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Week in Review

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11/05/2022

For the week 10/31-11/4

[Posted 7:00 PM ET, Friday]

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

Edition 1,229

We are days away from an historic midterm election that hopefully doesn’t evolve into a cataclysmic one.

With Republicans on the verge of taking back Congress, barring a Democratic surprise in keeping the Senate, President Joe Biden’s agenda will largely go up in flames.

The process turns into a cataclysm if the new House committee leaders choose to go for payback, in all shapes and sizes, including an attempt to impeach the president. [Which would fail in the Senate, but would not be good for the markets, and a vast majority of us.]

I was struck by the comments of two financial industry titans on CNBC this week.

Legendary investor Leon Cooperman talked of how back in 1776, and then our nation’s first election, there were only about 1 million eligible to vote (slaves and women excluded, of course), and yet the country would come up with leaders like Washington, Jefferson, Madison and Hamilton.

Today, there are over 330 million people in America and the best we could do is Donald Trump and Joe Biden.

Real estate tycoon Sam Zell then talked of the impact of social media, “a terrible idea,” and the dearth of leadership today, and Cooperman and Zell are right on all fronts.

It’s truly pathetic.

Former president Trump strongly hinted that he is considering launching a third bid for the White House.

At a rally in Iowa on Thursday, Trump said: “And now, in order to make our country successful and safe and glorious, I will very, very, very probably do it again.”

“Get ready, that’s all I’m telling you, very soon.  Get ready,” he added, teasing a 2024 bid.

Trump, looking to take advantage of likely Republican wins, would announce by Thanksgiving, according to reports.  Axios reported today that the launch will be Nov. 14.

A Reuters/Ipsos poll late last month showed that just 41 percent of Americans view Trump favorably.

Then there is President Biden, a flat-out embarrassment.

Editorial / New York Post

“Turning 80 next month, Biden’s already the oldest man ever to serve as president. And for all his lifelong habit of gaffes and verbal bumbling, it’s becoming harder and harder to watch the man without thinking he has some serious neurological problems.

“After a recent tree-planting event on the White House South Lawn, for example, the prez wandered off on his own, muttering ‘Which way are we going?’ as his minders gingerly tried to direct him.  (And that’s just his latest wander-off; they’re becoming fairly common.)

“He also just bizarrely resurrected his ‘I got arrested while trying to see Mandela’ story – a Biden oldie that he finally recanted in September, before bringing it up again on Sunday, as if he’d never admitted it was made up.

“He greeted the election of Britain’s new prime minister – head of government in our greatest Western ally – by mispronouncing his name: ‘Rishi Sunak’ became ‘Rashee Sanook’ (not a typical error for a guy who’s spent decades hobnobbing around the globe)….

“Meanwhile, his administration completely and inexplicably refuses to release the records of Biden’s visitors to Delaware, where he’s spent about a quarter of his presidency. Is Joe getting treated by a neurologist there, and wants to keep it out of the public eye? ….

“Democracy is impossible without an informed populace.  And Americans need to know if we’re living through ‘Weekend at Biden’s’ or have a president who’s actually fit to lead.”

Here’s the deal.  When historians look back on this era I’ve been covering, four godawful presidents in a row, historically four of the six or seven worst in our history given the stakes, Biden might be saved, somewhat, by his support of Ukraine, should this conflict end in a satisfactory conclusion…with Ukraine on the path to recovery and with most of its territory back, and with Russia no longer posing a serious threat to its neighbors, which would mean Vladimir Putin is out and he’s been replaced by a technocrat.

But if Joe Biden does not announce by mid-January that he will not seek a second term, as I’ve been saying he would do starting back in 2021, and if Donald Trump is already two months into his new campaign, I’ll have to commit hari-kari.

[My friends and family need not worry, knowing I can’t leave the scene until the Mets win a World Series, the Jets reach the Super Bowl, and Wake Forest basketball makes a Final Four.]

---

But speaking of the other paramount issue of our day, a new Wall Street Journal poll showed that while a majority of Americans continue to support aid for Ukraine, support is becoming a partisan issue as Republican opposition grows to helping the country, which makes me want to scream. [Rep. Marjorie Taylor Greene, for one, can go to hell.]

Some 30% of respondents overall said they believe the administration is doing too much to help Ukraine, up from 6% in a March Journal poll.  The change was driven by a big shift among GOP voters: 48% of Republicans now say the U.S. is doing too much, up from 6% in the previous survey.

The portion of GOP voters who said the U.S. isn’t doing enough to help Ukraine fell to 17%, a steep drop from 61% in March.

House Minority Leader Kevin McCarthy (R-Calif.), who will likely become speaker after the GOP wins the majority, said last month that Congress wouldn’t “write a blank check to Ukraine” under GOP leadership.  He later clarified that some within his caucus want greater accountability for the funds sent to the government in Kyiv.

---

This week in Ukraine….

After a massive missile strike on Kyiv and other cities Monday, water supplies were apparently restored on Tuesday in the capital, after the Russian attacks left 80% of its residents without running water.

Vladimir Putin said the strikes on Ukrainian infrastructure were partly in retaliation for Ukraine’s drone attack on Russian ships in the Black Sea.  Russia then froze its participation in the grain export program, sending global wheat prices soaring.  Ukraine and Russia are both among the world’s largest exporters of food.

Ukraine said it shot down most of the missiles fired, but some hit power stations, knocking out electricity and water supplies.

Ukraine’s army commander in chief, Valeriy Zaluzhnyi, said on Telegram that Russia had launched 55 cruise missiles and dozens of other munitions at “civilian targets” across the country.  But the presidential office said thanks to improved air defenses, “the destruction is not as critical as it could be.”

Prime Minister Denys Shmygal said the strikes had still caused power cuts in “hundreds” of areas across seven Ukrainian regions.

U.S. State Department spokesman Ned Price told reporters on Tuesday that Russia’s attacks on Ukrainian water and energy supplies are aimed at exacerbating human suffering and are particularly heinous.

Ukrainian foreign minister Dmytro Kuleba said on Twitter: “Instead of fighting on the battlefield, Russia fights civilians.”  Ukraine’s battered energy infrastructure would be repaired with equipment from 12 countries, Kuleba said in a separate statement.

The Russian army confirmed it carried out the cruise missile strikes and that all had hit their intended targets.

It then carried out another round of shelling and missiles strikes on Thursday across the country, knocking out electricity to the Zaporizhzhia nuclear plant, Europe’s largest, and disconnecting it from the power grid after shelling damaged the high voltage lines, leaving it with just diesel generators.  Ukrainian nuclear firm Energoatom said the plant has 15 days worth of fuel to run the generators.  Its reactors need power to keep the fuel inside cool and prevent a meltdown.

---

Wednesday, Russia said it would resume its participation in the grain deal to free up vital exports from Ukraine after suspending it over the weekend in a move that had threatened to exacerbate hunger across the world.

Ukrainian presidential adviser Mykhailo Podolyak said that Russia is resuming participation in the deal because it realized the initiative would still work without the Kremlin’s involvement.  Moscow’s decision showed that Russian “blackmail” and “escalation and threats” fail when they meet a resolute response.

“One way or another, Russia, embarrassed, returned to the ‘grain initiative’ because it suddenly turned out that the grain corridor would work even without the Kremlin’s participation,” Podolyak said. “This says only one thing: Russia is always inferior to those who are stronger, those who know how to take a blow, those who argue their position strongly.”

Tuesday night, President Volodymyr Zelensky said the world must respond firmly to any Russian attempts to disrupt Ukraine’s grain export corridor, as more ships were loading despite Moscow suspending its participation in the UN-brokered deal.

The deal, brokered by the United Nations and Turkey on July 22, provided safe passage for vessels carrying grain and other fertilizer exports.

Russia then withdrew from the accord over the weekend, saying it could not guarantee safety for civilian ships because of an attack on its Black Sea fleet.

Putin, in a news conference on Monday, said Ukrainian drones had used the same marine corridors that grain ships transited under the deal.  Moscow called ship movements through the Black Sea security corridor “unacceptable.”

But a record volume of 354,500 tons of agricultural products left Ukrainian ports Monday, despite Moscow’s weekend announcement.

One big issue is insurance.  The head of cargo at Lloyd’s of London insurer Ascot told Reuters that his company is pausing writing new coverage for shipments from Monday “until we better understand the situation.”

Insurance previously issued “still stands,” said Chris McGill.  Most policies must be renewed on a seven-day basis.

In a late Tuesday night video address, Zelensky said ships were still moving out of Ukrainian ports with cargoes thanks to the work of Turkey and the UN.  The UN later confirmed the first of 40 planned ship inspections was completed in Istanbul waters, which allows the ships to continue on to their designations.

“But a reliable and long-term defense is needed for the grain corridor,” Zelensky said.  “Russia must clearly be made aware it will receive a tough response from the world to any steps to disrupt our food exports,” he said.  “At issue here clearly are the lives of tens of millions of people.”

Meanwhile, Russia told civilians on Tuesday to leave an area along the eastern bank of the Dnipro River in the Ukrainian province of Kherson, a major extension of an evacuation order that Kyiv says amounts to the forced depopulation of occupied territory.

Russia had previously ordered civilians out of a pocket it controls on the west bank of the river, where Ukrainian forces have been advancing for weeks with the goal of capturing the city of Kherson.

In the city of Bakhmut, a target of Russia’s armed forces in their slow advance through the eastern Donetsk region, some residents were refusing to leave as fighting intensified.

This week, President Putin announced Moscow had completed the ‘partial’ military mobilization announced in September and no further call-up notices would be issued.  When Putin announced this Sept. 21, it was the first such mobilization since World War II.  But mobilization has proceeded chaotically and thousands have fled Russia to avoid being drafted.

Thursday, U.S. Defense Secretary Lloyd Austin said Ukrainian forces can retake Kherson, but the comment was made as a Russian-installed official in Kherson region said Moscow was pulling its troops from the west bank of the Dnipro River, signaling a significant retreat.

Ukraine said it was still fighting in the area and was wary of the occupying Russian forces setting a trap.  There were Russian troops in Kherson city wearing civilian clothes.

The region’s capital and river port Kherson is the only big city Russia has captured intact since the invasion began.  Russia has fought for months to hang on to the pocket of land it holds on the west bank at the mouth of the Dnipro that bisects Ukraine.  Moscow had sent tens of thousands of troops to reinforce the area, one of its biggest battlefield priorities.

A spokesperson for Ukraine’s southern military command said, “This could be a manifestation of a particular provocation, in order to create the impressions that the settlements are abandoned, that it is safe to enter them, while they are preparing for street battles,” said Natalia Humeniuk.

EU foreign policy chief Josep Borrell warned on the sidelines of a G7 foreign ministers meeting: “Putin’s Russia is destroying Ukraine. They cannot occupy it, they cannot win on the battlefield, they cannot win the war – and they are destroying the country systematically.”

Further Russian attacks Thursday night left 4.5 million Ukrainians without power, President Zelensky said in his video address.  450,000 were without power in Kyiv Friday morning.

Zelensky said, Russian attacks on Ukraine’s energy sector and energy facilities “do not stop for a single day,” he said, adding that to “endure Russian energy terror” is Ukraine’s “national task.”

“The very fact that Russia resorted to terror against the energy industry shows the weakness of the enemy. They cannot defeat Ukraine on the battlefield, and that is why they are trying to break our people in this way – to humiliate Ukrainians, to strike at the morale of our people, at the resistance of our people.  I believe that Russia will not succeed,” Zelensky said, echoing Josep Borrell.

Friday, Vladimir Putin publicly endorsed the evacuation of civilians from parts of Kherson region, the latest sign of retreat.

“Now, of course, those who live in Kherson should be removed from the zone of the most dangerous actions, because the civilian population should not suffer,” Putin told pro-Kremlin activists as he marked Russia’s Day of National Unity.

Putin added that Russia’s confrontation with the “neo-Nazi regime” in Ukraine was inevitable.

Meanwhile, the UN nuclear watchdog said it had found no sign of undeclared nuclear activity at three sites in Ukraine that it inspected at Kyiv’s request, in response to Russian allegations that work was being done on a “dirty bomb.”

---

--The White House said Wednesday that it has information that indicates that North Korea is covertly supplying Russia with a “significant” number of artillery shells for the war in Ukraine.

National Security spokesman John Kirby told reporters that North Korea was attempting to obscure the shipments by funneling them through countries in the Middle East and North Africa.

Kirby said the amount of shells was not insignificant, but was unlikely to change the momentum or outcome of the war.  However, they could still be deadly for Ukrainians, he said.

--The Kremlin on Monday dismissed a British media report that Liz Truss’ mobile telephone was hacked by Russian agents.  The Daily Mail reported on Saturday that Russian spies gained access to Truss’ phone while she was foreign minister. 

When asked about the report, Kremlin spokesman Dmitry Peskov said there was little in the British media that could be taken seriously.  “Unfortunately, there is a shortage of material in the British media that can be perceived as serious. And we treat such publications as the yellow press,” Peskov said.

But this story makes total sense in light of the Kremlin’s harsh rhetoric towards Truss, singling her out more than any other European leader.

--Along the lines of the above, Russia’s defense ministry said on Saturday that representatives of a British navy unit blew up the Nord Stream gas pipelines in the Baltic Sea last month.  The defense ministry gave no evidence for its claim.

Britain denied Russia’s claims, calling them “false claims of an epic scale.”

“To detract from their disastrous handling of the illegal invasion of Ukraine, the Russian Ministry of Defense is resorting to peddling false claims of an epic scale,” a spokesperson for Britain’s ministry of defense said.  “This latest invented story, says more about the arguments going on inside the Russian Government than it does about the West.”

--Vladimir Putin said on Monday that a natural gas hub could be set up in Turkey quite easily and predicted that many in Europe would want to sign contracts for supplies.  Putin made his remarks in a news conference.  Earlier this month Turkish President Erdogan said he had agreed with Putin to create a natural gas hub in Turkey.

--Norway puts its military on a raised level of alert from Tuesday as it sharpens security in response to the war in Ukraine, the country announced on Monday.

Norway is now the biggest exporter of natural gas to the European Union, accounting for around a quarter of all EU imports after a drop in Russian flows.

“This is the most severe security situation in several decades,” Prime Minister Jonas Gah Stoere told a news conference. “There are no indications that Russia is expanding its warfare to other countries, but the increased tensions make us more exposed to threats, intelligence operations and influence campaigns.”

--Ukrainian first lady Olena Zelenska urged tech workers from around the world to create innovations to stop Russia and help save people in her country.

--Oleg Tinkov, a Russian oligarch, renounced his citizenship, saying he did not want to be “associated with a fascist country.”

---

Wall Street and the Economy

The Federal Reserve’s Open Market Committee raised the target for its benchmark funds rate by 75 basis points, a fourth straight such increase, to a range of 3.75% to 4.00% (the highest since early 2008) at its confab Wednesday and altered its post-meeting statement to suggest that it will proceed cautiously with future rate increases.

“In determining the pace of future increases in the target range, the Committee will take into account the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic and financial developments,” the statement said.

The FOMC still expects to raise rates further to bring the target range to a level that would be “sufficiently restrictive to return inflation to 2% over time.”

There were no other changes to the statement and no dissents in the voting.

Chair Jerome Powell then said at his post-meeting press conference that when it comes to moving to smaller rate rises from the 75-basis point moves that have defined recent rate hikes, “that time is coming and it may come as soon as the December meeting,” but he added “no decision has been made” yet on what to do at the next gathering.

And then he added that inflation was higher than expected, and that there would be a sustained period of below trend growth.  The Fed “will stay the course util the job is done.”  Powell added, it would be “very premature to be talking about pausing,” and that officials would most likely raise rates higher than their previous forecast, which showed rates peaking at 4.6 percent next year

And with that, the market cratered.

On to the December 13-14 FOMC meeting and all the key inflation and economic data beforehand, of which there will be a great deal.

Editorial / Wall Street Journal

“The cliché is that a central bank’s job is to take away the punch bowl, though not usually in 30 minutes.  Yet that’s what happened Wednesday when Federal Reserve Chairman Jerome Powell explained in his press conference that he really is staying the anti-inflation course, half an hour after a Fed statement had seemed to hint to the contrary.

“The Federal Open Market Committee increased its target range for the fed funds rate by 0.75 percentage points, to 3.75%-4%, as Mr. Powell had primed markets to expect. But investors cheered the FOMC statement, which said future decisions will account for ‘the cumulative tightening’ achieved so far as well as ‘the lags’ with which monetary policy operates. Wall Street has been searching for signs the Fed might start moderating the pace of rate increases or stop raising altogether, and it sounded like the FOMC was offering that hope. Stock and bond prices surged.

