Week in Review

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Week in Review

09/24/2022

For the week 9/19-9/23

 

[Posted 11:00 AM ET, Friday]

***I had to leave some items on the cutting-room floor due to the fact I’m posting much earlier than normal.  After a seven-hour drive, I hope to fill in some blanks, including the weekly market #s late in the evening.

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Edition 1,223

It has been a hugely important week in the war, with Vlad the Impaler’s mobilization of troops that has caused chaos inside Russia, and at its borders as tens of thousands, or more, seek to leave the country. 

At the same time, today we are seeing the beginning of sham referendums in some of the territory Russia holds, the first step in annexation, that is yet another game-changer.

But first, from day one of Russia’s invasion of Ukraine, I alluded to the tale of the rat as being front and center in Vladimir Putin’s childhood and how it shaped him.  Now, in the past week or so, everyone is alluding to it, so I thought I’d lead with an official retelling of the story.

Ruadhan Mac Cormaic (sic) / Irish Times…Sat., 9/17

“Few world leaders have been able to shape their own personal mythology quite like Vladimir Putin, the inscrutable career spy who appeared in the Kremlin as if from nowhere.  His backstory is a product of his own careful curation. As a result, we do at least know how he wishes the world to see him.  And so this week, Putin’s adversaries will have had reason to recall the story of the cornered rat.

“It is one of the childhood memories Putin shared with his authorized biographers, and has repeated often: how, in the 1950s Leningrad of his childhood, he and his friends used to chase rats around the courtyard of his apartment building.  One day, Putin’s story goes, he cornered a rat and closed in with a big stick, only for the rat suddenly to lunge forward and attack, giving him the fright of his life.  He learned a lesson.  ‘No one should be cornered.  No one should be put in a situation where they have no way out.’

“Seven months into his invasion of Ukraine, Putin is at risk of being cornered.  How he responds will shape the outcome of the war as well as his presidency and perhaps even the future security of Europe.

“In their lighting offensive in the northern Kharkiv region, Ukrainian forces have retaken 7,000sq km of territory occupied by Russia since the summer, dramatically altering the dynamic of a war in which the front lines had been static for months….

“Russia responded to its battlefield losses by knocking out the power supply and other civilian infrastructure in the Kharkiv region….

“The general assumption is that Putin’s position is secure.  Given the Russian state’s repressive powers and the weakness of the opposition, its leaders in jail and its activists unable to organize, the prospect of an internal challenge is generally discounted.  But western capitals have a poor record of anticipating revolutions – they failed to predict the fall of the Soviet Union – and the longer the war continues, the more volatile the situation will become….

“Putin’s rat anecdote has often been interpreted as a veiled threat of nuclear war.  Some analysts worry that Russia could use tactical nuclear weapons in Ukraine – a prospect that is dismissed by Moscow.  It would set off a dangerous spiral and almost certainly draw a Western response.

“It is more likely that Putin may decide to intensify air attacks on Ukrainian cities and infrastructure while betting that surging energy prices and possible shortages in Europe this winter will persuade Ukraine’s allies to talk Kyiv into a truce on Russia’s terms.  That seems highly unlikely, however, and any attempt to raze Ukrainian cities, as Russia did in Syria, will only harden the resolve of Ukrainians and the West.  After recent reversals, this is now Moscow’s dilemma: the harder it strikes back, the weaker it looks.”

And so this week in Ukraine….

In an interview on CBS’ “60 Minutes” broadcast Sunday, President Biden said victory for Ukraine meant removing Russian forces from the entire country and pledged U.S. support for as long as it takes.

“Winning the war in Ukraine is to get Russia out of Ukraine completely and to recognize the sovereignty. They’re defeating Russia,” Biden said.

“Russia’s turning out not to be as competent and capable as many people thought they were going to be.”

Britain said Russian forces had widened strikes on civilian infrastructure following battlefield setbacks and were likely to expand their targets further.

“As it faces setbacks on the front lines, Russia has likely extended the locations it is prepared to strike in an attempt to directly undermine the morale of the Ukrainian people and government,” Britain’s defense ministry said.

Some military analysts continue to say Russia might stage a nuclear incident at the Zaporizhzhia nuclear plant held by Russia but run by Ukrainian staff.

U.S. Army General Mark Milley, chairman of the Joint Chiefs of Staff, called for vigilance on Sunday after visiting a base in Poland aiding Ukraine’s war effort.

“The war is not going too well for Russia right now so it’s incumbent upon all of us to maintain high states of readiness, alert.”

President Volodymyr Zelensky spoke of the mass grave near Izyum after Russian troops were forced out of the Kharkiv region, around 450 bodies, including 17 Ukrainian soldiers, some of whose bodies showed signs of torture.

Asked on Monday about Zelensky’s statements, Kremlin spokesman Dmitry Peskov told reporters: “It’s the same scenario as in Bucha.  It’s a lie, and of course we will defend the truth in this story.”

Russia previously rejected claims that its troops had committed war crimes in Bucha, outside Kyiv.

Also, in his nightly video address to the Ukrainian people on Monday, President Zelensky said: “The occupiers are clearly in a panic,” adding that he was now focused on “speed” in liberated areas.  “The speed at which our troops are moving.  The speed in restoring normal life,” he said.

But Ukraine’s offensive in the south was going more slowly, meeting stiff resistance.

On Tuesday, Russia paved the way for the formal annexation of swathes of Ukrainian territory, backing referendum plans in areas of Ukraine its soldiers control in a direct challenge to the West that could sharply escalate the war.

After a critical battlefield defeat in northeastern Ukraine, President Putin is pondering his next steps.  Annexation is one answer.

In what appeared to be choreographed requests, Russian-backed officials across 15% of Ukrainian territory – an area about the size of Hungary or Portugal – lined up to request referendums on joining Russia.

The self-styled Donetsk (DPR) and the Luhansk People’s Republics (LPR), which Putin recognized as independent just before the invasion, and Russian-installed officials in the Kherson and Zaporizhzhia regions have asked for votes over less than 24 hours.  Luhansk, Donetsk and Kherson officials said the referendums would take place in just days – on Friday Sept. 23 through Monday Sept. 27.

Russia does not fully control any of the four regions, with only around 60% of Donetsk region in Russian hands.  Asked about the referendums, Russian Foreign Minister Sergei Lavrov said: “From the very start of the operation…we said that the peoples of the restrictive territories should decide their fate, and the whole current situation confirms that they want to be masters of their fate.”

If Moscow formally annexed a vast additional chunk of Ukraine, Putin would essentially be daring the United States and its European allies to risk a direct military confrontation with Russia, the world’s biggest nuclear power.

“All this talk about immediate referendums is an absolutely unequivocal ultimatum from Russia to Ukraine and the West,” said Tatiana Stanovaya, founder of the political analysis firm R. Politik.  French President Emmanuel Macron called the referendum plans “a parody.” 

“If the Donbas referendum idea wasn’t so tragic, it would be funny,” Macron told reporters in New York.

Dmitry Medvedev, who served as Russian president from 2008 to 2012 and is now deputy chairman of the Russian Security Council, backed the referendums, which he said would change the path of Russia history and allow the Kremlin more options for defense of what he said would become Russian territory.

“Encroachment onto Russian territory is a crime which allows you to use all the forces of self defense,” Medvedev said in a post on Telegram.  “This is why these referendums are so feared in Kyiv and the West.

“It is equally important that after the amendments to the constitution of our state, no future leader of Russia, no official will be able to reverse these decisions.”

Vyacheslav Volodin, the speaker of Russia’s lower house of parliament, the Duma, said he would support the folding in of the parts of Ukraine that voted to join Russia.

Ukraine said the threat of referendums was “naïve blackmail” and a sign Russia was running scared.  “The Russians can do whatever they want.  It will not change anything,” Ukraine’s Foreign Minister Dmytro Kuleba said in response to reporters’ questions at the United Nations.  In a tweet, he added: “Russia has been and remains an aggressor illegally occupying parts of Ukrainian land.  Ukraine has every right to liberate its territories and will keep liberating them whatever Russia has to say.”

Ukraine says it will not rest until every Russian soldier is ejected from its territory.  Kyiv says it will never accept Russian control over its territory and has called on the West to supply more and better arms to fight Russian forces.

President Biden warned in March that a direct confrontation between the NATO military alliance and Russia would mean World War III.  Biden and NATO leaders have been careful to say that they do not want NATO troops in direct conflict with Russian troops.

Last Friday, Putin brushed off the lightning Ukrainian counteroffensive in recent weeks and cast the conflict as an attempt to prevent what he said was a Western plot to carve up and destroy Russia.

Russia’s parliament on Tuesday approved a bill to toughen punishments for a host of crimes such as desertion, damage to military property and insubordination if they were committed during military mobilization or combat situations.

Vladimir Putin was then supposed to address the nation in a rare address Tuesday evening.  Instead, it was Wednesday morning and it shook a few people up, while what he said was unsurprising coming from Vlad the Impaler, the cornered rat.

Putin ordered a partial mobilization of reservists in Russia, in a measure that was an admission that Moscow’s war against Ukraine isn’t going according to plan.

Vlad told his countrymen that Russia is fighting “virtually the entire military machine of the collective West,” according to the text of the speech.  And: “The goal of that part of the West is to weaken, divide, and ultimately destroy our country,” he said.

The troops are needed “to defend our motherland and its sovereignty and territorial integrity, and to ensure the safety of our people and people in the liberated territories.”

According to Putin’s logic, “Washington, London, and Brussels are openly encouraging Kiev to move the hostilities to our territory,” he claimed, against any evidence in the public record.  “They openly say that Russia must be defeated on the battlefield by any means, and subsequently deprived of political, economic, cultural, and any other sovereignty and ransacked,” Vlad claimed.

Putin also warned the West that he isn’t bluffing over using all the means at his disposal to protect Russia’s territory, in what appeared to be a veiled reference to Russia’s nuclear capability.

Putin accused the West of engaging in “nuclear blackmail” and noted “statements of some high-ranking representatives of the leading NATO states about the possibility of using nuclear weapons of mass destruction against Russia.”

He didn’t identify who had made such comments.

“To those who allow themselves such statements regarding Russia, I want to remind you that our country also has various means of destruction, and for separate components and more modern than those of NATO countries and when the territorial integrity of our country is threatened, to protect Russia and our people, we will certainly use all the means at our disposal,” Vlad said.

He added: “It’s not a bluff.”

[Russia’s nuclear doctrine allows the use of such weapons if weapons of mass destruction are used against it or if the Russian state faces an existential threat from conventional weapons.]

Putin’s gambit has a strong element of risk – it could backfire, by making the Ukraine war unpopular at home and hurting his own standing, and it exposes Russia’s underlying military shortcomings.

