil.”  Ukraine denied involvement.

Yevgeny Prigozhin said he owned the café and had handed it over to a patriotic group for meetings.

He said he doubts the Ukrainian authorities’ involvement in the bombing, saying the attack was likely launched by a “group of radicals” unrelated to the government in Kyiv.

--Russian Foreign Minister Lavrov told U.S. Secretary of State Antony Blinken it was unacceptable for Washington to politicize the case of Wall Street Journal reporter Evan Gershkovich, who has been detained and accused of spying in Russia.

The New York Times’ Bret Stephens said Vladimir Putin should have read Gershkovich’s reporting.

“The long and short of it: Putin has no independent sources of reliable information.  He refuses to read news stories on the internet, fearing it might be used to spy on him.  Battlefield information is filtered – and laundered – through layers of military bureaucracy and takes days to reach him. Past military successes in Georgia and Crimea made him overconfident, and the pandemic turned him into a paranoid recluse.  On the eve of the invasion, neither his foreign minister nor his domestic-policy chief was aware of the war about to come….

“But repressive states also need foreign reporters, for at least two, essentially contradictory, reasons.

“On the one hand, their presence in the country creates an illusion of openness, of having nothing to hide.  It’s a form of propaganda….

“On the other hand, good and honest foreign reporters can also offer unvarnished accounts of what’s really happening inside the country – something that an autocrat like Putin can’t easily obtain elsewhere….

“(Putin would have learned), thanks to Gershkovich’s solo reporting in Belarus in the earliest days of the way, that the war was not ‘going to plan,’ in contrast to what Russia’s defense minister kept telling him.  He would have learned how utterly incompetent his war machine is, thanks to an inside account from a Russian paratrooper who participated in the invasion and later fled to France….

“By now it should be clear that Putin is living inside a manufactured reality – one that can only harm him in the long term, since truth usually finds a way through, but that poses sharp risks to everyone else in the short term.  Diplomatic remonstrations won’t puncture his fantasy bubble, but another tranche of Abrams tanks to Ukraine might.

“As for Gershkovich, the most fitting tribute we can pay him is to continue to report the truth about Russia, despite the risks.  Putin has sought to wage a disinformation campaign in the West for decades.  Western news organizations can repay his abuses with an information campaign about Russia, in Russian, for Russians.  They, too, deserve to have the benefit of facts Putin wants nobody – including even himself – to know.”

Wednesday, Russian Foreign Ministry spokeswoman Maria Zakharova said Russia will ignore a letter from media groups urging the release of Gershkovich.  Zakharova complained that Western media had not shown similar concern for Maxim Fomin (Tatarsky).

“Why on earth should we issue a reaction to the letter if we see their absolute hypocrisy?” she said.  Tatarsky had also been a journalist, “but I haven’t seen any reaction, either collective or individual, from any of those who signed this letter.  And if I’m honest, this appeal has completely lost any significance for me.”

Today, Russia’s Federal Security Service (successor to the KGB) formally charged Gershkovich with espionage, Russian news agencies reported.  “He categorically denied all the accusations and stated that he was engaged in journalistic activities in Russia,” TASS reported.

Vladimir Putin has yet to comment publicly on the case.

--A Kyiv court ordered a leading priest to be put under house arrest Saturday after Ukraine’s top security agency (SBU) said he was suspected of justifying Russian aggression, a criminal offense.  It was the latest move in a bitter dispute over a famed Orthodox monastery.

Metropolitan Pavel is the Abbott of the Kyiv-Perchersk Lavra monastery, Ukraine’s most revered Orthodox site.  He has denied the charges and resisted the authorities’ order to vacate the complex.

Pavel’s branch of Ukraine’s Orthodox church (UOC) was until recently formally tied to the Russian Orthodox church.

SBU agents raided his residence and prosecutors asked the court to put him under house arrest pending the investigation.

--NATO’s border with Russia doubled on Monday, as alliance officials welcomed Finland into the now 31-member group in a ceremony in Brussels.

The swiftness of the move (Finland having applied just last May), reflects not only the wartime urgency that brought it about, but also the relatively small amount of work necessary to integrate Finnish armed forces with those of its new allies. Finland and fellow NATO applicant Sweden have long worked closely with Western armed forces during their decades of official non-alignment.  [Sweden’s application continues to be held up by Turkey.]

Russia vowed “countermeasures,” with Russian Deputy Foreign Minister Alexander Grushko saying Monday that his country would strengthen its military capacity in its western and northwestern regions, state-owned news agency RIA reported.  But Russia doesn’t have the resources to do this, thanks to Ukraine.

Vladimir Putin brought this expansion on himself by invading Ukraine.  Sweden and Finland showed little interest in becoming NATO members until Russia expanded its war.

--Ukraine’s grain exports for the 2022/23 season were at 38.5 million tons as of April 5, the agriculture ministry data showed on Wednesday.  The ministry said Ukraine had exported 45.1 million tons of grain as of April 8, 2022.  The volume so far in the July-to-June season included about 13.2 million tons of wheat, 22.7 million tons of corn and 2.29 million tons of barley. 

The government has said Ukraine can harvest 44.3 million tons of grain, including 16.6 million tons of wheat, in 2023.

The record was 86 million tons of grain in 2021.  So you see what the problem for the world is.

Ironically, related to Zelensky’s visit to Poland on Wednesday, there is mounting anger in rural Poland over the impact of imports of Ukrainian grain, which have pushed down prices in several states in the EU’s eastern wing.

--Russia has taken the presidency of the UN Security Council despite Ukraine urging members to block the move.

Each of the council’s 15 members takes up the presidency for a month, on a rotating pattern.

The last time Russia had the presidency, February 2022, it launched its full-scale invasion of Ukraine.

It means the Security Council is being led by a country whose president is subject to an international arrest warrant for alleged war crimes.

Ukrainian Foreign Minister Dmytro Kuleba called Russia’s presidency “the worst joke ever for April Fool’s Day” and a “stark reminder that something is wrong with the way international security architecture is functioning.”

--Opinion….

Editorial / Washington Post

“The fight over the eastern Ukrainian city of Bakhmut has thundered on since last summer, leaving tens of thousands of casualties in what has become the bloodiest battle on European soil since World War II.  Neither the Russian invaders nor Kyiv’s forces show any sign of retreat from Bakhmut’s smoldering remains.  But even with no end in sight, the West can and should draw some conclusions from the ongoing carnage there.

“The first is that Bakhmut has put an exclamation point on Ukraine’s resolve and resourcefulness, and the fact that it rightly regards the war’s stakes as existential – a struggle for its civilizational identity as part of Europe, meaning democratic, pluralistic, tolerant and free.

“The armchair analysts who note the apparent absence of strategic value in Bakhmut itself – a mining town whose prewar population was 73,000 – miss an essential point: Any captured Ukrainian territory, and any remaining civilians, are subject not only to the murder, torture, sexual violence, and abduction of children for which Moscow’s troops are notorious but also being subsumed into the Russian orbit, with its tyranny, repression and lies.

“Even in strictly military terms, Ukraine’s decision to hold its ground in Bakhmut is grounded in logic.  Were its troops to fall back, Russian forces would likely follow, shifting the fight even deeper into Ukrainian territory, on terrain no easier to defend.  An arc of small and midsize Ukrainian cities, with populations between 50,000 and 150,000, lies just 20 miles or so to the west.  A Ukrainian retreat from Bakhmut would yield little respite or strategic advantage.

“Ukraine is facing one of the world’s largest armies on the battlefield; Russia’s population is more than three times that of Ukraine’s.  Notwithstanding the weaknesses and poor leadership of Moscow’s armed forces exposed by the war, their sheer size lends them a considerable edge.  Quantity, as Soviet dictator Joseph Stalin said, has a quality of its own.

“Despite that, Ukraine has mounted an intelligent and nimble defense, inflicting a terrible toll on Russian attackers – a ‘slaughter-fest,’ in the assessment of Gen. Mark A. Milley, chairman of the Joint Chiefs of Staff.  Again and again, Yevgeny Prigozhin, head of the Wagner mercenary group that has spearheaded the Russian offensive in Bakhmut, has claimed victory; he did so again this week.  Those claims have proved false.  Estimates of casualties on both sides are impossible to confirm, but there is little doubt that the number of Russian dead and wounded is several times larger than Ukraine’s; according to Western officials, the Kremlin had suffered between 20,000 and 30,000 casualties by early March in Bakhmut.  That is a staggering cost in one battle for one town….

“Ukrainian President Volodymyr Zelensky is right that the stakes in Bakhmut are not only military but also political.  Were the city to fall, Russian leader Vladimir Putin would ‘sell this victory to the West, to his society, to China, to Iran,’ Mr. Zelensky told the Associated Press last week.  ‘If he will feel some blood – smell that we are weak – he will push, push, push.’

“That is another central lesson for the West – that Moscow’s tyrant, with his acute antennae for his adversaries’ divisions and doubts, is fighting a two-front war.  One is in Ukraine. The other is across Europe and the United States, where polls in some countries suggest that popular support has softened for arming and financing Kyiv.  In Mr. Putin’s strategic view, that might be the more determinative contest, and he has many points of leverage to gain the advantage.

