Week in Review

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Week in Review

09/03/2022

For the week 8/29-9/2

[Posted 8:30 PM ET, Friday]

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Special thanks to W.W. for his ongoing support.

Edition 1,220

It’s the unofficial end of summer and I hope you had a good one, with limited travel delays if you were flying around.  Me?  I did zippo, nada, and loved it.  I didn’t go anywhere (after a very stressful summer of 2021 for personal reasons), though I exercised a lot outside and that’s exactly what I wanted to do.  And I watched my New York Mets…which has been rewarding thus far.

I cover all the big events of the week below, including President Biden’s speech and the still-developing fiasco at Mar-a-Lago.  Donald Trump is in deep trouble, but any formal action by the Justice Department will not come until after the midterms (ditto any filing of papers against Hunter Biden)…at least that’s my guess.

Should there be an indictment of the former president, a significant segment of the country will go ballistic (hopefully not too much literally so), Christmas may kind of suck as a result, and at about the same time I will be winding it down when it comes to WIR…at least in its current format. 

For now, I was struck by two comments I heard regarding the war in Ukraine.

One was from a CNBC host who I respect suggesting: “Are we going to wake up one morning and see the situation in Ukraine has changed for the better?”

No, I mused.  Unless, as a learned friend of mine said, we find out Vlad the Impaler has been, err, impaled himself. Putin is never going to just pull back.  That’s when a tactical nuke could be dropped on Kyiv, or a move against the Baltics (think, again, Kaliningrad).

The other comment was from former Trump butt-boy and retired Army Col. Doug MacGregor, who told Tucker Carlson on Fox News: “End the war in Ukraine and lift the sanctions on Russia.”

That’s the Trumpist view.  Ukraine is no interest of ours and to ‘save’ Europe, just let Vlad have his way, not just in Ukraine, but inevitably elsewhere.

But as General Anthony McAuliffe replied to the Germans, who asked for his surrender during the Battle of the Bulge… “Nuts!”

This week in Ukraine….

--Armed with sophisticated western-supplied weapons, Ukraine began a fresh push this week to reclaim territory in the south, with President Volodymyr Zelensky urging Russian soldiers to flee for their lives, Zelensky saying Ukraine’s forces were on the offensive throughout the east and south.

Monday night in his address, Zelensky said: “If they want to survive, it’s time for the Russian military to run away. Go home.  Ukraine is taking back its own (land).”

“Active military engagement is now happening along the whole front line: in the south, in the Kharkiv region, in Donbas,” Zelensky said in his nightly address on Tuesday.

Russia captured large tracts of southern Ukraine near the Black Sea coast in the early weeks of the six-month-old war, including in the Kherson region (whose capital is also called Kherson), which lies north of the Russian-annexed Crimean Peninsula.

Ukraine sees recapturing the region as crucial to preventing Russia from pushing further west, which could eventually cut off its access to the Black Sea.

But Kyiv has released few details of the fighting.  Unverified reports and images on social media suggest Ukrainian forces may have taken back some villages and destroyed some Russian targets in the south.

But Russia’s defense ministry claims its troops routed Ukrainian forces, with “1,200” dead while losing “139 tanks, armored vehicles and trucks,” adding that air defense units had shot down dozens of missiles near Kherson.

Kremlin spokesman Dmitry Peskov said on Tuesday that Russia is methodically pressing on with its plans.  “All of our goals will be reached,” he said.

--Which brings us to the issue that scares the world…the status of the Zaporizhzhia nuclear plant in Ukraine’s south that is under Russian control, though manned by Ukrainian staff.  Russia captured it in March and it’s been a hotspot since with both sides trading blame for shelling in the area.

Ukraine has accused Russia of deliberately shelling corridors to make it unsafe for IAEA inspectors to visit the plant.

President Zelensky said: “The situation at the Zaporizhzhia nuclear power plant and in Enerhodar and surrounding areas remains extremely dangerous.  The risk of a radiation disaster due to Russian actions does not decrease for an hour.”

A mission from the International Atomic Energy Agency (IAEA), led by its chief, Rafael Grossi, arrived in Kyiv on Monday, with a nuclear watchdog team setting off for Zaporizhzhia on Wednesday.

Russian-installed officials in the area near the power station suggested the visit might last only one day, while IAEA and Ukrainian officials suggested it would last longer.

“The mission will take a few days.  If we are able to establish a permanent presence, or a continued presence, then it’s going to be prolonged.  But this first segment is going to take a few days,” Grossi told reporters in Zaporizhzhia.  “We have a very important task there to perform – to assess the real situation there, to help stabilize the situation as much as we can,” he said, adding the IAEA team had guarantees from both Russia and Ukraine enabling it to enter the war zone.

So Thursday, Grossi visited the plant with his team for several hours, with fighting in the immediate area, and he said he would continue to worry until the situation at Zaporizhzhia has been stabilized.

“We are not going anywhere. The IAEA is now there, it is at the plant and it is not moving – it’s going to stay there,” Grossi told reporters.  “We’re going to have a continued presence there at the plant with some of my experts.”

Those experts, he said, would provide what he called an impartial neutral technically sound assessment of what was happening on the ground.  “I worried, I worry and I will continue to be worried about the plant until we have a situation which is more stable, which is more predictable,” he said.

There have been varying reports as to how many IAEA inspectors will remain on site, but Grossi said five.

--Russia completely halted gas supplies to Europe via a major pipeline, saying repairs are needed.  The Russian state-owned energy giant, Gazprom, said the restrictions on the Nord Stream 1 pipeline would last until the end of the week.

Nord Stream 1 stretches 745 miles under the Baltic Sea from the Russian coast near St. Petersburgh to northeastern Germany.

The pipeline, which opened in 2011, was shut down for 10 days in July – again for repairs, according to Russia – and has recently been operating at just 20% capacity because of what Russia describes as faulty equipment.

France accused Moscow of using energy supplies as “a weapon of war.”

Russian ex-president Dmitry Medvedev said Russia would turn off the gas supply to Europe if Brussels pushes ahead with a price cap on Russian gas.  Responding to comments by European Commission head Ursula von der Leyen about putting a ceiling on the price Europe pays for Russian gas, Medvedev wrote on the Telegram messaging app: “There will simply be no Russian gas in Europe.”

Friday, Russia said gas deliveries via Nord Stream 1 remained at risk over operational issues.  Deliveries are due to resume on Saturday.

Gazprom Chief Executive Alexei Miller said on Wednesday that sanctions meant Siemens Energy, a pipeline equipment supplier, could not carry out regular maintenance.  Siemens, which normally services Nord Stream 1 turbines, said it was not involved in maintenance work now being conducted by Gazprom.

Then suddenly Friday afternoon, Russia scrapped the Saturday deadline to resume gas flows via Nord Stream 1, after saying it discovered a fault during maintenance, deepening Europe’s difficulties in securing fuel for winter.

Gazprom said it could no longer provide a timeframe for restarting deliveries.  The announcement created chaos in the financial markets.

--Russian state prosecutors on Tuesday requested a 24-year prison sentence for former journalist Ivan Safronov in his trial for treason, state news agency Tass quoted Moscow City Court as saying.

Safronov covered military affairs for Russia newspapers before becoming an aide to the head of the space agency two months before his arrest in July 2020. He denies accusations of passing military secrets about Russian arms sales in the Middle East and Africa to the Czech Republic, a NATO member, while he worked as a reporter in 2017, calling them “a complete travesty of justice and common sense.”

Safronov said all the information he used or wrote of on a Czech journalist’s website was based on open sources.  His detention sent a chill through Russia’s media landscape, where controls were already strict and have been tightened further since Russia invaded Ukraine in February.

--Russia’s FSB security service on Monday named another Ukrainian it said was part of a team that assassinated Darya Dugina, the daughter of ultra-nationalist Alexander Dugin, in a car bomb a week earlier.  Two days after the 29-year-old’s murder, the FSB said it had solved the case, naming a Ukrainian woman, who it said trailed Dugina for weeks, planted the bomb, and then fled to Estonia – all with Kyiv’s backing.

Ukraine has denied involvement

On Monday, the FSB said it had identified what it called another member of a Ukrainian “sabotage and terrorist group” which it said had plotted and carried out the killing.

Again, this is all garbage.

--In a somewhat similar story, potentially, the chairman of Russia’s largest private oil company, Lukoil, which criticized Russia’s military operation in Ukraine, fell out of a hospital window and died, Russian news reports said Thursday.

The circumstances of Lukoil chairman Ravil Maganov’s death were unclear.  Tass cited an unnamed law enforcement source as saying Maganov died by suicide while being treated at Central Clinical Hospital in Moscow.  The report said he had been admitted for a heart attack and was taking antidepressants.

A Lukoil statement Thursday said Maganov “passed away after a severe illness” but did not give details.

Lukoil was one of the few Russian companies to publicly censure Russia’s military operation in Ukraine, calling in March for the “immediate cessation of the armed conflict.”

Maganov is the latest in a series of Russian businessmen, particularly in the energy industry, who have died unexpectedly in unclear circumstances this year.

His body was found on the grounds of the hospital, where Russia’s political and business elite are often treated, the reports said.

Interesting, isn’t it?

--Millions of tons of food from previous harvests in Ukraine still needs to be cleared to make room in silos for the next one, the UN coordinator for a grains deal said last weekend.  More than 1 million tons of gains and other foods have so far been exported under the accord brokered by the UN and Turkey.

--European Union foreign ministers agreed on Wednesday to fully suspend a visa facilitation agreement with Russia, making it harder and more costly for Russian citizens to enter the EU, the bloc’s foreign policy chief Josep Borell said.

Diplomats said the EU ministers could not agree immediately on a blanket ban of travel visas for Russians as member states were split on the issue. Borell said there had been a substantial increase in border crossings from Russia into neighboring states since mid-July.  “This has become a security risk for these neighboring states,” he added.  “In addition to that, we have seen many Russians traveling for leisure and shopping as if no war was raging in Ukraine.”