The mobilization is unlikely to bring any consequences on the battlefield for months because of a lack of training facilities and equipment.

The U.S. ambassador to Ukraine, Bridget Brink, tweeted that the mobilization is a sign “of weakness, of Russian failure.”

John Kirby, spokesman for the White House’s National Security Council, said that when it comes to the nuke threat: “It’s irresponsible rhetoric for a nuclear power to talk that way.  But it’s not atypical for how he’s been talking the last seven months and we take it very seriously.”

British Defense Secretary Ben Wallace echoed that assessment, describing Putin’s move as “an admission that his invasion is failing.”

“He and his defense minister have sent tens of thousands of their own citizens to their deaths, ill-equipped and badly led,” Wallace said in a statement.  “No amount of threats and propaganda can hide the fact that Ukraine is winning this war, the international community are united and Russia is becoming a global pariah.”

Russian political analysts Dmitry Oreshkin said Putin’s announcement smacked of “an act of desperation.”  He predicted that Russians will resist the mobilization through “passive sabotage.”

“People will evade this mobilization in every possible way, bribe their way out of this mobilization, leave the country,” Oreshkin told the Associated Press in an interview Wednesday.

And so it was…as after Putin’s address, Russian media reported a sharp spike in demand for plane tickets abroad, even though far fewer of those have been available since the start of the war and they are much more expensive than before.

To wit….One-way flights out were rocketing in price and selling out fast on Wednesday after Putin’s order.  The announcement of the call-up of reservists raised fears that some men of fighting age would not be allowed to leave the country.  Direct flights from Moscow to Istanbul and Yerevan in Armenia, both destinations that allow Russians to enter without a visa, were sold out within hours, according to Aviasales, Russia’s most popular flight-booking site.

Putin’s announcement won’t go down well with the general public, Dmitry Oreshkin said, describing it as “a huge personal blow to Russian citizens, who until recently (took part in hostilities) with pleasure, sitting on their couches, watching TV. And now the war has come into their home.”

And so as a further example, traffic arriving at Finland’s and Georgia’s border with Russia “intensified” overnight (Wednesday) and remained elevated, the Finnish Border Guard said. 

Russian Defense Minister Sergei Shoigu said in a television interview following Putin’s speech that as many as 300,000 troops would be called up, with the move a gradual one.  Only those with relevant combat and service will be mobilized, Shoigu said.  He added that there are around 25 million people who fit this criteria, but only around 1% of them will be mobilized.

Shoigu added that 5,937 Russian soldiers had been killed since the start of the conflict. The United States in July estimated Russia’s death toll at about 15,000.

German Chancellor Olaf Scholz said on Tuesday in his first address to the United Nations General Assembly that Vladimir Putin will only give up his “imperial ambitions” that risk destroying Ukraine and Russia if he recognizes he cannot win the war.  “This is why we will not accept any peace dictated by Russia and this is why Ukraine must be able to fend off Russia’s attack.”

The return of imperialism, with Putin’s war on Ukraine, was not just a disaster for Europe but for the global, rules-based peace order, the chancellor said.  He called on the UN to defend this from those who would prefer a world where the “strong rule the weak.”

“Do we watch helpless as some want to catapult us back into a world order where war is a common means of politics, independent nations must join their stronger neighbors or colonial masters, and prosperity and human rights are a privilege for the lucky few?” Scholz asked.  “Or do we manage together to ensure the multipolar world of the 21st century remains a multilateral world?  My answer, as a German and European, is: we must manage it.”

Scholz announced Berlin would host a conference on the reconstruction of Ukraine on Oct. 25.  Germany would help the Kyiv government with the “enormous cost of rebuilding the country,” he said.

Addressing the United Nations General Assembly Wednesday, hours after Putin’s address to his people, President Biden declared that Russia has “shamelessly violated the core tenets” of the UN with its “brutal, needless war” in Ukraine.  He said the war is an affront to the heart of what the international body stands for as he looked to rally allies to stand firm in backing the Ukrainian resistance.

Biden said reports of Russian abuses against civilians in Ukraine “should make your blood run cold.”  And he said Putin’s new nuclear threats against Europe showed “reckless disregard” for Russia’s responsibilities as a signer of the Treaty on the Non-Proliferation of Nuclear Weapons.

The president criticized Russia for scheduling “sham referenda” this week in territory it has forcibly seized in Ukraine.

“A permanent member of the UN Security Council invaded its neighbor, attempted to erase a sovereign state from the map.  Russia has shamelessly violated the core tenets of the UN charter,” he told his UN audience.

Biden also pledged $2.9 billion in global food security aid to address shortages caused by the war and the effects of climate change.

So then it was Zelensky’s turn to speak, hours after Putin’s mobilization order.  Addressing the UN General Assembly by video Wednesday, Zelensky demanded a special UN tribunal impose “just punishment” on Russia for its invasion of Ukraine.

“A crime has been committed against Ukraine, and we demand just punishment. The crime was committed against the lives of our people. The crime was committed against the dignity of our women and men.”

Zelensky insisted his country would prevail in repelling Russia’s attack and forcing its troops out.  “We can return the Ukrainian flag to our entire territory. We can do it with the force of arms,” the president said. “But we need time.”

“They talk about the talks but announce military mobilization. They talk about the talks but announce pseudo-referendums in the occupied territories of Ukraine,” he said.

He said Moscow wants to spend the winter preparing its forces in Ukraine for a new offensive, or at least preparing fortifications while mobilizing more troops.

“Russia wants war. It’s true.  But Russia will not be able to stop the course of history,” he said, declaring that “mankind and the international law are stronger” than what he called a “terrorist state.”

Zelensky laid out what he said were five non-negotiable conditions for peace.  These included punishment for Russian aggression, restoration of Ukraine’s security and territorial integrity, and security guarantees.

Many of the delegates gave the Ukrainian leader a standing ovation at the end of his speech.

Addressing the Security Council Thursday, Russian Foreign Minister Sergei Lavrov defended Moscow’s war.  Lavrov was only in the chamber to deliver his address to the meeting of the 15-member body, which was attended by U.S. Secretary of State Antony Blinken and China’s Foreign Minister Wang Yi.

Lavrov did not listen to anyone else speak.

“I noticed today that Russian diplomats flee as aptly as Russian forces,” Ukraine’s Foreign Minister Dmytro Kuleba told the Security Council meeting on accountability in Ukraine.

Lavrov accused Kyiv of threatening Russia’s security and “brazenly trampling” the rights of Russians and Russian-speakers in Ukraine, adding that it all “simply confirms the decision to conduct the special military operation was inevitable.”

Ukraine’s Kuleba said: “The amount of lies coming from Russian diplomats is quite extraordinary.”

Lavrov said countries supplying weapons to Ukraine and training its soldiers were parties to the conflict, adding that “the intentional fomenting of this conflict by the collective West remained unpunished.”

Blinken pledged that Washington would continue to support Ukraine to defend itself.  “The very international order we’ve gathered here to uphold is being shredded before our eyes. We can’t let President Putin get away with it,” he told the council.

UN Secretary-General Antonio Guterres said that a nuclear conflict is “totally unacceptable.”  Guterres also said plans for “so-called” referendums were concerning.

“Any annexation of a state’s territory by another state resulting from the threat or use of force is a violation of the UN Charter and of international law,” Guterres said.

China’s Wang said the priority was to resume dialogue without preconditions and for both sides to exercise restraint and not escalate tensions.  “China’s position on Ukraine is clear,” Wang said.  “The sovereignty, territorial integrity of all countries should be respected and the reasonable security concerns of all countries should be taken seriously.”

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--There was some good news Wednesday. Russia released 215 prisoners to Ukraine in exchange for 55 of its own prisoners including close Putin ally Viktor Medvedchuk.  It is the largest prisoner exchange since Russia’s invasion of Ukraine.

Some of the Ukrainian fighters were captured after a protracted battle for the port city of Mariupol earlier this year, the Azov battalion.

Medvedchuk was a former Ukrainian lawmaker and ally of Putin accused of high treason.  He was arrested in April, after escaping house arrest on treason charges days after the Russian invasion.

[Russian nationalists are furious with Putin over the ‘trade.’]

Earlier in the say, Saudi Arabia said Russia had released 10 foreign prisoners of war captured in Ukraine following mediation by Saudi Crown Prince Mohammed bin Salman, including two Americans.

--Russian shelling damaged infrastructure in more than 50 settlements, including Bakhmut, Zaporizhzhia and Nikopol, with Russian forces also trying to hit a thermal power plant near the city of Slovyansk in the Donetsk region, the Ukrainian General Staff said in its Wednesday morning update.

Ukrainian troops pushed back Russian attacks near nine settlements, according to the statement.  Russia shelled the Zaporizhzhia nuclear plant overnight, causing damage at one of the power units, the Ukrainian nuclear operator Energoatom said on Telegram.  Russia hit residential buildings in Ukraine’s second largest city Kharkiv with missiles Tuesday night.  And they pounded the dam at a key reservoir in the Kharkiv region, with local authorities warning of the risk of “catastrophic flooding of territories.”

--Jailed opposition leader Alexey Navalny slammed Putin’s mobilization order during a court hearing, accusing the president of expanding the war to maintain his grip on power.

“Putin is tormenting a neighboring country, killing people there, and now he is throwing a huge number of Russian citizens into the meat grinder of war,” Navalny said in a video posted by his organization.  “It was a crime, and now it has become a crime of a much larger scale.”

An estimated 1,400 were arrested across Russia in protests the first 24 hours after Putin’s announcement.  It’s foolish to make too much of this, yet, as it’s scattered all over a rather massive country…35 arrests here, 32 there…but hopefully it’s a start.

Disturbingly, some of those arrested were handed draft notices.  Some university students who joined the demonstrations were threatened with expulsion, which could annul draft exemptions.

--Lithuanian Defense Minister Arvydas Anusauskas said the Baltic nation is putting its Rapid Reaction Force on high alert to prevent any provocation from Russia after Putin’s address.  “As Russia’s military mobilization will also take place near our borders, in the Kaliningrad region, Lithuania cannot just watch,” Anusauskas said in a Twitter post.

Reminder: The Kaliningrad exclave, a former German territory that was seized by the Soviet Union in World War II and which is now sandwiched between NATO members Lithuania and Poland, has been cut off in part from Russia’s main territory with all of the economic sanctions levied against Russia.  But there are nukes there.

--India’s prime minister, Narendra Modi, publicly criticized Russia’s invasion of Ukraine, telling President Putin at a summit in Uzbekistan that “today’s era is not an era of war.”  Putin responded that he understood Modi’s concerns, but that his goals in Ukraine had not changed – the main one being the “liberation” of the Donbas region.  He then appeared to threaten to hit more civilian infrastructure.