“Then Mr. Powell met the press, and his message remains more hawkish than not.  While allowing that the pace of rate increases might slow, he also said recent data suggest the top rate the FOMC needs to reach may be higher than the Fed has previously predicted. He also swatted away Wall Street’s fretting about ‘overtightening’ by saying he believes the greater risk would be not to tighten enough.

“Message received. Stocks promptly fell, by 3.4% in the case of Nasdaq.”

But then the market liked today’s jobs report, with the October nonfarm payroll figure at a better-than-expected 261,000, while September’s figure was revised upward to 315,000, and the unemployment rate rose to 3.7%, which the Fed actually wants to see.

Also, importantly, average hourly wages rose 0.4%, and 4.7% from a year ago, which has been gradually decelerating, another positive in terms of the Fed.  However, there are all kinds of labor issues that will impact wages, not to the Fed’s liking, some of which are spelled out below, and not just here, but abroad.

On other important data, the October ISM manufacturing figure came in at 50.2 (50 the dividing line between growth and contraction), while the non-manufacturing/services number for the month was 54.4, the lowest since May 2020.

The Chicago PMI on the manufacturing side, closely followed, was a worse-than-expected 45.2.

September construction and factory orders rose 0.2% and 0.3%, respectively.

The Atlanta Fed’s very early GDPNow barometer for fourth quarter growth is at 3.6%.

The National Retail Federation said retail sales for the holiday season, November and December, are expected to reach as much as $960.4 billion, up between 6% to 8% over the same period last year.  But with inflation of 8%, the forecast puts adjusted spending at or below 2021 levels.

Holiday retail sales increased 13.5% year-over-year to a record $888.7 billion last year, and by 9.3% in 2020.  Sales have grown at about 4.9% on average over the last 10 years, according to the NRF.

NRF CEO Matthew Shay said in a press release: “While consumers are feeling the pressure of inflation and higher prices, and while there is continued stratification with consumer spending and behavior among households at different income levels, consumers remain resilient and continue to engage in commerce.”

Online and other non-store sales are expected to increase between 10% and 12% this year.

To meet demand, retailers will hire between 450,000 and 600,000 seasonal workers in 2022, the NRF projects, but retailers have been hard pressed to fill all their open positions amid the ongoing labor squeeze.

On the housing front, mortgage volumes at Wells Fargo continue to slow rapidly, which is leading to further layoffs as the housing slump deepens.

According to reports, Wells, a leader in this category, had about 18,000 loans in its retail organization pipeline in the early weeks of the fourth quarter, down as much as 90% from a year earlier, when the pandemic-fueled housing boom was in full swing.

The latest 30-year fixed-rate mortgage number out of Freddie Mac was 6.95%, down from last week’s multi-year high of 7.08%, but with the 10-year Treasury rising anew this week, this figure is likely to go back over 7.00%.

Europe and Asia

We had the final PMI readings for October in the eurozone, courtesy of S&P Global, and they were ugly.  The EA19 composite reading was 47.3, a 23-month low.  Manufacturing 46.4, services 48.6.  All in contraction mode.

Germany: 45.1 mfg., 46.5 services
France: 47.2, 51.7
Italy: 46.5, 46.4
Spain: 44.7, 49.7
Ireland: 51.4, 53.2
Netherlands: 47.9 mfg.
Greece: 48.1 mfg.

UK: 46.2 mfg., 48.8 services

All of the manufacturing figures, save for Ireland, are essentially 29-month lows.

Joe Hayes / S&P Global

“After a weak third quarter of PMI and official GDP data, the latest survey results for the start of the fourth quarter suggest the eurozone economy is now headed for a winter recession. High inflation is dampening demand and hurting business confidence.  Fears that the energy crisis could intensify over the winter period are also feeding uncertainty and weighing on decision-making.

“Nonetheless, the ECB will want to continue with monetary tightening to contain inflation.  October PMI data suggest inflationary pressures remained extremely elevated across the eurozone. We did, however, see some dovish tones in the rhetoric surrounding the ECB’s October policy decision, clearly showing that the Governing Council are concerned by the rapidly deteriorating economic outlook.  A substantial worsening of economic conditions in the coming months may give policymakers a difficult decision to make with regards to the path of monetary tightening, for fear of being too aggressive and prolonging the downturn.”

A flash estimate on euro area inflation for October came in at 10.7%, courtesy of Eurostat, up from 9.9% in September.  Ex-food and energy, the rate is 6.4% vs. 6.0% in Sept.

Germany 11.6% (again, flash Oct.), France 7.1%, Italy 12.8% (big spike), Spain 7.3% (big decline), Netherlands 16.8%, Ireland 9.6%.

September producer prices in the EA19 were up 1.6% over August, and a staggering 41.9% compared with September 2021. [Eurostat]

Eurostat also released flash estimates for third-quarter GDP in the eurozone, 0.2% over the previous quarter, 2.1% over Q3 2021, down from 4.3% in Q2.

Published growth rates, Q3 2022 over Q3 2021…

Germany 1.1%, France 1.0%, Italy 2.6%, Spain 3.8%.

And we had a reading on September euro area unemployment, 6.6%, down from 6.7% in August, and down from 7.3% in September 2021.

Germany 3.0%, France 7.1%, Italy 7.9%, Spain 12.7%, Netherlands 3.8%, Greece 11.8%.

Britain: Not much politically since Rishi Sunak became prime minister as the country awaits the new budget, to be unveiled Nov. 17.

But the Bank of England followed the Federal Reserve in raising its benchmark interest rate 75 basis points to 3%, even as the BoE strongly hinted that any future rate increases won’t be as high as some investors and traders have feared.

Bank policymakers believe other hits to economic activity will be enough to bring inflation under control, with the country heading into recession (probably a long one, like two years) and the government planning tax hikes and another round of austerity.

Bank of England Governor Andrew Bailey said, in unusually blunt terms: “We can’t make promises about future interest rates but based on where we stand today, we think Bank Rate will have to go up by less than currently priced in financial markets.”

Earlier, markets were expecting Bank Rate to peak at around 4.75%.

The BoE said it now expected inflation will hit a 40-year high of around 11% during the current quarter.

Unemployment could rise to 6.4% from its current 3.5%.

Turning to AsiaChina released out its October PMIs, courtesy of the National Bureau of Statistics, with manufacturing at 49.2 vs. September’s 50.6; non-manufacturing/services at 48.7 vs. 50.6.  So not good.

The private Caixin manufacturing reading was 49.2 vs. 48.1 prior, with services at 48.4 vs. 49.3. 

Strict Covid restrictions continue to impact the domestic economy, while softening global demand is no help.

But there were various reports this week that among the steps to loosen up, China may soon shorten Covid quarantine requirements for inbound travelers from the current 10 days to seven or eight days.  Like whoopty-damn-do.  You going over there if this change were made? I didn’t think so.

In Japan, the October manufacturing PMI was 50.7, with services at 53.2.

Industrial production for September was down 1.6% month-over-month, up 9.8% year-over-year, with retail sales in the month up 4.5% Y/Y.

Taiwan’s October manufacturing PMI came in at a dreadful 41.5 vs. 42.2 in September.

South Korea’s was at 48.2 vs. 47.3.

Street Bytes

--The Dow Jones finally fell after a huge four-week rally, the other major indices falling as well, as the hoped-for Fed pivot just is not happening any time soon.

The Dow lost 1.4% to 32403, the S&P 500 fell 3.3% and Nasdaq 5.6%.

For the month of October, which ended Monday, the Dow soared 14%, the best single month since 1976.  The S&P gained 8%, but Nasdaq just 4% amid all the disappointing earnings reports from the tech titans.

The outperformance between the Dow and Nasdaq was the biggest since Feb. 2002.  The Dow, broadly speaking, is comprised of value stocks and companies able to pass along price increases to consumers.

Speaking of the Nasdaq and its tech titans, as of Thursday, Oct. 27, Alyssa Lukpat of the Wall Street Journal noted: “The 20 richest tech billionaires have collectively lost nearly half a trillion dollars this year amid the stock market’s sharp tumble, a loss of wealth that is more than the market values of all but seven companies in the S&P 500.

“The world’s richest tech moguls – including Mark Zuckerberg, Bill Gates and Larry Ellison – have seen more than $480 billion in paper wealth disappear this year, according to the Bloomberg Billionaires Index, a daily ranking of the richest people in the world.”

Elon Musk and Jeff Bezos have each seen more than $58 billion in wealth wiped away this year (again, a/o Oct. 27).

These same titans then lost more money this week, in general.

--U.S. Treasury Yields

6-mo. 4.55%  2-yr. 4.66%  10-yr. 4.16%  30-yr. 4.26%

We had a terrific example of how badly some traders missed the Fed’s message.

At 2:15 p.m. on Wednesday, after the Fed issued its statement accompanying the 75-basis point hike in rates, the 2-year stood at 4.45%.

After Powell’s press conference, and the strong dose of reality, the yield was 4.72% and hit a 15-year high Friday of 4.79% before settling at 4.66%.

The 10-year rose from 3.99% to 4.17%, and then 4.20% today before its close of 4.16%.

--Saudi Arabian state oil producer Aramco beat forecasts on Tuesday with a 39% jump in third-quarter net income and reported record free flows, joining rivals in benefiting from higher prices and robust demand.

Aramco’s net income rose to $42.4 billion for the three months to Sept. 30 from $30.4 billion a year earlier, just above the median forecast of $41.7 billion.

--BP reported a profit of $8.2 billion for the third quarter, more than double the profit over the same three months last year.

BP said it will pay $800 million in windfall tax this year, a levy on profits made from extracting UK oil and gas.

The windfall tax was introduced by Rishi Sunak when he was chancellor.

--As alluded to above, pilot unions at the major airlines, American, United, and Delta, have all rejected contract proposals the last week or so, the board of the Allied Pilots Association, which represents American’s roughly 15,000 pilots, the latest to do so.

Pilots are seeking pay raises as well as better scheduling and other changes they say will improve their quality of life.

Pilots at United this week spurned a tentative agreement that would have provided raises of more than 14.5% over 18 months, and pilots at Delta voted to authorize union leaders to call a strike if they deem it necessary.

American’s proposal was for a 12% raise initially, followed by another 5% after a year and then 2% after two years.

There is no sign there will be job actions around the holidays, yet.

--Speaking of job actions, hundreds of workers at London’s Heathrow airport will walk out in the run-up to the soccer World Cup this month over demands for better pay, a British union said Friday.  Unite said 700 workers involved in ground-handling, airside transport and cargo will strike for three days starting Nov. 18.  The World Cup in Qatar begins Nov. 20.

Unite said the strike action “will inevitably cause disruption, delays and cancellations to flights throughout Heathrow, with travelers to the World Cup particularly affected.”

Qatar Airways, which has scheduled an additional 10 flights a week during the World Cup, would be particularly impacted.

--TSA checkpoint numbers vs. 2019

11/3…89 percent of 2019 levels
11/2…88
11/1…80
10/31…80
10/30…91
10/29…100
10/28…100
10/27…112

The trend of the last five days is interesting.

--China ordered a seven-day lockdown of the areas around Foxconn Technology Group’s main plant in Zhengzhou, a move that will severely curtail shipments in and out of the world’s largest iPhone factory.

The lockdown will last until Nov. 9, as the local government said in a statement posted to its WeChat account.

The abrupt action is a further reflection of Beijing’s Covid Zero approach and will further disrupt Foxconn’s main operations base, which cranks out an estimated four of five of Apple Inc.’s latest handsets (some put it at 70%).  The Taiwanese company was already grappling with a Covid flare-up that forced some of its 200,000 staff into quarantine and pushed others to flee the facility – some on foot.

In a statement, Foxconn said it will keep operating within a “closed loop,” or a self-contained bubble that limits contact with the outside world. But the company didn’t address questions about how it will ship goods in and out of the compound during the area-lockdown. 

The company denied claims on social media of several deaths from an outbreak at the plant.

“There are no deaths at our facility,” a Foxconn unit said in a statement.  “We believe this is a maliciously edited video.”

Shares in Apple fell precipitously this week from last Friday’s close of $155 to $138.

--Advanced Micro Devices issued a glum sales outlook for the current quarter and said it would cut spending as the chip maker responds to a deep slump in demand for consumer products.

AMD CEO Lisa Su said the company was cutting expenses in businesses that weren’t doing as well to adapt to the soft demand outlook.

AMD said it expected around $5.5 billion of revenue in the current quarter, up by 14% but below analysts’ forecasts.

The subdued outlook reflected a challenged market for PCs, echoed by everyone from Microsoft to Intel, AMD’s big competitor, and the market is declining faster than expected.  Su said the PC market could fall by close to 20% this year.

The company is also expecting global economic weakness to impact its business supplying chips for servers that go into datacenters.  That business has been a strong point for AMD, driven partly by demand from fast-growing cloud-computing companies in North America.  Su said corporate buyers of servers were “taking longer to make decisions and perhaps being a little bit more conservative” on capital spending.

--Dutch shipping giant Maersk has been profiting from the pandemic and the boon in business, but the company warned Wednesday that a looming global recession is expected to reduce container demand in 2022, with “plenty of dark clouds on the horizon.”

Shares in the company, perceived as a barometer of the health of the economy, fell 6%.

Maersk earned record profits last quarter due to “substantially higher freight rates,” but it said that rates began to drop toward the end of the period “due to weakening consumer demand, coupled with markets beginning to normalize with fewer supply chain disruptions” and less congestion.

Plus, ocean freight volumes are down.  CEO Soren Skou, in an interview with CNN, said the decline is “clearly a sign that the consumer is not spending as much money as he or she has done in the last few years, and probably also a sign that many of our customers have too much inventory.”

Demand for bigger goods like televisions, couches or BBQs has also fallen after people made big purchases during lockdowns and, now, they won’t be replacing same for years, Skou noted.

--As reported by Aaron Elstein of Crain’s New York Business: “Average pay for Wall Street workers is on pace to fall by more than 20% this year after the New York state Comptroller’s Office said last week that it hit a record $516,560 last year.  A 20% drop would translate to average pay of $414,000 – still four times higher than the average private-sector wage in New York.”

This is what happens in a bear market (and dormant capital markets) and it spells bad news for the city and state, which rely heavily on Wall Street and the securities industry for tax revenue.

On its own, the securities industry accounted for 22% of all state tax revenue in the fiscal year that ended March 31, cushioning the blow from big declines in tourism and other key revenue sources.

--Similarly, and as Mr. Elstein (who I correspond with from time to time on various topics) also reported, Vornado Realty Trust said it won’t be erecting towers around Penn Station (New York) any time soon.

“The headwinds in the current environment are not at all conducive to development,” CEO Steven Roth said Tuesday.

Asked if he might revise his ambitious plans for redeveloping the area around Penn Station, perhaps by constructing more apartments and fewer offices, Roth said, “That’s not something we’re going to get into now.”

New York Gov. Kathy Hochul has been pinning her hopes on Vornado and others developing 18 million square feet of space around Penn Station to generate tax revenue from higher rents and more commercial activity will pay to rebuild the nation’s busiest commuter hub.

--Elon Musk is looking to quickly boost Twitter Inc.’s revenue by embracing subscriptions, aiming to make the company less dependent on digital ads, that account for nearly 90% of its total sales.

Musk signaled in several tweets that he was leaning toward an $8-per-month subscription offering.

This week, two large advertising companies recommended that their clients temporarily hold off on advertising on Twitter, adding urgency to Musk’s efforts to identify alternative revenue sources.

Interpublic Group of Cos. and Havas Media urged their clients to pause their Twitter ads because of concerns about the company’s ability to monitor its content.  [The likes of General Mills, Mondelez International, and Pfizer are among those having done so thus far.]

Musk has begun meeting with top advertising executives to try to reassure them about the direction of Twitter and has offered to meet with clients directly, according to reports.

But Friday, in a tweet, Musk said Twitter had suffered “a massive drop in revenue” because of advertisers cutting back, blaming it on “activist groups pressuring advertisers.”

Bigger picture, CNN’s Jake Tapper interviewed tech entrepreneur and business professor, Scott Galloway, less than 24 hours after Musk took control of Twitter.

Galloway had said a while back the deal would go through when there were doubts, and now he has real concerns.

“I think what we’re going to talk about a lot more [Ed. aside from layoffs], moving forward, is whether or not Mr. Musk is compromised, and thereby a platform that has huge influence might be compromised.

“He gets about a quarter of his cash flow, or specifically Tesla, and arguably, about half his wealth, from the success, or lack thereof, of Tesla and China.  And when the PRC has already been unmasked as trying to weaponize Twitter, to influence the midterm elections?  You begin to wonder, what kind of conflicts might he have, in terms of protecting the platform, and protecting democracy, if you will, from the PRC’s influence. So, this is just about to get interesting.  He wrote or tweeted that ‘The bird is freed.’  I would argue the bird is fried!  I think this is going to get very ugly very fast.”