--Russian Foreign Minister Sergei Lavrov warned Moldova that threatening the security of Russian troops in the breakaway region of Transdniestria risked triggering military confrontation with Moscow.  Russia has stationed peacekeeping troops in Transdniestria since the early 1990s, when an armed conflict saw pro-Russian separatists wrest most of the region from Moldovan control.

Russia says its army is there to maintain peace and stability, but Moldova wants Moscow to withdraw its forces.  Reminder: Moldova borders Ukraine.

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Biden Agenda

In a rare primetime speech that was not covered by the networks Thursday night, President Joe Biden, in a speech from Philadelphia’s Independence Hall, said equality and democracy were under assault.

The president said the Republican Party was dominated, driven and intimidated by Donald Trump, and that represented a threat to the country.

Biden said MAGA Republicans did not respect the Constitution of the United States and were a “clear and present danger to our democracy.”

He said democracy could not survive when one side believed there were only two outcomes to an election – “either they win or they were cheated.”

“MAGA forces are determined to take this country backwards. Backwards to an America where there is no right to choose, no right to privacy, no right to contraception, no right to marry who you love.”

“History tells us that blind loyalty to a single leader and a willingness to engage in political violence is fatal to democracy,” Biden said.

“For a long time,” he said, “we’ve reassured ourselves that American democracy is guaranteed. But it is not.  We have to defend it.  Protect it.  Stand up for it. Each and every one of us.”

“Donald Trump and the MAGA Republicans represent an extremism that threatens the very foundation of our republic,” Biden said.

For his part, Thursday, Trump suggested that if re-elected to the White House he would pardon and provide an official apology to those convicted for involvement in the attack on the Capitol on January 6th.

“I mean full pardons with an apology to many,” he told a conservative radio host.  “I will be looking very, very strongly about pardons, full pardons.”

Trump also said he was giving financial help to some of those involved in Jan. 6.

“I am financially supporting people that are incredible and they were in my office actually two days ago.  It’s very much on my mind.  It’s a disgrace what they’ve done to them,” he said.

I’m biting my tongue.

House Republican leader Kevin McCarthy said it is the Democratic president, not Republicans, trying to divide Americans. “In the past two years, Joe Biden has launched an assault on the soul of America, on its people, on its laws, on its most sacred values.”

John Podhoretz / New York Post

“Joe Biden has become America’s leading troll – and he’s trolling Donald Trump.  The president’s supposedly grand speech in ‘defense of democracy’ under attack by ‘Trump and the MAGA Republicans’ was hardly a visionary call to renew our commitment to the Republic.

“If it had been the highfalutin speech we were promised, Biden wouldn’t have spent ludicrous time praising himself for things like prescription-drug costs and burn-pit health coverage. No, this speech was nakedly, even comically, designed not to elevate but to offend – to poke and taunt and push his predecessor and his predecessor’s camp followers and acolytes into firing back about how evil Biden is.

“Biden wants Trump angry, and loud, and silencing every other voice but his own.  It’s not an accident that Biden’s rise and the Democratic enthusiasm surge has come in tandem with Trump once again at the top of the American news agenda over the past six weeks. Biden knows he won in 2020 by successfully making the election a referendum on Trump.  Nothing would make him happier than having the 2022 election continue in that vein.

“For that to happen, he needs Trump and his Trumpies to be seduced into yelling and screaming and tweeting and arguing that the 2020 election needs to be re-run and that people who stormed the Capitol need to be apologized to and whatever other damn-fool argle-bargle comes out of their mouths and fingers.

“That ludicrous blather excites them in unseemly ways even as it scares other Republicans – those who just want to have a normal midterm in which the party in power is made to answer for the condition of a country in which seven-in-ten people say we’re on the wrong track – into silence and toadiness.

“It also reminds the independents who voted for Trump in 2016 and then ran the hell away from him in 2018 and 2020 why they ran….

“It also inflames Democrats who might otherwise find voting in the midterms a depressing prospect at a time of near double-digit inflation, a worsening border crisis, and rising crime.  Biden needs Democrats fired up.

“And nothing fires them up like getting a chance to slam Trump.  If the president can make Democrats think a vote in November 2022 is a vote against Trump he can eliminate the enthusiasm gap between the parties (which almost always favors the one out of power), reverse political gravity, and win a most unexpected triumph.

“Trump has said forever that his greatest political lesson came from Roy Cohn – never allow an attack to go unanswered.  That’s exactly what Biden is counting on.

“And that’s the real reason he stood in front of Independence Hall and pretended to be the great defender of democracy he has no right to claim to be.  This is the hypocrite who said in January 2022 that he ‘easily’ believed the 2022 election ‘could be illegitimate.’

“This is the hypocrite who, in June 2021, described the legislation that had passed and been signed into law in the state of Georgia through a proper constitutional process – the very constitutional means of self-government he praised to the skies at the beginning of his speech – as ‘Jim Crow 2.0.’

“This is the hypocrite who has never denied Stacey Abrams’ preposterous claim that she was the rightful winner of the Georgia governorship in 2018.

“So spare us your preposterous pieties, Joe Biden. Still, you do earn cynical snaps when it comes to the sheer audacity of your transparent trolling.”

--The Army said the military is now conducting “an ammunitions industrial base deep dive” to determine how to support Ukraine while protecting “our own supply needs.”  The Army said it also asked Capitol Hill for $500 million a year in upgrade efforts for the Army’s ammunition plants.

Chairman of the Joint Chiefs of Staff Army Gen. Mark Milley has been conducting monthly reviews of the U.S. arsenal to determine whether the readiness levels are still appropriate given the needs for the ammunition in Ukraine.

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Wall Street and the Economy

We had bunch of economic news for the U.S. economy this week, capped off by the August jobs report today…315,000 added, a little above consensus, and vs. a revised 526,000 for July, the unemployment rate rising to 3.7% from 3.5% (more Americans came off the sidelines to look for jobs), while average hourly earnings at 0.3% were a tick below forecast, and up 5.2% year-over-year, which is still negative on a real basis when considering the impact of inflation.

On the manufacturing front, the ISM figure for August was 52.8, same as July’s reading (50 the dividing line between growth and contraction), with the closely followed Chicago purchasing managers index for the month at 52.2 vs. 52.1 prior.

July readings on construction and factory orders were both down and below forecast…-0.4% and -1.0%, respectively.

And the S&P CoreLogic Case-Shiller home price index for June showed the 20-city index rose 0.4% over May, and 18.6% from a year ago, which was down from May’s pace of 20.5%, which is significant, given all the other trends in housing.

*Freddie Mac’s weekly 30-year fixed rate mortgage is at 5.66%, up from 4.99% a month ago (and a peak of 5.81% in June).  It’s hurting prospective buyers.  The Mortgage News Daily rate is 6.23% for a 30-Yr FRM.

We were at 3.22% at the start of the year.

The Atlanta Fed’s GDPNow barometer for third-quarter growth is up to 2.6%.

But of course the key is the Federal Reserve and its upcoming Open Market Committee, Sept. 20-21, where Chair Jerome Powell and his band of merry pranksters will be hiking the benchmark funds rate further…50 or 75 basis points.

Ahead of that, the Fed will be scrutinizing critical inflation data for August consumer and producer prices that will be released Sept. 13 and 14.

This week, Federal Reserve Bank of New York President John Williams said that combating high inflation is likely to require lifting the central bank’s short-term rate above 3.50% (from its current 2.25%-2.50%) and holding it at that level through next year.

‘Holding through next year’ is the new mantra among Fed governors, after the stock market had rallied this summer on the belief the Fed would ‘pivot’ and begin lowering rates in 2023.

“Our focus is on getting inflation back down to 2%,” and the current level of price pressures is “far too high,” Williams said in an interview with the Wall Street Journal.

To reduce inflation amid a strong labor market, Williams said the Fed will very likely need to raise rates high enough to slow economic activity.  To do that, Williams added, interest rates will need to rise above the inflation rate, which he said he expects to fall to between 2.5% and 3% next year.

“We’re still quite a ways from that, and to me, that’s one of the benchmarks,” said Williams.  “We need to get the interest rate, relative to where inflation is expected to be over the next year, into a positive space and probably even higher.”

Europe and Asia

The big story in the eurozone is the inflation rate, as well as a slowdown, with Eurostat releasing a flash estimate for August that shows prices in the euro area rose at an annual rate of 9.1%, vs. 8.9% in July and 3% a year earlier, the highest such rate since records began in early 1997.  Energy was the huge culprit, up an annualized 38.3%.  If you take out energy and food, you have a core rate of 5.5% vs. 5.1% in July and 1.6% last year, with the European Central Bank’s target at 2%.

Annualized flash rates of inflation:

Germany 8.8%, France 6.5%, Italy 9.0%, Spain 10.3%, Ireland 8.9%, Netherlands 13.6%!  The Baltics (Estonia, Latvia, Lithuania) all have rates of 20.8%+.

July industrial producer prices were up by 4.0% in the eurozone month over month, and up a whopping 37.9% from July 2021.

Irish public sector workers were offered a 6.5% pay rise over the next two years on Tuesday as the government and trade unions averted the risk of strike action for now.  But as you can see, this is still short of matching the rate of inflation.  Just an example of the issues faced across the continent…and across the pond here in the U.S.

And then you had Electric Ireland, the State’s largest energy retailer, raising its standard household electricity and gas prices by 26.7 percent and 37.5 percent, respectively, from October 1st.

As in the increases will add around $450 a year to the average customer’s electric bill and $515 to their gas bill.  This is significant cash.  Not good.

The company said, “It is with considerable reluctance that we are increasing electricity and gas prices again for our customers, which is necessary given the continuing increases in wholesale energy prices, particularly gas.”