--Alla Pugacheva, the queen of Soviet pop music, on Sunday denounced Putin’s war, which she said was killing soldiers for illusory aims, burdening ordinary people and turning Russia into a global pariah.

Since the Feb. 24 invasion, Russia has cracked down on dissent, with fines for artists who make anti-war comments.  State TV casts critics as traitors to the motherland.

Pugacheva, 73, a Soviet and them post-Soviet icon who is probably Russia’s most famous woman, requested Russia also class her as a “foreign agent” after her husband, 46-year-old TV comedian Maxim Galkin, was on Sept. 16 included on the state’s list.

“I ask you to include me among the ranks of foreign agents of my beloved country because I am in solidarity with my husband,” Pugacheva said on Instagram which is banned in Russia.

When Mikahil Gorbachev died, she praised the last Soviet leader for allowing freedom and rejecting violence.

--Russia seems to be having trouble treating its wounded soldiers from the Ukraine front, according to Mark Krutov of Radio Free Europe/Radio Liberty.  Krutov on Monday found that employees of Russian energy giant Gazprom “are being forced to chip in at least RUB 1000 ($17) each to buy medications for Russian soldiers wounded in Ukraine – due to the “catastrophic lack of supplies in hospitals.”

--Slovenia said it’s giving Ukraine 28 M-55S tanks soon.  In exchange, Berlin’s military will aid in the transfer and Slovenia will receive various transport vehicles from the German military.

--Thursday, U.S. Treasury Secretary Janet Yellen said a planned Western cap on Russian oil is already making a difference, noting that Russia was now offering China and India “enormous discounts” while looking for other outlets for its oil.  In December, Europe would halt the bulk of its purchases of 3 million barrels per day, putting additional pressure on Russia to find new buyers for its oil, Yellen told a conference.

Opinion….

Roger Cohen / New York Times

“Vladimir V. Putin’s menacing televised address on Wednesday was much more than a bid to change the course of his faltering war against Ukraine. It attempted to invert a war of aggression against a neighbor into one of defense of a threatened ‘motherland,’ a theme that resonates with Russians steeped in patriotic history.

“Mr. Putin aimed at nothing less than altering the meaning of the war for his country, raising the stakes for the entire world.  He warned the West in unmistakable terms – ‘this is not a bluff’ – that the attempt to weaken or defeat Russia could provoke nuclear cataclysm….

“Mr. Putin cornered is Mr. Putin at his most dangerous.  That was one of the core lessons of his hardscrabble youth that he took from the furious reaction of a rat he cornered on a stairwell in what was then Leningrad.

“ ‘Russia won its defensive wars against Napoleon and Hitler, and the most important thing Putin did here from a psychological perspective was to claim this, too, is a defensive war,’ said Michel Eltchaninoff, the French author of ‘Inside the Mind of Vladimir Putin.’  ‘It was an aggressive war.  Now it’s the defense of the Russian world against the Western attempt at dismemberment.’

“In Mr. Putin’s telling, that imagined world imbued with some inalienable Russian essence has grown in size.  He said Russia would support imminent referendums in four regions of Ukraine on whether to join Russia – votes denounced by Ukraine and the West as a sham, and a likely prelude to annexation.

“The Kremlin has signaled that if it absorbs that territory, the Ukrainian counter offensives underway in the east and south to recapture territory seized by Russia would be considered attacks on Russian soil, justifying any level of retaliation, up to and including a nuclear response.

“ ‘If the territorial integrity of our country is threatened, we will of course use all means at our disposal to defend Russia and our people,’ Mr. Putin said.

“His speech, which may of course be a bluff despite his denial, nevertheless placed before the West a dilemma that has been inherent in its policy from the start of the war: How far can intense military and logistical support of Ukraine – effectively everything short of NATO troops on the ground – go without setting off nuclear confrontation?

“ ‘I believe the nuclear threat is a bluff but it gives Putin a means to terrify the West, and accentuate divisions about providing arms because some may now view that as too dangerous,’ said Sylvie Bermann, a former French ambassador to Russia….

“Full of anger and venom, portraying Ukraine as the headquarters of neo-Nazis and the West as a giant engine of ‘Russophobia,’ Mr. Putin appeared as deluded about the neighbor he attacked as he was in his Feb. 24 speech that announced the war.

“He has downsized Russia’s military ambitions in Ukraine…without downsizing his obsessions over Russian humiliation at the breakup of the Soviet Union three decades ago….

“Mr. Putin ‘claimed he had to act because Russia was threatened.  But no one threatened Russia and no one other than Russia sought conflict,’ Mr. Biden said.

“The speeches came on the eve of a winter that will be hard in Europe, with inflation and energy costs rising, and days before an Italian election Sunday in which a far-right candidate, Giorgia Meloni, is the favorite. The European extreme right has generally been sympathetic to Moscow, although her own position appears to be evolving.

“Up to now, President Biden has been very effective in cementing western unity.  But while the Biden administration has little apparent faith in diplomacy with Moscow at this stage, France and Germany still seek the dialogue with Russia that Mr. Macron mentioned in his speech on Tuesday to the United Nations, a dialogue judged necessary, he said, because ‘we seek peace.’

“Not at any price, however.  Mr. Macron’s position has hardened.  He presented a stark picture of a world hovering on the brink of war and brutal division as a result of Russia’s ‘imperial’ aggression.

“He said the world was close to ‘an enlarged era of conflict, a permanent one, where sovereignty and security will be determined by force, by the size of armies.’  It was imperative, he insisted, that those remaining neutral – an apparent reference to India and China, among others – speak out.

“ ‘Those who are silent today are, despite themselves, or secretly, serving the cause of the new imperialism,’ Mr. Macron said.

“The Russian attempt to rebuild the imperium lost at the dissolution of the Soviet Union finds itself at a treacherous crossroads.  After multiple military setbacks, Mr. Putin spoke from a weaker position than the one he held seven months ago.

“ ‘The situation is very dangerous because Putin is in a trap,’ Ms. Bermann said.”

Fintan O’Toole / Irish Times

“The Russians have long regarded ‘General Winter’ as one of their greatest military leaders.  Vicious cold assaulted the remains of Napoleon’s Grande Armee in 1812.  The snow and freezing winds made life unbearable for Hitler’s half-starved Sixth Army at Stalingrad in 1943.

Vladimir Putin is losing his insane war on Ukraine.  A counteroffensive has liberated the Kharkiv region and Ukraine seems, for now at least, to have gained the initiative.

“But this is still a long, grinding conflict, and Putin is counting on General Winter again.  The difference this time is that the big chill is to do its work very far indeed behind enemy lines, as much in Cork as in Kyiv.

“Putin’s gamble in Ukraine was always based on his perception of western weakness.  He did not believe that the rest of Europe would be willing to endure, for the sake of a country whose very existence he doubts, the privations he can impose through his control of much of its energy supply.

“The uncomfortable truth is that we can’t yet say with confidence that he’s wrong.  General Winter is about to combine forces with Field Marshal Electricity Bill.  They will make a formidable army.

“I don’t know if there has ever quite been a war like this before, where the outcome depends so much on the pain threshold of those who are not part of it. Ukraine cannot prevail without the financial and military support of democratic governments.

“Those governments rely on the tolerance of their own electorates. The battle lines thus run through our bathrooms and kitchens.

“The cost of having a shower in Roscommon or cooking a pot of pasta in Rome weighs heavily on the fate of Ukraine.  Our light switches count, alongside drones and rockets, as weapons of war.

“It’s a strange feeling – and strange feelings create unpredictable responses.  No one really knows how far a general sense of solidarity will stretch if ordinary people have to choose between heating and eating.

“How will it be when governments are facing their own enraged and desperate citizens and Putin makes it known to them that if they push Ukraine to make some concessions he could see his way to pump some cheap gas?

“So much rests on the answer.  The stakes include the future of liberal democracy and the future of the planet.

“There is a lot to be said about how badly the West misunderstood Putin and underestimated the strength of the psychic hold that paranoia about ‘encirclement’ has over Russians.  There is a lot to be teased out eventually about the conflicting and sometimes downright contradictory signals NATO gave about its intentions towards Ukraine.

“But right now there is just one imperative: Putin must not win.  If he does, any hope for a law-bound international order is over.  The ability of the democracies to withstand the internal subversion of authoritarian populist movements (all of whom are, not coincidentally, in thrall to Putin) will be fatally undermined….

“Ukraine’s successes on the battlefield will help to reassure the citizens of its allied countries that their sacrifices are not pointless.  But they also make it ever more obvious to those citizens that this war has a long way to go.

“The first glow of indignation and sympathy has faded.  It has to be replaced by a realistic campaign to mitigate the problems the war creates for ordinary people in the West.

“Winter is coming. Governments must act to make sure that our hearts do not grow cold towards Ukraine.”

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Wall Street and the Economy

The Federal Reserve’s Open Market Committee raised the benchmark funds rate an expected 75 basis points to a range of 3% to 3.25% at the end of its two-day meeting Wednesday, with the year-end target for fed funds revised up sharply to 4.4% from 3.4% previously.

The updated estimates for the funds rate also show another 25-basis point tightening in 2023 to 4.6% before easing to 3.9% in 2024 and 2.9% in 2025.

You can ignore the forecasts for 2024 and 2025, and basically all but the beginning of 2023, but with two more meetings this year, Nov. 1-2 and Dec. 13-14, you are looking at certainly another 75 basis points in November, and then we’ll see in December but it will be a further hike.  The 4.4% rate estimate means 75- and 50-bps the next two but lots of data and geopolitical news to consider.

The Statement of Economic Projections also showed that inflation growth is expected to be faster than previously expected over the next three years, GDP growth over the same period slower and the unemployment rate higher.

Fed officials now expect 0.2% growth in GDP this year, down notably from 1.7% projected in June, and just 1.2% in 2023 and 1.7% in 2024. [Goldman Sachs adjusted its GDP forecast to 1.1% in 2023, with 2022 unchanged at 0%.]

The FOMC in its statement said: “The committee is strongly committed to returning inflation to its 2% objective.”

In his press conference Wednesday afternoon, Powell said: “My main message has not changed since Jackson Hole.  The FOMC is resolved to bring inflation down and we will keep at it until the job is done.”  He added, the funds rate will likely need to remain elevated for “some time.”

That’s really all you need to know.  The Fed is staying the course, belatedly so.  The stock market responded by falling over 500 points, and then more the rest of the week.

Powell also said the housing market will have to go through a “correction” to get supply and demand into better balance and return housing price growth to a more normal pace.

Speaking of which, existing-home sales for August declined a seventh consecutive month, though at a pace that was a little better than expected, with the median existing-home price rising 7.7% from a year ago to $389,500, but it was the second month in a row that the median sales price fell after reaching a record high in June.