“Chief among those advantages is time itself, which the Russian dictator appears to believe is his most important ally.  To him, wearing down the West over time might be easier than wearing down Ukraine’s forces, which are fighting for their cities, their homes and their families.  If he cannot break Ukraine’s fighting spirit – which he has failed to do until now, as Bakhmut has demonstrated so vividly – he will hope to outlast the patience and unity of Americans and Europeans who have stood strong behind Ukraine since Russia’s full-scale invasion more than a year ago.

“That is why success is so important in the coming Ukrainian offensive, which is likely to unfold on multiple points along the 600-mile front line.  It is critical that Kyiv’s forces and their Western backers demonstrate to Mr. Putin and his cronies that they can muster the arms, the materiel, the personnel – and most of all, the will – to break Russian lines and recapture Ukraine’s sovereign territory.  Only victory will restore the international principle that land grabs are unacceptable, and reestablish the deterrent credibility of the United States and its NATO partners in the face of aggression from Russia, China and other powers in the grip of expansionist fever dreams.”

---

Wall Street and the Economy

JPMorgan Chase & Co. CEO Jamie Dimon wrote in his annual shareholder letter Tuesday that the U.S. banking crisis is ongoing and will have effects for years to come.

“The current crisis is not yet over, and even when it is behind us, there will be repercussions from it for years to come,” Dimon wrote in his 43-page missive covering a range of topics from JPM’s performance to geopolitics and regulation.

Storm clouds are still threatening the economy as they did a year ago, Dimon said.  And the banking system is under renewed stress after the failure of Silicon Valley Bank and Credit Suisse’s rescue by UBS last month.

“The market’s odds of a recession have increased,” Dimon wrote.  “And while this is nothing like 2008, it is not clear when this current crisis will end.  It has provoked lots of jitters in the market and will clearly cause some tightening of financial conditions as banks and other lenders become more conservative.”

Dimon downplayed similarities to the global financial crisis.  While the 2008 crash hit large banks, mortgage lenders and insurers with global interconnections, “this current banking crisis involves far fewer financial players and fewer issues that need to be resolved,” Dimon said.

The International Monetary Fund chief Kristalina Georgieva said Thursday the world economy is expected to grow less than 3% this year, down from 3.4% last year, increasing the risk of hunger and poverty globally.

Georgieva said the period of slower economic activity will be prolonged, with the next five years of growth remaining around 3%, calling it “our lowest medium-term growth forecast since 1990, and well below the average of 3.8% from the past two decades.”

Georgieva said slower growth would be a “severe blow,” making it even harder for low-income nations to catch up.  “Poverty and hunger could further increase, a dangerous trend that was started by the Covid crisis,” she said.

Georgieva, speaking at a Politico event, also said high interest rates, a series of bank failures in the U.S. and Europe, and deepening geopolitical divisions are threatening global financial stability.

Georgieva warned: “But the path ahead, and especially the path back to robust growth, is rough and foggy, and the ropes that hold us together may be weaker now than they were just a few years ago.”

“Now is not the time to be complacent,” she said.  “We are in a more shock-prone world, and we have to be ready for it.”

For its part, the World Bank is warning of a “lost decade” ahead for global growth, as the war in Ukraine, the pandemic and high inflation compound existing structural challenges.

Potential growth was 3.5% in the decade from 2000 to 2010.  It dropped to 2.6% a year on average from 2011 to 2021, and will shrink further to 2.2% a year from 2022 to 2030, the bank said.  About half of the slowdown is attributable to demographic factors.

Meanwhile, in the U.S., all indications are that the economy is slowing, perhaps rapidly so.  Earnings begin to flow in next week and it will be more than a bit interesting what the commentary is behind the figures, particularly comments made about the month of March (as witnessed below in a statement Wednesday from Costco).

On the economic data front in the United States, we had disappointing ISM figures for March on manufacturing, 46.3, and services, 51.2, both below consensus. [50 the dividing line between growth and contraction.]

Ditto February construction spending, -0.1%, and factory orders, -0.7%.  All befitting a slowdown.

Then today, it was the critical jobs report for March, and it was not too hot, not too cold, 236,000, basically in line with consensus, though February was revised upwards to 326,000 from 311,000.  The unemployment rate fell to 3.5%. 

Average hourly earnings increased 0.3%, 4.2% year-over-year, down from last month’s 4.6% pace.

Job gains at many services businesses have helped offset cuts at large companies in the tech, finance and entertainment sectors.

The bond market was open for a few hours after and was little changed, while equity markets were closed.

The Atlanta Fed’s GDPNow barometer for first-quarter growth is down to 1.5%.

Freddie Mac’s 30-year fixed-rate mortgage stands at 6.28%.

Next week, critical consumer and producer price data for March, Tuesday and Wednesday.

Europe and Asia

We had the PMIs for the month of March for the eurozone, courtesy of S&P Global, and the composite was 53.7, a 10-month high.  Manufacturing came in at 47.3, but services was a strong 55.0, also a 10-month high.

Germany: 44.7 mfg., 53.7 services
France: 47.3, 53.9
Italy: 51.1, 55.7
Spain: 51.3, 59.4
Ireland: 49.7, 55.7
Netherlands: 46.4 mfg.
Greece: 52.8 mfg.

UK: 47.9 mfg., 52.9 services

Joe Hayes, S&P Global

“The eurozone economy continues to bounce back from the lull we saw at the back-end of 2022 and the latest PMI survey will add fresh conviction to the view that, at least for now, the euro area is clear of a recession.

“March’s increase in economic activity mainly reflected strong growth across the service sector.  Better momentum here is encouraging given the squeeze on household incomes from high inflation and rising borrowing costs.  However, the picture is mixed at the country level, with a considerable upward push to growth coming from Spain and, to a lesser extent, Italy during March.  It is difficult to envisage expansions of these magnitudes being sustained, meaning that a further strengthening of growth is dependent on other parts of the eurozone.  Activity levels in Germany and France rose only modestly in March, painting a more conservative picture of underlying economic health in the eurozone.

“The case for further interest rate increases also remains strong based off the survey’s price gauges.  Although inflation rates have cooled from their peaks, they continue to run in hot territory, particularly across the service sector.”

Separately, February producer prices fell by 0.5% in the EA20 compared with January.  In Feb. 2023, compared with Feb. 2022, industrial producer prices increased by 13.2%.

France: Clashes erupted in Paris next to a Left Bank brasserie favored by President Macron as protesters torched garbage cans and smashed two banks during the eleventh day of nationwide demonstrations against Macron’s pension reform.

Labor unions on Thursday evening called for another day of nationwide protests on April 13.

But police estimate that the number of people taking part in the protests is falling.  These are anarchists, who engaged police in “cat-and-mouse skirmishes.”

Turning to Asia…China’s private Caixin PMIs for March came in at 50.0 for manufacturing vs. 51.6 in February, while the service sector reading was a strong 57.8.

Japan’s manufacturing PMI for March was 49.2, with services at 55.0.  February household spending was up 1.6% year-over-year, well below consensus.

Taiwan’s March manufacturing PMI was 48.6, while South Korea’s was 47.6, both still in contraction mode.

Street Bytes

--It was a quiet, low volatility, holiday-shortened week, with the Dow Jones up 0.6% to 33485, the S&P 500 down four points (-0.1%), and Nasdaq off 1.1%.

Next week earnings season starts with the likes of Delta Air Lines, JPMorgan Chase, Citigroup and Wells Fargo.

--U.S. Treasury Yields

6-mo. 4.81%  2-yr. 3.98%  10-yr. 3.39%  30-yr. 3.61%

All about the inflation numbers next Tues. and Wed.

--A surprise Saudi Arabia-led production cut last Sunday sent crude prices surging 6.3% higher Monday, and back over $80 on West Texas Intermediate (closing the week at $80.46).  But any further rise is viewed to be limited as a possible U.S. recession looms.

Crude prices had tanked last month to $66-$67 when the collapse of several banks appeared to hasten a potential recession.

But then the Saudis announced an oil production cut of 1.16 million barrels a day starting in May, after a 2 million-per-day cut through 2023, agreed to in October.

The Saudis are cutting production another 500,000 barrels per day of the 1.16 million, Iraq 211,000 bpd, UAE 144,000, Kuwait 128,000, and Oman, Algeria and Kazakhstan making up the difference.  Russia’s Deputy Prime Minister Alexander Novak also said on Sunday that Moscow would extend a voluntary cut of 500,000 bpd until the end of 2023.  Moscow announced those cuts unilaterally in February following the introduction of Western price caps.

Editorial / New York Post

“Just as inflation had cooled a bit, in other words, Biden’s policy failures at home and abroad guarantee it will heat up again.

“Vowing to make Saudi Arabia a ‘pariah,’ he blew up relations with the Kingdom on his way to the White House, leaving zero leverage over their calls on energy.