S&P Global released the final eurozone manufacturing PMI number for August and it came in at 49.6, a 26-month low.

Germany 49.1 (26-mo. low), France 50.6, Italy 48.0 (26-mo. low), Spain 49.9, Ireland 51.1, Netherlands 52.6, Greece 46.8.

The August figure in the UK was down to 47.3 from 52.1, the steepest contraction since May 2020.

Chris Williamson / S&P Global

“The euro area’s beleaguered manufacturers reported a further steep drop in production in August, meaning output has now fallen for three successive months to add to the likelihood of GDP falling in the third quarter.  Forward-looking indicators suggest that the downturn is likely to intensify – potentially markedly – in coming months, meaning recession risks have risen.

“Falling sales have not only led increasing numbers of factories to cut production, but have also meant warehouses are filling with unsold stock to a degree unprecedented in the survey’s 25-year history.  Similarly, raw material inventories are accumulating due to the sudden and unexpected drop in production volumes.

“Weak demand and efforts to reduce high inventory levels are therefore combining to drive production lower in the months ahead….

“Some good news on inflation is provided by an easing in rates of increase for both factory input costs and selling prices, linked to weakened demand and fewer supply chain issues.  However, the rate of inflation signaled remains elevated by historical standards, thanks principally to energy, the cost and supply of which presents a major unknown for the outlook for both production and inflation in the months ahead.”

Eurostat reported the July unemployment rate for the euro area was 6.6%, down from 6.7% in June and 7.7% July 2021.

Germany 2.9%, France 7.5%, Italy 7.9%, Spain 12.6%, Ireland 4.2%, Netherlands 3.6%.

If you were traveling by train in the Netherlands as a tourist this week (or regular passenger), you were faced with a strike across the country, Tuesday, that brought trains to a halt as a wage dispute escalated.  Look at the inflation rate there.

Britain: We should learn Monday whether Liz Truss has been tabbed to replace Boris Johnson as Conservative Party leader and prime minister.

Turning to Asia…China’s official government PMI for August manufacturing was 49.4 vs. 49.0 prior, with the service sector reading at 52.6 vs. 53.8.  Caixin’s private manufacturing figure for the month was 49.5 vs. 50.4.

Separately, China’s surveyed jobless rate for people aged 16 to 24 – which includes most high school and college graduates – has been rising sharply this year as China has intensified lockdowns and other measures.  And so the youth unemployment rate has risen from 15.3 percent in January to 19.9 percent in July, according to the National Bureau of Statistics.

One more.  Hong Kong’s Peak Tram reopened, which I took note of; this being one of my favorite tourist attractions.  Picture, it used to draw over six million visitors annually before Covid-19.  The views at the top are spectacular, there’s a very nice restaurant I would always plan a lunch around, and just a cool experience.

But get this.  Hong Kong, which still has severe Covid restrictions for overseas visitors, had 134,000 tourists in the past year, vs. 65 million in 2018.  Imagine the impact on hotels, restaurants, and the like.

Japan’s August PMI for manufacturing fell to 51.5 vs. 52.1 in July, so still growth.

July industrial production fell 1.8% year-over-year; July retail sales rose 2.4% Y/Y.  The July unemployment rate was 2.6%.

South Korea’s August manufacturing PMI was 47.6 vs. 49.8, still contraction mode, ditto Taiwan, way down to 42.7, as a deterioration in demand continued.

Street Bytes

--Stocks fell a third consecutive week, with the Dow Jones losing 3.0% to 31318, the S&P 500 3.3%, and Nasdaq 4.2%.  The S&P and Nasdaq are down 8% and 11% over the three-week period, respectively.  Fed fears continue to dominate, and it doesn’t help that more than a few corporations are warning their future results may not be so rosy.  Today, the issue was a late report on gas supplies to Europe and a potential shutdown of same, as covered above.

The month of August sucked…the Dow -4.1%, S&P -4.2% and Nasdaq -4.6%.

--U.S. Treasury Yields

6-mo. 3.31%  2-yr. 3.39%  10-yr. 3.19%  30-yr. 3.34%

Bonds have been tanking on a reassessment of future Fed actions, with the yield on the key 10-year rising from 2.65%, 7/29, to 3.19% today.

Back on March 4, the yield was 1.74%.

Across the pond, the damage is also severe.  On March 4 the German 10-year was at -0.08%, the Italian 10-year at 1.53%.  Today, they are 1.52% and 3.82%.

--After rising early in the week, oil prices shed nearly 8% and posted their third straight monthly decline, down 20% over that period, amid signs that recession worries are upstaging concerns over dwindling supplies of crude at home and abroad.

Fears that Russian crude would be shut out of the market by sanctions, leaving the world starved for oil, pushed prices up.  Now, expectations for demand to decline amid deteriorating economic conditions have pulled them lower.  And Russian oil is finding other homes.

Domestically, data on Wednesday showed that nationwide crude inventories dropped for a third week.

On a separate, related topic, I did not know that my own New York area is running so low on fuel that the Biden administration is warning of government action to address exports and suppliers are resorting to expensive U.S. tankers to restock the region.

Bottom line, Russian supplies used to fill a critical gap during frigid weather, such as last February, but they won’t be available again.

And a supply crunch could come sooner than winter if we have hurricane issues.  Plus Gulf Coast refineries begin scheduled maintenance in the fall.  But even when supply is abundant, a dearth of pipelines and tankers means Gulf Coast refiners have limited options for sending gasoline and diesel to eastern markets.

Speaking of diesel and the price of gasoline…regular gas at the pump nationally continues to decline, $3.80 today, but diesel is back over $5.00 ($5.07).  Countries around the globe are hungrier than ever for U.S. diesel as they seek alternatives to costly natural gas to run power plants.

But as U.S. fuel demand soars, market forces may fulfill the administration’s wish to curb exports.  Domestic diesel consumption rises at this time of year, drawing down stockpiles, as Midwest farmers snap up supply to power machines that harvest crops.

As for the harvest, the worst drought in a decade is posing fresh challenges to farmers in the Corn Belt, already struggling with higher costs.

According to a survey taken last week by the Professional Farmers of America Inc. Midwest Crop tour, in which farmers, traders and others in the sector evaluate corn and soybeans growing in fields across seven states, crop damage from South Dakota and Nebraska to Iowa and Illinois was evident.

Pro Farmer this month cut its outlook for corn yields by 13% in Nebraska and 22% in South Dakota, relative to levels in its survey last year.

It’s not just drought…a string of hailstorms hammered Nebraska crops in June, with hail coverage claims ranking among the most ever, as reported by a division of Zurich North America.

But the implications are global, as reported by Archer Daniels Midland Co. and Bunge Ltd., when you factor in the war in Ukraine (as noted above), and poor weather in South America, the EU and China that will keep grain supplies tight.  [Barron’s]

Separately, the U.S. Department of Agriculture said in a report that the cost of everything farmers use to cultivate crops from fertilizer to feed and labor is skyrocketing.  Production costs are estimated to rise by $66.2 billion or 18% in 2022, the most ever.

--Goldman Sachs Group Inc. made waves in announcing it was getting rid of its Covid-19 protocols and that the bank’s employees can enter most of its offices regardless of vaccination status, and aren’t required to test for Covid-19 regularly or wear masks, according to a memo sent to employees Tuesday.  The new rules are set to take place Sept. 6, the day after Labor Day.

“With many tools including vaccination, improved treatments and testing now available, there is significantly less risk of severe illness,” Goldman said in the memo.

Goldman has been among the more aggressive banks in bringing employees back to the office.

Morgan Stanley sent a memo to New York-area staffers last week saying it would discontinue Covid testing and health requirements, though MS wants employees who test positive for Covid to continue to isolate for five days, and then wear a mask for five more days, the person said.

And Thursday, Jefferies Financial Group, which had praised remote work, has decided to summon employees back to the office.

“As long as Covid continues to be manageable, we need everyone back in our offices on a consistent basis,” CEO Rich Handler and President Brian Friedman said in a staff memo Thursday.

I’m anxious to see the impact on the two commuter parking lots I monitor daily come next Tuesday, many of these folks Wall Street types.

A big issue is going to be childcare.  It ain’t what it was pre-pandemic, sports fans.  ‘Bosses’ better be careful what they say to some of the workers.

--The New York Post’s Lydia Moynihan reported that Goldman “has been hit by a wave of defections, and the atmosphere at the financial giant is at ‘an all-time toxic high right now.’”

“Six overworked first-year bankers quit and walked out en masse from the bank’s 200 West Street headquarters (last week) after getting news of their bonuses, sources told The Post.

“Their departures have been followed by others in the same division – as everyone from chief executive David Solomon on down – constantly stresses the need to ‘perform, perform, perform,’ sources said.”

All the workers who quit have lined up jobs elsewhere, such as in tech, private equity or healthcare.  [Industry veterans say the young’uns doth protest too much.]

--Boeing said on Monday that United Parcel Service will order eight more of its 767 jets, bringing the logistics giant’s total fleet of 767-300 freighters to 108 as it looks to meet growing capacity demands.

Air cargo revenue surged to $204 billion in 2021, the International Air Transport Association said earlier this month. That was more than double 2019 levels, before the pandemic battered air travel.  Boeing estimates that the global freighter fleet will grow to 3,610 airplanes by 2041, up from 2,250 currently.

--Ryanair is hopeful but not certain of returning to pre-Covid profit levels of over $1 billion this year as travelers trade down to low-cost services, CEO Michael O’Leary told Reuters on Tuesday.

Last month the Irish airline, Europe’s largest by passenger numbers, said it was too soon to provide meaningful profit guidance for the fiscal year, which ends on March 31, 2023.

O’Leary said: “I’m hopeful.  But again there is too much uncertainty this winter over Ukraine, and also the recession.”