Twitter was then sued over Musk’s plan to eliminate about 3,700 jobs, which workers say the company is doing without enough notice in violation of federal and California law.  A class-action lawsuit was filed Thursday.

Twitter said it intended to cut staff Friday, the company said in an email to employees. Musk plans to get rid of half the workforce, making good on plans to slash costs.

The federal Worker Adjustment and Retraining Notification Act restricts large companies from mounting mass layoffs without at least 60 days of advance notice.

--Marriott International Inc. said on Thursday China’s strict Covid policies were delaying openings of some properties in the country, a key market for hotel operators.

“The market in China is most certainly where we’re seeing the most challenges,” CEO Anthony Capuano said during an analyst call.  Shares of the Sheraton-owner fell 4%.

About 60% of Marriott’s projects in the pipeline in China are in the luxury and upper upscale tier, which are significant money generators, Capuano said.  The company, however, continued to benefit from strong travel demand elsewhere despite economic headwinds, with Marriott joining its rival Hilton Worldwide Holdings Inc. in raising its annual profit forecast on Thursday.

“Looking forward we expect that the recession will mute, but not derail, growth in the U.S. hotel industry.

For the quarter through September, Marriott posted a 36.3% rise in revenue per available room (RevPAR) at $120.60, compared to a year earlier on a constant currency basis.  Its revenue rose nearly 35% to $5.31 billion, falling slightly short of analysts’ average estimate of $5.34 billion.  Adjusted profit per share was $1.69, one cent above expectations.

--Canada’s economy added 108,300 jobs in October, far ahead of forecasts, though the jobless rate remained at 5.2%.  The services sector was up by a net 63,200 positions, mostly in accommodation and food services.

--Johnson & Johnson said on Tuesday it would buy heart pump maker Abiomed Inc. in a $16.6 billion deal, its biggest in nearly six years, as the conglomerate seeks to boost its cardiovascular business.

The deal comes as J&J is spinning off its consumer health business to focus on its pharmaceuticals and medical devices operations.

Abiomed develops medical technology that provides circulatory and oxygenation support.  Founded in 1981, the company’s Impella heart pumps are the smallest in the world and have been used in the United States since 2008.  Impella’s worldwide revenue totaled $985 million in fiscal 2022.  Heart disease accounts for nearly 700,000 death in the country and remains a leading cause of death in the United States.

--Starbucks reported stronger-than-expected financial results for the fiscal fourth quarter as high demand for its coffee meant people were willing to spend more on their orders.

The coffee chain said per-share earnings fell to $0.81 during the three months ended Oct. 2 from $0.99 a year earlier, compared with the consensus of $0.72.  Revenues rose 3.3% to a record $8.41 billion, also ahead of the Street’s view.

Global comparable store sales increased 7% in the quarter, more than a 4.2% rise modeled by analysts, driven by higher average spending.  U.S. same-store sales increased 11%, while operations outside North America reported a 5% decrease due to Covid-19 restrictions in China.

The shares soared about 8% on the generally bullish report.

--Uber shares surged 12% after the company reported revenue and adjusted earnings gains for the last quarter as its customers spent more on rides and food delivery.

Revenue for Q3 was up 72% from a year earlier to $8.34 million.  Adjusted earnings hit $516 million, its strongest ever, with both above the Street. 

Uber was bolstered by high ride prices in the U.S., while gross bookings – the value of transitions made on the app – grew 26% to $29.12 billion, below the $29.63 billion estimated by analysts.

The company said it expects bookings in the current quarter of between $30 billion and $31 billion, short of Wall Street’s forecast of $32 billion, but investors were encouraged by Uber’s upbeat earnings guidance.

Fares remain elevated despite better driver numbers.  Nationwide prices in September for a standard Uber and Lyft were 36% higher than in September 2019, according to market-research firm YipitData.  [Neither Uber nor Lyft releases pricing data.]

Uber has been cutting costs, with a hiring freeze and scaled-back marketing.

Rival Lyft disclosed plans to cut 13% of its staff – about 680 jobs – as part of a plan to reduce operating expenses.  The company added that it isn’t changing its financial forecasts for the third quarter as the company reports earnings on Monday.

“We were much too optimistic about the internet economy’s near-term growth in 2022 and 2023 and underestimated both the likelihood and impact of a broader slowdown,” CEO Patrick Collison said in an email to staff.

--Amazon declared a halt to corporate hiring in the face of growing uncertainty in the global economy and given growth in the company’s staff in recent years. The company cut its staff by almost 100,000 in the June quarter and the move follows the company’s report of disappointing third-quarter results last week.

Amazon said it still intends to hire a meaningful number of people in 2023, and remains excited about significant investments in larger businesses, as well as newer initiatives like Prime Video, Alexa, groceries, the Kuiper satellite communications project, the autonomous-driving unit Zoox, and healthcare.

I don’t know why Amazon would be excited with half of these.

--The New York Times Co. raised its full-year forecast for adjusted operating profit on Wednesday, a sign that the media organization’s plan of bundling subscriptions was helping offset a decline in ad spending from recession-wary businesses.

The publisher has been trying to reach a wider audience and increase revenues by bundling its traditional print and digital news offerings with cooking recipes, crossword puzzles, product review site Wirecutter and sports news site The Athletic, which the Times bought earlier this year.  That helped the company add 180,000 online subscribers in the three months to September, powering its third-quarter adjusted profit above Street forecasts and sending the shares 7% higher.

Revenue in Q3 came in at a $547.7 million, slightly below expectations amid the slide in ad spending, mirroring the likes of Meta Platforms and Google-parent Alphabet Inc., which sounded the alarm on a decline in advertising from businesses grappling with decades-high inflation.

--So much for CNN’s latest attempt to juice ratings in primetime.  The experiment with Jake Tapper at 9:00 p.m. has failed miserably and he is being returned to his 4:00 p.m. slot after the midterms.

“CNN Tonight with Jake Tapper” only averaged 854,000 viewers, a distant third behind Fox News’ “Hannity” with 2.6 million viewers and MSNBC’s “Alex Wagner Tonight” with 1.6 million.  Tapper’s audience is actually worse than this figure….691,000 in October.

Ironically, his daytime program, which has been guest-hosted in Tapper’s absence, has averaged more viewers the last month than his primetime slot at 839,000 last month.

I like Tapper, and I watch his 4:00 p.m. show for hard news after having CNBC on (at least in the background) most of the day.

Meanwhile, CNN’s new morning show entry, co-hosted by Poppy Harlow, Kaitlan Collins and Don Lemon, got off to a horrendous start this week, 387,000, trailing behind Fox News’ “Fox & Friends” average of 1.5 million and the 793,000 for MSNBC’s “Morning Joe.”

I watch the first 20 minutes of the “Today Show” before switching to CNBC.

But note to CNN…Don Lemon just isn’t likeable.  [I’m a big Kaitlan Collins fan, on the other hand.]

--And over at CNBC, Shepard Smith is out after just two years following the launch of “The News with Shepard Smith.”

I was initially looking forward to Smith’s 7:00 p.m. news slot, and watched initially, and then I started watching other stuff, and during baseball season I’m watching every Mets game, for starters.

Also, on the news front, I’m watching far more BBC News than ever before, especially during the recent political upheaval in the country, which impacted our financial markets.

Foreign Affairs, Part II

China: As noted above, like in the Foxconn example, China is continuing to crack down on Covid outbreaks, with authorities in Guangzhou saying they faced a “dire and complicated” outbreak as the number of Covid-19 cases rose sharply in the southern city.

On Tuesday, the city announced it had 190 confirmed local cases and 289 asymptomatic infections, a slight decrease from the day before.

But Guangzhou health authorities said that the reason for the sharp increase from a month earlier was that people in the restricted areas were still moving around without taking appropriate precautions.

“This round of local outbreak has been spreading into Guangzhou through airports, seaports, railways, freight buses and passenger cars,” said a representative of the Guangzhou Health Commission.

This is the attitude, despite all the rumors of the country loosening restrictions.

Today, German Chancellor Olaf Scholz, visiting President Xi, announced an agreement to let expatriates in China use the Covid-19 vaccine from Germany’s BioNTech and pressed for Beijing to allow the shot to be made freely available to Chinese citizens (not likely any time soon).

Meanwhile, the U.S. is making plans to deploy long-range B-52 bombers to northern Australia, drawing criticism from Beijing, which warns the move could spark an arms race in the region.

A new, U.S.-funded aircraft-parking apron at an Australian air force base near the town of Katherine will be able to accommodate up to six B-52 aircraft.

The bombers in northern Australia would allow the U.S. to project more power over the disputed South China Sea and deter Chinese activities there.  U.S. Marines have already been training for part of the year in this part of the country.

“The U.S.-Australia alliance is a cornerstone of U.S. foreign and security policy,” U.S. Defense Department spokesman Lt. Col. Martin Meiners said this week.  Both nations are “committed to evolving the alliance to effectively respond to the strategic environment.”

North Korea: Tensions are sky high on the Korean Peninsula after the latest provocations from Pyongyang, with further missile launches to be expected in the days ahead, including I’m sure after I post tonight, and what seems to be an inevitable nuclear test.

Wednesday, North Korea fired a barrage of at least 23 missiles into the sea, including one that landed less than 60 km off South Korea’s coast, which the South’s President Yoon Suk-yeol described as “territorial encroachment.”

It was the first time a ballistic missile had landed near the South’s waters since the peninsula was divided in 1945, and the most missiles fired by the North in a single day.

Thursday, North Korea fired multiple missiles into the sea, including a longer-range intercontinental ballistic missile (ICBM), though the latter was “presumed to have ended in failure,” according to South Korean officials.  The same night, Pyongyang also fired more than 80 rounds of artillery into the sea.

But the ICBM test was hugely worrisome as it fell into the water between North Korea and Japan, though it seemed destined to fly over Japan had it been a success, which would have been the second time in a month that occurred.

Friday, South Korea was forced to scramble its fighter jets because a reported 200 North Korean aircraft were approaching the South.

Japanese Prime Minister Fumio Kishida and South Korean President Yoon slammed the missile tests, while the U.S. condemned the ICBM launch as “a clear violation” of United Nations Security Council resolutions.

Today, the United States accused Russia and China of providing “blanket protection” to North Korea from further UN Security Council action and said the pair had “bent over backwards” to justify Pyongyang’s ballistic missile launches.

China’s UN Ambassador Zhang Jun said, “The council should play a constructive role rather than always stressing on pressure.”

Ryo Hinata-Yamaguchi, of the University of Tokyo’s Research Center for Advanced Science and Technology, said it was likely tensions on the Korean Peninsula would remain high for some time as further missile launches and other forms of military provocations, including potentially multiple nuclear tests, should be expected.

“There are also risks of accidental conflicts given the intensity of the saber-rattling,” he said, as it was clear Pyongyang’s timing of its provocations was related to the joint exercises between the U.S. and South Korea.  [South China Morning Post]

In response to North Korea’s actions, the U.S. and South Korea extended their drills past today.

The secretary of the Central Committee of North Korea’s ruling Workers’ Party said Washington and Seoul had made a very dangerous decision by extending the drills and were “shoving” the situation out of control.  “The United States and South Korea will find that they have made a terrible mistake that cannot be reversed,” said Pak Jong Chon.  Pak had previously issued statements demanding the drills be stopped.

South Korean and U.S. stealth aircraft have been simulating attacks during the drills.

Shockingly, neither side has made a mistake yet. It just seems inevitable there will be one.

Separately, South Korean officials said police need to explain how they responded after receiving multiple emergency calls hours and minutes before a Halloween party crush killed 156 people on Saturday night, a horrific tragedy. At least 26 citizens from 14 countries were among the dead, including two Americans.

Tens of thousands of young revelers had crowded into narrow streets and alleyways of the popular Itaewon district for the first Halloween festivities in three years virtually free of Covid-19 restrictions.

A transcript of emergency calls released by the police on Tuesday showed the first warning of a possible deadly crush roughly four hours before the disaster, with police receiving 10 other similar calls before the chaos was known to have turned fatal, according to the transcripts.

South Korea’s police chief then acknowledged the emergency response was “inadequate.”  Yoon Hee-keun said he felt “limitless responsibility about public safety” over what happened and vowed a full investigation.

Israel: Former prime minister and Likud leader Benjamin Netanyahu is set to become Israel’s next prime minister. 

For the fifth time since 2019, Israelis went to the polls in national elections Tuesday and with more than 80 percent of the votes counted across the country by Wednesday afternoon, Netanyahu held the lead.

According to the exit polls Tuesday night, Netanyahu’s bloc, which includes Likud, Religious Zionist Party (RZP), United Torah Judaism (UTJ) and Shas, crossed the 61-seat threshold and will be able to form the next coalition.

Netanyahu’s Likud party was expected to receive 31 seats, while the centrist Yesh Atid, headed by caretaker prime minister Yair Lapid was going to take 23 seats.

The far-right Religious Zionist Party saw a dramatic rise in contrast to previous years with 14-15 seats, and thus will wield significant power.

Defense Minister Benny Gantz’s National Unity Party picked up 11 seats.

Israel’s ultra-Orthodox parties saw a large voter turnout with Shas getting 10 seats and United Torah Judaism seven seats, according to the exit polls.

According to the exit polls, which have been off just slightly over the years, the Netanyahu bloc was at 62 seats while the Lapid bloc had 54-55 seats. 

The voter turnout was surprisingly high, 72 percent, for an electorate suffering from voter fatigue.

The victory will bring Netanyahu back into power after serving as prime minister between 1996-1999 and 2009-2021.  He is already Israel’s longest-serving prime minister and has spent the last year as head of the Opposition.

“We are on the brink of a very big victory,” a smiling Netanyahu told cheering supporters at Likud party headquarters.

His voice hoarse from weeks of campaigning, Netanyahu vowed to form a “stable, national government,” as the crowd interrupted him singing “Bibi, king of Israel.”

The Religious Zionist Party (RZP), which gained the support of many young voters, West Bank settlers and Orthodox Jews, is headed by Bezalei Smotrich, but number two on the list, Itamar Ben Gvir, has attracted the most attention with his provocative anti-Arab rhetoric and demands to be appointed Israel’s next public security minister in charge of the police.

And so in the end, Netanyahu’s bloc took 64 of the 120 seats, as Yair Lapid conceded defeat.

“The state of Israel comes before any political consideration,” Lapid said.  “I wish Netanyahu success, for the sake of the people of Israel and the state of Israel.”

Netanyahu still has to be officially tasked by the president with forming a government, a process that could take weeks.

The far-right RZP will be his senior partner with 14 seats.  Itamar Ben-Gvir’s growing popularity has raised concerns that Israel’s democracy is at risk.

Iran: Tehran announced it would hold public trials of about 1,000 people charged in the city over unrest, as authorities step up efforts to crush more than six weeks of protests ignited by Mahsa Amini’s death in police custody.

Iranian leaders have described the protests as a plot by enemies of the Islamic Republic, including the United States and Israel.

The semi-official Tasnim news agency, citing the chief justice of Tehran province, said the trials of about 1,000 people “who have carried out acts of sabotage in recent events, including assaulting or martyring security guards, (and) setting fire to public property” would take place in a Revolutionary Court.

As of Monday, the activist HRANA news agency said 283 protesters had been killed in the unrest, including 44 minors.  Some 34 members of the security forces were also killed.

Last Saturday, the head of Iran’s powerful Revolutionary Guards warned protesters that Saturday would be their last day of taking to the streets.

Guards commander Hossein Salami said in some of his toughest language yet that “This sinister plan, is a plan hatched in the White House and the Zionist regime.”

But the protests continued, with security forces opening fire in numerous spots, including today.  Witnesses told the BBC that security forces attacked protesters with shotguns, tear gas and machetes near the grave of a woman shot dead while protesting.

Wednesday, Iran’s Supreme Leader Ayatollah Ali Khamenei said he had no dispute with young people on the streets, but he stepped up claims that the U.S., Israel and Europe are conducting a form of unconventional warfare against Iran.

“These are our own kids and we don’t have any dispute with them,” Khamenei said in a speech to a group of students in Tehran.  “The recent incidents were hybrid warfare and not merely street points,” he said, pointing to the U.S., Israel and Europe.

This week, U.S. and Saudi officials grew increasingly concerned about a possible attack by Iran in the region, driven by a desire to deflect attention from its internal unrest.  Khamenei claimed his regime has intervened to stop the alleged foreign interference.