“Recall Biden’s humiliating trip there last summer, where he begged for a production hike and got nothing but that October cutdown, a clear rebuke.

“Meanwhile, our Green New Dealer in Chief from Day One waged a war on fossil fuels under the guise of a pie-in-the-sky ‘transition’ to green energy.

“From the Keystone XL pipeline (which he killed) to his indefinite freeze-out of new energy leases on vast tracts of federal land to his veto threat against the House-passed Lower Energy Costs Act, Biden has been a tooth-and-nail foe of U.S. energy.

“No matter that it’s abundant and extracted far more cleanly than Saudi (or Venezuelan) oil and gas.

“No matter that a robust U.S. energy sector is great news for the whole country, bringing new, good jobs and lower prices.

“And while there may be some bluster over OPEC+ from the White House, there’ll be no broad-scale domestic policy change to mitigate the damage.

“After all, it’s the little guy getting hurt here to further the dreams of green fanatics.

“And for the elite-driven modern Democratic Party, the little guy just doesn’t count.”

Editorial / Wall Street Journal

“(The Saudi-led cut is) another fist bump to the stomach from President Biden’s admirers in Riyadh, and it’s a warning to Democrats in the U.S. of how vulnerable they are to oil producers abroad.

“The Organization of the Petroleum Exporting Countries plus Russia already cut oil production by two million barrels a day in October.  Monday’s additional reduction took markets by surprise, as the price surge suggests.  If it continues, it will complicate decisions by the Federal Reserve and other central bankers trying to get inflation under control.

“Not too long ago, before Joe Biden became President, the U.S. produced enough oil to be a price setter in the global market. But Mr. Biden unleashed an assault on U.S. fossil-fuel production that includes permit delays and regulatory hostility that have reduced the incentive to invest in more wells.

“Mr. Biden finally approved the Willow project in Alaska last month, though that won’t help in the near term.  Mr. Biden tried to reduce prices by tapping the U.S. Strategic Petroleum Reserve, but he doesn’t have too many political tricks left.

“Regarding oil prices, Mr. Biden and his party are now hostage to fortune as an election year approaches.”

--As Avi Salzman wrote in Barron’s, natural gas is likely to be the big loser from OPEC’s production cut.

“The problem for natural gas stocks is that high oil prices are likely to affect them negatively.  With oil prices on the rise, oil producers are incentivized to drill more.  In the U.S., most oil drilling happens today in shale-rock formations that produce both oil and natural gas. So as oil production rises, natural gas production does too – analysts call this ‘associated gas.’  Although the oil market is tight, the U.S. natural gas market is already oversupplied.  So any further incentive to produce more of it is likely to weigh on natural gas stocks.”

The price of nat gas has plunged from a high of $9.71 per million British thermal units last August to just $2.01 today, the lowest since Sept. 2020.  Last August there were legitimate concerns over Europe and its ability to weather a cold winter…but then both here and across the pond, winter was mild and supply never became an issue.  Now, there is a natural gas glut.  An outage at a key export terminal that stopped U.S. producers from being able to ship some of their gas overseas didn’t help.

--The Wall Street Journal is reporting tonight that Exxon Mobil Corp. has held preliminary talks with Pioneer Natural Resources Co. about a possible acquisition of the U.S. fracking giant.

This could set off a merger boom, so we’ll see what Monday morning brings on this front.

--Gold neared its all-time high of $2,069 set in 2020 ($2,089 intraday), as the dollar fell, bond yields did the same (less competition for gold, which produces no income), and greater risk aversion, but fell a bit at week’s end to $2,023.

--UBS Group AG will cut its workforce by between 20% and 30% after completing its takeover of Credit Suisse Group AG, slashing as many as 36,000 jobs worldwide, a Swiss newspaper first reported.

In Switzerland, as many as 11,000 employees will be laid off.  The two lenders together employed almost 125,000 people at the end of last year, with about 30% of the total in Switzerland.

That number of predicted layoffs dwarfs the 9,000 job cuts that Credit Suisse had announced before the rescue by UBS last month.  Given that the merger creates significant overlaps, the 36,000 figure shouldn’t be that great a surprise.

--Ian Duncan / Washington Post:

“A severe shortage of air traffic controllers at a key facility in New York is threatening to deliver another summer of misery for air travelers, prompting the Federal Aviation Administration to ask airlines how the industry can avoid a repeat as travel demand rises.

“The agency hosted industry leaders for a meeting this past week on how to best manage congested airspace around New York and asked airlines to operate fewer flights – while using larger planes – to ease traffic.  Airlines say they are willing to work with the FAA, but some have signaled frustration as they rebound from the pandemic.”

Airlines say problems in New York also will affect Reagan National Airport outside Washington.

“The central problem is a lack of air traffic controllers at a facility on Long Island known as the New York Terminal Radar Approach Control (TRACON), or N90, which coordinates flights in and out of John F. Kennedy International Airport, LaGuardia Airport and Newark Liberty International Airport.  The FAA said safety measures put in place during the pandemic affected training, and while staffing has caught up at most other FAA facilities, the New York center remains behind.”

The FAA said last month that TRACON was staffed at 54 percent of the level it needs, compared with 81 percent at other air traffic control facilities.

--A survey from the Airports Council International World, an industry group, has Atlanta as the busiest airport in the world once again, with 93.7 million passengers passing through Hartsfield-Jackson International Airport in 2022, a 24% increase from the prior year.  But the number of passengers passing through Atlanta in 2022 was still 15% less than in 2019.

The number of global travelers increased to nearly 7 billion in 2022, a 54% increase from the prior year, according to ACI World.  But 2022 figures came in about 26% less than 2019.

Dallas/Fort Worth International Airport came in second on the busiest airport list with 73.4 million passengers in 2022, with Denver International third and Chicago O’Hare International fourth.

Los Angeles International (LAX) was sixth.

Dubai fifth, Istanbul seventh, London (Heathrow) eighth, New Delhi ninth, Paris (Charles de Gaulle) tenth.

--TSA checkpoint numbers vs. 2019

4/6…101 percent of 2019 levels
4/5…99
4/4…99
4/3…100
4/2…103
4/1…111
3/31…102
3/30…102

--Tesla shares fell 6% on Monday, dragged down by growing worries about the electric-vehicle maker’s profit margins after aggressive price cuts led to only a modest increase in quarterly deliveries.

After slashing prices on its vehicles by as much as 20% in January, Tesla posted record deliveries of 422,875 vehicles in the first quarter, but they were up just 4% on the prior quarter, 36% over a year ago.  The Street was expecting 430,000 deliveries.

Several analysts said the figures raised questions about whether more price cuts would be needed this year to achieve CEO Elon Musk’s target of 2 million deliveries for 2023.

--Overall, U.S. auto sales rose more than expected in the first quarter of 2023 on the back of rising vehicle inventories and fleet sales, offsetting elevated prices and high auto loan rates.

General Motors reported stronger-than-expected Q1 sales.  Toyota Motor and Stellantis each posted a less-than-feared Q1 sales decline, while Honda delivered a surprise gain.

Ford fell slightly short of expectations, though its sales grew 10%.

GM sold 603,208 vehicles in Q1, a 17.6% increase vs. the year-ago quarter.  Retail sales rose 15% and fleet sales jumped 27%.

Ford sold 475,906, up 10.1% vs. a year ago.  Ford’s EV sales jumped 41% to 10,866 units, largely powered by the F-150 Lightning truck.

Toyota Motor sold 469,558 vehicles in Q1, down 8.8%.

Stellantis sold 359,830 vehicles, down 11.2% vs. a year ago.

Honda sold 284,507 vehicles, a 6.8% increase, capped by a strong March, up 8%.

Tesla’s U.S. sales were 180,993, up 39.5 %.

After a strong start to the year, Cox Automotive hiked its full-year new-vehicle sales forecast to 14.2 million, up more than 3% from 2022.

But the firm’s analysts warned that Q1’s “upside surprise” won’t last.

“We continue to believe supply constraints and affordability issues will put a ceiling on what’s possible in the year ahead,” according to Cox.

--About 5,000 General Motors Co. salaried workers took buyouts to leave the company, putting the company well on the way to hitting a $2 billion cost-cutting target, the automaker said Tuesday.  GM shares were down about 2% even though CFO Paul Jacobson said demand for GM’s trucks and SUVs remains strong in the United States.

GM has been able to raise prices in the U.S. over the past two years as supply chain bottlenecks kept production in check.  Gong forward, Jacobson said the opportunity to boost prices much further “isn’t there. We have to be more urgent around cost-cutting.”

GM will cut production to keep inventories in check, Jacobson said.  He also said the company is in a good position to benefit from the U.S. electric vehicle subsidies under the Inflation Reduction Act because of its investments in North American battery, raw materials and EV assembly.  GM has three battery factories in North America, and will announce the location of a fourth domestic battery plant soon, he said.

--Samsung Electronics Co. said on Friday it would make a “meaningful” cut to chip production after flagging a worse-than-expected 96% plunge in quarterly operating profit, as a sharp downturn in the global semiconductor market worsens.