Six percent+ mortgage rates will do that, and on that front, Freddie Mac’s weekly barometer, released Thursdays, had the rate on a 30-year fixed-rate mortgage up to 6.29% vs. 6.02% a week ago and 3.11% on Dec. 31, highest since October 2008.

The Atlanta Fed’s GDPNow barometer for third-quarter growth is down to 0.3%.

Editorial / Wall Street Journal

“The Federal Reserve’s release of its latest economic thinking on Wednesday continued what you might call its gradual climb to meet inflation reality.  It has taken far too long, but the central bankers are getting closer to the degree of monetary tightening required to get inflation down.

“The Federal Open Market Committee raised its target fed funds rate another 75 basis points to between 3% and 3.25%.  That’s the third 75-point hike in a row.  More significant is the forward guidance in its median economic projections that rates could rise another 125 basis points this year and higher than that in 2023.  This suggests a so-called terminal rate during this tightening cycle that is higher than 4.5% and could be 5% next year.

“While the pace of rate increases has been fast in recent months, the story of the last year is how long it took the Fed to act.  The median Fed projection for its target rate for 2022 has climbed from 0.9% last December to 1.9% in March, 3.4% in June and now 4.4%.  That march upward reflects the Fed’s historic misjudgment in how high inflation would increase and how persistent it would turn out to be.

“One cost of delay will be slower economic growth as the Fed must tighten more than it otherwise would have.  The median forecast of board members and bank presidents for economic growth this year is now a mere 0.2%, down from 1.7% in June, 2.8% in March – and 4% last December if you can believe they believed that only nine months ago.  The GDP growth forecast for next year is a still meager 1.2%.  In short, we’re in for stagflation.

“Even this might be optimistic if you consider Milton Friedman’s admonition that monetary policy operates with long and variable lags.  This means today’s tightening might not have its greatest impact until the end of 2023 or into 2024.  Equity markets voted with the pessimists Wednesday as they sold off late, and bond yields retreated from intraday highs.

“Rumors of looming recession are everywhere, but the Fed still has inflation falling rapidly in 2023 and unemployment rising only modestly to a high of 4.4% from 3.7% today.  That’s about as soft a landing as anyone could expect.  It assumes there are no financial surprises along the way, which there always are as rising rates trip up the over-leveraged.

“Chairman Jerome Powell would no doubt count this Fed forecast as a victory if he can pull it off.  Given the deep inflationary hole we’re in, and the lack of any pro-growth policies from the Biden Administration or Congress, it’s probably the best we can hope for.”

Europe and Asia

The Swiss National Bank raised interest rates by 75 basis points to bring borrowing costs above zero for the first time in almost eight years, following other recent moves in the euro region, such as a full-point increase out of Sweden’s Riksbank.  The Swiss increase was the central bank’s most aggressive tightening in two decades.

The Bank of England raised its key lending rate a seventh consecutive time, this time 50 basis points.

The German producer price index for August, ex-energy, came in at a staggering 14%, and the German 10-year yield rose to 1.96% on Thursday (over 2.00% Friday), highest since 2014.  The European Central Bank will be meeting next month to further hike rates.

Britain: The government said on Wednesday it would cap wholesale electricity and gas costs for businesses at less than half the market rate from next month, helping to relieve the pressure of soaring energy costs but adding to the government’s fast-rising spending. 

Wholesale prices for electricity will be capped at about 211 pounds ($239) per megawatt hour and for gas at 75 pounds per MWh, compared to forecast market rates of 600 pounds and 180 pounds respectively.

“We have stepped in to stop businesses collapsing, protect jobs and limit inflation,” said finance minister Kwasi Kwarteng.

Groups representing businesses from pubs to steelmakers welcomed the intervention, saying the government had thrown a lifeline to companies battling to survive.  But the government didn’t publish any estimate of the costs, though reports have put it at 42 billion pounds, on top of more than 100 billion pounds for a previously announced scheme to help households.

And then today, the new Truss government announced a sweeping plan of tax cuts it said would be funded by borrowing and revenues generated by anticipated growth, and the British stock and bond markets dived as Treasury chief Kwarteng offered few details on the cost of the program and its impact on the government’s own targets for reducing deficits and borrowing.

Italy: Italians go to the polls this weekend as the nation, which has seen seven governments in 11 years, holds parliamentary elections on Sunday, with Giorgia Meloni’s Brothers of Italy party leading in preelection polls.  If it prevails, she would become the nation’s first female prime minister – and first far-right leader since Mussolini.

Meloni has been called a fascist, an extremist and – to an extent – a de facto heir to the 20th century dictator.

The trend for far-right leaders has been seen across Europe.  This month in Sweden, the ultraconservative Sweden Democrats party took a surprising 20% of the vote.  In France, Marine Le Pen, a second-generation right-winger and perennial presidential candidate, has seen support increase with every new election.  Hungary’s Viktor Orban – who openly advocates an “illiberal democracy” as he shuts down university programs and civil-society organizations – recently decried the “mixing of races.” The prime minister’s words and deeds recently prompted the European Parliament to declare in a vote that “Hungary can no longer be considered a full democracy,” but “an electoral autocracy” in which basic democratic norms aren’t observed.

Turning to Asia…there was zero major economic news from China this week.

In Japan…August inflation was up again, 3.0% year-over-year, after 2.6% in July, though ex-food and energy the rate was 1.6% Y/Y.

The Bank of Japan maintained its ultra-loose monetary policy and dovish policy guidance on Thursday, remaining an outlier among the wave of central banks raising interest rates to combat soaring inflation.

But the Ministry of Finance intervened in currency markets to sell dollars and buy yen, the first such intervention in 24 years, to slow the recent fall in the Japanese currency.  The yen fell to 145.87 to the dollar, its weakest level since 1998, before the intervention.

Street Bytes

--Update 9:00 PM ET, after a very long drive: It was a second consecutive godawful week for the major indexes, with the Dow Jones falling 4.0% to 29590, lowest since Nov. 2020. The S&P 500 lost 4.7%, finishing at 3693, just above its lows, while Nasdaq lost 5.1%, making it over 10% in just the last two weeks and over 30% for the year.

It’s all about the global growth scare and rising bond yields, coupled with escalation in Ukraine.

Bank of America reports investors are flocking to cash and shunning almost every other asset class as they turn the most pessimistic since the global financial crisis.

Cash had inflows of $30.3 billion, while global equity funds saw outflows of $7.8 billion in the week through Sept. 21, the bank said in a note from its strategists, led by Michael Hartnett.  Bonds lost $6.9 billion, while $400 million left gold, the data showed.

Investor sentiment is “unquestionably” the worst it’s been since the crisis of 2008, with losses in government bonds being the highest since 1920, Hartnett wrote in a note.

Earnings season is around the corner and analysts project profit among companies in the S&P 500 will rise 3.5% from a year earlier, down from forecasts for 9.8% on June 30, according to FactSet.  Estimates for 2022 growth have declined to 7.7% from 9.6%.

--U.S. Treasury Yields

6-mo. 3.86%  2-yr. 4.20%  10-yr. 3.68%  30-yr. 3.61%

It bears repeating…the yield on the 2-year was 0.72% last Dec. 31…an historic rise.

But the yield on the British 10-year bond rose from 3.13% to 3.82% in one week, for reasons given above.

--A 98-day stretch of declines in the average national gasoline price ended on Wednesday, as the price of crude appeared to have stabilized in the $80s the past few weeks (the high on West Texas Intermediate being $120 in mid-June).  But oil is collapsing Friday to below $80, which augurs for further declines at the pump if it sticks.

The national average gas price was up a smidge Wednesday to $3.68 a gallon (where it finished the week), after peaking at $5.01.  [The price at the pump down the road from me is $3.79, off a high of $5.45.]  Diesel has been declining steadily, finally, and is now $4.91 (though still way over last year’s $3.30).

Jinjoo Lee of the Wall Street Journal has a piece today on the Strategic Petroleum Reserve after the U.S. Energy Information Administration said this week the SPR declined by nearly 7 million barrels in the week ended Sept. 16, “leaving it at roughly 427 million barrels – the lowest since 1984.”

The Department of Energy on Monday said it plans to sell up to 10 million barrels from the SPR in November, extending the SPR draw beyond the initial October target.  This leaves levels perilously low, at a rather dangerous time, geopolitically in particular.

--Walmart Inc. announced its holiday hiring is cooling along with demand for patio furniture and apparel.

The company said Wednesday that it plans to hire around 40,000 mostly seasonal workers for the busy holiday shopping period and that it would offer current employees extra hours before filling roles.  Last year, Walmart was scrambling for around 150,000 permanent employees to work over the holidays and beyond.

A Walmart spokeswoman said the company is hiring less this year because its operations are better staffed versus a year ago.  The company had about 1.7 million U.S. employees as of January, compared with 1.6 million as of early 2021.

Among the 40,000 WMT is looking to hire are 1,500 full-time permanent truck drivers.

Target Corp. said on Thursday it plans to hire up to 100,000 seasonal workers and start offering festive deals earlier than previous years.  The big-box retailer had hired 100,000 workers for last year’s holiday season.  Back in 2019 and 2020, the company hired about 130,000 seasonal workers each year.

[Earlier this month, UPS said it planned to hire around 100,000 seasonal workers, about the same amount it planned to hire last year.]

The early holiday retail sales outlook calls for a rise of between 4% and 6% year over year from November to January, according to Deloitte’s annual holiday retail forecast released Sept. 13.

--Banks including Wells Fargo, Bank of America, and JPMorgan Chase have pulled back on financing for offices and other commercial real estate following a record burst of lending in the first half of this year.

The biggest lenders – including Morgan Stanley and Goldman Sachs – have become more selective and stiffened borrowing terms while issuing fewer new commercial property loans.

It’s a combination of weaker client demand and the surge in rates.  And, in some case, heightened regulatory oversight, as the government looks to gauge risk and how severe losses could be in a worst-case scenario.

--Ford Motor Co. said a lack of parts and inflation would leave it with a third-quarter operating profit way below consensus and the shares fell steeply.  The company said the costs of parts would be $1 billion higher in the third quarter of the year than it had expected because of inflation and shortages of some components.  The warning indicates that the supply chain chaos is continuing to hurt car companies and could drag into 2023.

In Monday’s disclosure, Ford said it won’t finish 40,000 to 45,000 higher-margin trucks and SUVs it had planned to produce by the end of the third quarter.  Those vehicles will be completed by the end of the year.

Ford says that shortfall in output, combined with $1 billion in higher-than-expected costs, will result in a quarterly operating profit of about $1.4 billion to $1.7 billion.  Analysts were projecting about $2.9 billion in operating profit before the update.

But the company stuck with an earlier forecast that operating profit for the full year will be between $11.5 billion to $12.5 billion.  Given its performance in the first three quarters of the year, Ford will need to earn about $4.5 billion in the fourth quarter to hit that number, which is well ahead of current consensus.