“The Iranian nation really punched them in the mouth and will from now on, too,” the Ayatollah added, referring to foreign adversaries.

By week’s end, the U.S. and Saudi officials said the threat of an attack from Iran had diminished.

Brazil: In the runoff presidential election last weekend, leftist former president Luiz Inacio Lula da Silva (“Lula”), 77, edged out far-right incumbent Jair Bolsonaro, 67, 50.9 percent to 49.1 percent, according to the country’s election authority.

But after the results were announced, Bolsonaro didn’t publicly concede or react right away.

Bolsonaro’s campaign had made repeated – and unfounded – claims of possible electoral manipulation before the vote, raising fears that, if he lost, he would not accept defeat and try to challenge the results.

For Lula, the results represented a stunning comeback.  His imprisonment for corruption sidelined him from the 2018 election won by Bolsonaro, who has used the presidency to promote conservative social values while also delivering incendiary speeches and testing democratic institutions.

Lula said he wants to bring in centrists and even some leaning to the right, and to restore the kind of prosperity the county enjoyed when he last served as president from 2003-2010.  Yet he faces headwinds in a politically polarized society.

For starters, lawmakers close to Bolsonaro won a majority in Congress, which means that Lula will face stiff opposition to his policies in the legislative body when he takes office in January.

Lula has been cheered for his climate policies and Sunday he told supporters, “Brazil is ready to retake its leadership in the fight against the climate crisis.  Brazil and the planet need a living Amazon.”

Destruction of the Brazilian rainforest hit a 15-year high under Bolsonaro, who rolled back environmental protections, and pushed for more mining and commercial farming in the region.

But, again, Lula’s ambitions on this front will be checked by Congress.

Bolsonaro’s backers routinely label Lula “a thief” and argue that the annulment of his conviction does not mean he was innocent, just that the proper legal procedure was not followed.

So the president did not publicly address his defeat until Tuesday, and then just said he would allow the transition to continue, but we’re talking January (sound familiar?).   The Supreme Court said in a statement the president recognized the result of the vote.

Bolsonaro thanked voters who had cast their ballots for him but did not acknowledge defeat.  But he did not contest the result either, as some had feared he would.

But Bolsonaro spoke for only two minutes and did not take questions.

Pro-Bolsonaro truckers set up roadblocks throughout the country to protest Lula’s return to power.  Some truckers posted videos calling for a military coup.

Wednesday, supporters of Bolsonaro were calling for an armed forces intervention, but that’s out of the question.

And then Bolsonaro for the first time asked protesters blocking roads to lift the blockades as demonstrations are restricting people’s right to come and go and bringing losses to the economy.

In a video posted on social media, Bolsonaro said Wednesday: “I know you are upset… Me too.  But we have to keep our heads straight.  I will make an appeal to you: clear the highways.”

By week’s end, it appeared the protests were petering out.

I’m guessing a deal has been cut. Allow a transition, Mr. Bolsonaro, and you won’t be prosecuted on various issues as seemed imminent.  Just a guess.

Somalia: At least 100 people were killed and 300 injured in two car bombs that exploded outside the education ministry in the capital of Mogadishu, Saturday, the country’s president then said on Sunday.

The first explosion hit the ministry then the second blast occurred as ambulances arrived and people gathered to help the victims, the police said.

There was no claim of responsibility but Islamist group al Shabaab frequently carries out bombings and gun attacks in Mogadishu and elsewhere.

India: The death toll in the collapse of a century-old cable suspension bridge into a river on Sunday in the western Indian state of Gujarat, killed at least 135 in one of the country’s worst accidents in years.

As families mourned, attention was turning to why the bridge, built by the British in the late 1800s and touted as an “engineering marvel,” collapsed and who might be responsible.

The local government had awarded a 15-year contract to maintain and manage the bridge to a company (Ajanta manufacturing Pvt. Ltd.) mainly known for making clocks, mosquito racquets and electric bikes, per a story I read in the AP.

The bridge, which spans a wide section of the Machchu river, reopened on Oct. 26, the first day of the Gujarati New Year, which coincides with the Hindu festival season, and the newly reopened attraction drew hundreds of sightseers. 

Random Musings

--Presidential approval ratings….

Gallup: 40% approve of President Biden’s job performance, 56% disapprove; 39% of independents approve (Oct. 3-20).

Rasmussen: 42% approve of Biden’s performance, 56% disapprove (Nov. 4).

A new CNN poll gave Biden a 41% approval rating, 59% disapproval.

A Quinnipiac University survey of registered voters had Biden at 37%, 54% disapproving.

--According to the CNN poll conducted by SSRS, an enthusiastic Republican base and persistent concerns about the state of the economy place the GOP in a strong position for this coming Tuesday’s election.

The new survey shows that Democratic enthusiasm about voting is significantly lower than it was in 2018, when the Democratic Party took control of the House. Republican voters in the new poll express greater engagement with this year’s midterm election than Democrats across multiple questions gauging likelihood of vote.

Overall, 27% of registered voters say they are extremely enthusiastic about voting this year, down from 37% just ahead of the 2018 midterm elections, and the decline in enthusiasm comes almost entirely among Democrats.  Four years ago, 44% of Democratic registered voters said they were extremely enthusiastic about voting; now, just 24% say the same.  Among Republicans, the number has dipped only narrowly, from 43% to 38%.

In the new poll, Republicans top Democrats on a generic ballot question asking voters which party’s candidate they would support in their own House district by 51% to 47% among likely voters.  Among registered voters, the race is about even, with 47% behind the Republicans and 46% the Democrats.  Closely divided generic ballot numbers have often translated into Republican gains in the House.

[The aforementioned Quinnipiac survey, on the generic ballot question, had it 48-44, Republicans, among registered voters.]

Republican standing in the battle for the House this year is bolstered by broad concerns about the state of the nation’s economy.  The economy and inflation are far and away the top issue for likely voters in this final stretch, with about half of all likely voters (51%) saying those will be the key issues determining their vote for Congress this year.  Abortion, the second-ranking issue, lands as the top concern for 15% of likely voters.  Other issues tested were chosen by fewer than 10% of likely voters each, including voting rights and election integrity (9%), gun policy (7%), immigration (6%), climate change (4%) and crime (3%).

Republican and independent likely voters are broadly focused on the economy, with 71% of Republicans and 53% of independents calling it the top issue in their vote.  Democratic likely voters are more split, with the economy and abortion the top issue for near-equal shares – 29% say abortion, 27% the economy and inflation.

Those likely voters who say the economy is their top concern break heavily in favor of Republicans in their House district, 71% to 26%. By an even wider margin, they say they trust the GOP more specifically to handle the economy and inflation (71% Republicans vs. 18% Democrats).

Overall, 75% of Americans say that the economy is in a recession, up from 64% who felt that way this summer.  Majorities across party lines see the economy as already in recession, including 91% of Republicans, 74% of independents and 61% of Democrats.

--In New York Times/Siena College polls of likely voters across four key Senate races:

Arizona: Democrat Mark Kelly ahead of Republican Blake Masters, 51-45
Pennsylvania: Democrat John Fetterman ahead of Republican Dr. Mehmet Oz, 49-45
Georgia; Democrat Raphael Warnock ahead of Republican Herschel Walker, 49-48
Nevada: Democrat Catherine Cortez Masto and Republican Adam Laxalt tied at 47-47.

As in anything can happen.

Biden Agenda

President Biden threatened on Monday to seek a new windfall profits tax on major oil and gas companies unless they ramp up production to curb the price of gasoline at the pump.

Biden lashed out against Big Oil and their latest profits, which he called an “outrageous” bonanza stemming from Russia’s war on Ukraine.

The impact of the war on oil prices (natural gas, particularly in Europe, is a different topic) lasted for just a few months, until the global market recognized that the impact on Russian oil production ended up being minimal because despite all the Western sanctions on their crude, they ended up selling it to India and China.  Russian production is thus down minimally from historic levels.

Well, Biden threatened the windfall profits tax, which will never clear Congress, especially the one about to be elected, and he’s crying crocodile tears without understanding how the oil market works, including down to the retail level and the mom-and-pop operators of fuel stations.

Biden said in his pathetic remarks Monday that if Big Oil doesn’t use their profits to expand oil supplies (the same supplies he came into office condemning…having campaigned on an anti-oil platform) or return it to consumers in the form of price reductions (how this would work is a mystery), the president told reporters at the White House:

“If they don’t, they’re going to pay a higher tax on their excess profits and face other restrictions.  My team will work with Congress to look at these options that are available to us and others. It’s time for these companies to stop war profiteering, meet their responsibilities to this country, give the American people a break and still do very well.”

What an amazing bunch of bullshit, or ‘malarkey.’

Again, the ‘war profiteering’ angle to the story is now over.  If you want to talk about war profiteering, you could potentially actually look at the food industry, which has indeed been greatly disrupted by the war.  But not oil!

Republicans fired back, faulting Biden for policies that discouraged the energy industry from expanding capacity.

“Haven’t American families suffered enough from President Biden’s damaging attack on America-made energy?” asked Rep. Kevin Brady of Texas, the top Republican on the House Ways and Means Committee, and a classic moderate Republican of the kind I like, I hasten to add (though he’s retiring).  “Desperately trying to salvage the midterm elections, now he’s proposing another dangerous policy that will increase energy prices and energy poverty while making America more vulnerable to foreign countries for our daily energy needs.”

The oil industry accused the president of politicking, noting the steep drop in gas prices since the June peak.  And production in America is up 4 percent from last year, with the number of rigs being deployed increasing.

I have praised Big Oil for their profits.  “Good for them,” I’ve said.

Oh, how I wish T. Boone Pickens were still alive.  He’d give Biden a great history lesson on the Boom and Bust cycle of the industry, since day one of its founding.

Sure, a company like Exxon Mobil just reported record profits and raised its dividend last Friday, citing a commitment to “return excess cash” to shareholders.  Many Americans own Exxon shares through their retirement plans, mutual funds, exchange-traded funds (ETFs), and they benefit.

But Exxon also invests in new production if it sees an economic benefit to do so, just like other companies do…like a Caterpillar, Ford, even McDonalds.  Yes, McDonalds, in their case, new stores.  Look at Starbucks in China, which I don’t think long-term was a smart move, but they keep expanding there because they think that is the best use of their capital, and a long-term benefit to shareholders.

Editorial / Wall Street Journal

“The President who has done everything in his power to limit U.S. oil investment is now furious that he succeeded.

“Mr. Biden doesn’t seem to believe oil companies should be allowed to make a profit or even cover marginal costs. ‘We need to keep making progress by having energy companies bring down the cost of a gallon of gas to reflect what they pay for a barrel of oil,’ he said.  Anything more is ‘excess’ profit.

“Keep in mind that oil majors’ current profits follow steep losses in the pandemic. As oil prices plunged amid lockdowns, companies and OPEC nations pared investment and shut in wells.  Demand for oil then bounced back much quicker than supply, which has driven up prices – and profits. That’s Econ 101.

“Mr. Biden is miffed in particular that companies are returning cash to shareholders rather than increasing supply.  ‘You should be using these record-breaking profits to increase production and refining,’ he said this month.  But the progressive climate lobby and his own Administrations’ climate policies have been urging the opposite.

“Exxon Mobil lost a board proxy fight in 2021 after large public pension funds and asset managers criticized it for investing too much in oil and generating too little profit.  Exxon and its board need to assess ‘the possibility that demand for fossil fuels may decline rapidly in the coming decades,’ BlackRock said.

“The International Energy Agency warned only last week that ‘no one should imagine that Russia’s invasion can justify a wave of new oil and gas infrastructure in a world that wants to reach net zero [greenhouse-gas] emissions by 2050.’  It added that ‘any new projects would face major commercial risks’ that may result in failing ‘to recover their upfront cost.’

“No wonder oil companies are returning cash to shareholders rather than make investments in production that take decades to pay off.  U.S. shale drilling can produce returns more quickly. But rather than drill more wells, many producers are shrinking their inventory of ‘drilled but uncompleted’ wells.

“The Energy Information Administration reported last week that the number of these wells fell to the lowest since December 2013, which means production will eventually taper off even in the prolific Permian Basin.  Permitting challenges impeded new drilling, as does limited pipeline capacity to move natural gas produced alongside oil.

“Large asset managers are also pressuring oil giants to maintain ‘capital discipline’ – i.e., spend less on production.  Private U.S. oil companies added 47 drilling rigs in the third quarter while public firms added only one.  Climate lobbyists want companies to return profits to shareholders or invest in green energy.

“Continental Resources founder Harold Hamm said this month he is taking his company private to have the ‘freedom to explore.’  ‘We have all felt the limits of being publicly held over the last few years, and in such a time as this, when the world desperately needs what we produce, I have never been more optimistic,’ Mr. Hamm wrote to employees.

“Mr. Biden and fellow Democrats simply refuse to understand the economic consequences of their assault on American fossil fuels.  They have come to believe that climate is a crisis and that banishing oil and gas is urgent.  But that means higher prices, which they now blame on the very companies they want to go out of business.  Economic logic won’t persuade them, but maybe a rout at the ballot box will.”

--Campaigning in Florida, President Biden attacked Republicans for wanting to take away voters healthcare and retirement benefits.

“You’ve been paying into Social Security your whole life, you earned it, now these guys want to take it away,” Biden said at one stop, “a sparse crowd at a South Florida community center,” as Reuters put it.  “Who in the hell do they think they are?”

Well, that’s just a lie.  As far as I understand, Florida Republican Sen. Rick Scott has merely proposed requiring Congress to periodically pass legislation renewing government programs including Social Security and Medicare that are now guaranteed without such a renewal.  But Scott has also said that he and other senior Republicans want to preserve those benefit programs.

But both sides are being disingenuous.  The retirement age has to be raised, and it can be so incrementally, and over many years…it’s just a fact.  This should have been done over a decade ago…as was detailed in these very pages at the time.

Remember folks, the history of such matters, and the proper context, is all here.  Just another why I don’t suffer fools gladly.

--In a speech Wednesday, Biden amplified his argument that democracy is at stake, warning the United States is “on a path to chaos” amid growing fears of political violence, with the first election since Jan. 6, 2021, and the horde that was “whipped up into a frenzy” by Donald Trump’s lies about the 2020 election.

“I wish I could say the assault on our democracy ended that day,” Biden said.  “But I cannot.”

“This is the path to chaos in America,” he said. “It’s unprecedented.  It’s unlawful. And it’s un-American.  As I’ve said before, you can’t love your country only when you win.”

I don’t disagree with this message at all…but it’s not what voters are going to be pulling the lever for on Tuesday, Mr. President.  It’s about your economy.  They are voting on that, and others may base their vote on the abortion topic, immigration, and/or crime.

I do hope, personally, that all the election deniers are defeated.  The biggest danger to democracy is potential changes in who can certify elections, taking it out of the hands of certified electoral officials.

And it is true an overwhelming 85% of Americans say they are very or somewhat worried about democracy’s future, according to a USA TODAY/Suffolk University Poll conducted in late October.

Those who say they are “very worried” include 67% of Republicans, 55% of Democrats and 51% of independents.

But the nature of those concerns differs and often conflicts.

Republicans tended to express concern about Democrats being able to cast fraudulent ballots.  Democrats tended to express concern about results being misrepresented or overturned by Republican officials responsible for counting them.

But the president’s message in the final days was useless.  No one is listening to anything he says, witness his putrid approval ratings and lack of enthusiasm in his party as noted above.

Trump World

--Chief Justice John Roberts on Tuesday put a temporary hold on the handover of former President Donald Trump’s tax returns to a congressional committee.

Roberts’ order gives the Supreme Court time to weigh the legal issues in Trump’s emergency appeal to the high court, filed Monday.

Without court intervention, the tax returns could have been provided as early as Thursday by the Treasury Department to the Democratic-controlled House Ways and Means Committee.

Roberts gave the committee until Nov. 10 to respond.  The fight over Trump’s taxes has been going on since 2019.

By the way, he’s “under audit,” or so Trump would tell you, and he’s been under audit since, oh, about 1978.

--But the Supreme Court also declined to block Senator Lindsey Graham (R-S.C.) from having to testify before a grand jury in a criminal investigation of Donald Trump’s efforts to overturn his 2020 election loss in the state of Georgia, a big setback for both Graham and Trump.

Graham contends that as a member of Congress he is protected under the Constitution from questioning in the investigation. 

There were no publicly noted dissents to the decision.  Justice Clarence Thomas on Oct. 24 temporarily blocked Graham’s testimony pending a decision by the full court on how to proceed.