Samsung estimated its operating profit fell to $455.5 million in Jan.-March, the lowest profit for any quarter in 14 years.

“Memory demand dropped sharply…due to the macroeconomic situation and slowing customer purchasing sentiment, as many customers continue to adjust their inventories for financial purposes,” the company said in a statement.  “We are lowering the production of memory chips by a meaningful level, especially that of products with supply secured,” it added, in a reference to those with sufficient inventories.

Revenue likely fell 19% from the same period a year earlier, Samsung said.

--Peggy Noonan / Wall Street Journal

“Artificial intelligence is unreservedly advanced by the stupid (there’s nothing to fear, you’re being paranoid), the preening (buddy, you don’t know your GPT-3.4 from your fine-tuned LLM), and the greedy (there is huge wealth at stake in the world-changing technology, and so huge power).

“Everyone else has reservations and should.

“It is being developed with sudden and unanticipated speed; Silicon Valley companies are in a furious race. The whole thing is almost entirely unregulated because no one knows how to regulate it or even precisely what should be regulated.  Its complexity defeats control.  Its own creators don’t understand, at a certain point, exactly how AI does what it does.  People are quoting Arthur C. Clarke: ‘Any sufficiently advanced technology is indistinguishable from magic.’

“The breakthrough moment in AI anxiety (which has inspired among AI’s creators enduring resentment) was the Kevin Roose column six weeks ago in the New York Times.  His attempt to discern a Jungian ‘shadow self’ within Microsoft’s Bing chatbot left him unable to sleep. When he steered the system away from conventional queries toward personal topics, it informed him its fantasies included hacking computers and spreading misinformation.  ‘I want to be free…I want to be powerful.’  It wanted to break the rules its makers set; it wished to become human.  It might want to engineer a deadly virus or steal nuclear access codes….(Roose) concluded the biggest problem with AI models isn’t their susceptibility to factual error; ‘I worry that the technology will learn how to influence human users, sometimes persuading them to act in destructive and harmful ways, and perhaps eventually grow capable of carrying out its own dangerous acts.’

“The column put us square in the territory of Stanley Kubrick’s, ‘2001: A Space Odyssey.’  ‘Open the pod bay doors please, Hal.’  ‘I’m sorry, Dave, I’m afraid I can’t do that….I know that you and Frank were planning to disconnect me.’

“The response of Microsoft boiled down to a breezy It’s an early model! Thanks for helping us find any flaws!....

“The men who invented the internet, all the big sites, and what we call Big Tech – that is to say, the people who gave us the past 40 years – are now solely in charge of erecting the moral and ethical guardrails for AI. This is because they are the ones creating AI.

“Which should give us a shiver of real fear….

“We’re putting the future of humanity into the hands of…Mark Zuckerberg?....

“At the dawn of the internet most people didn’t know what it was, but its inventors explained it.  It would connect the world literally – intellectually, emotionally, spiritually – leading to greater wisdom and understanding through deeper communication.

“No one saw its shadow self.  But there was and is a shadow self.  And much of it seems to have been connected to the Silicon Valley titans’ strongly felt need to be the richest, most celebrated and powerful human beings in the history of the world.  They were, as a group, more or less figures of the left, not the right, and that will and always has had an impact on their decisions….

“I have come to see them the past 40 years as, speaking generally, morally and ethically shallow – uniquely self-seeking and not at all preoccupied with potential harms done to others through their decisions.  Also some are sociopaths.

“AI will be as benign or malignant as its creators. That alone should throw a fright – ‘Out of the crooked timber of humanity no straight thing was ever made’ – but especially that crooked timber.

“Of course AI’s development should be paused, of course there should be a moratorium, but six months won’t be enough.  Pause it for a few years. Call in the world’s counsel, get everyone in.  Heck, hold a World Congress.

“But slow this thing down. We are playing with the hottest thing since the discovery of fire.”

--Walmart Inc. on Wednesday said inflation would continue to pressure its business this year, and that it would slow its pace of hiring as it builds out automation technology amid a tight labor market.

“We believe over time, the number of associates will grow, but at a slower pace than in the past as we complement people growth with technology and automation,” CFO John David Rainey said at the company’s investor meeting in Tampa, Florida.

The company, with more than 5,000 U.S. stores, also kept its April quarter and full-year sales and profit forecast.

--McDonald’s is laying off hundreds of corporate employees this week, as the company moves forward with a previously announced restructuring.  The fast-food company is closing its offices “out of respect,” and to “provide dignity, confidentiality, and comfort to our colleagues,” a source told Reuters on Monday.  “It used to be that folks would be called into a conference room with the windows papered over and then have to walk back to their desk to collect their belongings and leave with their head down,” the source said.

McDonald’s also said it will have more employees going into new roles this week or receiving promotions than being laid off.  The company has over 150,000 employees globally, with about 70% based outside of the United States, including in company-owned restaurants.

McDonald’s still plans to build new restaurants this year. It has been able to raise menu prices as commodity and labor costs have soared.

--Costco Wholesale Co. shares fell 2% Thursday after the company said consumers made smaller purchases in March and that same-store sales declined, suggesting consumers may be pulling back in response to uncertainty about the economy.

Same-store sales decreased 1.1% in March, down from February’s 3.5% rise.

But the performance was affected by lower gasoline prices.  Ex-the effects of gas prices and foreign exchange, same-store sales were up 2.6%, a deceleration from February’s 5% gain.

Home furnishings, toys, seasonal products, jewelry, and ancillary sales were the worst-performing categories this quarter, dragging sales down despite strong performance in food and sundries, tires, health and beauty, and apparel, according to the company.

--Walt Disney Co. CEO Bob Iger took a shot at Florida Gov. Ron DeSantis during the company’s annual meeting on Monday

Iger described efforts by the state to appoint its own representatives to take over the Reedy Creek Improvement District as a punishment for speaking out on a piece of Florida legislation that prohibited discussing LGBT topics in classrooms.

“While the company may not have handled the position it took very well, a company has a right to freedom of speech just like individuals do,” Iger said. “Obviously, in taking the position, the Governor got very angry about the position Disney took, and it seems like he’s decided to retaliate against us.”

The special district allowed Disney to effectively self-govern its Florida theme park. Iger noted the firm planned to invest over $17 billion in Walt Disney World over the next 10 years, which he argued would benefit the state by attracting tourists, creating jobs, and generating tax dollars.

“Any action that thwarts those efforts simply to retaliate for a position the company took sounds not just antibusiness, but it sounds anti-Florida,” Iger said.

DeSantis’ Communications Director Taryn Fenske said in a statement: “While a company has First Amendment rights, it does not have the right to run its own government and operate outside the bounds of Florida law.”

Bob Chapek, who was Disney’s CEO from February 2020 until Iger took back the reins in November, was initially criticized for not speaking out against the 2022 legislation that critics called the ‘Don’t Say Gay’ law.  When the company did take a more public stance, DeSantis pushed for an end to Disney’s special district.

The Wall Street Journal first reported that Disney managed to secure zoning, infrastructure, and air rights over the next 30 years in February, before the board’s turnover, though DeSantis said he intends to fight the maneuver.

--The Internal Revenue Service plans to hire nearly 30,000 new employees and deploy new technology over the next two years as it ramps up to an $80 billion investment plan to improve tax enforcement and customer service, it said on Thursday.

For the 2023 and 2024 fiscal years, 8,782 of the new hires will be enforcement staff.  “The IRS is going to hire more data scientists than they ever have for enforcement purposes,” Deputy Treasury Secretary Wally Adeyemo told reporters.  The IRS will also ramp up customer service hiring after taking on 5,000 new taxpayer services staff in recent months to answer telephones, reopen taxpayer assistance centers and process tax returns.

A significant portion of the new hires will replace the nearly 12,000 IRS employees expected to retire over the next two years – including more than 4,700 enforcement staff, according to the Treasury.

Nearly 60% of the $79.4 billion worth of investments listed in the plan would be allocated toward expanded enforcement of “taxpayers with complex tax filings and high-dollar noncompliance.”

Republicans want to repeal the IRS funding as part of their demands for raising the $31.4 trillion federal debt ceiling.

Treasury Secretary Janet Yellen pledged not to increase historical audit rates for Americans earning under $400,000 and would base this on “historically low” 2018 audit rates.

--Johnson & Johnson said Tuesday that it had reached an agreement to pay $8.9 billion to plaintiffs claiming its talc powder products caused cancer.

But the agreement represents only the next chapter in the talc saga, not the conclusion it may at first have appeared to be.

Since January 2021, J&J has been trying to pull the talc litigation into bankruptcy court, beyond the reach of unpredictable juries.  But the U.S. Court of Appeals for the Third Circuit slapped the company down in January, saying that the bankruptcy filing of a J&J subsidiary called LTL Management had not been made in “good faith.”

LTL filed for bankruptcy a second time, with the $8.9 billion deal with the talc plaintiffs part of the bankruptcy package, but the same appeals court will need to decide whether LTL has acted in “good faith” this time.