--Newark Liberty International Airport ranked last among major U.S. airports for on-time flights through the first six months of this year – with more than 1 in 3 flights arriving or departing late, according to an NJ.com analysis of federal data.

May was the worst month with just 56% of flights arriving or departing on time.  June was only 59%, according to data from the Department of Transportation.

Compared to the 30 largest airports in the U.S., Newark was the worst from January to June with 61% of flights on-time, followed by Denver International (67%), JFK International (68%) and Regan National (68%).  LaGuardia was in the bottom 10 with 71% of flights arriving and departing on-time.

--Boeing settled with the SEC for $200 million over issues related to the 737 MAX, and how Boeing communicated to the public, and investors, following two deadly MAX crashes.

“We will never forget those lost on Lion Air Flight 610 and Ethiopian Airlines Flight 302,” Boeing said in a statement. “And we have made broad and deep changes across our company in response to those accidents – fundamental changes that have strengthened our safety processes and oversight of safety issues, and have enhanced our culture of safety, quality, and transparency.”

Boeing says the settlement fully resolves SEC issues related to the MAX.  Last year, Boeing reached a $2.5 billion settlement with federal prosecutors as part of a deferred prosecution agreement.

SEC chair Gary Gensler said in his own statement: “In times of crisis and tragedy, it is especially important that public companies and executives provide full, fair and truthful disclosures to the markets.  The Boeing Company and its former CEO, Dennis Muilenburg, failed in this most basic obligation.”

--TSA Checkpoint travel numbers vs. 2019 levels…

9/22…94 percent of 2019 levels
9/21…91
9/20…93
9/19…93
9/18…94
9/17…97
9/16…92
9/15…95

--Workers are returning to U.S. offices at the highest rate since the pandemic, as infection rates continue to decline and more companies intensify efforts to bring employees back.

Office use on average was 47.5% of early 2020 levels for workers in the office over the five business days from Sept. 8 to Sept. 14 in the 10 major metro areas monitored by Kastle Systems, which tracks security swipes into buildings, the highest percentage since late-March 2020.

Office use for Tuesday and Wednesday was at about 55% last week, also a high during the pandemic, Kastle said. 

Ridership on the Long Island Rail Road surpassed 200,000 for the first time since March 2020.  Metro-North (which serves the New York and Connecticut ‘burbs) also reached a high a week ago Wednesday.

In Texas, normally the leader in return-to-office usage figures, downtown Houston experienced a 10-point rise after Labor Day to 63% after being stuck on about 50% for five months, according to Central Houston Inc., which monitors mobile phone movement entering office buildings.

--FedEx, whose shares tanked a record 21% the other week when it preannounced poor results, reported its official earnings for its fiscal first quarter Thursday and the company outlined cost cuts of up to $2.7 billion after falling demand and company missteps hammered results.  The shares rose slightly but were still near their 52-week low.

Earnings per share fell 21.3% for the quarter ended Aug. 31, in line with its prior warning, as the company blamed a rapidly deteriorating global economy and the CFO said he expects the weak trends to persist across most regions for the rest of the current fiscal year.

Analysts and investors were skeptical – in large part because revenue increased 5.5%.  On the conference call, analysts asked FedEx executives pointed questions such as whether they had the right team in place to set the company on the right path.  One asked why FedEx was underperforming rival United Parcel Service with its more costly unionized workforce.

And on the revenue side, FedEx announced plans to raise average rates by 6.9% starting on Jan. 2.  Executives defended the action, even as analysts questioned the wisdom of pushing through its biggest-ever increase when demand is cooling.

Last week, FedEx said adjusted earnings per share for the quarter ended Aug. 31 fell to $3.44 from $4.37 a year earlier, even though revenue rose to $23.2 billion from $22 billion.

--General Mills lifted its fiscal 2023 outlook as at-home food consumption trends are expected to drive sales volume higher while the company’s fiscal first-quarter earnings topped analysts’ expectations.

The food producer said Wednesday it now anticipates adjusted per-share profit to rise 2% to 5% in constant-currency terms, up from its prior guidance for EPS to be flat to up 3%.  The company expects organic net sales growth of 6% to 7%, up from previous projections of 4% to 5%.

“Significant inflation and reduced consumer spending power has led to an increase in at-home eating and other value-seeking behaviors,” CEO Jeff Harmening said in a statement. 

General Mills sees higher input cost inflation during the fiscal year, now between 14% to 15% of cost of goods sold.

GIS reported adjusted EPS of $1.11 per share, up from $0.99 a year earlier and ahead of the Street’s view of $1.  Net sales advanced 4% to $4.72 billion, matching analysts’ mean estimate.

Sales in the North America retail segment climbed 10% to $2.99 billion in the quarter, with 19% and 21% gains for the pet and foodservice divisions, respectively, according to the company. International sales slumped 30% to $652.5 million.

--The Southern California median home price remained unchanged in August from the previous month as rising mortgage rates made houses even less affordable for many people.

The six-county region’s median held steady at $740,000, the fourth consecutive month prices didn’t increase, according to data released Tuesday by real estate firm DQNews.

Sales of new and existing houses, condos and townhomes dropped 28.3% from a year earlier.

The steep rise in borrowing costs, with rates over 6%, adds more than $1,000 to the monthly payment for a median-priced home of $740,000 – a cost many can’t afford.

For those who can stomach the increase, the Southern California median price is 2.6% less than the all-time high reached this spring.  The median price is 6.7% below the peak in Orange County.

--Gap is cutting 500 corporate jobs, mainly in the New York and San Francisco offices, as well as in Asia.

“We’ve let our operating costs increase at a faster rate than our sales, and in turn our profitability,” Bob Martin, Gap’s executive chairman and interim CEO, wrote in a memo to employees on Tuesday.

The company has endured years of slumping sales at the flagship Gap brand and, more recently, problems at the Old Navy chain, which accounts for more than half of total revenue.

Last week, the company said it was ending a partnership with Kanye West to make clothes under the Yeezy Gap label, after Mr. West accused the company of breaching the 10-year agreement.

Gap had about 8,700 employees in headquarters locations as of Jan. 29, according to its annual report.

Gap swung to a loss of $49 million in the three months ended July 30 from a profit of $258 million a year earlier. Net sales fell 8% to $3.86 billion.

--Uber Technologies said a hacker affiliated with the Lapsus$ hacking group was responsible for a cyber attack that forced the ride-hailing company to shut several internal communications temporarily last week.

Uber said the attacker had not accessed any user accounts (as first feared) and the databases that store sensitive user information such as credit card numbers, bank accounts or trip details.

The company said it was in close coordination with the FBI and the Department of Justice on the matter.

--Beyond Meat Inc.’s chief operating officer was arrested in Arkansas over the weekend, after a physical altercation in which he allegedly bit a person’s nose and threatened to kill him.

Doug Ramsey, 53, of Fayetteville, Ark., was arrested Saturday night and charged with terroristic threatening and third-degree battery.  He was released the following morning on $11,085 bond, according to court records.

Ramsey joined Beyond Meat in December following a 30-year career at Tyson Foods Inc., where he oversaw the meat giant’s domestic poultry and global McDonald’s Corp. businesses.

California-based Beyond Meat has struggled with languishing sales and fallout from the Covid-19 pandemic.  The plant-based meat company has reported losses in recent quarters due partly to weaker demand for its products in grocery stores.

Ramsey got into a fight in a parking garage following a University of Arkansas football game.  The arresting officer wrote in the report that “Mr. Ramsey also bit the owner’s nose, ripping the flesh on the tip of the nose.”

This is what happens when you work with real meat for 30 years and are suddenly thrown into an alternate universe.

--We note the passing of Fred Franzia, champion of inexpensive wine, who died at the age of 79 last week.  As Jonah Valdez of the Los Angeles Times put it:

“Fred Franzia once said that if you get a group of consumers together and have a blind tasting between his $2 wine and a $10 wine, most wouldn’t be able to taste the difference.

“ ‘If you can’t tell the difference or taste the difference, then why spend the money?” he said.

“It’s a question he posed and acted on in a blind move of his own in the middle of the grape surplus of the early 2000s, creating his Charles Shaw line of wines priced at a mere $1.99 at Trader Joe’s stores.

“The move was seen, mostly by the Napa elite Franzia so despised, as a fad that would quickly fade once the surplus ended.  Instead, Franzia and his line of wine, which buyers affectionately knew as ‘Two Buck Chuck,’ revolutionized the way wine was seen and sold across California and the U.S.

“ ‘I don’t make wine to put in a closet,’ Franzia told ABC News in a 2009 interview after selling more than 500 million bottles of his discount wine.  ‘We sell wine to drink.’”

Franzia was the nephew of Ernest Gallo, founder of E&J Gallo Winery, which today is the largest producer of California wine.  Franzia’s father and uncle ran Franzia Brothers Winery based in the Central Valley city of Rion, where Franzia grew up working in the family’s vineyards, he told the New Yorker.

In 1973, Coca-Cola bought Franzia Brothers, and Franzia, along with his brother and cousin, decided to start their own wine company, Bronco Wine Co.  Bronco acquired huge parcels of land for its vineyards and Franzia relied on the company’s massive scale, along with aggressive efficiency, to keep the cost of his wine low.

In 1994, Franzia and other Bronco executives were indicted on federal fraud charges for falsely claiming that their wine came from premium grapes, such as zinfandel, chardonnay or cabernet.  Although five were imprisoned, Franzia avoided incarceration by pleading guilty, paying $500,000 in fines and stepping down as Bronco’s president.

--Many of you saw the story of the tractor trailer in Florida, loaded with Coors Light cans, that had an accident and spilled all its cargo.  If you get one of those cans, just remember to tap the top…it’s been violently shaken, you understand.

The Pandemic

--I have to go back to a Lancet Commission report on the lessons for the future from the Covid-19 pandemic.

From the executive summary:

“As of May 31, 2022, there were 6.9 million reported deaths and 17.2 million estimated deaths from Covid-19, as reported by the Institute for Health Metric and Evaluation (IHME).  This staggering death toll is both a profound tragedy and a massive global failure at multiple levels. Too many governments have failed to adhere to basic norms of institutional rationality and transparency, too many people – often influenced by misinformation – have disrespected and protested against basic public health precautions, and the world’s major powers have failed to collaborate to control the pandemic.