Graham is not a target of the investigation but has been subpoenaed to testify before the special grand jury, which was formed as part of the investigation led by Fulton County District Attorney Fani Willis, a Democrat, into possible coordinated attempts to illegally interfere in the outcome of the 2020 election.  [The Raffensperger case]

To me, of all the Trump investigations, this is the most open and shut case against him and he will be indicted.

--The criminal trial on tax fraud charges into the Trump Organization commenced this week, with prosecutor Susan Hoffinger, of the Manhattan district attorney’s office, saying, “This case is about greed and cheating, cheating on taxes. The scheme was conducted, directed and authoritze at the highest levels of the accounting department at the company.”

Hoffinger said the company benefited from the scheme by “keeping their trusted chief financial officer happy (Allen Weisselberg)” and avoiding some taxes.  “Everybody wins here.  Of course, everybody but the tax authorities.  The problem with doing it this way is that it’s not legal.”

Donald Trump has not been charged in the case, while the Trump Organization has pleaded not guilty.

The case is separate from a $250 million civil lawsuit filed by New York’s attorney general against Trump, three of his adult children and his company in September, accusing them of lying to banks and insurers by overvaluing his real estate assets and Trump’s net worth.

---

--David DePape, 42, was accused of a hammer attack on Paul Pelosi, husband of House Speaker Nancy Pelosi, who told police he was on a “suicide mission,” according to court documents.  DePape, an illegal immigrant since 2002 (Canada), pleaded not guilty to attempted murder of Pelosi and assault with a deadly weapon.

Court documents say he had planned to hold Nancy Pelosi hostage and break “her kneecaps” if she “lied” to him.  Pelosi was on the other side of the country at the time.

According to court papers cited by the media, DePape told police, “I didn’t really want to hurt him, but you know this was a suicide mission,” he allegedly said.  “I’m not going to stand here and do nothing, even if it cost me my life.”

DePape also told police he planned to target several state and federal politicians and members of their families, as well as a local professor, according to the filing.

The attack on Paul Pelosi was grounds for jokes and unfounded rumors, further proving my point in my opening last week that tens of millions of Americans have the brain of a turnip…and I’ve really had it.  There are so many people I have zero respect for.

At least Senate Minority Leader Mitch McConnell issued an immediate and unequivocal condemnation of the attack.  Other Republican leaders, or would-be leaders (see Arizona’s Kari Lake), made light of it, which is beyond comprehension. 

Paul Pelosi was released from the hospital on Thursday as he continues to recover from a fractured skull and injuries to his right arm and hands.

--According to a new report published Tuesday in the journal JAMA Network Open, binge drinking is to blame for 20% of the deaths of American adults between the ages of 20 and 49 over a recent four-year period.  When the age bracket is extended to 20-64, consuming excessive alcohol is tied to one in eight deaths.

Researchers examined national and state mortality data from 2015-19, noting that deaths fully attributable to alcohol have risen in the past decade.

Excessive alcohol use is a leading preventable cause of premature death that can beget ailments such as heart disease, cancer, unintentional injury and liver disease.

25% of adults binge drink weekly.  A quarter of adults who binge drink do so at least weekly, according to the CDC.

According to the CDC, an estimated one in six adults binge drink – classified as four or more drinks in one sitting for a woman and five or more drinks for a man – with a quarter of them binge drinking at least weekly.

The data from the new study shows the percentage of deaths fully caused by alcohol (such as alcoholic liver disease) is higher among men (15%) than women (9.4%).

--The U.S. flu season is off to a fast start, with hospitalization rates the highest for this time of year in more than a decade, federal data showed.

Centers for Disease Control and Prevention estimates showed that last Friday, there had been at least 880,000 cases of flu this season, some 6,900 hospitalizations and 360 deaths, thru the week ending Oct. 22.

Today, the CDC reiterated that hospitalizations continue to increase and that there have been 5 million fewer doses of influenza vaccine administered to U.S. adults so far this year.

Flu season typically peaks between December and February.

--I feel sorry for those running Sunday’s New York City Marathon in what will likely be record heat.  Like temps in the 60s for most of the runners, four hours and under (as it peaks in the 70s).  Not ideal.

I ran a full marathon in Kiawah, S.C., in 1999 in high temps and I should have died of dehydration.  But I finished...barely.

---

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

Pray for Ukraine.

Good luck to our election workers.

---

Gold $1685
Oil $92.60…highest in four weeks

Regular Gas: $3.79; Diesel: $5.31 [$3.41-$3.63 yr. ago]

Returns for the week 10/31-11/4

Dow Jones  -1.4%  [32403]
S&P 500  -3.3%  [3770]
S&P MidCap  -1.2%
Russell 2000  -2.5%
Nasdaq  -5.6%  [10475]

Returns for the period 1/1/22-11/4/22

Dow Jones  -10.8%
S&P 500  -20.9%
S&P MidCap  -15.3%
Russell 2000  -19.8%
Nasdaq  -33.0%

Bulls 35.8
Bears 37.3

Hang in there.

Brian Trumbore



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Week in Review

11/05/2022

For the week 10/31-11/4

[Posted 7:00 PM ET, Friday]

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

Edition 1,229

We are days away from an historic midterm election that hopefully doesn’t evolve into a cataclysmic one.

With Republicans on the verge of taking back Congress, barring a Democratic surprise in keeping the Senate, President Joe Biden’s agenda will largely go up in flames.

The process turns into a cataclysm if the new House committee leaders choose to go for payback, in all shapes and sizes, including an attempt to impeach the president. [Which would fail in the Senate, but would not be good for the markets, and a vast majority of us.]

I was struck by the comments of two financial industry titans on CNBC this week.

Legendary investor Leon Cooperman talked of how back in 1776, and then our nation’s first election, there were only about 1 million eligible to vote (slaves and women excluded, of course), and yet the country would come up with leaders like Washington, Jefferson, Madison and Hamilton.

Today, there are over 330 million people in America and the best we could do is Donald Trump and Joe Biden.

Real estate tycoon Sam Zell then talked of the impact of social media, “a terrible idea,” and the dearth of leadership today, and Cooperman and Zell are right on all fronts.

It’s truly pathetic.

Former president Trump strongly hinted that he is considering launching a third bid for the White House.

At a rally in Iowa on Thursday, Trump said: “And now, in order to make our country successful and safe and glorious, I will very, very, very probably do it again.”

“Get ready, that’s all I’m telling you, very soon.  Get ready,” he added, teasing a 2024 bid.

Trump, looking to take advantage of likely Republican wins, would announce by Thanksgiving, according to reports.  Axios reported today that the launch will be Nov. 14.

A Reuters/Ipsos poll late last month showed that just 41 percent of Americans view Trump favorably.

Then there is President Biden, a flat-out embarrassment.

Editorial / New York Post

“Turning 80 next month, Biden’s already the oldest man ever to serve as president. And for all his lifelong habit of gaffes and verbal bumbling, it’s becoming harder and harder to watch the man without thinking he has some serious neurological problems.

“After a recent tree-planting event on the White House South Lawn, for example, the prez wandered off on his own, muttering ‘Which way are we going?’ as his minders gingerly tried to direct him.  (And that’s just his latest wander-off; they’re becoming fairly common.)

“He also just bizarrely resurrected his ‘I got arrested while trying to see Mandela’ story – a Biden oldie that he finally recanted in September, before bringing it up again on Sunday, as if he’d never admitted it was made up.

“He greeted the election of Britain’s new prime minister – head of government in our greatest Western ally – by mispronouncing his name: ‘Rishi Sunak’ became ‘Rashee Sanook’ (not a typical error for a guy who’s spent decades hobnobbing around the globe)….

“Meanwhile, his administration completely and inexplicably refuses to release the records of Biden’s visitors to Delaware, where he’s spent about a quarter of his presidency. Is Joe getting treated by a neurologist there, and wants to keep it out of the public eye? ….

“Democracy is impossible without an informed populace.  And Americans need to know if we’re living through ‘Weekend at Biden’s’ or have a president who’s actually fit to lead.”

Here’s the deal.  When historians look back on this era I’ve been covering, four godawful presidents in a row, historically four of the six or seven worst in our history given the stakes, Biden might be saved, somewhat, by his support of Ukraine, should this conflict end in a satisfactory conclusion…with Ukraine on the path to recovery and with most of its territory back, and with Russia no longer posing a serious threat to its neighbors, which would mean Vladimir Putin is out and he’s been replaced by a technocrat.

But if Joe Biden does not announce by mid-January that he will not seek a second term, as I’ve been saying he would do starting back in 2021, and if Donald Trump is already two months into his new campaign, I’ll have to commit hari-kari.

[My friends and family need not worry, knowing I can’t leave the scene until the Mets win a World Series, the Jets reach the Super Bowl, and Wake Forest basketball makes a Final Four.]

---

But speaking of the other paramount issue of our day, a new Wall Street Journal poll showed that while a majority of Americans continue to support aid for Ukraine, support is becoming a partisan issue as Republican opposition grows to helping the country, which makes me want to scream. [Rep. Marjorie Taylor Greene, for one, can go to hell.]

Some 30% of respondents overall said they believe the administration is doing too much to help Ukraine, up from 6% in a March Journal poll.  The change was driven by a big shift among GOP voters: 48% of Republicans now say the U.S. is doing too much, up from 6% in the previous survey.

The portion of GOP voters who said the U.S. isn’t doing enough to help Ukraine fell to 17%, a steep drop from 61% in March.

House Minority Leader Kevin McCarthy (R-Calif.), who will likely become speaker after the GOP wins the majority, said last month that Congress wouldn’t “write a blank check to Ukraine” under GOP leadership.  He later clarified that some within his caucus want greater accountability for the funds sent to the government in Kyiv.

---

This week in Ukraine….

After a massive missile strike on Kyiv and other cities Monday, water supplies were apparently restored on Tuesday in the capital, after the Russian attacks left 80% of its residents without running water.

Vladimir Putin said the strikes on Ukrainian infrastructure were partly in retaliation for Ukraine’s drone attack on Russian ships in the Black Sea.  Russia then froze its participation in the grain export program, sending global wheat prices soaring.  Ukraine and Russia are both among the world’s largest exporters of food.

Ukraine said it shot down most of the missiles fired, but some hit power stations, knocking out electricity and water supplies.

Ukraine’s army commander in chief, Valeriy Zaluzhnyi, said on Telegram that Russia had launched 55 cruise missiles and dozens of other munitions at “civilian targets” across the country.  But the presidential office said thanks to improved air defenses, “the destruction is not as critical as it could be.”

Prime Minister Denys Shmygal said the strikes had still caused power cuts in “hundreds” of areas across seven Ukrainian regions.

U.S. State Department spokesman Ned Price told reporters on Tuesday that Russia’s attacks on Ukrainian water and energy supplies are aimed at exacerbating human suffering and are particularly heinous.

Ukrainian foreign minister Dmytro Kuleba said on Twitter: “Instead of fighting on the battlefield, Russia fights civilians.”  Ukraine’s battered energy infrastructure would be repaired with equipment from 12 countries, Kuleba said in a separate statement.

The Russian army confirmed it carried out the cruise missile strikes and that all had hit their intended targets.

It then carried out another round of shelling and missiles strikes on Thursday across the country, knocking out electricity to the Zaporizhzhia nuclear plant, Europe’s largest, and disconnecting it from the power grid after shelling damaged the high voltage lines, leaving it with just diesel generators.  Ukrainian nuclear firm Energoatom said the plant has 15 days worth of fuel to run the generators.  Its reactors need power to keep the fuel inside cool and prevent a meltdown.

---

Wednesday, Russia said it would resume its participation in the grain deal to free up vital exports from Ukraine after suspending it over the weekend in a move that had threatened to exacerbate hunger across the world.

Ukrainian presidential adviser Mykhailo Podolyak said that Russia is resuming participation in the deal because it realized the initiative would still work without the Kremlin’s involvement.  Moscow’s decision showed that Russian “blackmail” and “escalation and threats” fail when they meet a resolute response.

“One way or another, Russia, embarrassed, returned to the ‘grain initiative’ because it suddenly turned out that the grain corridor would work even without the Kremlin’s participation,” Podolyak said. “This says only one thing: Russia is always inferior to those who are stronger, those who know how to take a blow, those who argue their position strongly.”

Tuesday night, President Volodymyr Zelensky said the world must respond firmly to any Russian attempts to disrupt Ukraine’s grain export corridor, as more ships were loading despite Moscow suspending its participation in the UN-brokered deal.

The deal, brokered by the United Nations and Turkey on July 22, provided safe passage for vessels carrying grain and other fertilizer exports.

Russia then withdrew from the accord over the weekend, saying it could not guarantee safety for civilian ships because of an attack on its Black Sea fleet.

Putin, in a news conference on Monday, said Ukrainian drones had used the same marine corridors that grain ships transited under the deal.  Moscow called ship movements through the Black Sea security corridor “unacceptable.”

But a record volume of 354,500 tons of agricultural products left Ukrainian ports Monday, despite Moscow’s weekend announcement.

One big issue is insurance.  The head of cargo at Lloyd’s of London insurer Ascot told Reuters that his company is pausing writing new coverage for shipments from Monday “until we better understand the situation.”

Insurance previously issued “still stands,” said Chris McGill.  Most policies must be renewed on a seven-day basis.

In a late Tuesday night video address, Zelensky said ships were still moving out of Ukrainian ports with cargoes thanks to the work of Turkey and the UN.  The UN later confirmed the first of 40 planned ship inspections was completed in Istanbul waters, which allows the ships to continue on to their designations.

“But a reliable and long-term defense is needed for the grain corridor,” Zelensky said.  “Russia must clearly be made aware it will receive a tough response from the world to any steps to disrupt our food exports,” he said.  “At issue here clearly are the lives of tens of millions of people.”

Meanwhile, Russia told civilians on Tuesday to leave an area along the eastern bank of the Dnipro River in the Ukrainian province of Kherson, a major extension of an evacuation order that Kyiv says amounts to the forced depopulation of occupied territory.

Russia had previously ordered civilians out of a pocket it controls on the west bank of the river, where Ukrainian forces have been advancing for weeks with the goal of capturing the city of Kherson.

In the city of Bakhmut, a target of Russia’s armed forces in their slow advance through the eastern Donetsk region, some residents were refusing to leave as fighting intensified.

This week, President Putin announced Moscow had completed the ‘partial’ military mobilization announced in September and no further call-up notices would be issued.  When Putin announced this Sept. 21, it was the first such mobilization since World War II.  But mobilization has proceeded chaotically and thousands have fled Russia to avoid being drafted.

Thursday, U.S. Defense Secretary Lloyd Austin said Ukrainian forces can retake Kherson, but the comment was made as a Russian-installed official in Kherson region said Moscow was pulling its troops from the west bank of the Dnipro River, signaling a significant retreat.

Ukraine said it was still fighting in the area and was wary of the occupying Russian forces setting a trap.  There were Russian troops in Kherson city wearing civilian clothes.

The region’s capital and river port Kherson is the only big city Russia has captured intact since the invasion began.  Russia has fought for months to hang on to the pocket of land it holds on the west bank at the mouth of the Dnipro that bisects Ukraine.  Moscow had sent tens of thousands of troops to reinforce the area, one of its biggest battlefield priorities.

A spokesperson for Ukraine’s southern military command said, “This could be a manifestation of a particular provocation, in order to create the impressions that the settlements are abandoned, that it is safe to enter them, while they are preparing for street battles,” said Natalia Humeniuk.

EU foreign policy chief Josep Borrell warned on the sidelines of a G7 foreign ministers meeting: “Putin’s Russia is destroying Ukraine. They cannot occupy it, they cannot win on the battlefield, they cannot win the war – and they are destroying the country systematically.”

Further Russian attacks Thursday night left 4.5 million Ukrainians without power, President Zelensky said in his video address.  450,000 were without power in Kyiv Friday morning.

Zelensky said, Russian attacks on Ukraine’s energy sector and energy facilities “do not stop for a single day,” he said, adding that to “endure Russian energy terror” is Ukraine’s “national task.”

“The very fact that Russia resorted to terror against the energy industry shows the weakness of the enemy. They cannot defeat Ukraine on the battlefield, and that is why they are trying to break our people in this way – to humiliate Ukrainians, to strike at the morale of our people, at the resistance of our people.  I believe that Russia will not succeed,” Zelensky said, echoing Josep Borrell.

Friday, Vladimir Putin publicly endorsed the evacuation of civilians from parts of Kherson region, the latest sign of retreat.

“Now, of course, those who live in Kherson should be removed from the zone of the most dangerous actions, because the civilian population should not suffer,” Putin told pro-Kremlin activists as he marked Russia’s Day of National Unity.

Putin added that Russia’s confrontation with the “neo-Nazi regime” in Ukraine was inevitable.