Ryanair will beat its pre-Covid peak of flying 149 million passengers in a year, with a forecast of 166.5 million for the current financial year.  But O’Leary said high fuel prices, economic turmoil and staffing pressures meant that the wider European short-haul market would not return to pre-Covid traffic levels in 2023 or 2024.

“In a very dark deep recession as we’ve had in the past, the total market may level out or decline slightly but more and more people will trade down to lower cost airlines like Ryanair,” he said.  “There’s every risk the economic situation this winter will cause people to fly less, but they won’t cut flying altogether,” he added.  O’Leary said Ryanair was seeing stronger bookings going into the winter period, including Christmas.  Average fares are likely to rise 3% to 4% this year and 3%-5% next year, he added.

Friday, Ryanair announced it flew 16.9 million passengers in August, breaking its record for the highest ever number it has carried in a single month for the second month in a row.  It flew 14.9 million in Aug. 2019.

--Pilots at Lufthansa went on strike Friday, forcing the airline to cancel about 800 flights, while stranding around 130,000 passengers in Frankfurt and Munich.

--TSA checkpoint travel numbers vs. 2019

9/1…110 percent of 2019 levels
8/31…105
8/30…86
8/29…92
8/28…122 [no doubt weather issues a factor in 2019]
8/27…95
8/26…85
8/25…88

--Nvidia Corp. shares tumbled anew on Wednesday as the company could lose as much as $400 million in quarterly sales after the U.S. imposed new licensing requirements on shipments of some of its most advanced chips to China.

Nvidia, the U.S.’s largest chip maker by market value, said in a regulatory filing that it was notified on Friday that it would be required to get a license from the U.S. government before shipping certain cutting-edge chips to China and Russia.

The company doesn’t sell chips to Russia, but the restriction on China could affect its outlook of about $5.9 billion of sales in the current quarter.

The U.S. imposed the requirement to address the risk that those products could get into the hands of military users in China and Russia, Nvidia said in its filing.

Advanced Micro Devices was also told to stop selling its advanced artificial intelligence chips to
China.

A Chinese foreign ministry spokesperson Wang Wenbin said on Thursday that the United States was attempting to impose a “technological blockade” and that the U.S. was trying to maintain its “technological hegemony” and stretching the concept of national security.

--HP Inc.’s sales declined in the latest quarter, and the PC maker cut its outlook as it joined the growing list of companies to report a slowdown in consumer spending on electronics and cautioned about lagging business sales going forward.

The computer-and-printer maker on Tuesday said revenue for its fiscal third quarter shrank 4.1% to $14.66 billion, weighed down by a 20% decline in consumer spending, while its commercial business grew 7%.  Consensus revenue was at $15.59 billion.

CEO Enrique Lores said that worsening consumer demand is expected to continue and that the company is seeing business appetite softening in the current quarter.  Corporate buyers continue to agree to deals, he said, but “they are slowing down the translation between those deals…into orders.”

In response, HP trimmed its fiscal 2022 outlook.

The Palo Alto, Calif.-based company’s results come as the market for personal computers is under pressure after demand for such devices took off during the pandemic as households adapted to remote work and distance learning.  PC shipments in the second quarter dropped by 12.6% from the year-ago period, marking their steepest decline in nine years, according to data from research firm Gartner Inc.

CEO Lores said the duration of the sales slowdown is hard to predict given the uncertainty over the wider economy, but that he expects long-term demand to be above pre-pandemic levels.

HP posted a profit of $1.12 billion, or $1.08 a share, for the quarter ended July 31, up slightly from $1.11 billion, or 92 cents a share, a year earlier.

Last week Dell Technologies posted lower results and said it had observed more cautious consumer behavior as the quarter progressed.

And before Dell, Intel Corp. posted a surprise quarterly loss and cut its full-year outlook, reflecting a slump in personal-computer purchases and product delays.

--So Tuesday, Best Buy Co. recorded lower profit and sales in its latest quarter as spending on computers and other home electronics faltered compared with earlier in the pandemic.

But the results were above analysts’ expectations, as net income fell 60% to $306 million, or $1.35 per share for the three-month period ended July 30.  That compares with $734 million, or $2.90 per share, in the year-ago period. Revenue dropped 13% to $10.33 billion.

Comparable sales in stores open at least a year dropped 12.1% compared to a 19.6% increase in the year-ago period.

Domestic gross profit was 22.0% versus 23.7% last year in part because the company stepped up discounts to move inventory.

Like many retailers, Best Buy entered the year expecting that financial results would be weaker than in 2021 when consumer spending was fueled by government stimulus support.

But soaring prices on necessities like food and gas have forced families to become more cautious. They are doing without new clothing, electronics, furniture and almost everything else that is not absolutely necessary.  And spending habits have shifted faster this year than anyone expected.

For the year, Best Buy is sticking to its previous forecast for an 11% drop in comparable sales.

--Bed Bath & Beyond said Wednesday that it will close stores and lay off workers in a bid to turn around its beleaguered business.

The Union, N.J. home goods retailer said it will close 150 stores, and slash its workforce by 20%.  It estimates the cuts will save $250 million in the company’s current fiscal year.  BBBY also claims it has lined up more than $500 million of new financing.

For now it will keep its Buybuy Baby chain.

Mired in a prolonged sales slump, the company also announced it will revert to its original strategy of focusing on national brands, instead of pushing its own store labels.  That reverses a strategy embraced by its former CEO, Mark Tritton, who was ousted in June after less than three years at the helm.

As of May, the retailer operates 955 stores, including 769 Bed Bath & Beyond stores, 135 Buybuy Baby stores and 51 stores under the names Harmon, Harmon Face Values or Face Values. As of February, it had roughly 32,000 employees.

--Snap is pulling back on its ambitions, announcing on Wednesday plans to slash a fifth of its workforce as part of a strategic reorientation that underlines just how sharply its fortunes have turned in the face of a series of challenges to its business. The social-media company said it is reining in investment on a range of areas, abandoning initiatives including its in-house “Originals” programming and confirming a report by the Wall Street Journal that it was dropping a camera drone project.

Snap had grown its head count by around 65% since the end of 2020, but now it plans to tell about 1,200 of its 6,400 employees that they are losing their jobs.

--Lululemon Athletica’s robust second-quarter results and full-year forecast show that the athletic-apparel maker’s high-end shoppers, who have continued to spend, are still buying athleisure along with dressier clothing, and the shares surged 10% on the news, before falling back some late Friday.

Lululemon earned an adjusted $2.20 per share, on revenue that rose 28.8% per year over year to $1.87 billion, well above expectations.  EPS a year ago was $1.65 on revenue of $1.45 billion.

Same-store sales rose 23%, also above consensus. 

The company guided higher for both the third quarter and the full year.

--Campbell Soup Co. reported fiscal Q4 earnings that were in line with expectations, as were net sales of $1.99 billion, though it forecast revenue to pick up pace in fiscal 2023 amid at-home food consumption trends.

The company projects net sales to gain between 4% and 6% in the new fiscal year, following a 1% rise posted during the 12 months ended July 31.

“With quick scratch cooking increasing in relevance as consumers continue to eat more at home to save money, we are well positioned to capture market share and growth,” CEO Mark Clouse said on an earnings call.

Both the meals and beverages and snacks segments reported annual revenue gains of 6% each.

--Starbucks has hired Laxman Narasimhan as its next chief executive.  He will take over from Howard Schultz in April, Schultz, Starbuck’s longtime leader, having taken back the reins of the company last April after Kevin Johnson stepped down.

Narasimhan has most recently led Reckitt Benckiser, the British conglomerate that makes Lysol disinfectant and Durex condoms.  Now discuss amongst yourselves.

--Joe Flint of the Wall Street Journal had a piece on NBC and how the network is considering reducing the number of hours it programs in prime time, a cost-cutting move that would reflect broadcast television’s diminishing popularity.

“Under the scenario being discussed, NBC would stop programming the 10 p.m. to 11 p.m. hour and give those seven hours per week to local TV stations to program.”

This is preliminary, and the earliest any change would come would be fall 2023.  What’s intriguing is that late-night programming, including “The Tonight Show Starring Jimmy Fallon,” could move to 10:30 p.m. after local news.

I am not a Fallon fan, but as I go to bed earlier these days, I wish all the networks would do this.

The Pandemic

--I fully recognize some of you wish I’d stop writing of this topic, but when the Chinese metropolis of Chengdu, 21 million strong, is told to lock down by the government you can see the coronavirus is still a major story with all kinds of economic and social implications.

The capital of Sichuan province is the biggest city to shut down since Shanghai’s bruising two-month lockdown earlier this year, and it shows China’s ongoing commitment to the Covid Zero approach espoused by President Xi Jinping, despite all the disruption it’s causing.

Chengdu reported 157 new Covid cases on Wednesday.  The city, which accounts for about 1.7% of China’s GDP, is home to tech companies and automakers, including Toyota and VW China, as well as Foxconn Technology Group, the world’s largest assembler of Apple’s iPhones and other devices.  Intel and other foreign firms also have facilities in the city.

And Chengdu is a popular tourist destination, famed for its giant panda sanctuary.  The overrated panda, I hasten to add.  It’s cute for about two days.

--The Food and Drug Administration on Wednesday authorized the retooled Covid-19 booster shots of both Moderna and Pfizer/BioNTech that target the currently dominant BA.4/BA.5 Omicron subvariants.  Both updated vaccines also include the original version of the virus targeted by all previous Covid shots, as the country prepares for another broad vaccination campaign in the fall.

A federal advisory panel then voted 13-1 Thursday to recommend the boosters for anyone 12 and older who wants one, CDC Director Rochelle Walensky signing off on it.

--Life expectancy fell in the United States in 2021 for the second year in a row to its lowest level since 1996, driven by Covid-19 deaths, according to provisional government data published on Wednesday.

The nearly one-year decline from 2020 to 76.1 years marked the largest two-year drop in life expectancy at birth in close to a century, the CDC found.