“The multiple failures of international cooperation include (1) the lack of timely notification of the initial outbreak of Covid-19; (2) costly delays in acknowledging the crucial airborne exposure pathway of SARS-CoV-2, the virus that causes Covid-19, and in implementing appropriate measures at national and global levels to slow the spread of the virus; (3) the lack of coordination among countries regarding suppression strategies; (4) the failure of governments to examine evidence and adopt best practices for controlling the pandemic and managing economic and social spillovers from other countries; (5) the shortfall of global funding for low-income and middle-income countries (LMICs), as classified by the World Bank; (6) the failure to ensure adequate global supplies and equitable distribution of key commodities – including protective gear, diagnostics, medicines, medical devices, and vaccines – especially for LMICs; (7) the lack of timely, accurate, and systematic data on infections, deaths, viral variants, health system responses, and indirect health consequences; (8) the poor enforcement of appropriate levels of biosafety regulations in the lead-up to the pandemic, raising the possibility of a laboratory-related outbreak; (9) the failure to combat systematic disinformation; and (10) the lack of global and national safety nets to protect populations experiencing vulnerability.”

Other than all this, a job well done.  Or maybe not.

--Leana S. Wen / Washington Post

“President Biden’s off-the-cuff comment during a ’60 Minutes’ interview that ‘the pandemic is over’ has sparked outrage from all sides.  Republicans are accusing Biden of hypocrisy as he asks Congress for more Covid-19 funding, while some on the left point to the disease’s continued death toll as evidence that the pandemic is nowhere near its finish line.

“These criticisms don’t detract from Biden’s point.  He’s right.  By multiple definitions, the pandemic is over.  That doesn’t mean that the coronavirus is no longer causing harm; it simply signals the end of an emergency state as Covid has evolved into an endemic disease.

“A pandemic is something that upends our daily lives and profoundly alters the way that we work, go to school, worship and socialize. That was certainly the case in March 2020.  I was among the public health experts who urged people to ‘stay home, save lives.’  We called for Americans to avoid ‘play dates, sleepovers, bars, restaurants, parties or houses of worship.’  Employers sent workers home en masse.  Schools pivoted to remote instruction.

“Things changed with the arrival of vaccines.  Many individuals, once vaccinated, began resuming their pre-pandemic activities.  Others, like my family, waited until younger kids could receive the shots.  By now, the vast majority of Americans have been vaccinated or recovered from Covid-19 or both.  The preventive antibody Evusheld and treatments such as Paxlovid and monoclonal antibodies provide further protection against severe illness.

“As a result, most Americans have turned the page and abandoned mitigation measures.  By August, according to a Morning Consult poll, just 14 percent of adults viewed Covid as a severe health risk.  This tracks with their other findings that only 28 percent still mask in all settings, while 75 percent were comfortable with indoor dining.

“For most of the country, the pandemic is effectively over because it is no longer altering people’s day-to-day lives.  To them, Covid has evolved from a dire deadly disease to one that’s more akin to the flu.  It’s still something people want to avoid, and they’ll take basic steps to do so, such as getting an annual vaccine.  Some might choose to take extra precautions, such as masking in indoor settings.  But the societal end of the pandemic has already arrived, a sentiment reflected in Biden’s comment.”

--Japanese Prime Minister Fumio Kishida said on Thursday his country will ease Covid-19 border control requirements next month, a key step in fostering a recovery in Japan’s tourism sector, which is eager to take advantage of the yen’s slide to a 24-year low.

Japan has maintained some of the strictest border measures among major economies since the pandemic’s onset, having effectively blocked entry to visitors for two years until it began a gradual reopening in June.

--Hong Kong’s leader announced the city would no longer require incoming travelers to quarantine in designated hotels as it seeks to remain competitive and open up globally after nearly two years.

Incoming travelers will also no longer need a negative PCR test within 48 hours before boarding a plane to Hong Kong, the city’s chief executive John Lee said Friday at a news conference.  Instead, they will need to present a negative Covid-19 result from a rapid antigen test conducted within 24 hours before the flight.

The measures will go into effect Monday.

--A top Chinese health official has warned locals against touching foreigners, a day after China recorded its first monkeypox infection.

In a post on Weibo, the chief epidemiologist at the Chinese Center for Disease Control and Prevention Wu Zunyou advised against “skin-to-skin contact with foreigners.”

The post drew controversy with some labeling it as racist.

Comments on the original post were then removed.

Covid-19 death tolls, as of Thursday…

***And so….I am no longer going to list the top ten in deaths for Covid, but I’m monitoring the #s and I will list them at the end of the year for the record.  I look at U.S. daily deaths as well and midweek, the most accurate reporting these days, it’s still 350 or so, per worldometers.info.

If things change, such as a new variant emerging in the fall, I’ll of course go back to my usual detailed reporting, but for now, only weekly tidbits as warranted.

Having said that, there was a better way for President Biden to massage the message (and I get into it more below).  I’m over 60 years of age.  A vast majority of Covid deaths these days are in that category.  That means those of us who are old enough to remember Mickey Mantle, Willie Mays, the assassination of JFK, Neil Armstrong on the moon and such still need to be encouraged to get the latest booster!

Foreign Affairs, part II

China / Taiwan:  Taipei said on Wednesday it will never allow China to “meddle” in its future, after a Chinese government spokesperson said Beijing was willing to make the utmost effort to strive for a peaceful “reunification” with the island. 

Taiwan rejects China’s sovereignty claims, as China continues to carry out military drills near the island since early last month, after House Speaker Nancy Pelosi’s visit to Taiwan, including firing missiles into waters nearby.

Ma Xiaoguang, a spokesperson for China’s Taiwan Affairs Office, told a news conference in Beijing ahead of next month’s once-in-five-years Communist Party congress that China was willing to make the greatest efforts to achieve peaceful “reunification.”  “The motherland must be reunified and will inevitably be reunified,” Ma said.

Taiwan’s Mainland Affairs Council said the island’s future was up to its 23 million people to decide.  “It allows no meddling by the other side of the Taiwan Strait,” it said in a statement.  China uses illegal military exercises and legal and economic retaliation to attempt to coerce Taiwan’s people, the council added, labeling Beijing’s behavior as “abominable.”

China has proposed a “one country, two systems” model for Taiwan, similar to the formula under which the former British colony of Hong Kong returned to Chinese rule in 1997.  Ma said Taiwan could have a “social system different from the mainland” that ensured their way of life was respected, including religious freedoms, but that was “under the precondition of ensuring national sovereignty, security, and development interests.”

All mainstream Taiwanese political parties have rejected that proposal and it has almost zero public support, according to opinion polls, especially after Beijing imposed a national security law on Hong Kong in 2020 after the city was rocked by anti-government and anti-China protests.

Beijing is yet to talk to Taiwan President Tsai Ing-wen since she took office in 2016.  She has offered to talk on the basis of equality and mutual respect.

As for Biden saying in his “60 Minutes” interview that the U.S. would defend Taiwan militarily, Air Force Secretary Frank Kendall issued a stern warning of his own to Beijing: Don’t do it.

Kendall said Chinese leaders should look no further than Russia’s botched attempt to take over Ukraine to see why an invasion of Taiwan would not be easy and would have severe consequences.

“China would be making an enormous mistake to invade Taiwan,” Kendall told reporters Monday at an Air Force conference.

Kendall, who has been sounding the alarm about China’s efforts to modernize since his time as the Pentagon’s top weapons buyer during the Obama administration, said there is “no evidence that there’s an imminent invasion of Taiwan intended by anybody.”

Kendall pointed to three miscalculations Russia made by invading Ukraine:

“The economic consequences of an act of aggression like that can be very significant,”

“What your military is telling you about how good it is, may not be true,” and

“The short war you imagine may not be the war you get.”

Biden’s utterance for a third, or fourth, time since becoming president that U.S. troops would defend Taiwan from an invasion, was walked back by the White House, again, as it reiterated the U.S. official position of strategic ambiguity has not changed, despite Biden’s comments.

But Kendall said: “I believe that the Taiwanese people would fight, and I believe that we would assist them in some form.”

White House Indo-Pacific coordinator Kurt Campbell said the U.S. government has not changed its policy on Taiwan in that its main goal is to secure the status quo and not to escalate the situation there.

Emphasizing that the president’s remarks “speak for themselves,” Campbell told a think tank event in New York, “I do think our policy has been consistent and is unchanged, and will continue.”

North Korea: Pyongyang on Thursday said it has never supplied weapons or ammunition to Russia and does not plan to do so in the future, according to a statement released by the state media KCNA.

“Recently, the U.S. and other hostile forces talked about the ‘violation of a resolution’ of the UNSC (UN Security Council), spreading a “rumor of arms dealings” between the DPRK and Russia… We have never exported weapons or ammunition to Russia before and we will not plan to export them,” KCNA quoted an official from the Ministry of National Defense, without naming him.

U.S. State Department deputy spokesperson Vedant Patel earlier this month said that Russia “is in the process of purchasing millions of rockets and artillery shells from North Korea for use in Ukraine.”

Calling it a “potential purchase,” White House national security spokesperson John Kirby clarified that there were “no indications that purchase has been completed and certainly no indications that those weapons are being used inside of Ukraine.”

North Korea, in Thursday’s statement, warned the United States to “keep its mouth shut” and stop circulating such rumors, which seems to be “aimed at tarnishing (the country’s) image.”

Iran: Tehran’s hardline president struck a defiant tone on Wednesday by demanding guarantees the United States not abandon any revived nuclear deal and by decrying “double standards” on human rights after the death of an Iranian woman in police custody.

Iranian President Ebrahim Raisi also said Tehran wanted former President Trump to face trial for the 2020 killing of Iran’s top Quds Force commander Qassem Soleimani in a U.S. drone attack in Iraq, holding up a picture of the general.

“There is a great and serious will to resolve all issues to revive the (2015 nuclear) deal,” Raisi told the UN General Assembly.  “We only wish one thing: observance of commitments.”

President Biden, speaking shortly after Raisi, reiterated his willingness to revive the nuclear pact.

Raisi sought to deflect criticism of last week’s death of 22-year-old Mahsa Amini, who was arrested by morality police in Tehran for “unsuitable attire.”  At least 30 people have been killed during protests across the country, as anger at the death in custody of Amini has unleashed fury in the streets since last Friday with some calling for “regime change.”

“Iran rejects some of the double standards of some governments vis-à-vis human rights,” Raisi said.  “Human rights belongs to all, but unfortunately it is trampled upon by many governments,” he added, referring to the discovery of unmarked graves of indigenous people in Canada, the suffering of the Palestinians and images of migrant children held in cages in the United States.

Thursday, in a press conference on the sidelines of the General Assembly, Raisi said Iran has freedom of expression, but the protests happening now are unacceptable “acts of chaos,” adding he had ordered a probe of Amini’s death.

Biden expressed a willingness to return to the nuke accord “if Iran steps up to its obligations,” but added “the United States is clear: We will not allow Iran to acquire a nuclear weapon.”

He also said: “We stand with the brave citizens and the brave women of Iran who right now are demonstrating to secure their basic rights.”