Meanwhile, the UN nuclear watchdog said it had found no sign of undeclared nuclear activity at three sites in Ukraine that it inspected at Kyiv’s request, in response to Russian allegations that work was being done on a “dirty bomb.”

---

--The White House said Wednesday that it has information that indicates that North Korea is covertly supplying Russia with a “significant” number of artillery shells for the war in Ukraine.

National Security spokesman John Kirby told reporters that North Korea was attempting to obscure the shipments by funneling them through countries in the Middle East and North Africa.

Kirby said the amount of shells was not insignificant, but was unlikely to change the momentum or outcome of the war.  However, they could still be deadly for Ukrainians, he said.

--The Kremlin on Monday dismissed a British media report that Liz Truss’ mobile telephone was hacked by Russian agents.  The Daily Mail reported on Saturday that Russian spies gained access to Truss’ phone while she was foreign minister. 

When asked about the report, Kremlin spokesman Dmitry Peskov said there was little in the British media that could be taken seriously.  “Unfortunately, there is a shortage of material in the British media that can be perceived as serious. And we treat such publications as the yellow press,” Peskov said.

But this story makes total sense in light of the Kremlin’s harsh rhetoric towards Truss, singling her out more than any other European leader.

--Along the lines of the above, Russia’s defense ministry said on Saturday that representatives of a British navy unit blew up the Nord Stream gas pipelines in the Baltic Sea last month.  The defense ministry gave no evidence for its claim.

Britain denied Russia’s claims, calling them “false claims of an epic scale.”

“To detract from their disastrous handling of the illegal invasion of Ukraine, the Russian Ministry of Defense is resorting to peddling false claims of an epic scale,” a spokesperson for Britain’s ministry of defense said.  “This latest invented story, says more about the arguments going on inside the Russian Government than it does about the West.”

--Vladimir Putin said on Monday that a natural gas hub could be set up in Turkey quite easily and predicted that many in Europe would want to sign contracts for supplies.  Putin made his remarks in a news conference.  Earlier this month Turkish President Erdogan said he had agreed with Putin to create a natural gas hub in Turkey.

--Norway puts its military on a raised level of alert from Tuesday as it sharpens security in response to the war in Ukraine, the country announced on Monday.

Norway is now the biggest exporter of natural gas to the European Union, accounting for around a quarter of all EU imports after a drop in Russian flows.

“This is the most severe security situation in several decades,” Prime Minister Jonas Gah Stoere told a news conference. “There are no indications that Russia is expanding its warfare to other countries, but the increased tensions make us more exposed to threats, intelligence operations and influence campaigns.”

--Ukrainian first lady Olena Zelenska urged tech workers from around the world to create innovations to stop Russia and help save people in her country.

--Oleg Tinkov, a Russian oligarch, renounced his citizenship, saying he did not want to be “associated with a fascist country.”

---

Wall Street and the Economy

The Federal Reserve’s Open Market Committee raised the target for its benchmark funds rate by 75 basis points, a fourth straight such increase, to a range of 3.75% to 4.00% (the highest since early 2008) at its confab Wednesday and altered its post-meeting statement to suggest that it will proceed cautiously with future rate increases.

“In determining the pace of future increases in the target range, the Committee will take into account the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic and financial developments,” the statement said.

The FOMC still expects to raise rates further to bring the target range to a level that would be “sufficiently restrictive to return inflation to 2% over time.”

There were no other changes to the statement and no dissents in the voting.

Chair Jerome Powell then said at his post-meeting press conference that when it comes to moving to smaller rate rises from the 75-basis point moves that have defined recent rate hikes, “that time is coming and it may come as soon as the December meeting,” but he added “no decision has been made” yet on what to do at the next gathering.

And then he added that inflation was higher than expected, and that there would be a sustained period of below trend growth.  The Fed “will stay the course util the job is done.”  Powell added, it would be “very premature to be talking about pausing,” and that officials would most likely raise rates higher than their previous forecast, which showed rates peaking at 4.6 percent next year

And with that, the market cratered.

On to the December 13-14 FOMC meeting and all the key inflation and economic data beforehand, of which there will be a great deal.

Editorial / Wall Street Journal

“The cliché is that a central bank’s job is to take away the punch bowl, though not usually in 30 minutes.  Yet that’s what happened Wednesday when Federal Reserve Chairman Jerome Powell explained in his press conference that he really is staying the anti-inflation course, half an hour after a Fed statement had seemed to hint to the contrary.

“The Federal Open Market Committee increased its target range for the fed funds rate by 0.75 percentage points, to 3.75%-4%, as Mr. Powell had primed markets to expect. But investors cheered the FOMC statement, which said future decisions will account for ‘the cumulative tightening’ achieved so far as well as ‘the lags’ with which monetary policy operates. Wall Street has been searching for signs the Fed might start moderating the pace of rate increases or stop raising altogether, and it sounded like the FOMC was offering that hope. Stock and bond prices surged.

“Then Mr. Powell met the press, and his message remains more hawkish than not.  While allowing that the pace of rate increases might slow, he also said recent data suggest the top rate the FOMC needs to reach may be higher than the Fed has previously predicted. He also swatted away Wall Street’s fretting about ‘overtightening’ by saying he believes the greater risk would be not to tighten enough.

“Message received. Stocks promptly fell, by 3.4% in the case of Nasdaq.”

But then the market liked today’s jobs report, with the October nonfarm payroll figure at a better-than-expected 261,000, while September’s figure was revised upward to 315,000, and the unemployment rate rose to 3.7%, which the Fed actually wants to see.

Also, importantly, average hourly wages rose 0.4%, and 4.7% from a year ago, which has been gradually decelerating, another positive in terms of the Fed.  However, there are all kinds of labor issues that will impact wages, not to the Fed’s liking, some of which are spelled out below, and not just here, but abroad.

On other important data, the October ISM manufacturing figure came in at 50.2 (50 the dividing line between growth and contraction), while the non-manufacturing/services number for the month was 54.4, the lowest since May 2020.

The Chicago PMI on the manufacturing side, closely followed, was a worse-than-expected 45.2.

September construction and factory orders rose 0.2% and 0.3%, respectively.

The Atlanta Fed’s very early GDPNow barometer for fourth quarter growth is at 3.6%.

The National Retail Federation said retail sales for the holiday season, November and December, are expected to reach as much as $960.4 billion, up between 6% to 8% over the same period last year.  But with inflation of 8%, the forecast puts adjusted spending at or below 2021 levels.

Holiday retail sales increased 13.5% year-over-year to a record $888.7 billion last year, and by 9.3% in 2020.  Sales have grown at about 4.9% on average over the last 10 years, according to the NRF.

NRF CEO Matthew Shay said in a press release: “While consumers are feeling the pressure of inflation and higher prices, and while there is continued stratification with consumer spending and behavior among households at different income levels, consumers remain resilient and continue to engage in commerce.”

Online and other non-store sales are expected to increase between 10% and 12% this year.

To meet demand, retailers will hire between 450,000 and 600,000 seasonal workers in 2022, the NRF projects, but retailers have been hard pressed to fill all their open positions amid the ongoing labor squeeze.

On the housing front, mortgage volumes at Wells Fargo continue to slow rapidly, which is leading to further layoffs as the housing slump deepens.

According to reports, Wells, a leader in this category, had about 18,000 loans in its retail organization pipeline in the early weeks of the fourth quarter, down as much as 90% from a year earlier, when the pandemic-fueled housing boom was in full swing.

The latest 30-year fixed-rate mortgage number out of Freddie Mac was 6.95%, down from last week’s multi-year high of 7.08%, but with the 10-year Treasury rising anew this week, this figure is likely to go back over 7.00%.

Europe and Asia

We had the final PMI readings for October in the eurozone, courtesy of S&P Global, and they were ugly.  The EA19 composite reading was 47.3, a 23-month low.  Manufacturing 46.4, services 48.6.  All in contraction mode.

Germany: 45.1 mfg., 46.5 services
France: 47.2, 51.7
Italy: 46.5, 46.4
Spain: 44.7, 49.7
Ireland: 51.4, 53.2
Netherlands: 47.9 mfg.
Greece: 48.1 mfg.

UK: 46.2 mfg., 48.8 services

All of the manufacturing figures, save for Ireland, are essentially 29-month lows.

Joe Hayes / S&P Global

“After a weak third quarter of PMI and official GDP data, the latest survey results for the start of the fourth quarter suggest the eurozone economy is now headed for a winter recession. High inflation is dampening demand and hurting business confidence.  Fears that the energy crisis could intensify over the winter period are also feeding uncertainty and weighing on decision-making.

“Nonetheless, the ECB will want to continue with monetary tightening to contain inflation.  October PMI data suggest inflationary pressures remained extremely elevated across the eurozone. We did, however, see some dovish tones in the rhetoric surrounding the ECB’s October policy decision, clearly showing that the Governing Council are concerned by the rapidly deteriorating economic outlook.  A substantial worsening of economic conditions in the coming months may give policymakers a difficult decision to make with regards to the path of monetary tightening, for fear of being too aggressive and prolonging the downturn.”

A flash estimate on euro area inflation for October came in at 10.7%, courtesy of Eurostat, up from 9.9% in September.  Ex-food and energy, the rate is 6.4% vs. 6.0% in Sept.

Germany 11.6% (again, flash Oct.), France 7.1%, Italy 12.8% (big spike), Spain 7.3% (big decline), Netherlands 16.8%, Ireland 9.6%.

September producer prices in the EA19 were up 1.6% over August, and a staggering 41.9% compared with September 2021. [Eurostat]

Eurostat also released flash estimates for third-quarter GDP in the eurozone, 0.2% over the previous quarter, 2.1% over Q3 2021, down from 4.3% in Q2.

Published growth rates, Q3 2022 over Q3 2021…

Germany 1.1%, France 1.0%, Italy 2.6%, Spain 3.8%.

And we had a reading on September euro area unemployment, 6.6%, down from 6.7% in August, and down from 7.3% in September 2021.

Germany 3.0%, France 7.1%, Italy 7.9%, Spain 12.7%, Netherlands 3.8%, Greece 11.8%.

Britain: Not much politically since Rishi Sunak became prime minister as the country awaits the new budget, to be unveiled Nov. 17.

But the Bank of England followed the Federal Reserve in raising its benchmark interest rate 75 basis points to 3%, even as the BoE strongly hinted that any future rate increases won’t be as high as some investors and traders have feared.

Bank policymakers believe other hits to economic activity will be enough to bring inflation under control, with the country heading into recession (probably a long one, like two years) and the government planning tax hikes and another round of austerity.

Bank of England Governor Andrew Bailey said, in unusually blunt terms: “We can’t make promises about future interest rates but based on where we stand today, we think Bank Rate will have to go up by less than currently priced in financial markets.”

Earlier, markets were expecting Bank Rate to peak at around 4.75%.

The BoE said it now expected inflation will hit a 40-year high of around 11% during the current quarter.

Unemployment could rise to 6.4% from its current 3.5%.

Turning to AsiaChina released out its October PMIs, courtesy of the National Bureau of Statistics, with manufacturing at 49.2 vs. September’s 50.6; non-manufacturing/services at 48.7 vs. 50.6.  So not good.

The private Caixin manufacturing reading was 49.2 vs. 48.1 prior, with services at 48.4 vs. 49.3. 

Strict Covid restrictions continue to impact the domestic economy, while softening global demand is no help.

But there were various reports this week that among the steps to loosen up, China may soon shorten Covid quarantine requirements for inbound travelers from the current 10 days to seven or eight days.  Like whoopty-damn-do.  You going over there if this change were made? I didn’t think so.

In Japan, the October manufacturing PMI was 50.7, with services at 53.2.

Industrial production for September was down 1.6% month-over-month, up 9.8% year-over-year, with retail sales in the month up 4.5% Y/Y.

Taiwan’s October manufacturing PMI came in at a dreadful 41.5 vs. 42.2 in September.

South Korea’s was at 48.2 vs. 47.3.

Street Bytes

--The Dow Jones finally fell after a huge four-week rally, the other major indices falling as well, as the hoped-for Fed pivot just is not happening any time soon.

The Dow lost 1.4% to 32403, the S&P 500 fell 3.3% and Nasdaq 5.6%.

For the month of October, which ended Monday, the Dow soared 14%, the best single month since 1976.  The S&P gained 8%, but Nasdaq just 4% amid all the disappointing earnings reports from the tech titans.

The outperformance between the Dow and Nasdaq was the biggest since Feb. 2002.  The Dow, broadly speaking, is comprised of value stocks and companies able to pass along price increases to consumers.

Speaking of the Nasdaq and its tech titans, as of Thursday, Oct. 27, Alyssa Lukpat of the Wall Street Journal noted: “The 20 richest tech billionaires have collectively lost nearly half a trillion dollars this year amid the stock market’s sharp tumble, a loss of wealth that is more than the market values of all but seven companies in the S&P 500.

“The world’s richest tech moguls – including Mark Zuckerberg, Bill Gates and Larry Ellison – have seen more than $480 billion in paper wealth disappear this year, according to the Bloomberg Billionaires Index, a daily ranking of the richest people in the world.”

Elon Musk and Jeff Bezos have each seen more than $58 billion in wealth wiped away this year (again, a/o Oct. 27).

These same titans then lost more money this week, in general.

--U.S. Treasury Yields

6-mo. 4.55%  2-yr. 4.66%  10-yr. 4.16%  30-yr. 4.26%

We had a terrific example of how badly some traders missed the Fed’s message.

At 2:15 p.m. on Wednesday, after the Fed issued its statement accompanying the 75-basis point hike in rates, the 2-year stood at 4.45%.

After Powell’s press conference, and the strong dose of reality, the yield was 4.72% and hit a 15-year high Friday of 4.79% before settling at 4.66%.

The 10-year rose from 3.99% to 4.17%, and then 4.20% today before its close of 4.16%.

--Saudi Arabian state oil producer Aramco beat forecasts on Tuesday with a 39% jump in third-quarter net income and reported record free flows, joining rivals in benefiting from higher prices and robust demand.

Aramco’s net income rose to $42.4 billion for the three months to Sept. 30 from $30.4 billion a year earlier, just above the median forecast of $41.7 billion.

--BP reported a profit of $8.2 billion for the third quarter, more than double the profit over the same three months last year.

BP said it will pay $800 million in windfall tax this year, a levy on profits made from extracting UK oil and gas.

The windfall tax was introduced by Rishi Sunak when he was chancellor.

--As alluded to above, pilot unions at the major airlines, American, United, and Delta, have all rejected contract proposals the last week or so, the board of the Allied Pilots Association, which represents American’s roughly 15,000 pilots, the latest to do so.

Pilots are seeking pay raises as well as better scheduling and other changes they say will improve their quality of life.

Pilots at United this week spurned a tentative agreement that would have provided raises of more than 14.5% over 18 months, and pilots at Delta voted to authorize union leaders to call a strike if they deem it necessary.

American’s proposal was for a 12% raise initially, followed by another 5% after a year and then 2% after two years.

There is no sign there will be job actions around the holidays, yet.

--Speaking of job actions, hundreds of workers at London’s Heathrow airport will walk out in the run-up to the soccer World Cup this month over demands for better pay, a British union said Friday.  Unite said 700 workers involved in ground-handling, airside transport and cargo will strike for three days starting Nov. 18.  The World Cup in Qatar begins Nov. 20.

Unite said the strike action “will inevitably cause disruption, delays and cancellations to flights throughout Heathrow, with travelers to the World Cup particularly affected.”

Qatar Airways, which has scheduled an additional 10 flights a week during the World Cup, would be particularly impacted.

--TSA checkpoint numbers vs. 2019

11/3…89 percent of 2019 levels
11/2…88
11/1…80
10/31…80
10/30…91
10/29…100
10/28…100
10/27…112

The trend of the last five days is interesting.

--China ordered a seven-day lockdown of the areas around Foxconn Technology Group’s main plant in Zhengzhou, a move that will severely curtail shipments in and out of the world’s largest iPhone factory.

The lockdown will last until Nov. 9, as the local government said in a statement posted to its WeChat account.

The abrupt action is a further reflection of Beijing’s Covid Zero approach and will further disrupt Foxconn’s main operations base, which cranks out an estimated four of five of Apple Inc.’s latest handsets (some put it at 70%).  The Taiwanese company was already grappling with a Covid flare-up that forced some of its 200,000 staff into quarantine and pushed others to flee the facility – some on foot.

In a statement, Foxconn said it will keep operating within a “closed loop,” or a self-contained bubble that limits contact with the outside world. But the company didn’t address questions about how it will ship goods in and out of the compound during the area-lockdown. 

The company denied claims on social media of several deaths from an outbreak at the plant.