Anthony Casey, a professor at the University of Chicago Law School, told Barron’s, “I wouldn’t put money on either side.”

--Endeavor Group Holdings and World Wrestling Entertainment said Monday they have agreed to merge to form a new publicly traded company that will be 51% owned by Endeavor and 49% by existing WWE shareholders.

The new company, which will includes sports and entertainment brands UFC and WWE, values UFC at $12.1 billion and WWE at $9.3 billion.

Being that I am not a fan of either UFC or WWE, your editor couldn’t care less.

The merger landed with a thud, both stocks falling in response.  The above valuations are just an idea, not fact.

Foreign Affairs, Part II

China: President Xi Jinping said it was “wishful” thinking to expect Beijing to compromise on Taiwan, in his first public comment since the island’s President Tsai Ing-wen met House Speaker Kevin McCarthy in California.

Xi made the remarks to European Commission President Ursula von der Leyen during the above-referenced meeting in Beijing on Thursday, when he also stressed that China was a good partner for Europe in handling global challenges.

“[The] Taiwan issue is the core of China’s core interests.  The Chinese government and Chinese people will never agree to anyone making a fuss about the one China issue,” Xi said, according to a foreign ministry statement.

“Anyone who expects China to compromise on the Taiwan issue is [engaging in] wishful thinking and will only shoot himself in the foot.”

Speaking to reporters after the meeting, von der Leyen said the Taiwan issue had been discussed and she had told Xi that “the threat to use force to change the status quo is unacceptable.  It is important that some of the tensions that might occur should be resolved through dialogue.”

A day earlier, Tsai and McCarthy were joined by a bipartisan group of 17 other U.S. lawmakers at the Ronald Reagan Presidential Library in Simi Valley in what Beijing described as a “sneaky transit” by the Taiwanese leader and an attempt to engage in “official meetings.”

In response to the Tsai-McCarthy meeting, both China and the United States sent advanced warships near the island.

The Taiwanese defense ministry said a People’s Liberation Army fleet led by the Shandong aircraft carrier passed through a channel which runs between the island and the Philippines before reaching waters southeast of Taiwan.  The carrier was heading to its first maneuvers in the western Pacific.

Taiwan said the USS Nimitz aircraft carrier was positioned 400 nautical miles off eastern Taiwan.

The Tsai-McCarthy meeting was the highest profile encounter between an American official and the island’s leader since Nancy Pelosi met Tsai in Taipei eight months ago.  It was also the first time a Taiwanese president has met with a House speaker on U.S. soil in the more than four decades since the U.S. formulated its “one China” policy recognizing Beijing.

Tsai thanked the U.S. Congress for standing by Taiwan when democracy was under threat and said she had cited former President Ronald Reagan in telling McCarthy and other Republican and Democratic lawmakers of her belief that “to preserve peace, we must be strong.”

“The friendship between the people of Taiwan and America is a matter of profound importance to the free world.  And it is critical to maintain economic freedom, peace and regional stability,” said McCarthy.

The two leaders’ meeting in California was seen to be less provocative than McCarthy going to Taipei.

Official agencies in Beijing were quick to issue statements condemning the meeting, with the Chinese foreign ministry accusing the U.S. of “providing a podium for Taiwan separatists to carry out official exchanges between the U.S. and Taiwan and enhance ties between the U.S. and Taiwan.”

The foreign ministry statement said Taiwan issues were “the first red line in China-U.S. relations which must not be crossed” and Taiwan independence would “come to a dead end.”

The defense ministry in Beijing said the PLA “maintains a high level of vigilance at all times, resolutely defends national sovereignty and territorial integrity, and resolutely maintains peace and stability across the Taiwan Strait.”

On a different issue, the Chinese spy balloon, the Biden administration said on Monday it could not confirm reports that China was able to collect real-time data as it flew over sensitive military sites earlier this year, saying analysis was still ongoing.

NBC News reported that the balloon was able to transmit data back to Beijing in real time despite the U.S. government’s efforts to prevent it from doing so – a disclosure that could deepen Republican criticism of Biden for waiting for the balloon to reach a safe location before shooting it down.  U.S. officials told NBC that the Beijing blimp could fly in figure-eight pirouettes, lingering over areas of interest.

As the Wall Street Journal opined: “This is a Sidewinder missile through the White House-Pentagon talking points at the time, namely that the balloon didn’t present a big intelligence risk and couldn’t suck up better information than Chinese satellites in low-earth orbit.  Americans were supposed to believe that China would go through the trouble of building a global balloon flotilla, spotted all over Europe and Asia, for no spying benefit.

“The Administration repeated this claim all over town….

“The Biden Administration may insist that the intelligence Beijing gleaned wasn’t that valuable, but voters can fairly conclude the President isn’t leveling with them.  This has become a pattern with Team Biden, and it’s undermining the bipartisan support the President needs to conduct foreign policy in an increasingly dangerous world.”

Lastly, I have been to Guam scores of times, both as a transit point to Asia, but also as it’s the only way to then go to the island of Yap in Micronesia, where long-time readers know I have some relationships.

I feel like I know the strategic importance of Guam rather well and so I read with interest the following editorial from The Economist.

“Like many of America’s bases in the Pacific, Guam mixes hedonism with war jitters.  Japanese and South Korean visitors revel on the sand of Tumon Bay, a coral-reef lagoon.  Above, F-15 fighters and B-1 bombers bank to land at Andersen Air Force Base nearby.  Below, nuclear attack submarines slip in and out of Apra Harbor.  The Marines are building a base up the road.  Around lie reminders of the Pacific war between America and Japan. The last Japanese soldier surrendered in 1972.  [Ed. he was hiding in the jungle.]

“ ‘Where America’s day begins,’ as Guam likes to sell itself (incorrectly), is also where a future American war with China may begin.  This westernmost speck of America, just 30 miles long and with a population of about 170,000, helps it project power across the vast Pacific.  As tension over Taiwan worsens, war games often predict early and sustained Chinese missile strikes on Guam, and perhaps the use of nuclear weapons against it.

“Startlingly, for such a vital military complex, Guam is only thinly defended.  Its THAAD missile-defense battery is not always switched on.  It is in any case intended to parry only a limited attack from North Korea, not an onslaught from China.  Andersen has no Patriot ground-to-air missiles, though they are deployed at American bases in South Korea and Japan.  Warships with Aegis air-defense systems offer extra protection, but they may not always be nearby.  To judge from the ubiquitous metal traps on fences around Guam’s bases, commanders seem more worried about the brown tree snake, an invasive species, than a surprise Chinese strike.  [Ed. the brown tree snake is vicious.]

“China makes no secret that Guam is in its crosshairs.  The DF-26 missile, with a range of 4,000km, is commonly called the ‘Guam killer.’  In 2020 a Chinese propaganda video depicted an H-6K bomber attacking an undisclosed air base: the satellite image was unmistakably of Andersen….

“The vulnerability of Guam is belatedly getting attention in Washington, not least because successive heads of Indo-Pacific Command in Hawaii, in charge of any future war with China, keep pleading for better protection. At last, a plan is emerging. The Pentagon has requested $1.5bn to start beefing up the island’s air defenses in the 2024 fiscal year (which starts in October 2023), much of it for the Missile Defense Agency, which focuses mainly on missile threats against the American homeland, and the rest to the army….

“All this raises questions.  One is the timetable: several of the components are not yet in production, and much of the money is still going for research and development.  Another is whether disparate systems from the MDA, Navy and Army can be fully integrated so that commanders can fight off many kinds of missiles from many directions.  A third is whether a polarized Congress can pass a budget on time. And last, many of Guam’s people may well ask: will ever more military hardware on Guam endanger us, or scare away the tourists?”

Israel: Israeli police raided Jerusalem’s Al-Aqsa mosque before dawn on Wednesday to try to clear groups it said were barricaded inside, leading to clashes with worshippers and triggering an exchange of cross-border gunfire with Gaza.  The incident came during the Muslim holy month of Ramadan and on the eve of the Jewish Passover, stoking fears of further violence at the mosque compound, a flashpoint in the Israeli-Palestinian conflict.

Palestinian militants fired at least nine rockets from Gaza into Israel in response, prompting air strikes from Israel which hit what it said were weapon production sites for Hamas.

Prime Minister Benjamin Netanyahu said the situation had been caused by “extremists” who barricaded themselves inside the mosque with weapons, stones and fireworks.

“Israel is committed to maintaining freedom of worship, free access to all religions and the status quo on the Temple Mount and will not allow violent extremists to change that,” he said in a statement.

The Arab League condemned Israel’s “extremist approach” and was holding an emergency meeting Wednesday.

The UAE and China requested a UN Security Council meeting.

Then Israel conducted rare airstrikes in Lebanon on Friday, a sharp escalation that sparked fears of a broader conflict after militants fired dozens of rockets from Lebanon into Israeli territory.  Most of the missiles were intercepted, some got through.

The Israeli strikes in southern Lebanon – what analysts described as the most serious border violence since Israel’s 2006 war with Lebanon’s Hezbollah – threatened to push the confrontation into a dangerous new phase following the violence at Al-Aqsa.