Disparity in life expectancy between men and women also widened last year to the highest in over two decades, with men now expected to live 73.2 years, nearly six fewer years than women.

Deaths from Covid contributed to half of the overall decline in life expectancy last year, with drug overdoses and heart disease also major contributors, the data showed.

Covid-19 was associated with more than 460,000 U.S. deaths in 2021, according to the CDC.

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

World…6,499,855
USA…1,072,330
Brazil…684,203
India…527,932
Russia…384,532
Mexico…329,536
Peru…215,780
UK…188,242
Italy…175,754
Indonesia…157,608
France…154,189

Canada…43,797

[Source: worldometers.info]

U.S. daily death toll…Mon. 212; Tues. 388; Wed. 484; Thurs. 315; Fri. 312.

Foreign Affairs, part II

China: We finally learned when the Communist Party is convening for its party congress, October 16, an event that will usher in the top leadership for the next five years.  The date was set during a monthly meeting of the Politburo, the party’s decision-making body.

The announcement of the twice-a-decade congress, well ahead of time, indicates that most of the closed-door negotiations on key positions are over.  The most important decisions are usually made ahead of the party congress, which largely serves as a formal occasion to legitimize and communicate those decisions to delegates.

More than 2,000 delegates from across the country will gather in Beijing to hear President Xi Jinping deliver a report summing up the party’s achievements in the past five years and setting out its political, social and economic policies.

And, yes, Xi is expected to begin a third term as the party’s leader at the end of the congress, which would make him the first to do so since the rule of Mao Zedong.

No surprise the congress is being held before the Group of 20 meeting to be held in Indonesia from November 15 to 16 and the Asia-Pacific Economic Cooperation summit in Thailand that begins after.

Indonesian President Joko Widodo has said Xi – who has not left the country for more than two years – would travel to Bali for the G20. It is not known if Xi will attend the APEC summit in person.

But we also know that Vladimir Putin will be at the G20, which will result in major tensions among the players, including President Biden, who is expected to meet with Xi at some point.

Meanwhile, the risk of a military clash over the Taiwan Strait was elevated this week after Taiwan fired shots for the first time to drive away a drone belonging to China.  Taiwan’s defense ministry said on Wednesday it would exercise the right to self-defense and counter-attack if mainland Chinese drones posing a threat to security did not leave Taiwan’s territory after being warned.  There were reports one of three drones was shot down, later confirmed by the government.

Japan’s defense ministry said China had launched “attack drones,” and with Taiwan firing at them, “tensions are escalated.”

Thursday, Taiwan’s defense ministry said 14 Chinese fighter jets flew across the median line of the Taiwan Strait, which serves as an unofficial territorial barrier.

Last Sunday two U.S. warships sailed through international waters in the Taiwan Strait in the first such operation since Nancy Pelosi’s visit to Taiwan enraged China.

Governor Doug Ducey (R-AZ) visited Taiwan and met with President Tsai Ing-wen as Taiwan Semiconductor Manufacturing Co. Ltd., a major Apple supplier and the world’s largest contract chipmaker, is constructing a $12 billion plant in Arizona.

“In the face of authoritarian expansionism and the challenges of the post-pandemic era, Taiwan seeks to bolster cooperation with the United States in the semiconductor and other high-tech industries,” Tsai said.  “This will help build more secure and more resilient supply chains.  We look forward to jointly producing democracy chips to safeguard the interests of our democratic partners and create greater prosperity.”

Ducey is the latest in a succession of officials from the United States to visit, defying pressure from China for such trips not to take place.

Separately, the United Nations human-rights agency said China’s government may have committed crimes against humanity in its treatment of ethnic Uyghurs and other Muslim minorities in Xinjiang, in a report that broadly supports critical findings by Western governments, human-rights groups and media detailing mass abuses in the region.

In the long-awaited report issued Wednesday, the UN agency assessed that serious human rights violations have been committed in the course of the Chinese government’s efforts to combat terrorism and extremism.  The agency quoted what it described as former detainees of internment camps in Xinjiang with credible accounts of torture and other forms of inhuman treatment between 2017 and 2019, including some instances of sexual violence.  The UN body said detainees had no form of redress.

The report also cited descriptions of possible forced labor associated with internment camps, including labor and employment schemes for the purported purposes of poverty alleviation and the prevention of extremism.  It said the extent of arbitrary and discriminatory detention of members of Uyghur and other predominantly Muslim groups “may constitute international crimes, in particular crimes against humanity.”

The UN also pointed to a “sharp decline in birth rates” in Xinjiang from 2017, with the rate dropping 48.7 percent between 2017 and 2019.

The report recommended “urgent action” by the Chinese government, the UN and the “international community more broadly” to address the human rights situation in Xinjiang,

The United States welcomed the UN report, with Secretary of State Antony Blinken saying in a statement: “This report deepens and reaffirms our grave concern regarding the ongoing genocide and crimes against humanity that PRC government authorities are perpetrating against Uyghurs.”

China has vigorously denied any abuses in Xinjiang.

Iran: Tehran said it needs stronger guarantees from Washington for the revival of the 2015 nuclear deal, its foreign minister said in Moscow on Wednesday, adding that the UN atomic watchdog (IAEA) should drop its “politically motivated probes” of Tehran’s nuclear work.  To which I just can’t help but say, [go blank yourself].

Iran has demanded assurances because the deal is a political understanding rather than a legally binding treaty that the U.S. would not abandon any new agreement, but President Biden cannot provide that.

Thursday, Iran’s foreign ministry said it sent a “constructive” response to U.S. proposals aimed at reviving the deal, prompting a less positive impression from the United States.

“We can confirm that we have received Iran’s response through the EU,” a State Department spokesperson said.  “We are studying it and will respond through the EU, but unfortunately it is not constructive.”

Supreme Leader Ayatollah Ali Khamenei hasn’t said anything about the talks publicly in months.

Wednesday, President Biden told Israeli Prime Minister Yair Lapid the United States will never allow Iran to acquire a nuclear weapon.  Last week, Lapid said that if the 2015 deal is revived, Israel will not be bound by it.

Meanwhile, Iran has begun enriching uranium with the second of three cascades, or clusters, of advanced IR-6 centrifuges recently installed at an underground plant at Natanz, a report from the IAEA said on Wednesday.  Like the first of those three cascades of up to 174 machines each, the second is enriching uranium to up to 5% fissile purity and the third has not been fed with nuclear material, the IAEA said in a report to member states.

Iraq: At least 23 died during a protest by supporters of Moqtada al-Sadr, an influential Shia cleric who resigned from politics on Monday.  Hundreds of Sadr’s followers stormed the government palace in Baghdad, clashing with police and rival Shia factions.  Iraq has been in political deadlock since Sadr’s party won the most seats in elections last year but was not able to form a government.  He positioned himself as a nationalist opposed to all foreign and especially Iranian influence.

Sadr then ordered his followers to end their protests in central Baghdad on Tuesday, easing the confrontation.  But clashes erupted in the southern city of Basra Thursday, with at least five dead in battles among rival Shiite militants.  The skirmishes were between followers of Sadr against mostly Iran-aligned parties and paramilitary groups.

Pakistan: The flood disaster continues as Southern Pakistan braced for yet more water as the surge flows down the Indus River (exacerbated by extreme glacial melt), threatening further devastation in a country that, incredibly, is one-third inundated…33 million impacted (or 15% of the 220 million population), over 1,200 dead since June (including over 400 children), hundreds of thousands of home destroyed.

The UN called the situation an “unprecedented climate catastrophe” as it appealed for $160 million to help.

Pakistan received nearly 190% more rain than its 30-year average from June to August, with some areas getting 40 inches.

But the country also has itself to blame.  Pakistan is one of the worst in the world when it comes to the rate of deforestation.

Argentina: President Alberto Fernandez said a man tried to assassinate politically powerful Vice President (former president) Cristina Fernandez outside her home but failed because the handgun misfired.  The video is terrifying.

The 35-year-old suspect is a Brazilian, but he’s been living in Argentina.  A motive has not been revealed as I post.  Brazil is spooked out as it is in the midst of a highly charged presidential campaign.

Russia / Mikhail Gorbachev: Gorbachev, who ended the Cold War without bloodshed but failed to prevent the collapse of the Soviet Union, died on Tuesday at the age of 91.

He was the last Soviet president, forged arms reduction deals with the United States and partnerships with Western powers to remove the Iron Curtain that had divided Europe since World War Two and bring about the reunification of Germany.  When pro-democracy protests swept across the Soviet bloc nations of communist Eastern Europe in 1989, he refrained from using force – unlike previous Kremlin leaders who had sent tanks to crush uprisings in Hungary in 1956 and Czechoslovakia in 1968.

But the protests fueled aspirations for autonomy in the 15 republics of the Soviet Union, which then disintegrated in chaotic fashion over the next two years. Gorbachev tried to prevent the collapse and couldn’t.

Gorbachev became general secretary of the Soviet Communist Party in 1985, aged just 54, and he set out to revitalize the system by introducing political and economic reforms, but they spun out of control.  His policy of ‘glasnost’ – free speech – allowed previously unthinkable criticism of the party and the state, and emboldened nationalists in the Baltic republics and elsewhere.  Many Russians never forgave Gorby for the turbulence that his reforms unleashed, as living standards plunged.  It was too high a price to pay for democracy.

A liberal economist, Ruslan Grinberg, visited Gorbachev in the hospital on June 30 and then told the armed forces news outlet Zvezda: “He gave us all freedom – but we don’t know what to do with it.”

After a failed coup attempt by hardliners in 1991, a weakened Gorbachev finally relinquished power to even more radical reformers led by Russian President Boris Yeltsin. The Soviet flag came down from the Kremlin on Dec. 25, 1991.