“There are no deaths at our facility,” a Foxconn unit said in a statement.  “We believe this is a maliciously edited video.”

Shares in Apple fell precipitously this week from last Friday’s close of $155 to $138.

--Advanced Micro Devices issued a glum sales outlook for the current quarter and said it would cut spending as the chip maker responds to a deep slump in demand for consumer products.

AMD CEO Lisa Su said the company was cutting expenses in businesses that weren’t doing as well to adapt to the soft demand outlook.

AMD said it expected around $5.5 billion of revenue in the current quarter, up by 14% but below analysts’ forecasts.

The subdued outlook reflected a challenged market for PCs, echoed by everyone from Microsoft to Intel, AMD’s big competitor, and the market is declining faster than expected.  Su said the PC market could fall by close to 20% this year.

The company is also expecting global economic weakness to impact its business supplying chips for servers that go into datacenters.  That business has been a strong point for AMD, driven partly by demand from fast-growing cloud-computing companies in North America.  Su said corporate buyers of servers were “taking longer to make decisions and perhaps being a little bit more conservative” on capital spending.

--Dutch shipping giant Maersk has been profiting from the pandemic and the boon in business, but the company warned Wednesday that a looming global recession is expected to reduce container demand in 2022, with “plenty of dark clouds on the horizon.”

Shares in the company, perceived as a barometer of the health of the economy, fell 6%.

Maersk earned record profits last quarter due to “substantially higher freight rates,” but it said that rates began to drop toward the end of the period “due to weakening consumer demand, coupled with markets beginning to normalize with fewer supply chain disruptions” and less congestion.

Plus, ocean freight volumes are down.  CEO Soren Skou, in an interview with CNN, said the decline is “clearly a sign that the consumer is not spending as much money as he or she has done in the last few years, and probably also a sign that many of our customers have too much inventory.”

Demand for bigger goods like televisions, couches or BBQs has also fallen after people made big purchases during lockdowns and, now, they won’t be replacing same for years, Skou noted.

--As reported by Aaron Elstein of Crain’s New York Business: “Average pay for Wall Street workers is on pace to fall by more than 20% this year after the New York state Comptroller’s Office said last week that it hit a record $516,560 last year.  A 20% drop would translate to average pay of $414,000 – still four times higher than the average private-sector wage in New York.”

This is what happens in a bear market (and dormant capital markets) and it spells bad news for the city and state, which rely heavily on Wall Street and the securities industry for tax revenue.

On its own, the securities industry accounted for 22% of all state tax revenue in the fiscal year that ended March 31, cushioning the blow from big declines in tourism and other key revenue sources.

--Similarly, and as Mr. Elstein (who I correspond with from time to time on various topics) also reported, Vornado Realty Trust said it won’t be erecting towers around Penn Station (New York) any time soon.

“The headwinds in the current environment are not at all conducive to development,” CEO Steven Roth said Tuesday.

Asked if he might revise his ambitious plans for redeveloping the area around Penn Station, perhaps by constructing more apartments and fewer offices, Roth said, “That’s not something we’re going to get into now.”

New York Gov. Kathy Hochul has been pinning her hopes on Vornado and others developing 18 million square feet of space around Penn Station to generate tax revenue from higher rents and more commercial activity will pay to rebuild the nation’s busiest commuter hub.

--Elon Musk is looking to quickly boost Twitter Inc.’s revenue by embracing subscriptions, aiming to make the company less dependent on digital ads, that account for nearly 90% of its total sales.

Musk signaled in several tweets that he was leaning toward an $8-per-month subscription offering.

This week, two large advertising companies recommended that their clients temporarily hold off on advertising on Twitter, adding urgency to Musk’s efforts to identify alternative revenue sources.

Interpublic Group of Cos. and Havas Media urged their clients to pause their Twitter ads because of concerns about the company’s ability to monitor its content.  [The likes of General Mills, Mondelez International, and Pfizer are among those having done so thus far.]

Musk has begun meeting with top advertising executives to try to reassure them about the direction of Twitter and has offered to meet with clients directly, according to reports.

But Friday, in a tweet, Musk said Twitter had suffered “a massive drop in revenue” because of advertisers cutting back, blaming it on “activist groups pressuring advertisers.”

Bigger picture, CNN’s Jake Tapper interviewed tech entrepreneur and business professor, Scott Galloway, less than 24 hours after Musk took control of Twitter.

Galloway had said a while back the deal would go through when there were doubts, and now he has real concerns.

“I think what we’re going to talk about a lot more [Ed. aside from layoffs], moving forward, is whether or not Mr. Musk is compromised, and thereby a platform that has huge influence might be compromised.

“He gets about a quarter of his cash flow, or specifically Tesla, and arguably, about half his wealth, from the success, or lack thereof, of Tesla and China.  And when the PRC has already been unmasked as trying to weaponize Twitter, to influence the midterm elections?  You begin to wonder, what kind of conflicts might he have, in terms of protecting the platform, and protecting democracy, if you will, from the PRC’s influence. So, this is just about to get interesting.  He wrote or tweeted that ‘The bird is freed.’  I would argue the bird is fried!  I think this is going to get very ugly very fast.”

Twitter was then sued over Musk’s plan to eliminate about 3,700 jobs, which workers say the company is doing without enough notice in violation of federal and California law.  A class-action lawsuit was filed Thursday.

Twitter said it intended to cut staff Friday, the company said in an email to employees. Musk plans to get rid of half the workforce, making good on plans to slash costs.

The federal Worker Adjustment and Retraining Notification Act restricts large companies from mounting mass layoffs without at least 60 days of advance notice.

--Marriott International Inc. said on Thursday China’s strict Covid policies were delaying openings of some properties in the country, a key market for hotel operators.

“The market in China is most certainly where we’re seeing the most challenges,” CEO Anthony Capuano said during an analyst call.  Shares of the Sheraton-owner fell 4%.

About 60% of Marriott’s projects in the pipeline in China are in the luxury and upper upscale tier, which are significant money generators, Capuano said.  The company, however, continued to benefit from strong travel demand elsewhere despite economic headwinds, with Marriott joining its rival Hilton Worldwide Holdings Inc. in raising its annual profit forecast on Thursday.

“Looking forward we expect that the recession will mute, but not derail, growth in the U.S. hotel industry.

For the quarter through September, Marriott posted a 36.3% rise in revenue per available room (RevPAR) at $120.60, compared to a year earlier on a constant currency basis.  Its revenue rose nearly 35% to $5.31 billion, falling slightly short of analysts’ average estimate of $5.34 billion.  Adjusted profit per share was $1.69, one cent above expectations.

--Canada’s economy added 108,300 jobs in October, far ahead of forecasts, though the jobless rate remained at 5.2%.  The services sector was up by a net 63,200 positions, mostly in accommodation and food services.

--Johnson & Johnson said on Tuesday it would buy heart pump maker Abiomed Inc. in a $16.6 billion deal, its biggest in nearly six years, as the conglomerate seeks to boost its cardiovascular business.

The deal comes as J&J is spinning off its consumer health business to focus on its pharmaceuticals and medical devices operations.

Abiomed develops medical technology that provides circulatory and oxygenation support.  Founded in 1981, the company’s Impella heart pumps are the smallest in the world and have been used in the United States since 2008.  Impella’s worldwide revenue totaled $985 million in fiscal 2022.  Heart disease accounts for nearly 700,000 death in the country and remains a leading cause of death in the United States.

--Starbucks reported stronger-than-expected financial results for the fiscal fourth quarter as high demand for its coffee meant people were willing to spend more on their orders.

The coffee chain said per-share earnings fell to $0.81 during the three months ended Oct. 2 from $0.99 a year earlier, compared with the consensus of $0.72.  Revenues rose 3.3% to a record $8.41 billion, also ahead of the Street’s view.

Global comparable store sales increased 7% in the quarter, more than a 4.2% rise modeled by analysts, driven by higher average spending.  U.S. same-store sales increased 11%, while operations outside North America reported a 5% decrease due to Covid-19 restrictions in China.

The shares soared about 8% on the generally bullish report.

--Uber shares surged 12% after the company reported revenue and adjusted earnings gains for the last quarter as its customers spent more on rides and food delivery.

Revenue for Q3 was up 72% from a year earlier to $8.34 million.  Adjusted earnings hit $516 million, its strongest ever, with both above the Street. 

Uber was bolstered by high ride prices in the U.S., while gross bookings – the value of transitions made on the app – grew 26% to $29.12 billion, below the $29.63 billion estimated by analysts.

The company said it expects bookings in the current quarter of between $30 billion and $31 billion, short of Wall Street’s forecast of $32 billion, but investors were encouraged by Uber’s upbeat earnings guidance.

Fares remain elevated despite better driver numbers.  Nationwide prices in September for a standard Uber and Lyft were 36% higher than in September 2019, according to market-research firm YipitData.  [Neither Uber nor Lyft releases pricing data.]

Uber has been cutting costs, with a hiring freeze and scaled-back marketing.

Rival Lyft disclosed plans to cut 13% of its staff – about 680 jobs – as part of a plan to reduce operating expenses.  The company added that it isn’t changing its financial forecasts for the third quarter as the company reports earnings on Monday.

“We were much too optimistic about the internet economy’s near-term growth in 2022 and 2023 and underestimated both the likelihood and impact of a broader slowdown,” CEO Patrick Collison said in an email to staff.

--Amazon declared a halt to corporate hiring in the face of growing uncertainty in the global economy and given growth in the company’s staff in recent years. The company cut its staff by almost 100,000 in the June quarter and the move follows the company’s report of disappointing third-quarter results last week.

Amazon said it still intends to hire a meaningful number of people in 2023, and remains excited about significant investments in larger businesses, as well as newer initiatives like Prime Video, Alexa, groceries, the Kuiper satellite communications project, the autonomous-driving unit Zoox, and healthcare.

I don’t know why Amazon would be excited with half of these.

--The New York Times Co. raised its full-year forecast for adjusted operating profit on Wednesday, a sign that the media organization’s plan of bundling subscriptions was helping offset a decline in ad spending from recession-wary businesses.

The publisher has been trying to reach a wider audience and increase revenues by bundling its traditional print and digital news offerings with cooking recipes, crossword puzzles, product review site Wirecutter and sports news site The Athletic, which the Times bought earlier this year.  That helped the company add 180,000 online subscribers in the three months to September, powering its third-quarter adjusted profit above Street forecasts and sending the shares 7% higher.

Revenue in Q3 came in at a $547.7 million, slightly below expectations amid the slide in ad spending, mirroring the likes of Meta Platforms and Google-parent Alphabet Inc., which sounded the alarm on a decline in advertising from businesses grappling with decades-high inflation.

--So much for CNN’s latest attempt to juice ratings in primetime.  The experiment with Jake Tapper at 9:00 p.m. has failed miserably and he is being returned to his 4:00 p.m. slot after the midterms.

“CNN Tonight with Jake Tapper” only averaged 854,000 viewers, a distant third behind Fox News’ “Hannity” with 2.6 million viewers and MSNBC’s “Alex Wagner Tonight” with 1.6 million.  Tapper’s audience is actually worse than this figure….691,000 in October.

Ironically, his daytime program, which has been guest-hosted in Tapper’s absence, has averaged more viewers the last month than his primetime slot at 839,000 last month.

I like Tapper, and I watch his 4:00 p.m. show for hard news after having CNBC on (at least in the background) most of the day.

Meanwhile, CNN’s new morning show entry, co-hosted by Poppy Harlow, Kaitlan Collins and Don Lemon, got off to a horrendous start this week, 387,000, trailing behind Fox News’ “Fox & Friends” average of 1.5 million and the 793,000 for MSNBC’s “Morning Joe.”

I watch the first 20 minutes of the “Today Show” before switching to CNBC.

But note to CNN…Don Lemon just isn’t likeable.  [I’m a big Kaitlan Collins fan, on the other hand.]

--And over at CNBC, Shepard Smith is out after just two years following the launch of “The News with Shepard Smith.”

I was initially looking forward to Smith’s 7:00 p.m. news slot, and watched initially, and then I started watching other stuff, and during baseball season I’m watching every Mets game, for starters.

Also, on the news front, I’m watching far more BBC News than ever before, especially during the recent political upheaval in the country, which impacted our financial markets.

Foreign Affairs, Part II

China: As noted above, like in the Foxconn example, China is continuing to crack down on Covid outbreaks, with authorities in Guangzhou saying they faced a “dire and complicated” outbreak as the number of Covid-19 cases rose sharply in the southern city.

On Tuesday, the city announced it had 190 confirmed local cases and 289 asymptomatic infections, a slight decrease from the day before.

But Guangzhou health authorities said that the reason for the sharp increase from a month earlier was that people in the restricted areas were still moving around without taking appropriate precautions.

“This round of local outbreak has been spreading into Guangzhou through airports, seaports, railways, freight buses and passenger cars,” said a representative of the Guangzhou Health Commission.

This is the attitude, despite all the rumors of the country loosening restrictions.

Today, German Chancellor Olaf Scholz, visiting President Xi, announced an agreement to let expatriates in China use the Covid-19 vaccine from Germany’s BioNTech and pressed for Beijing to allow the shot to be made freely available to Chinese citizens (not likely any time soon).

Meanwhile, the U.S. is making plans to deploy long-range B-52 bombers to northern Australia, drawing criticism from Beijing, which warns the move could spark an arms race in the region.

A new, U.S.-funded aircraft-parking apron at an Australian air force base near the town of Katherine will be able to accommodate up to six B-52 aircraft.

The bombers in northern Australia would allow the U.S. to project more power over the disputed South China Sea and deter Chinese activities there.  U.S. Marines have already been training for part of the year in this part of the country.

“The U.S.-Australia alliance is a cornerstone of U.S. foreign and security policy,” U.S. Defense Department spokesman Lt. Col. Martin Meiners said this week.  Both nations are “committed to evolving the alliance to effectively respond to the strategic environment.”

North Korea: Tensions are sky high on the Korean Peninsula after the latest provocations from Pyongyang, with further missile launches to be expected in the days ahead, including I’m sure after I post tonight, and what seems to be an inevitable nuclear test.

Wednesday, North Korea fired a barrage of at least 23 missiles into the sea, including one that landed less than 60 km off South Korea’s coast, which the South’s President Yoon Suk-yeol described as “territorial encroachment.”

It was the first time a ballistic missile had landed near the South’s waters since the peninsula was divided in 1945, and the most missiles fired by the North in a single day.

Thursday, North Korea fired multiple missiles into the sea, including a longer-range intercontinental ballistic missile (ICBM), though the latter was “presumed to have ended in failure,” according to South Korean officials.  The same night, Pyongyang also fired more than 80 rounds of artillery into the sea.

But the ICBM test was hugely worrisome as it fell into the water between North Korea and Japan, though it seemed destined to fly over Japan had it been a success, which would have been the second time in a month that occurred.

Friday, South Korea was forced to scramble its fighter jets because a reported 200 North Korean aircraft were approaching the South.

Japanese Prime Minister Fumio Kishida and South Korean President Yoon slammed the missile tests, while the U.S. condemned the ICBM launch as “a clear violation” of United Nations Security Council resolutions.

Today, the United States accused Russia and China of providing “blanket protection” to North Korea from further UN Security Council action and said the pair had “bent over backwards” to justify Pyongyang’s ballistic missile launches.

China’s UN Ambassador Zhang Jun said, “The council should play a constructive role rather than always stressing on pressure.”

Ryo Hinata-Yamaguchi, of the University of Tokyo’s Research Center for Advanced Science and Technology, said it was likely tensions on the Korean Peninsula would remain high for some time as further missile launches and other forms of military provocations, including potentially multiple nuclear tests, should be expected.

“There are also risks of accidental conflicts given the intensity of the saber-rattling,” he said, as it was clear Pyongyang’s timing of its provocations was related to the joint exercises between the U.S. and South Korea.  [South China Morning Post]

In response to North Korea’s actions, the U.S. and South Korea extended their drills past today.

The secretary of the Central Committee of North Korea’s ruling Workers’ Party said Washington and Seoul had made a very dangerous decision by extending the drills and were “shoving” the situation out of control.  “The United States and South Korea will find that they have made a terrible mistake that cannot be reversed,” said Pak Jong Chon.  Pak had previously issued statements demanding the drills be stopped.

South Korean and U.S. stealth aircraft have been simulating attacks during the drills.

Shockingly, neither side has made a mistake yet. It just seems inevitable there will be one.

Separately, South Korean officials said police need to explain how they responded after receiving multiple emergency calls hours and minutes before a Halloween party crush killed 156 people on Saturday night, a horrific tragedy. At least 26 citizens from 14 countries were among the dead, including two Americans.