The White House said of Amini’s death that it came about “after injuries sustained while in police custody for wearing an ‘improper’ hijab…an appalling and egregious affront to human rights.”

Tehran’s police commander said “cowardly accusations” had been made against police, that Amini suffered no physical harm, and the police had “done everything” to keep her alive.

Protests continued to grow Thursday and Friday as Raisi flew home.

Before he left, he was to have an interview with CNN’s Christiane Amanpour, but refused to do so because Amanpour wouldn’t wear a head scarf, which she is not required to do in the U.S.

Such is Iran.  Raisi will crack down hard.  The world will then watch to see the level of the counterreaction.

Random Musings

--Presidential approval ratings….

Gallup: New #s: 42% approve of President Biden’s job performance, 56% disapprove; 39% of independents approve (Sept. 1-16).  Prior split was 44-53, 40% ind.

Rasmussen: 43% approve of Biden’s performance, 54% disapprove (Sept. 23).

A new NBC News poll released Sunday had President Biden’s approval rating at 45%, its highest point since October.  His disapproval rating was down 3 points to 52%.

Women, Latino voters, and younger voters contributed to the boost in Biden’s approval ratings, with women rising to 52% from 47%, Latinos 48% from 40%, and voters aged 18-24 moving to 48% from 36%. [Think student loan forgiveness on this last segment.]

When asked about abortion, 61% of voters disapproved of the June decision to overturn Roe v. Wade, while 37% approved.

One in five voters picked “threats to democracy” as the top issue facing the country for the second straight month, while 18% called the cost of living the top issue.

Voters are tied on which party they would prefer to control Congress after the election in November, with 46% saying Republicans and the same number saying Democrats.

[A Reuters/Ipsos poll concluded on Sept. 12 that 37% of Americans would prefer to vote for a Democratic congressional candidate, with 34% preferring Republicans and 15% still undecided.]

Meanwhile, voters’ approval of Donald Trump dropped in the NBC News survey to 34% - the lowest level since April 2021, with 54% saying they have a negative view.

But a New York Times/Siena College poll gave Trump a 44% approval rating, 53% disapproval.

The same survey asked if the 2024 presidential election were held today, who would you vote for in a hypothetical between Biden and Trump.

Trump 42%
Biden 45%

Thirty-eight percent believe Donald Trump has not committed serious federal crimes, 51% believe he has.

--Biden Agenda

U.S. authorities have recorded more than 2 million encounters with people trying to cross the southern border this fiscal year and more than 203,000 in August alone, data from Customs and Border Protection showed.  Many encounters – 22% last month – are repeat attempts; the 2 million encounters represent fewer than 2 million migrants.

Many of those encounters at the border are still turned away under a pandemic-related health authority a federal judge won’t let the Biden Administration end.

But tens of thousands of migrants seeking asylum on U.S. soil can’t be returned to Mexico, which won’t accept migrants from Cuba, Nicaragua and Venezuela.  Migrants from those three countries alone numbered 55,333 in August.

Editorial / Wall Street Journal…on the “bipartisan failure that is U.S. immigration policy.”

“The U.S. needs willing workers and some of the migrants are genuinely fleeing persecution. But the porous U.S. asylum policy lets too many economic migrants enter the country and claim asylum, and so they continue to come by the hundreds of thousands from around the world.

“President Biden has sent every signal that they should keep coming.  In his first week in office he revoked President Trump’s Remain in Mexico policy, which had allowed migrants to be removed from the U.S. temporarily. This April he moved to end a policy known as Title 42, a pandemic-emergency power that also allowed more migrant expulsions (and remains in place for now under court order).

“A functioning political system would find some way to reform asylum rules, buttress border security, and allow more pathways for legal immigration so workers could go back and forth as the economy requires.

“But that would take presidential leadership that Mr. Biden won’t provide.  Given his own presidential ambitions, Mr. DeSantis would also be wise to offer better solutions than dropping migrants on Barack Obama’s vacation island.  But this is America in 2022, where political performance art rules the day.”

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Editorial / New York Daily News

“Joe Biden’s been many orders of magnitude better at managing Covid-19 than his happy-talking, fact-denying, quack-medicine-promoting predecessor, but the current president was wrong Sunday night on ’60 Minutes’ to declare the pandemic over. The worst of the public health emergency is indeed over – shutdowns feel like ancient history and masks are no longer required on airplanes, in schools and in many public places – but American deaths remain on average more than 500 a day.  [Ed. I’d put it more at about 400.]

“Though technical definitions vary, a pandemic is a disease that’s prevalent across international boundaries and affects a very large number of people.  This is still that.

“The Biden misstatement matters because it means state and local leaders and the public are less likely to rise to the moment as new variants spread – which is to say, to get vaccinated with updated versions of vaccines. That would help tamp down cases and hospitalizations. So, while we understand his political motivations, declaring victory may actually have the effect of breathing new life into the bug.

“We also didn’t appreciate Biden’s blunt ‘yes when asked whether ‘U.S. forces, U.S. men and women, would defend Taiwan in the event of a Chinese invasion.’  Even as the rest of the administration says policy hasn’t changed, for months the president’s comments have been inching toward this assertive posture.  The United States is better served by maintaining at least a hint of ambiguity about what it would do in the event of Chinese aggression.

“It might make more sense to aid the Taiwanese and to exercise leverage in other ways (as we’ve done with Ukraine to counter Russia).  The island nation is not in NATO; there’s little to gain and much to lose by preemptively announcing that the Army, Navy, Air Force and Marines will rush to the frontlines.

“Yes, the Communists in Beijing are suffocating Hong Kong.  Yes, a move on Taiwan would be a major breach of international law demanding a firm response.  No, that need not necessarily mean a new American war.”

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Meanwhile, also in the “60 Minutes” interview Sunday, the president said he’ll assess the situation once the November midterm elections are over as to whether he’ll run again in 2024.  Of course, that’s the right answer, and I continue to maintain in January he’ll announce he is not running.  California Gov. Gavin Newsom will probably have announced he is running before then.

--Trump World

Former President Trump has failed to provide evidence he declassified any records the FBI seized from his Florida estate and he is not entitled to review them or have them returned, the U.S. Justice Department has argued to a federal appeals court.

Prosecutors asked the Atlanta-based appeals court to lift a stay by U.S. District Judge Aileen Cannon that bars them from using any of the classified materials in their ongoing criminal investigation until after an independent arbiter called a special master completes a review to weed out any documents that could be privileged.  Of the more than 11,000 documents seized by the FBI from Mar-a-Lago on Aug. 8, about 100 have classified markings.

“Plaintiff again implies that he could have declassified the records before leaving office.  As before, however, Plaintiff conspicuously fails to present, much less show, that he actually took that step,” the Justice Department’s attorneys wrote in a filing late Tuesday.

The government’s latest effort came just hours after U.S. Judge Raymond Dearie, who was appointed by Cannon as special master, pressed Trump’s attorneys at a hearing in Brooklyn to provide him with evidence that Trump had actually declassified some of the seized materials.

“If the government gives me prima facie evidence (a legal term meaning a fact is presumed to be true unless disproved) that this is classified, and you decide not to advance a claim of declassification…as far as I’m concerned that’s the end of it,” Dearie told them.  “You can’t have your cake and eat it.”

Federal prosecutors in their filing to the appeals court highlighted that Trump’s attorneys had resisted Dearie’s request.

Dearie was appointed at Trump’s request, and Cannon tasked him with reviewing all the materials, including classified ones, so that he can separate anything that could be subject to attorney-client privilege or executive privilege.

The DOJ is conducting an investigation of Trump for retaining government records, some marked as highly classified including top secret, at Mar-a-Lago after leaving office in Jan. 2021.

Trump has denied wrongdoing and has claimed on social media posts without evidence that he declassified the records.  But his lawyers have yet to make any such claims in their legal filings.

“Plaintiff’s effort to raise questions about classification status is a red herring,” prosecutors told the U.S. Court of appeals in Tuesday’s late-night filing.  “Even if plaintiff could show that he declassified the records at issue, there would still be no justification for restricting the government’s use of evidence at the center of an ongoing criminal investigation.”

The 11th circuit court is a conservative-leaning one with 6 out of 11 Trump-appointed judges, and the court had not yet revealed which three of its judges will take up the DOJ’s appeal.

And then late Wednesday, the appellate court ruled that the Department of Justice can resume reviewing classified records seized by the FBI pending appeal, giving a boost to the criminal investigation.

The appeals court also said it would agree to reverse a portion of the lower court’s order that required the government to hand over records with classification markings for the special master’s review.

“We conclude that the United States would suffer irreparable harm from the district court’s restrictions on its access to this narrow and potentially critical set of materials, as well as the court’s requirement that the United States submit the classified records to the special master for review,” the three-judge panel wrote.

The panel added that the decision is “limited in nature,” as the Justice Department had asked only for a partial stay pending appeal, and that the panel was not able to decide on the merits of the case itself.

The department’s request to the court had not asked for a reversal of Cannon’s order itself, and it is not clear if prosecutors may separately seek to appeal other parts of Cannon’s ruling on the special master appointment.

Two of the three appellate judges that ruled were appointees of Trump.  Trump’s lawyers could potentially ask the U.S. Supreme Court, with its 6-3 conservative majority, including three justices appointed by him, to intervene in the matter.

For his part, Donald Trump then gave an interview to Fox News’ Sean Hannity Wednesday, and Trump insisted he had declassified the records seized at Mar-a-Lago – and said there’s no definitive document declassification process for U.S. heads of state.

The former president told Hannity the documents were declassified when he left the White House but didn’t say how.

“There doesn’t have to be a process, there can be a process, but there doesn’t have to be,” Trump told Hannity.  ‘You’re the president, you make that decision.”

“If you’re the president of the United States, you can declassify just by saying, ‘It’s declassified.’ Even by thinking about it.”

Good lord. 

“I declassified everything,” Trump said. 

Again, Trump’s lawyers ahead of Tuesday’s hearing, signaled they didn’t want to answer questions about the declassification status – because it could be part of the former president’s defense if he is ever indicted.

The FBI also said Trump failed to mention he had supposedly declassified the files and handled the documents “as if they were still classified,” according to court papers revealed earlier in the month.  It was only after the raid the former president said he had declassified them.

The appeals court wrote on the matter: “(Trump) suggests that he may have declassified these documents when he was president.  But the record contains no evidence that any of these records were declassified.”

Thursday, Judge Dearie asked Trump’s lawyers to submit by Sept. 30 a list of specific items “that plaintiff asserts were seized from the premises.”

“This submission shall be plaintiff’s (Trump’s) final opportunity to raise any factual dispute as to the completeness and accuracy of the Detailed Property Inventory,” wrote Dearie.

The judge clearly took note of Trump’s mountain of lies in his interview with Hannity.