Editorial / Wall Street Journal

“Mikhail Gorbachev was a paradoxical Soviet leader when the world needed one.  He had almost total power upon taking office but undertook reforms that undermined that power.  He rose through the Communist ranks but presided over the end of the regime.  His greatest achievement was allowing the Cold War to end without a war or a worse conflagration that the world feared for decades.

“Gorbachev is famous as the architect of ‘perestroika,’ or restructuring, and ‘glasnost,’ or openness.  They were radical concepts in the 1980s after decades of Stalinist and totalitarian Communist rule.  But the eighth and last leader of the Soviet era did not adopt those concepts out of liberal democratic conviction.

“He understood that the country he inherited in 1985 when he became general secretary of the Communist Party was losing the Cold War to a revitalized West.  Its economy wasn’t the juggernaut of central-planning genius that the CIA had assessed at the time.  It couldn’t deliver consumer goods of any quality to its people, as anyone who visited the country during that period could observe.

“Ronald Reagan had reversed the U.S. malaise of the 1970s with a defense buildup and reforms that unleashed America’s private economy.  Western leaders had deployed medium-range nuclear missiles in Europe despite a furious Soviet propaganda campaign.  Reagan’s Strategic Defense Initiative, though it never fulfilled its largest ambitions, convinced many Russians that they couldn’t compete with U.S. technology and vitality.  Gorbachev’s reforms were intended to revive the Soviet regime to be able to compete with Reagan’s America.

“As is often the case when a tyranny eases up, his reforms released forces that he and the Party couldn’t control.  Perestroika wasn’t far-reaching enough to bring prosperity, while glasnost inspired domestic critics and demands for further change.  The countries of Eastern Europe, long enslaved as members of the Warsaw Pact, saw their moment to break free.  Gorbachev refused to send in the tanks as his Soviet predecessors had done in Hungary and Czechoslovakia.

“The Intermediate-Range Nuclear Forces Treaty that Gorbachev and Reagan struck in 1987 did not turn out to be the first step toward nuclear disarmament.  The U.S. withdrew from it in 2019 after Vladimir Putin’s cheating became intolerable.  But the deal did build mutual trust between Gorbachev and Reagan, and later George H.W. Bush, and those relationships helped to bring the Cold War to an end with freedom as the victor.  Gorbachev couldn’t manage Russia’s post-Soviet politics and he resigned in 1991.

“Many Russians, not least Mr. Putin, blame Gorbachev for the fall of their empire.  Mr. Putin has tried to restore Greater Russia, playing to Russian nationalism and using military force.  But he hasn’t been able to turn Russia into a first-world, developed economy.  And he hasn’t been able to subdue Ukraine, despite brutal methods that echo of earlier Soviet leaders.

“Gorbachev gave Russians their chance to forge a better future, and the great tragedy is that they haven’t been able to do so.”

Gorbachev is to be buried in Moscow’s central Novodevichy Cemetery, where dozens of high-ranking politicians, poets, royals and intellectuals have been buried since it was established in the 16th century – among them Boris Yeltsin.  Gorbachev’s wife, Raisa, who died in 1999, is buried there.  But Nikita Khrushchev is the only other Soviet leader buried there, with most others laid to rest by the Kremlin’s walls on Red Square.

Natan Sharansky / Washington Post

“Mikhail Gorbachev was the last leader of the Communist Party of the Soviet Union, a post he held for only a few short years, from 1985 to 1991.  During his final speech, he expressed regret that the U.S.S.R. had fallen apart, but also emphasized his personal achievements, including the promotion of political and religious freedom, the introduction of democracy and a market economy, and, of course, the end of the Cold War.

“All politicians boast of their achievements when they conclude their terms in office.  In this case, however, what Gorbachev said was not a boast, but rather an understatement.

“Just a few years earlier, the Soviet Union had been one of history’s most frightening dictatorships, sending its troops far and wide, ruling over roughly a third of the globe, and controlling hundreds of millions of its own citizens through intimidation.  And while Soviet dissidents (I was among them) told the world that the regime was internally weak, our predictions of its downfall were dismissed as wishful thinking by Western experts mesmerized by the U.S.S.R.’s unshakable power.

“Yet the regime did fall – and it did so without the firing of a single shot.  In the eyes of the West, this outcome was the direct result of the decisions of one person: Gorbachev. It isn’t surprising that he was revered in the free world and was honored with the 1990 Nobel Peace Prize, or that terms he introduced to the political lexicon – glasnost (openness) and perestroika (restructuring) – helped define the era.

“What is perhaps surprising: Gorbachev never achieved that sort of admiration at home.  In a 2017 poll, only 8 percent of Russian citizens saw him in a positive light; the overwhelming majority view was negative.  The obvious reason for this is that many Russians regard the end of the Soviet Union as a tragedy, in which their nation lost its status as a fearsome world power.  Today, Vladimir Putin explicitly represents that sentiment….

“During his first trips to the West, before he became leader of the Politburo, Gorbachev discovered that the Soviet Union had paid a heavy diplomatic and economic price for its treatment of dissidents.  As a result, within the first year of ascending to power, he began to release political prisoners and long-time refuseniks (Jews fighting for their right to emigrate to Israel). When it soon became clear, however, that such a policy could lead to mass emigration, new restrictions were introduced.

“It was only after 250,000 demonstrators convened in Washington in 1987 to support Soviet Jews, greeting Gorbachev during his first visit as Russia’s leader with chants of ‘Let Our People Go!,’ that the Iron Curtain began to come down.

“Freer emigration from the U.S.S.R. quickly led to demands by religious and national groups for self-determination.  This, too, Gorbachev resisted, sending troops to Georgia, Lithuania and elsewhere, killing dozens of demonstrators in the process. The dissident Andrei Sakharov, whom Gorbachev released in late 1986 and who initially appeared to be the leader’s natural ally, spent the last years of his life actively fighting against Gorbachev’s attempts to save the single-party system and to avoid competition in Soviet elections.

“Very shortly before Sakharov died in 1989, he called me in Israel to say that he could not visit as he had planned, since he would not permit himself to leave Moscow for even a single day and potentially miss an opportunity to block Gorbachev’s bid for unrivaled power.

“I was the first political prisoner to be released by Gorbachev, in early 1986, and upon liberation, I was immediately asked whether I wanted to thank him for my freedom.  I replied that I was grateful to all those who fought for my release, including fellow Jews and foreign leaders, because I understood that without their fight, it would not have happened.  At that time, I deliberately avoided thanking Gorbachev because, with so many of my fellow dissidents still in prison and emigration still not permitted, I felt it would be irresponsible and even disloyal to give him credit.

“A decade after the fall of the U.S.S.R., circumstances had changed.  Participating with Gorbachev at a conference in Poland, I was asked about the forces leading to the regime’s demise.  In my response, I discussed three factors: Sakharov and other dissidents who fought valiantly to keep the spark of freedom alive; Western politicians such as Sen. Henry ‘Scoop’ Jackson (D-Wash.), President Ronald Reagan and British Prime Minister Margaret Thatcher, who had understood the nature of the regime and were ready to link relations with Moscow to the latter’s respect for human rights; and finally, Gorbachev, who perceived the direction of history and responded accordingly.

“Immediately after finishing my talk, I approached Gorbachev to thank him for releasing me.  I was surprised to discover that he was almost offended by my remarks, saying, ‘I released you against all advice to the contrary, and you listed me in only the third place?’  While I sympathized with his reaction, at that time I felt it was more important to amplify the voices of dissidents – particularly those in Asia and the Middle East, whose plight was so frequently ignored by the West – than to emphasize his role in the transition.

“Yet it we look at the 20th century not through the lens of political struggles, but rather from the bird’s-eye perspective of history, we see how utterly unique Gorbachev was.  In nearly every dictatorship there are dissidents, and from time to time there are also Western leaders willing to risk their political fates to promote human rights abroad.  But Gorbachev was a product of the Soviet regime, a member of its ruling elite who believed its ideology and enjoyed its privileges – yet decided to destroy it nevertheless.  For that, the world can be grateful.  Thank you, Mikhail Gorbachev.”

Vladimir Putin said in a condolence telegram Wednesday that Gorbachev had had a “huge impact on the course of world history,” adding he “deeply understood that reforms were necessary” and strove to offer his own solutions to the problems faced by the Soviet Union in the 1980s.

The Kremlin hailed Gorby as a statesman who will go down in history, but said his “romanticism” about prospects for a rapprochement with the West had been misplaced.  Spokesman Dimitry Peskov said the hopes of Gorbachev for cordial relations between the Soviet Union and the West “did not work out,” adding that the “bloodthirstiness of our opponents showed itself.”

Random Musings

--Presidential approval ratings….

Gallup: 44% approve of President Biden’s job performance, 53% disapprove; 40% of independents approve (Aug. 1-23).

Rasmussen: 45% approve of Biden’s performance, 53% disapprove (Sep. 2).

--According to a new Wall Street Journal poll, Democrats hold a slight edge over Republicans, 47% to 44%, when voters are asked which party they would support in their congressional district if the election were held today.  Republicans had a five-point advantage in March.

Among independents, more voters now favor a Democratic candidate for Congress than a Republican, 38% to 35%.  In March, Republicans led among independents by 12 points.

Recall the Supreme Court’s reversal of the landmark 1973 Roe v. Wade abortion ruling was in late June.

--Trump World:

--The Justice Department said it had evidence that classified documents were deliberately concealed from the FBI when it tried to retrieve them in June from former President Donald Trump’s Florida estate, prompting its unprecedented search of his home.

In a 54-page filing, prosecutors on Tuesday laid out their evidence of obstruction of justice, alleging publicly for the first time that Trump aides both falsely certified in June that the former president had returned all the government records he had stored in his home after leaving the White House in January 2021.

It also revealed that Trump lawyers “explicitly prohibited government personnel from opening or looking inside any of the boxes” inside a storage room when FBI agents first travelled to his Mar-a-Lago resort in June to retrieve the records.