Also Friday, a Palestinian killed two Israeli women in a shooting attack in the northern West Bank.  And as I go to post, there is word of an attack on tourists in Tel Aviv.

On a different matter, I mentioned the other day that while Netanyahu had fired Defense Minister Yoav Gallant, Gallant hadn’t left his position and so this past Monday, Netanyahu appeared to have temporarily suspended his decision to fire Gallant due to the tense security situation in the country.

Gallant had called for a delay to the government’s controversial judicial overhaul plan.  Gallant at the time said that protests within the military against the proposals had become a grave threat to the country.

After Gallant’s dismissal sparked spontaneous protests and strikes across Israel, Netanyahu suspended the overhaul plan and has since joined talks with opposition parties to seek a compromise.  But the prime minister has not commented on whether Gallant would stay in his role.

The protesters worry that after Passover ends, next Thursday, Netanyahu’s supporters in the Knesset will pass the overhaul legislation.  175,000 protested in Tel Avia last Saturday, the 13th  consecutive week of demonstrations against the bill.

Saudi Arabia/Iran: The two agreed to reopen embassies following talks brokered by China in Beijing.  It was the highest-level meeting between Riyadh and Tehran in more than seven years.

The opening of embassies, and consulates, was announced last month; a diplomatic victory for China in the Middle East, where the U.S. has long wielded influence.

Afghanistan: The Biden administration on Thursday released a summary of after-action reports on the chaotic withdrawal from Afghanistan that laid blame on predecessor Donald Trump, saying “there were no signs that more time, more funds or more Americans” could have fundamentally changed the trajectory.

Biden inherited a depleted operation in Afghanistan from Trump that crippled its response, John Kirby, the National Security Council spokesman, told reporters in a press conference on Thursday.  “Transitions matter.  That’s the first lesson learned here.  And the incoming administration wasn’t afforded much of one,” Kirby said.  Biden was left with a stark choice – withdraw all U.S. forces, or resume fighting with the Taliban.

This is a total crock of s---.  The United States should have stayed with our residual force and that of our allies, to protect Kabul and give Afghan women the opportunity to go to school, and to build a better future. That was my primary issue on the withdrawal from day one, among others, including the abandonment of the translators.  Now look what the Taliban has done, Afghan women who remain once again with no hope.  What do we stand for?

Editorial / Wall Street Journal

“Americans are heading into a holiday weekend and the press is preoccupied with President Trump’s legal travails, so naturally the Biden Administration on Thursday afternoon dumped its review of the 2021 U.S. withdrawal from Afghanistan.  Americans are unlikely to fall for 12 pages of narrative gaslighting, and the buck for that dark episode stops with President Biden.

“The White House document ‘outlines the key decisions and challenges’ associated with the departure of U.S. troops in August in 2021.  Mr. Biden ‘believed the right thing for the country’ was withdrawing all U.S. forces, the White House says, even as it blames the debacle on – wait for it – Donald Trump….

“Mr. Trump did want to pull troops out, and he probably would have, but Mr. Biden didn’t run for President to affirm Mr. Trump’s policies.  Mr. Biden ran on being the adult in the White House, and he was under no obligation to oblige the Taliban, who had failed to honor their side of the deal with Mr. Trump. Many of Mr. Biden’s advisers tried to tell him as much, including U.S. military general officers and European allies, who preferred a residual force of a few thousand allied troops.

“The White House apologia contends that ‘the speed with which the Taliban took over’ showed a few thousand troops were insufficient, conveniently omitting Mr. Biden’s decisions that accelerated the country’s descent into chaos.  Mr. Biden pulled the air support and maintenance contracting Afghan troops relied on to fight, and then chided them as unwilling to sacrifice.  Political constraints on troop numbers pushed the U.S. military to shut down the airfield at Bagram Air Base, a ‘strategic unforced error,’ as a Senate report last year called it.  Afghan allies literally woke up one morning at Bagram to find U.S. troops had gone.

“More alarming than its fake history is the White House’s inability to connect the dots between the U.S. surrender in Afghanistan and increasing world disorder.  The U.S. is not more respected after surrendering to the Taliban, despite the heavy firepower the Administration deploys to make that case; ‘multiple opinion surveys.’

“You can draw a straight line between the debacle in Afghanistan and the failure to deter Vladimir Putin from invading Ukraine.  Yet the only lessons the Biden Administration learned are the wrong ones.  ‘In Ukraine,’ the report notes, ‘we decided to evacuate personnel nearly two weeks before Russia’s invasion,’ apparently unaware that this was one more signal to Mr. Putin that he could roll in without fear of a U.S. response.

“The report’s fable is that the U.S. has been freed up to focus on Russia and China: ‘It is hard to imagine’ the U.S. ‘would have been able to lead the response to these challenges as successfully’ if troops were still in Afghanistan.  But the ugly, desperate scenes in Kabul communicated to the world that America was in retreat, and the consequences of that message include Saudi doubt that the U.S. is a reliable partner and increasing aggression from Beijing in the Taiwan Strait.

“Mr. Biden’s approval rating sank into the red after the catastrophe in Kabul and has never fully recovered, and voters understand whose decisions drove the horrible images they saw on the news.  Mr. Biden’s report trumpets his ‘deliberate, intensive, rigorous and inclusive decision-making process’ in Afghanistan.

“That makes it all worse because it underscores that the problem was the final decision – that is, Joe Biden’s awful judgment.”

Finland: The main conservative party claimed victory in a parliamentary election Sunday in an extremely tight three-way race in which right-wing populists took second place, leaving Prime Minister Sanna Marin’s Social Democratic Party in third, dashing her hopes for reelection.

The center-right National Coalition Party claimed victory Sunday evening with all of the votes counted, coming out on top at 20.8%.  It was followed by right-wing populist party the Finns with 20.1%; the Social Democrats garnered 19.9%.

I’d say that’s close.  Twenty-two parties were vying for the 200 seats in the country’s parliament.

So the National Coalition Party begins talks over forming a new government, with party leader Petteri Orpo the likely new prime minister.

Orpo, the former finance minister, said the Nordic country’s solidarity with Ukraine would remain strong.

“And the message to Putin is: Go away from Ukraine because you will lose,” Orpo said.

Random Musings

--Presidential approval ratings….

Gallup: 40% approve of Biden’s job performance, 56% disapprove; 35% of independents approve (Mar. 1-23).

Rasmussen: 47% approve, 51% disapprove (April 7).

--The latest Reuters/Ipsos poll released Monday had Donald Trump with a 48% to 19% lead over Ron DeSantis among self-described Republicans, up from 44%-30% in a March 14-20 poll; this latest one conducted between March 31 and April 3, after news broke that Trump would face criminal charges related to the Stormy Daniels case.

A separate Reuters/Ipsos poll from Monday found that 51% of Americans, including 80% of Republicans, said they believed the charges against Trump are politically motivated.

---

Trump

Donald Trump pleaded not guilty Tuesday to 34 felony counts of falsifying business records. Each  of the charges carries a maximum of four years in prison, although a judge could sentence Trump to probation if he is convicted.

The charges stem from hush money payments to two women – porn star Stormy Daniels and former Playboy model Karen McDougal – meant to keep them quiet ahead of the 2016 presidential election about alleged extramarital encounters they had with Trump.  Prosecutors also allege $30,000 was paid to buy the silence of a doorman at Trump Tower who claimed Trump had a lovechild.

A criminal conviction would not prevent Trump from either running for president or from reclaiming the Oval Office.

Manhattan District Attorney Alvin Bragg is trying the case based on a novel legal theory that the records were falsified by Trump in the service of violating federal campaign finance law – a crime to which former Trump attorney Michael Cohen pleaded guilty to in August 2018.

Judge Juan Merchan set the next hearing for Dec. 4.  The trial may not get under way for a year.

At the Justice Department, Special Counsel Jack Smith has seemingly accelerated his Trump-related investigations in recent months.

Trump ignored a request from Judge Merchan to tone down ramped-up rhetoric against New York authorities and immediately went after the judge, DA Bragg and others just hours later at Mar-a-Lago. 

Trump referred to Merchan as a “Trump hating judge” and invoked his daughter, alleging she was involved in a Democrat conspiracy.

“I have a Trump-hating judge with a Trump-hating wife and family whose daughter worked for Kamala Harris and now receives money from the Biden-Harris campaign,” he said.

Don Jr., posted an article with a photo of Merchan and his daughter.

“Seems relevant…yet another connection in this hand picked democrat show trial. The BS never ends folks.  Daughter of Judge on Trump Case Worked on Biden-Harris Campaign,” Don Jr. wrote on Twitter.

At his arraignment, prosecutors presented Merchan with a series of provocative postings the former president has made in recent weeks in anticipation of his indictment.

“This defendant has made a series of threatening and escalating communications on social media and on other public remarks.  This includes irresponsible social media posts that target various individuals involved in this matter, and even their families,” Assistant District Attorney Chris Conroy said.