---

Meanwhile, Trump, his family business, and three of his adult children were sued on Wednesday by New York’s attorney general, who accused them of overvaluing the former president’s assets and net worth through a decade of lies to banks and insurers.

Attorney General Letitia James filed her lawsuit in a New York state court in Manhattan, accusing the Trump Organization of “numerous acts of fraud and misrepresentations” in preparing financial statements from 2011 to 2021. She also said Trump, who has long used his net worth to burnish his image and fame as a successful businessman and politician, inflated his wealth by billions of dollars to help his company obtain favorable financial terms on transactions, including lower interest rates and cheaper insurance coverage.

The complaint also names Trump’s adult children, Donald Trump Jr., Eric Trump and Ivanka Trump as defendants, as well as longtime company executives, including former Chief Financial Officer Allen Weisselberg.

So add this to all of Trump’s problems, including the criminal probe in Georgia that to me has always seemed the most obvious case of major-league wrongdoing.

James, a Democrat, said the values of 23 assets had been “grossly and fraudulently inflated,” and her office uncovered more than 200 examples of misleading asset valuations. Those assets included marquee properties such as Mar-a-Lago and Trump’s penthouse apartment atop Trump Tower.  The lawsuit seeks to recoup at least $250 million of alleged improper gains.

“Claiming that you have money that you do not have does not amount to the ‘art of the deal,’ it’s the art of the steal,” James told a news conference, alluding to Trump’s 1987 memoir.

She called the “pattern of fraud and deception” used by Trump and the Trump Organization “astounding.”

Trump, in a statement posted on Truth Social called the lawsuit “Another Witch Hunt by a racist Attorney General” who was pursuing the case for political gain.  James is Black and running for reelection in November.

While the case does not involve criminal charges, James said Trump repeatedly violated several state criminal laws and may have violated federal criminal law, and asked U.S. prosecutors and the IRS to investigate.

I watched the press conference and some of James’ examples were almost laughable, but also nothing new when it comes to the inveterate liar.  I’ll never forget having beers during the 2016 campaign with a friend high up in the New York banking world who told me of Trump’s reputation for inflating assets for the express purpose of obtaining loans and how he was known to try to get out of paying contractors, or if he did pay, do so very late.  A real scumbag.

One of the examples James gave was how Trump pretended his Trump Tower apartment was 30,000 square feet, when it was actually 11,000, and that its $327 million valuation in 2015 was “absurd” because no New York City apartment had sold for $100 million at the time. She also said Trump valued Mar-a-Lago as high as $739 million by pretending it could be developed for residential use, and that it should have been valued closer to $75 million.

James opened her probe three years ago after Michael Cohen, who was Trump’s lawyer and fixer before turning on him, said in congressional testimony that the former president had inflated some asset values to save money on loans and insurance.

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Donald Trump’s support among Republican voters in Florida has significantly eroded this year according to a USA TODAY/Suffolk University Poll, as Gov. Ron DeSantis scores gains in his home state.

In a hypothetical 2024 presidential primary in the Sunshine State, DeSantis now leads Trump 48% to 40%. That’s a reversal from a January USA/Suffolk poll, when Trump led DeSantis 47% to 40%.

“This doesn’t necessarily mean DeSantis would lead in any other GOP primary state,” said David Paleologos, director of the Suffolk University Political Research Center. “But it is one data point suggesting a shift in preferences from GOP voters away from Trump and toward DeSantis from Republicans who know both potential combatants quite well.”

For the Senate in Florida, Republican incumbent Marco Rubio narrowly leads Democratic challenger Val Demings 45% to 41%.  Rubio’s support has dropped 4 points since January.

For the governorship, DeSantis leads Democratic challenger Charlie Crist 48% to 41%, little changed from beginning of the year.

President Biden’s approval rating ticked up to a still putrid 42% in Florida, 56% disapproving.  It was 39-53 in January.

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Fundraising groups tied to Republican Party leaders are sharply increasing spending on campaign ads to help the party win control of Congress in the Nov. 8 general elections.  But not Donald Trump’s Save America, a PAC fundraising group that under U.S. election law can fund the Republican former president’s political allies and his frequent rallies but not any election campaign of his own.

Despite amassing more than $90 million in the PAC – an unprecedented sum for a former leader – Trump’s group has yet to report any ad spending to support Republican candidates, according to a disclosure filed to the Federal Election Commission on Tuesday.

While Trump is not obligated to use Save America’s cash pile on ads, his failure to join the Republican spending spree is further fueling speculation he is holding onto the cash to help fund his White House run, though Save America would not be able to fund his campaign.

Save America has spent $9 million on rallies with candidates where Trump has repeatedly hinted at a 2024 run.  But the big money is spent on television ads.

--Tom Nichols / The Atlantic

“Trump rallies can often seem ridiculous, not least because Trump himself is inherently a ridiculous person.  He grips the podium and shouts, his sweaty angst giving rise to a reddish tint apparent even under the thick layer of orange-hued chemicals he slathers on his face.  In these moments, stock phrases and gimmicky asides pop out of his mouth like lottery numbers churning to the top of a Powerball machine.

“But Saturday night’s Ohio rally was not a typical Trump carnival, and it was not just ridiculous – it was dangerous.  His embrace of the QAnon conspiracy theorists represents a new expansion not only of Trump’s cult of personality, but of his threats to sow violence.

“Despite his seeming inability to remember anything from one thought to the next, Trump has a kind of lizard-brain awareness of danger – only to himself, of course – that guides him when he’s faced with threats.  His reflex in such situations is to do whatever it takes to survive, including bullying, lying, threatening, and breaking the law. He is in political and legal jeopardy now, and he has decided to escalate his war against the rule of law, the American system of government, and the American people by embracing and potentially weaponizing QAnon.

“The QAnon movement might seem as ridiculous as Trump, but it is tragic and hazardous.  As my friend Rob Tracinski wrote recently, it is ‘an online grift that got out of hand and became a worldview,’ and millions of people now believe that there ‘is a global network of pedophiles who secretly run the world and control our politics so that they can abuse children.’  This is no ordinary conspiracy theory about commies fluoridating the water; the emotional punch of threats to children has already led to near tragedies and, in some cases, disastrous outcomes involving unstable and violent people.

“Initially, of course, Trump only winked at the QAnon movement, accepting its support in the same way that he accepted, without acknowledging it, the support of groups such as the Proud Boys.  That last microgram of hesitancy is now gone.  Trump recently shared images of himself wearing a Q pin, and the Ohio rally seemed to meld a QAnon event with an evangelical meeting. As Trump closed out his remarks, orchestral music began to play – using a song apparently very similar to the favored theme of QAnon – and the rally-goers reacted by lifting their index fingers in the air….

“With many of his previous supporters in groups such as the Oath Keepers lying low after January 6, Trump is making a show of recruiting from a movement whose members might include people willing to do violence on his behalf.

“Unless Trump has become a QAnon true believer – and that is unlikely, as he believes in nothing but himself – it is difficult to imagine any other motive here but increasing apprehension both in Washington and among the public about indicting him or holding him accountable for his behavior in any way.  If you want political support and are trying to help J.D. Vance (who so far hasn’t said a word about any of this) in his Ohio Senate run, you hold a rally and lambaste your opponents and plump for your guy – Trump’s done this before and knows the drill.  You do not, however, play creepy music and present yourself as the leader of one of the most unhinged crusades of modern times.  That kind of rally is not meant to gather voters. Instead, it’s meant to recruit a mob and let the rest of the country see who’s on your side if you are threatened in any way.”

--Back to DeSantis, appearing with Sean Hannity on Fox, he claimed credit for bringing immigration to the top of voters’ minds.

“Immigration and the border, I think, is now…a front burner issue.  And I think this is one where Republicans have the advantage, without question. So run on it. And then if we do get majorities in the Congress, Sean, they need to do something with that power to hold Biden accountable on this issue.”

No disagreement on this here.  Immigration has always been a reliable wedge issue for Republicans heading into elections.

In a recent NBC News poll of registered voters, the GOP has a massive 36-point advantage over Democrats on “dealing with border security,” and a smaller but still significant 17-point advantage on “dealing with immigration.”

--The House will vote on an overhaul of a centuries-old election law, an effort to prevent future presidential candidates from trying to subvert the popular will.

The legislation under consideration is a direct response to the Jan. 6, 2021, insurrection and Donald Trump’s efforts to find a way around the Electoral Count Act, an arcane 1800s-era law that governs, along with the U.S. Constitution, how states and Congress certify electors and declare presidential election winners.

While that process has long been routine and ceremonial, Trump and a group of his aides and lawyers tried to exploit loopholes in the law in an attempt to overturn his defeat.

The bill would set new parameters around the Jan. 6 joint session of Congress that happens every four years after a presidential election.

The legislation, co-sponsored by Republican Rep. Liz Cheney and Democratic Rep. Zoe Lofgren, intends to ensure that future Jan. 6 sessions are “as the constitution envisioned, a ministerial day,” Cheney said.

“The American people are supposed to decide an election, not Congress,” Lofgren said.

--Hurricane Fiona hit Puerto Rico on the anniversary of Hurricane Hugo, which slammed into the island in 1989 as a Category 3 storm, and two days before the anniversary of 2017’s devastating Hurricane Maria – from which the territory has yet to fully recover.

Maria caused nearly 3,000 deaths and destroyed the power grid.  Fiona then knocked out power to the island of 3.2 million, but service was largely returning.  Ponce received at least 27 inches of rain.

Fiona, which hit as a strong tropical storm, quickly strengthened to Cat 3 status.  The real story could be damage to the Canadian Maritimes, particularly Nova Scotia, if it stays on its current track.

Japan was hit this week by one of the biggest typhoons ever to strike the nation, Nanmadol bringing winds of 112 mph and 20 inches of rain in some parts.

Alaska was hammered by one of the worst storms to hit in decades, the remnants from a different typhoon, that caused major flooding in the coastal communities of the Bering Strait.

But this week it will be about the emergence of Hermine, which has a good shot of being a major hurricane that hits the Gulf, thus threatening 15% of the nation’s crude oil production, though its current projected path wouldn’t do so.

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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 $1651
Oil $79.43

Regular Gas: $3.68, nationally; Diesel: $4.91 [$3.18 / $3.30 yr. ago]

Returns for the week 9/19-9/23

Dow Jones  -4.0%
S&P 500  -4.7%
S&P MidCap  -5.9%
Russell 2000  -6.6%
Nasdaq  -5.1%

Returns for the period 1/1/22-9/23/22

Dow Jones  -18.6%
S&P 500  -22.5%
S&P MidCap  -21.2%
Russell 2000  -25.2%
Nasdaq  -30.5%

Bulls 30.0
Bears 31.4

Hang in there.

Brian Trumbore

***I will have an abbreviated WIR next week due to travel.

 

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