“The government also developed evidence that government records were likely concealed and removed from the Storage Room and that efforts were likely taken to obstruct the government’s investigation,” the department said in a filing in U.S. District Court in the Southern District of Florida.

It released a photograph of some of the records found inside Trump’s home bearing classification markings, some of which refer to clandestine human sources.

Lawyers for Trump have argued that the storage of sensitive files at his Florida home “should have never been cause for alarm.”

His legal team said the FBI search this month was “unprecedented, unnecessary, and legally unsupported.”

The 19-page legal filing posted by the former president’s team on Wednesday night did not respond to the Justice Department claims of obstruction.

A National Archives team visited the seafront club in January and retrieved 15 boxes of White House records that contained “highly classified reports,” said the filing.

The Justice Department began investigations which found evidence that “dozens of additional boxes” probably containing sensitive material still remained at Mar-a-Lago.

On June 3, three FBI agents and a Justice Department lawyer arrived at Mar-a-Lago to collect materials, but were “explicitly prohibited” by Trump’s representatives from searching any boxes inside a storage room at the property, according to the 54-page filing.

Evidence was also found that records were “likely concealed and removed” from the storage area and that efforts were “likely taken” to obstruct the investigation, officials said.

Investigators said they grew concerned that Trump’s representatives were misleading them, in particular after the June visit.

Prosecutors also said Trump’s team didn’t say that any of the documents were declassified when they turned over records in June.

Aides to the former president have since said Trump broadly declassified documents, an action for which there is no documented evidence.  And if he did so, how come no one has seen them?!

Thursday, a judge held a hearing on whether an independent legal official known as a special master should be appointed to oversee the evidence and determine whether any of it is protected under executive privilege.

The Justice Department has argued that a special master is not necessary, given that it says most of the evidence has already been inspected by investigators.

In Wednesday’s court papers, Trump’s lawyers accused the DOJ of “gratuitously” including a photograph in its Tuesday filing of “allegedly classified materials” that had been “pulled from a container and spread across the floor for dramatic effect.”

“Left unchecked, the DOJ will impugn, leak, and publicize selective aspects of their investigation,” Trump’s lawyers wrote, arguing why a special master was necessary.

Friday, we learned the FBI recovered more than 11,000 government documents and photographs during its Aug. 8 search of Mar-a-Lago, as well as 48 empty folders labeled as “classified,” according to court records that were unsealed by U.S. District Judge Aileen Cannon in West Palm beach, who heard Thursday’s oral arguments by Trump’s attorneys and the Justice Department’s top two counterintelligence prosecutors over the issue of a special master being appointed.

Cannon deferred ruling immediately on the request but agreed to unseal two records filed by the DOJ.

Former Attorney General William Barr, who was appointed by Trump, questioned the usefulness of such an appointment.  “I think at this stage, since they’ve (FBI) already gone through the documents I think it’s a waste of time” to have a special master, Barr said in an interview on Fox News.

Barr added that he saw no “legitimate reason” for Trump having documents at his Florida estate if they were classified.  He added, “I frankly am skeptical of this claim (by Trump) that ‘I declassified everything.’  Because frankly I think it’s highly improbable and second, if he sort of stood over scores of boxes not really knowing what was in them and said ‘I hereby declassify everything in here,’ that would be such an abuse, show such recklessness that it’s almost worse than taking the documents.”

Of the 11,000 government records and photos, 18 were labeled as “top secret,” 54 were labeled “secret” and 31 were labeled “confidential.” But you also have all these empty folders, 90 in all, of which the 48 were marked “classified.”  It is totally unclear why the folders were empty.

When it comes to the government, as Bill Barr said, “The facts are beginning to show that they were being jerked around.  How long do they wait?”

Andrew C. McCarthy / New York Post…former federal prosecutor

“I’ve been a naysayer on the notion that the Justice Department is trying to make a criminal case against former President Donald Trump based on the Mar-a-Lago raid, at least with respect to the offenses most often touted: mishandling classified documents and illegally retaining government records.

“But that has come with a significant caveat: If the evidence of obstruction of justice proved to be convincing, there’s a very good chance the government would indict.

“The court filing made by the Justice Department on Tuesday night, in response to Trump’s lawsuit seeking a special master to review materials seize by the FBO, indicates that prosecutors have amassed formidable evidence of obstruction.  That’s a game-changer.

“As I explained in The Post last week, ‘The Justice Department typically takes very seriously any tampering with witnesses or evidence.’  Moreover, if it turned out that the FBI had damning ‘proof of attempts to conceal or destroy government records, especially highly classified ones,’ that would amount to criminal conduct that is virtually always prosecuted.

“Classified information cases are very difficult to do, even without the added complication of a suspect who happens to have been the only official in government with the power to declassify any intelligence.  It is hard to prove the case without risking disclosure of the intelligence.  And a prosecution centering on unlawful retention of government records has its own complications.  Post-Watergate, when Congress enacted the Presidential Records Act, lawmakers did not include criminal enforcement provisions.  The Justice Department now believes that gap has been filled by a different statute (sec. 2071), which criminalizes the removal or concealment of government records.  Maybe so, but the question would have to be litigated.

“By contrast, obstruction is uncomplicated and easy to prove.  There would be no need to get into the content of government documents, classified or not.  The case would focus on Trump’s allegedly lying about having government records and concealing them. What’s in the documents is beside the point.

“And just as important, given the certainty that the former president and his supporters would claim that he is being selectively prosecuted because the Biden administration fears him as a potential 2024 opponent, an obstruction case is easy to understand.  It involves the kind of misconduct – energetically concealing evidence, lying to investigators, lying under oath in a certification to a grand jury, and (DOJ suggests) possibly destroying documents and intimidating witnesses – that we would expect any American (or at least any American not named Clinton) to be prosecuted over.

“Even before Tuesday night’s Justice Department court filing, we knew that the National Archives and Records Administration (NARA) had pleaded with Trump for months to return presidential records he had taken to Mar-a-Lago.

“Only in January 2022, a year after leaving office, did he grudgingly surrender 15 boxes, because NARA had threatened to involve Congress.  The boxes contained prodigious amounts of classified information: 700 pages worth, much of it top-secret.  Upon beginning to investigate, the FBI developed evidence (still not described) indicating that Trump continued to hoard classified intelligence.  Thus, a grand jury subpoena was issued on May 11, demanding (a) the surrender of any documents marked classified, and (b) a sworn certification that there were no more such documents at Mar-a-Lago.

“There followed a June 3 meeting with government officials at Trump’s Florida estate.  Contrary to the former president’s public claims that it was amicable, it was under duress.  It took place pursuant to a grand jury subpoena in a criminal investigation.

“Contrary to Trump’s claims that he was completely cooperative, the subpoena was occasioned by his obdurate refusal to return the government’s property. The government’s court filing details that Trump’s representatives provided a false statement under oath, claiming that the package of 38 documents they surrendered that day was the entirety of the classified material stored at the estate.  But, again contrary to Trump’s claims of cooperation, his representatives rebuffed the FBI’s request to be permitted to inspect boxes of government records contained in a storage room.

“The government’s submission elucidates that Trump conceded the documents he was holding were classified – he surrendered them on the explicit demand to turn over classified records in his possession, and he never claimed to have declassified them.

“In addition, the government never agreed to the permanent storage of government records at Mar-a-Lago provided Trump beefed up the security.  To the contrary, officials were frustrated at being refused permission to inspect boxes of what the law deems to be the government’s property.  Trump apparently added a better lock because DOJ officials complained about the lack of security, but DOJ was not saying he could keep the documents if he improved the security.

“It was just a question of how to get the documents back. Based on its continuing investigation, particularly interviews of witnesses whom prosecutors do not want to identify, the FBI concluded that Trump persisted in storing top-secret intelligence at Mar-a-Lago.  While some was likely to be in the boxes, other documents were apt to be found in his office space, among other places he frequented.

“That is just what the August 8 search uncovered. As prosecutors point out, in addition to finding classified documents in Trump’s office, the FBI found 76 classified documents in storage room boxes – more than twice as many as Trump’s representatives produced on June 3 when they claimed there was nothing more to be found at the resort.

“This is a serious obstruction case that appears as if it would not be difficult to prove.  The Justice Department is under immense pressure from the Democratic base to indict Trump, and the jury pool in Washington, D.C., where the government would file any indictment, is intensely anti-Trump.  It is thus hard to imagine that Attorney General Merrick Garland will decide against filing charges.

“The best hope Trump has of avoiding an indictment is that Democrats would rather run against a wounded Trump in 2024 than indict him in 2022.”

--Among the statements Donald Trump made on Truth Social this week was his demand that he be reinstated as president or “a new Election, immediately” after news that Facebook temporarily limited a controversial story about Hunter Biden’s laptop in users’ news feeds before the 2020 election.

Trump was responding to Facebook, now Meta, CEO Mark Zuckerberg’s comments on Joe Rogan’s podcast that a New York Post story about the laptop “fit the pattern” of polarizing content, including “Russian propaganda,” that the FBI had warned the company about. The laptop story had several red flags that raised questions about its authenticity and Zuckerberg said Facebook limited its reach on the site’s news feed for five or seven days.

In his statement, Trump wrote in all capital letters that the “FBI BURIED THE HUNTER BIDEN LAPTOP STORY BEFORE THE ELECTION knowing that, if they didn’t, ‘Trump would have easily won the 2020 Presidential Election.’  This is massive FRAUD & ELECTION INTERFERENCE at a level never seen before in our Country.”

Trump continued: “REMEDY: Declare the rightful winner or, and this would be the minimal solution, declare the 2020 Election irreparably compromised and have a new Election, immediately!”

Trump also favored all manner of posts involving QAnon, and he posted a picture of President Biden, Vice President Harris and House Speaker Nancy Peloi, where there’s a black bar over their eyes, which reads “Your enemy is not in Russia.”