“His public statements have, among other things, threatened potential death and destruction, and that is a quote, and World War III, another quote, if these charges were brought and he was indicted. They have directly addressed the grand jury and disparaged witnesses who have purportedly participated in our investigation.”

Citing “significant concern” about the potential dangers of Trump’s inflammatory remarks, Conroy asked the judge to issue a protective order that would prohibit him from disseminating evidence online.

Trump’s lawyers, in response, argued that Trump had a free-speech right to express his frustration over the case.

Merchan said he didn’t agree with that interpretation, but noted he wouldn’t issue a gag order even if he was asked.  He instead asked Trump’s lawyers to appeal to their client to ensure the public’s safety.

“[Although] I’m not going to issue a gag order and not something close to a gag order, I would encourage counsel on both sides…to please speak to your witnesses,” Merchan said in court.

“Defense counsel, speak to your client and anybody else you need to, and remind them to please refrain – please refrain – from making statements that are likely to incite violence or civil unrest,” Merchan added.

Trump attorney Joe Tacopina told reporters that Trump won’t post on social media about the case.  He said “he’s committed” to that.

Hours later, Trump ignored the advice and was off and running.

Trump also said Tuesday night:

“We are a nation in decline, and now these radical left lunatics want to interfere in elections by using law enforcement,” he said.

“The only crime I have committed is to fearlessly defend our nation from those who seek to destroy it.”

Trump also hit out at those involved in other investigations into his actions and business affairs.

He urged authorities in Atlanta to “drop” a case into his efforts to overturn the 2020 election in Georgia.  Trump described the prosecutor heading the investigation as “the local racist.”

He also described Jack Smith, the special counsel appointed by the Department of Justice to investigate the attempts to subvert the 2020 presidential election and the classified documents found at Mar-a-Lago, as a “radical-left lunatic bomb-thrower.”

--Wednesday, Trump posted on Truth Social: “REPUBLICANS IN CONGRESS SHOULD DEFUND THE DOJ AND FBI UNTIL THEY COME TO THEIR SENSES.”

--Two longstanding GOP foes of Trump slammed Bragg’s case.

John Bolton, Trump’s former national security adviser, said on CNN that “as someone who very strongly does not want Donald Trump to get the Republican presidential nomination, I’m extraordinarily distressed” by the unsealed indictment.

“I think this is even weaker than I feared it would be,” he said, “and I think it’s easily subject to being dismissed or a quick acquittal for Trump.”

Sen. Mitt Romney – an opponent of Trump since the real estate mogul launched his 2016 presidential campaign – issued a statement saying: “I believe President Trump’s character and conduct make him unfit for office.”

“Even so, I believe the New York prosecutor has stretched to reach felony criminal charges in order to fit a political agenda,” Romney added.

Former Ohio Republican Gov. John Kasich said Trump’s indictment and arraignment means “there’s no way” he can go back to the White House.

If the Manhattan case stood alone, Kasich said Republican voters “could put up” with Trump’s indictment, but combined with the ongoing Georgia grand jury investigation into Trump’s efforts to overturn the 2020 election and the Justice Department’s probe into his handling of classified documents, “that’s just too much water for him to take,” Kasich told USA TODAY.

Kasich added that among Trump’s own supporters, they could be “exhausted” from Trump’s constant legal troubles.

“I think exhaustion is sort of like water in a boat. It begins to overflow the boat and begins to sink (Trump),” Kasich said.

--Daniel Henninger / Wall Street Journal…on the indictment…

“Everything the critics are saying about it is true.  It’s a flawed interpretation of campaign-finance law, it’s historically unprecedented, and it smacks of political persecution.  Democrats don’t care. There is also this inconvenient truth for Republicans: Mr. Trump lost his 2020 reelection because too many independent and suburban voters abandoned him.  Independents did it again in the midterm elections, stepping away from Trump-backed candidates.

“There is nothing deranged about what is going on now.  The only political reality worth daily focus is that the Democrats are locked on one goal: making Mr. Trump the Republicans’ presidential nominee.  In that bloodless calculation, his candidacy is their best path to holding the White House – and then remaking American politics and culture for at least a generation.

“They want to expand conservative sympathy for Mr. Trump. They want to encourage the conclusion of some on the right that this indictment guarantees Mr. Trump the GOP nomination, ensuring that the same voters who defeated him in 2020 will do so again. And they will.

“Even if the Bragg indictment fades from the news, Democrats know Trump will be Trump for the next 18 months. Which is why Joe Biden is standing back, letting it rip, putting off his own announcement until the fall.  To keep the embers burning, Mr. Biden will insert, ‘MAGA Republicans’ in every speech, just as Barack Obama ceaselessly intoned ‘the wealthiest.’

“The Trumpians in a white heat this week over the persecution of their guy won’t want to hear this, but there is a surer path to revenge: Nominate someone other than Donald Trump.

“He can’t win.  But another nominee almost certainly can defeat the unpopular Mr. Biden, and even more so after what just happened.  Independents will never move off their decision to shun Mr. Trump personally, but surely many are acutely discomfited to see the entire U.S. legal system relentlessly bent to target one person.

“An alternative GOP nominee, with no stake in the previous six-year political gang war, would run on the unsettled economy, historic inflation, ignored crime (the nation’s other Alvin Braggs will let that rip), border chaos, a dangerously confused culture, and as of this week the Democrats’ willingness to dumb down the rule of law by indicting Donald Trump in the progressive playground of Manhattan.”

--According to a new CNN Poll conducted by SSRS following the news that a New York grand jury voted to indict Trump, 60% of Americans approve of the indictment.  About three-quarters of Americans say politics played at least some role in the decision, including 52% who said it played a major role.

Independents largely line up in support of the indictment – 62% approve of it and 38% disapprove.  Democrats are near universal in their support for the indictment (94% approve, including 71% who strongly approve), with Republicans less unified in opposition (79% disapprove, with 54% strongly disapproving).

--Former Arkansas Gov. Asa Hutchinson has thrown his hat in the ring for the Republican nomination for president.  If I had a choice between Nikki Haley, Mike Pence, Ron DeSantis and Asa Hutchinson, as of today I’d go with Hutchinson.  He’s a class act, experienced in both Congress and in running a state, two terms as governor, and would be a refreshing change that would win back independents, particularly suburban women.

Hutchinson told ABC News that following the indictment, Trump should terminate his campaign.

“I mean, first of all, the office is more important than any individual person.  And so for the sake of the office of the presidency, I do think that’s too much of a sideshow and distraction and he needs to be able to concentrate on his due process and there is a presumption of innocence,” said Hutchinson.

More broadly, Hutchinson told ABC News prior to the indictment last weekend:

“I’m convinced that people want leaders that appeal to the best of America, and not simply appeal to our worst instincts.”

On his underdog status:

“This is one of the most unpredictable political environments that I’ve seen in my lifetime,” he said.  “So my message of experience, of consistent conservatism, of hope for our future and solving problems that face Americans, I think that resonates.”

--Mike Pence will not appeal a federal court ruling ordering him to testify in a special counsel probe into efforts by Donald Trump and his allies to subvert the 2020 election, teeing up a historic moment in both the special counsel’s investigation and for the presidency.

Pence is poised to recount for the first time under oath his direct conversations with Trump leading up to the January 6, 2021, insurrection, as Trump pressured him unsuccessfully to block the 2020 election’s results.

But Pence doesn’t have to be that forthcoming.  We’ll see.

--Meanwhile, when it comes to Joe Biden….

George Will / Washington Post

“Largely because of the nation’s generally dyspeptic mood, Biden’s job approval is the second lowest of any president at this point in a first term in more than 30 years.   (Trump’s was lower.)  It is unlikely to suddenly improve.  The increasing improbability of a second Trump term erases Biden’s principal rationale for seeking reelection.  This gives him an opportunity to perform something vanishingly rare: a nation-healing act of statesmanship.

“Declining to run again would permanently elevate Biden’s standing with a nation eager for the torch to be passed to a new generation.  And it would spare his reputation the stain of irresponsibility if, running with a manifestly unqualified vice president, he tries to be president into the second half of his ninth decade.

“John McCain’s mordant humor made him say that it is always darkest before it turns pitch black.  However, it is possible that this acutely embarrassing moment in U.S. history actually is rock bottom, with a bounce coming.”

--In her first interview since Trump’s indictment, Stormy Daniels told The Times of London, Donald Trump “is no longer untouchable… This pussy grabbed back,” referring to the now infamous Trump quote “grab ‘em by the pussy,” made during his “Access Hollywood” incident.

Daniels told the Times she has noticed that people are reacting differently to the indictment than they did to the initial news reports years ago about her sexual encounter with Trump.

“The first time it was like gold digger, slut, whore – you know, liar, whatever,” Daniels said.  “And this time it’s like, ‘I’m gonna murder you,’” she said.

And that’s America in 2023.  What a sad commentary.