But the QAnon posts were his most explicitly, unobscured, QAnon-promoting and QAnon-baiting posts to date.

In one, he reposted the QAnon slogan – “Where We Go One We Go All.”  In another, he reposted a 2017 message from “Q” that’s critical of the intelligence community. The QAnon conspiracy theory/anonymous account posts periodically on 8kun, and claims to document a secret battle being waged by Trump against the Democratic Party, which followers of the theory contend is run by satanic, child-eating cannibals who run a pedophile ring filled with celebrities and political elites who have been covertly running the United States government for decades.

Users of QAnon forums rejoiced at Trump’s apparent endorsement of the conspiracy theory and its mythology.

--Editorial / Wall Street Journal

“One reason Democrats are thrilled to keep Donald Trump at political center stage is because they know they can count on him to continue his revenge campaign against fellow Republicans. Even by that all-too familiar standard of behavior, the former President’s smears against his former Transportation Secretary Elaine Chao are especially ugly.

“Mr. Trump has been pursuing a vendetta against Mitch McConnell since the Senate GOP leader denounced the former President’s role in the events of Jan. 6.  Mr. Trump calls him ‘a broken down hack politician,’ despite Mr. McConnell’s role in keeping a Supreme Court seat open in 2016 for Mr. Trump to run on.  The Court issue was crucial to Mr. Trump’s victory, and Mr. McConnell was indispensable in getting his judicial nominees through the Senate.

“Mr. McConnell is wise to ignore Mr. Trump’s attacks.  But that may be why Mr. Trump has recently dragged in Ms. Chao, who is Mr. McConnell’s wife. On Aug. 20 in a post on Truth Social, his social-media site, Mr. Trump said Mr. McConnell ‘should spend more time (and money!) helping [Republicans] get elected, and less time helping his crazy wife and family get rich on China!’

“The money line is itself rich since Mr. Trump spends almost none of his own campaign stash helping other Republicans.  But the political-action committee affiliated with Mr. McConnell is spending tens of millions to elect candidates Mr. Trump endorsed and who have been struggling in the polls.

“On Aug. 24 Mr. Trump escalated with a statement that ‘The Democrats have Mitch McConnell and his lovely wife, Elaine ‘Coco’ Chao, over a barrel.  He and she will never be prosecuted, as per the last paragraphs of this story.’  He then linked to a story in The Federalist, an online publication, that was full of guilt by innuendo.

“Ms. Chao came to the U.S. as a child from Taiwan, not China.  You may have heard there’s a difference. She’s one of six daughters of James S.C. Chao, who founded the Foremost Group, a U.S. shipping company based in New York.  It’s an immigrant success story.  Ms. Chao’s sister Angela is now CEO, but Elaine is neither an employee nor an owner.

“The company specializes in bulk-commodity ships that carry grain and other freight.  Foremost Group ships travel often to Chinese ports because much of the world’s commodity trade goes to and from China.  The destinations are set by the owner of the commodities.  You can’t be in the global shipping business and not travel to Chinese ports.

“Some Foremost ships were built in China over the years, but we’re told the company currently has no such contracts.  The company does have contracts for ships made in Japan.  Angela Chao was also on the board of the Bank of China, a commercial bank, not the central bank. But countless American firms have done business with Chinese companies since the country opened up in the 1980s and there was hope for its economic and political reform.

“Those hopes have been undone by President Xi Jinping and his Politburo. But doing business with China remains legal, as Mr. Trump underscored when he struck his ‘phase one’ trade deal with Mr. Xi in 2019.  Is Mr. Trump now claiming that any American who does business in China is a traitor or in bed with the Communist Party?  It’s hard to believe Mr. Trump would make these accusations if Ms. Chao wasn’t ethnic Chinese.

“If he believes what he says, then why did Mr. Trump invite Ms. Chao to join his cabinet?  The Foremost Group’s commercial history and business with China were all known at the time.  Mr. Trump also praised Ms. Chao for doing ‘an incredible job’ as late in his term as July 2020.  In April 2020 he said she was doing a ‘fantastic job.’  Ms. Chao’s real offense, apart from being married to Mr. McConnell, is that she resigned from the cabinet after the Jan. 6 riot.  Mr. Trump can’t abide that stand on principle.

“Democrats in Congress tried to dig up dirt on Ms. Chao and her family, but they came up empty. They triggered a Department of Transportation Inspector General probe into several charges of misconduct.  But in March 2021, after Ms. Chao had left office, the IG report concluded; ‘This report does not make any conclusion regarding the compliance of the Secretary or any other Federal employee with any ethical principle or rule.’  It closed the probe after it found no prosecutorial interest by the Biden Justice Department.

“Beyond the unfairness to Ms. Chao, all of this relates to Mr. Trump’s role in the GOP.  Instead of focusing on President Biden, Mr. Trump cares above all about settling scores with members of his own party.  His politics is always about himself, not a larger cause.  His vendettas have already hurt Republican prospects in 2022 by blackballing good candidates and letting Democrats divert attention from Mr. Biden’s failures.  No wonder Democrats are thrilled to have Mr. Trump around.”

--Over the weekend, South Carolina Republican Sen. Lindsey Graham said a few times there would be “riots in the street” if Donald Trump is prosecuted for taking classified documents to Mar-a-Lago.

“There is a double standard when it comes to Trump,” Graham said on Fox News, contrasting the FBI’s search of Mar-a-Lago to the agency’s probe of his political rivals, including Hillary Clinton for her use of a private email server while she was secretary of state, and President Biden’s son Hunter, who is under investigation for tax liabilities, though Graham and other Republicans regularly say the FBI should probe his overseas business dealings.

“And I’ll say this: If there is a prosecution of Donald Trump for mishandling classified information after the Clinton debacle…there will be riots in the street,” Graham said.

Richard Haass, president of the Council on Foreign Relations, chastised Graham on Twitter.

“[Graham’s] prediction that violence may follow any prosecution of the former Potus may not qualify legally as incitement but it is irresponsible all the same as it will be seen by some as a call for violence,” he wrote.  “Public officials are obligated to call for the rule of law.”

Appearing on “Meet the Press,” Rep. Adam Kinzinger (R-Ill.) accused members of his party of “hypocrisy” for defending Donald Trump’s handling of classified documents.

“The hypocrisy of folks in my party that spent years chanting ‘lock her up’ about Hillary Clinton because of some deleted emails or quote unquote wiping a server are now out there defending a man who very clearly did not take the national security of the United States to heart.”

--Virginia “Ginni” Thomas, the conservative activist and wife of Supreme Court Justice Clarence Thomas, pressed lawmakers to overturn Joe Biden’s 2020 victory not only in Arizona, as previously reported, but also in Wisconsin, according to emails obtained under state public-records law.

The Washington Post first reported this year that Ginni Thomas emailed 29 Arizona state lawmakers, some of them twice, in November and December 2020.  She urged them to set aside Biden’s popular-vote victory and “choose” their own presidential electors, despite the fact that responsibility rests with Arizona voters under state law.

The new emails show Thomas messaging two Republican lawmakers in Wisconsin, at virtually the same time the same message was being sent to Arizona lawmakers.

--Sarah Palin lost a special congressional election in Alaska, in a district that was Republican-held for nearly five decades.  The winner, Democrat Mary Peltola, will be the first Alaskan Native to serve as a lawmaker in Congress for the state.

The race was to fill a vacancy left after the former officeholder, Rep. Don Young, died.  The seat is up for grabs again in November and Palin has said she will run against Peltola a second time.

Peltola, a former state lawmaker who beat Palin by three percentage points in a state that Donald Trump took by 10 points in 2020, advocated for abortion access, climate action and the state’s salmon populations.

--At a ceremony last Saturday in Rome, a consistory that your editor once attended, Pope Francis inducted 20 cardinals from all around the world, choosing men who mostly agree with his vision of a more progressive and inclusive Church and influencing their choice of his eventual successor.

Francis, 85, has now chosen 83 of the 132 cardinal electors, or about 63%.  With each consistory, Francis has continued what diplomats have called a “tilt towards Asia,” increasing the likelihood that the next pope could be from the region.

While Francis has casually thrown out he could resign for health reasons, he has no plans to do so anytime soon, which means he could appoint more cardinals next year.

--NASA is supposedly going to try again Saturday, weather permitting, to launch NASA’s Artemis I mission, having scrubbed a lunar-orbit set for last Monday due to technical glitches, a fresh hurdle for NASA as it looks to prove its most powerful rocket ever can handle planned missions to the moon.

A process known as an engine bleed wasn’t able to sufficiently cool down one of the rocket’s four engines to try to attempt a launch, a problem complicated by a leak in a valve that helps adjust pressure.

Humans haven’t set foot on the moon since 1972, and Artemis I is a major step to one day getting astronauts back there, perhaps 2025.

--The 150,000 residents of Jackson, Mississippi (and 30,000 in surrounding communities) went without reliable drinking water this week after pumps at the main water treatment plant failed, following flooding of the Pearl River.

The plant has been in need of repairs for decades, we learned.  This is what government is for.  As in nice freakin’ job, folks.

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

Pray for Ukraine.

God bless America.

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Gold $1722
Oil $87.25

Regular Gas: $3.80, nationally; Diesel: $5.07 [$3.18 / $3.28 yr. ago]

Returns for the week 8/29-9/2

Dow Jones  -3.0%  [31318]
S&P 500  -3.3%  [3924]
S&P MidCap  -4.3%
Russell 2000  -4.7%
Nasdaq  -4.2%  [11630]

Returns for the period 1/1/22-9/2/22

Dow Jones  -13.8%
S&P 500  -17.7%
S&P MidCap  -15.8%
Russell 2000  -19.4%
Nasdaq  -25.7%

Bulls 38.4…down from last week’s 45.1
Bears 30.1

Hang in there.

Brian Trumbore

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