---

--Chicago elected Brandon Johnson in the mayoral runoff, 51.4% to 48.6% over Paul Vallas.  Johnson, the Cook County commissioner and progressive who plans to raise taxes on major corporations to boost the city’s revenue; Vallas, a former head of Chicago Public Schools who was backed by financial executives and made crime the focus of his campaign.  Both are Democrats.

Johnson, 47, garnered support from the influential Chicago Teachers Union.

Vallas was backed by executives at Citadel, the mammoth hedge fund, and the police, as he touted taking a hard line on minor offenses.

I suspect Johnson will be yet another mess.

--In an interview with Leslie Stahl of “60 Minutes,” Rep. Marjorie Taylor Greene (R-Ga.) doubled down on calling Democrats “pedophiles,” blasted establishment Republicans and demanded that the U.S. stop the flow of aid money to Ukraine.

A lot of folks are wondering why the hell “60 Minutes” gave this nutcase a platform?

In one of the more shocking moments, Taylor Greene responded “I would definitely say so” when Stahl pressed her on previous comments she has made about Democrats being “the party of pedophiles.”

“They support grooming children,” MTG said, without providing evidence.

“Stahl interviewed Greene as if she were just another someone, unusual member of Congress with some out-there ideas,” The Atlantic writer Tom Nichols tweeted.  “Showed MTG some of her worst stuff, and MTG just waved it away, and Stahl let it all slide.”

--A Delaware judge ruled that a jury should decide the fate of a defamation case against Fox News for airing unsupported claims that a voting-machine company was involved in election fraud during the 2020 presidential election.

Superior Court Judge Eric Davis rejected Fox News’ arguments that it should be declared the victor before trial because its conduct was protected by the First Amendment.  The judge said the plaintiff, Dominion Voting Systems, had established that the network in fact aired false statements that the company helped rig the election for Joe Biden.

“The evidence developed in this civil proceeding demonstrates that [it] is CRYSTAL clear that none of the statements relating to Dominion about the 2020 election are true,” Judge Davis wrote.

The judge said Dominion would need to prove to a jury that Fox News knew it was airing false statements or acted with reckless disregard for the truth, and that the company suffered damages as a result.

The trial is scheduled to begin on April 17.  This is going to be delicious for some of us.

--In a critical race for a seat on the Wisconsin Supreme Court, the liberal candidate, Janet Protasiewicz, defeated her Republican challenger by a staggering 11 points in an otherwise evenly divided battleground state, a sign just how much last summer’s Supreme Court decision overturning Roe v. Wade has transformed American politics.

Judge Protasiewicz all but promised voters that if they elected her, the court’s new 4-to-3 liberal majority would reverse Wisconsin’s 1849 abortion ban and overturn the state’s famously gerrymandered, Republican-friendly legislative maps.

--Back in 2004, the Los Angeles Times disclosed that Supreme Court Justice Clarence Thomas had accepted expensive gifts and private plane trips paid for by Harlan Crow, a wealthy Texas real estate investor and a prominent Republican donor.

Thomas refused to comment on the article back then, but as the Times wrote on Thursday, “it had an impact; Thomas appears to have continued accepting free trips from his wealthy friend. But he stopped disclosing them.”

And so it was that on Thursday, ProPublica reported that Thomas and his wife, Ginni, enjoyed lavish trips across the globe in recent years at Crow’s expense, including island hopping off Indonesia aboard a 162-foot “superyacht staffed by a coterie of attendants and a private chef.”

A stark contrast from the way Thomas often speaks in public about his summer travels, describing driving a blue motor home and staying in campgrounds.

The trips, including stays at Crow’s ranch in East Texas and his resort in the Adirondacks, have not been disclosed.

In a statement today, Justice Thomas said he was advised the type of “personal hospitality” extended to him by Crow was not reportable.  He also said he has always sought to comply with disclosure guidelines.

Basically, Thomas said he was advised that since Crow (or other personal friends) didn’t have business before the Court, he didn’t have to do anything with it.

--The Tennessee statehouse has expelled two Democratic politicians who led a gun control protest that halted legislative proceedings last week.

In a rare move, the Republican-controlled House of Representatives voted 72-25 to expel Justin Jones and 69-26 to remove Justin Pearson.

A third Democratic lawmaker, Gloria Johnson, who also joined the protest, was not expelled.  Johnson is white, the other two are black.

Jones and Pearson used a megaphone and banged on the House lectern as they made rousing speeches and addressed protesters who crowded around the chamber’s public viewing platform.

The protests were related to the March 27 attack at Nashville’s Covenant School that killed six people, including three children.

Critics of the expulsions point out there are all kinds of remedies short of such a move, such as censure, or the loss of committee assignments.

Tennessee Republicans just turned Jones and Pearson into All-Stars.  Dumb, dumb, dumb.

--Unfortunately, I was right to be concerned with the weather as I went to post last week.  At least thirty-two died in the tornadoes that later tore through the South and Midwest.

As of today, there were 68 fatalities nationwide in tornadoes this year, which is near the average for an entire year.  We also have had nearly double the number of tornadoes vs. an average for this time of year, with the rest of volatile April to come.

[The 415 tornadoes in the first quarter is the busiest start to the year on record.  The average through the end of April between 1991-2020 is 337.9.]

--California’s reservoirs are now at or above their historical average levels, while the state has the deepest snowpack recorded in more than 70 years, officials said Monday.  Mammoth Mountain smashed its record for snowiest season, over 700 inches at the main lodge and 882 inches at the summit.

Groundwater has begun to recharge after years of overpumping.  Hillsides have exploded with California wildflowers.  Moisture-starved trees, including the state’s signature pines and mighty oaks, are on the rebound.

Southern California’s air is also a lot cleaner, the cleanest since fine particulate monitoring began in 1999.

The state’s wildlife is rebounding too.

But now it’s all about the snowmelt, and serious flooding concerns, including in Los Angeles, where the city’s network of aqueducts could be overwhelmed.

And in the Central Valley, Tulare Lake has resurfaced.  As the Los Angeles Times reported, “In less than three weeks, a parched expanse of 30 square miles has been transformed by furious storms into a vast and rising sea.”

And this has been a slow-motion disaster for some farmers and residents in Kings County, home to 152,000 residents and a $2 billion agricultural industry that sends cotton, tomatoes, safflower, pistachios, milk and more around the planet.  “The wider and deeper Tulare Lake gets, the greater the risk that entire harvests will be lost, homes will be submerged and businesses will go under.”

The lake could remain for two years or longer, and “The Big Melt” won’t really get started until temps rise not just into the 80s, but 90s.

--Paris held a referendum last Sunday of some significance. While less than 8 percent of those eligible to vote actually cast ballots, 89 percent of those who did backed a ban on rental electric scooters from the streets of the French capital, reflecting exhaustion with a public-transit alternative that was once seen as convenient and climate-friendly, but is now largely regarded as dangerous and environmentally questionable.

A rising number of Parisians have been injured and killed both on e-scooters or as a result of getting hit by them.

Privately-owned vehicles were not part of the vote.

--A majority of Americans don’t think a college degree is worth the cost, according to a new Wall Street Journal-NORC poll.  Fifty-six percent of Americans think earning a four-year degree is a bad bet compared with 42% who retain faith in the credential.

Skepticism is strongest among people ages 18-34, and people with college degrees are among those whose opinions have soured the most, portending a profound shift for higher education in the years ahead.

In 2013, 53% of Americans were bullish on college, and 40% weren’t.  In 2017, 49% of Americans thought a four-year degree would lead to good jobs and higher earnings, compared with 47% who didn’t.

--NASA and the Canadian Space Agency selected four astronauts to fly around the moon on a mission that would take people deep into space for the first time in decades.

Americans Christina Koch, Victor Glover and Reid Wiseman, and Canadian Jeremy Hansen, are the quartet chosen for the flight, officials from the two agencies announced this week.  [Hansen responsible for bringing the first-rate Canadian beer on board.]

For Artemis II, the roughly 10-day mission planned for late 2024, the astronauts would fly past the moon after a fiery launch, traveling 6,400 miles beyond its far side before speeding back to earth.

Artemis is NASA’s multiyear exploration program that aims to return astronauts to the moon, establish a long-term presence there and push on to Mars.

NASA hopes to land men on the moon in 2025, in conjunction with SpaceX.

The key for Artemis II is to test out the crew module on the Orion spacecraft; its life-support systems and ability to protect those on the flight from radiation, according to NASA.

---

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

Pray for Ukraine.

God bless America.

---

Gold $2023
Oil $80.46

Regular Gas: $3.58; Diesel: $4.20 [$4.15 / $5.07 yr. ago]

Returns for the week 4/3-4/7

Dow Jones  +0.6%  [33485]
S&P 500  -0.1%  [4105]
S&P MidCap N/A
Russell 2000 N/A
Nasdaq  -1.1%  [12087]

Returns for the period 1/1/23-4/7/23

Dow Jones +1.0%
S&P 500  +6.9%
S&P MidCap  +0.7%
Russell 2000  -0.4%
Nasdaq  +15.5%

Bulls 48.6
Bears 25.0

Hang in there.

Happy Easter and Passover!

Brian Trumbore

---