Tens of thousands of young revelers had crowded into narrow streets and alleyways of the popular Itaewon district for the first Halloween festivities in three years virtually free of Covid-19 restrictions.

A transcript of emergency calls released by the police on Tuesday showed the first warning of a possible deadly crush roughly four hours before the disaster, with police receiving 10 other similar calls before the chaos was known to have turned fatal, according to the transcripts.

South Korea’s police chief then acknowledged the emergency response was “inadequate.”  Yoon Hee-keun said he felt “limitless responsibility about public safety” over what happened and vowed a full investigation.

Israel: Former prime minister and Likud leader Benjamin Netanyahu is set to become Israel’s next prime minister. 

For the fifth time since 2019, Israelis went to the polls in national elections Tuesday and with more than 80 percent of the votes counted across the country by Wednesday afternoon, Netanyahu held the lead.

According to the exit polls Tuesday night, Netanyahu’s bloc, which includes Likud, Religious Zionist Party (RZP), United Torah Judaism (UTJ) and Shas, crossed the 61-seat threshold and will be able to form the next coalition.

Netanyahu’s Likud party was expected to receive 31 seats, while the centrist Yesh Atid, headed by caretaker prime minister Yair Lapid was going to take 23 seats.

The far-right Religious Zionist Party saw a dramatic rise in contrast to previous years with 14-15 seats, and thus will wield significant power.

Defense Minister Benny Gantz’s National Unity Party picked up 11 seats.

Israel’s ultra-Orthodox parties saw a large voter turnout with Shas getting 10 seats and United Torah Judaism seven seats, according to the exit polls.

According to the exit polls, which have been off just slightly over the years, the Netanyahu bloc was at 62 seats while the Lapid bloc had 54-55 seats. 

The voter turnout was surprisingly high, 72 percent, for an electorate suffering from voter fatigue.

The victory will bring Netanyahu back into power after serving as prime minister between 1996-1999 and 2009-2021.  He is already Israel’s longest-serving prime minister and has spent the last year as head of the Opposition.

“We are on the brink of a very big victory,” a smiling Netanyahu told cheering supporters at Likud party headquarters.

His voice hoarse from weeks of campaigning, Netanyahu vowed to form a “stable, national government,” as the crowd interrupted him singing “Bibi, king of Israel.”

The Religious Zionist Party (RZP), which gained the support of many young voters, West Bank settlers and Orthodox Jews, is headed by Bezalei Smotrich, but number two on the list, Itamar Ben Gvir, has attracted the most attention with his provocative anti-Arab rhetoric and demands to be appointed Israel’s next public security minister in charge of the police.

And so in the end, Netanyahu’s bloc took 64 of the 120 seats, as Yair Lapid conceded defeat.

“The state of Israel comes before any political consideration,” Lapid said.  “I wish Netanyahu success, for the sake of the people of Israel and the state of Israel.”

Netanyahu still has to be officially tasked by the president with forming a government, a process that could take weeks.

The far-right RZP will be his senior partner with 14 seats.  Itamar Ben-Gvir’s growing popularity has raised concerns that Israel’s democracy is at risk.

Iran: Tehran announced it would hold public trials of about 1,000 people charged in the city over unrest, as authorities step up efforts to crush more than six weeks of protests ignited by Mahsa Amini’s death in police custody.

Iranian leaders have described the protests as a plot by enemies of the Islamic Republic, including the United States and Israel.

The semi-official Tasnim news agency, citing the chief justice of Tehran province, said the trials of about 1,000 people “who have carried out acts of sabotage in recent events, including assaulting or martyring security guards, (and) setting fire to public property” would take place in a Revolutionary Court.

As of Monday, the activist HRANA news agency said 283 protesters had been killed in the unrest, including 44 minors.  Some 34 members of the security forces were also killed.

Last Saturday, the head of Iran’s powerful Revolutionary Guards warned protesters that Saturday would be their last day of taking to the streets.

Guards commander Hossein Salami said in some of his toughest language yet that “This sinister plan, is a plan hatched in the White House and the Zionist regime.”

But the protests continued, with security forces opening fire in numerous spots, including today.  Witnesses told the BBC that security forces attacked protesters with shotguns, tear gas and machetes near the grave of a woman shot dead while protesting.

Wednesday, Iran’s Supreme Leader Ayatollah Ali Khamenei said he had no dispute with young people on the streets, but he stepped up claims that the U.S., Israel and Europe are conducting a form of unconventional warfare against Iran.

“These are our own kids and we don’t have any dispute with them,” Khamenei said in a speech to a group of students in Tehran.  “The recent incidents were hybrid warfare and not merely street points,” he said, pointing to the U.S., Israel and Europe.

This week, U.S. and Saudi officials grew increasingly concerned about a possible attack by Iran in the region, driven by a desire to deflect attention from its internal unrest.  Khamenei claimed his regime has intervened to stop the alleged foreign interference.

“The Iranian nation really punched them in the mouth and will from now on, too,” the Ayatollah added, referring to foreign adversaries.

By week’s end, the U.S. and Saudi officials said the threat of an attack from Iran had diminished.

Brazil: In the runoff presidential election last weekend, leftist former president Luiz Inacio Lula da Silva (“Lula”), 77, edged out far-right incumbent Jair Bolsonaro, 67, 50.9 percent to 49.1 percent, according to the country’s election authority.

But after the results were announced, Bolsonaro didn’t publicly concede or react right away.

Bolsonaro’s campaign had made repeated – and unfounded – claims of possible electoral manipulation before the vote, raising fears that, if he lost, he would not accept defeat and try to challenge the results.

For Lula, the results represented a stunning comeback.  His imprisonment for corruption sidelined him from the 2018 election won by Bolsonaro, who has used the presidency to promote conservative social values while also delivering incendiary speeches and testing democratic institutions.

Lula said he wants to bring in centrists and even some leaning to the right, and to restore the kind of prosperity the county enjoyed when he last served as president from 2003-2010.  Yet he faces headwinds in a politically polarized society.

For starters, lawmakers close to Bolsonaro won a majority in Congress, which means that Lula will face stiff opposition to his policies in the legislative body when he takes office in January.

Lula has been cheered for his climate policies and Sunday he told supporters, “Brazil is ready to retake its leadership in the fight against the climate crisis.  Brazil and the planet need a living Amazon.”

Destruction of the Brazilian rainforest hit a 15-year high under Bolsonaro, who rolled back environmental protections, and pushed for more mining and commercial farming in the region.

But, again, Lula’s ambitions on this front will be checked by Congress.

Bolsonaro’s backers routinely label Lula “a thief” and argue that the annulment of his conviction does not mean he was innocent, just that the proper legal procedure was not followed.

So the president did not publicly address his defeat until Tuesday, and then just said he would allow the transition to continue, but we’re talking January (sound familiar?).   The Supreme Court said in a statement the president recognized the result of the vote.

Bolsonaro thanked voters who had cast their ballots for him but did not acknowledge defeat.  But he did not contest the result either, as some had feared he would.

But Bolsonaro spoke for only two minutes and did not take questions.

Pro-Bolsonaro truckers set up roadblocks throughout the country to protest Lula’s return to power.  Some truckers posted videos calling for a military coup.

Wednesday, supporters of Bolsonaro were calling for an armed forces intervention, but that’s out of the question.

And then Bolsonaro for the first time asked protesters blocking roads to lift the blockades as demonstrations are restricting people’s right to come and go and bringing losses to the economy.

In a video posted on social media, Bolsonaro said Wednesday: “I know you are upset… Me too.  But we have to keep our heads straight.  I will make an appeal to you: clear the highways.”

By week’s end, it appeared the protests were petering out.

I’m guessing a deal has been cut. Allow a transition, Mr. Bolsonaro, and you won’t be prosecuted on various issues as seemed imminent.  Just a guess.

Somalia: At least 100 people were killed and 300 injured in two car bombs that exploded outside the education ministry in the capital of Mogadishu, Saturday, the country’s president then said on Sunday.

The first explosion hit the ministry then the second blast occurred as ambulances arrived and people gathered to help the victims, the police said.

There was no claim of responsibility but Islamist group al Shabaab frequently carries out bombings and gun attacks in Mogadishu and elsewhere.

India: The death toll in the collapse of a century-old cable suspension bridge into a river on Sunday in the western Indian state of Gujarat, killed at least 135 in one of the country’s worst accidents in years.

As families mourned, attention was turning to why the bridge, built by the British in the late 1800s and touted as an “engineering marvel,” collapsed and who might be responsible.

The local government had awarded a 15-year contract to maintain and manage the bridge to a company (Ajanta manufacturing Pvt. Ltd.) mainly known for making clocks, mosquito racquets and electric bikes, per a story I read in the AP.

The bridge, which spans a wide section of the Machchu river, reopened on Oct. 26, the first day of the Gujarati New Year, which coincides with the Hindu festival season, and the newly reopened attraction drew hundreds of sightseers. 

Random Musings

--Presidential approval ratings….

Gallup: 40% approve of President Biden’s job performance, 56% disapprove; 39% of independents approve (Oct. 3-20).

Rasmussen: 42% approve of Biden’s performance, 56% disapprove (Nov. 4).

A new CNN poll gave Biden a 41% approval rating, 59% disapproval.

A Quinnipiac University survey of registered voters had Biden at 37%, 54% disapproving.

--According to the CNN poll conducted by SSRS, an enthusiastic Republican base and persistent concerns about the state of the economy place the GOP in a strong position for this coming Tuesday’s election.

The new survey shows that Democratic enthusiasm about voting is significantly lower than it was in 2018, when the Democratic Party took control of the House. Republican voters in the new poll express greater engagement with this year’s midterm election than Democrats across multiple questions gauging likelihood of vote.

Overall, 27% of registered voters say they are extremely enthusiastic about voting this year, down from 37% just ahead of the 2018 midterm elections, and the decline in enthusiasm comes almost entirely among Democrats.  Four years ago, 44% of Democratic registered voters said they were extremely enthusiastic about voting; now, just 24% say the same.  Among Republicans, the number has dipped only narrowly, from 43% to 38%.

In the new poll, Republicans top Democrats on a generic ballot question asking voters which party’s candidate they would support in their own House district by 51% to 47% among likely voters.  Among registered voters, the race is about even, with 47% behind the Republicans and 46% the Democrats.  Closely divided generic ballot numbers have often translated into Republican gains in the House.

[The aforementioned Quinnipiac survey, on the generic ballot question, had it 48-44, Republicans, among registered voters.]

Republican standing in the battle for the House this year is bolstered by broad concerns about the state of the nation’s economy.  The economy and inflation are far and away the top issue for likely voters in this final stretch, with about half of all likely voters (51%) saying those will be the key issues determining their vote for Congress this year.  Abortion, the second-ranking issue, lands as the top concern for 15% of likely voters.  Other issues tested were chosen by fewer than 10% of likely voters each, including voting rights and election integrity (9%), gun policy (7%), immigration (6%), climate change (4%) and crime (3%).

Republican and independent likely voters are broadly focused on the economy, with 71% of Republicans and 53% of independents calling it the top issue in their vote.  Democratic likely voters are more split, with the economy and abortion the top issue for near-equal shares – 29% say abortion, 27% the economy and inflation.

Those likely voters who say the economy is their top concern break heavily in favor of Republicans in their House district, 71% to 26%. By an even wider margin, they say they trust the GOP more specifically to handle the economy and inflation (71% Republicans vs. 18% Democrats).

Overall, 75% of Americans say that the economy is in a recession, up from 64% who felt that way this summer.  Majorities across party lines see the economy as already in recession, including 91% of Republicans, 74% of independents and 61% of Democrats.

--In New York Times/Siena College polls of likely voters across four key Senate races:

Arizona: Democrat Mark Kelly ahead of Republican Blake Masters, 51-45
Pennsylvania: Democrat John Fetterman ahead of Republican Dr. Mehmet Oz, 49-45
Georgia; Democrat Raphael Warnock ahead of Republican Herschel Walker, 49-48
Nevada: Democrat Catherine Cortez Masto and Republican Adam Laxalt tied at 47-47.

As in anything can happen.

Biden Agenda

President Biden threatened on Monday to seek a new windfall profits tax on major oil and gas companies unless they ramp up production to curb the price of gasoline at the pump.

Biden lashed out against Big Oil and their latest profits, which he called an “outrageous” bonanza stemming from Russia’s war on Ukraine.

The impact of the war on oil prices (natural gas, particularly in Europe, is a different topic) lasted for just a few months, until the global market recognized that the impact on Russian oil production ended up being minimal because despite all the Western sanctions on their crude, they ended up selling it to India and China.  Russian production is thus down minimally from historic levels.

Well, Biden threatened the windfall profits tax, which will never clear Congress, especially the one about to be elected, and he’s crying crocodile tears without understanding how the oil market works, including down to the retail level and the mom-and-pop operators of fuel stations.

Biden said in his pathetic remarks Monday that if Big Oil doesn’t use their profits to expand oil supplies (the same supplies he came into office condemning…having campaigned on an anti-oil platform) or return it to consumers in the form of price reductions (how this would work is a mystery), the president told reporters at the White House:

“If they don’t, they’re going to pay a higher tax on their excess profits and face other restrictions.  My team will work with Congress to look at these options that are available to us and others. It’s time for these companies to stop war profiteering, meet their responsibilities to this country, give the American people a break and still do very well.”

What an amazing bunch of bullshit, or ‘malarkey.’

Again, the ‘war profiteering’ angle to the story is now over.  If you want to talk about war profiteering, you could potentially actually look at the food industry, which has indeed been greatly disrupted by the war.  But not oil!

Republicans fired back, faulting Biden for policies that discouraged the energy industry from expanding capacity.

“Haven’t American families suffered enough from President Biden’s damaging attack on America-made energy?” asked Rep. Kevin Brady of Texas, the top Republican on the House Ways and Means Committee, and a classic moderate Republican of the kind I like, I hasten to add (though he’s retiring).  “Desperately trying to salvage the midterm elections, now he’s proposing another dangerous policy that will increase energy prices and energy poverty while making America more vulnerable to foreign countries for our daily energy needs.”

The oil industry accused the president of politicking, noting the steep drop in gas prices since the June peak.  And production in America is up 4 percent from last year, with the number of rigs being deployed increasing.

I have praised Big Oil for their profits.  “Good for them,” I’ve said.

Oh, how I wish T. Boone Pickens were still alive.  He’d give Biden a great history lesson on the Boom and Bust cycle of the industry, since day one of its founding.

Sure, a company like Exxon Mobil just reported record profits and raised its dividend last Friday, citing a commitment to “return excess cash” to shareholders.  Many Americans own Exxon shares through their retirement plans, mutual funds, exchange-traded funds (ETFs), and they benefit.

But Exxon also invests in new production if it sees an economic benefit to do so, just like other companies do…like a Caterpillar, Ford, even McDonalds.  Yes, McDonalds, in their case, new stores.  Look at Starbucks in China, which I don’t think long-term was a smart move, but they keep expanding there because they think that is the best use of their capital, and a long-term benefit to shareholders.

Editorial / Wall Street Journal

“The President who has done everything in his power to limit U.S. oil investment is now furious that he succeeded.

“Mr. Biden doesn’t seem to believe oil companies should be allowed to make a profit or even cover marginal costs. ‘We need to keep making progress by having energy companies bring down the cost of a gallon of gas to reflect what they pay for a barrel of oil,’ he said.  Anything more is ‘excess’ profit.

“Keep in mind that oil majors’ current profits follow steep losses in the pandemic. As oil prices plunged amid lockdowns, companies and OPEC nations pared investment and shut in wells.  Demand for oil then bounced back much quicker than supply, which has driven up prices – and profits. That’s Econ 101.

“Mr. Biden is miffed in particular that companies are returning cash to shareholders rather than increasing supply.  ‘You should be using these record-breaking profits to increase production and refining,’ he said this month.  But the progressive climate lobby and his own Administrations’ climate policies have been urging the opposite.

“Exxon Mobil lost a board proxy fight in 2021 after large public pension funds and asset managers criticized it for investing too much in oil and generating too little profit.  Exxon and its board need to assess ‘the possibility that demand for fossil fuels may decline rapidly in the coming decades,’ BlackRock said.

“The International Energy Agency warned only last week that ‘no one should imagine that Russia’s invasion can justify a wave of new oil and gas infrastructure in a world that wants to reach net zero [greenhouse-gas] emissions by 2050.’  It added that ‘any new projects would face major commercial risks’ that may result in failing ‘to recover their upfront cost.’

“No wonder oil companies are returning cash to shareholders rather than make investments in production that take decades to pay off.  U.S. shale drilling can produce returns more quickly. But rather than drill more wells, many producers are shrinking their inventory of ‘drilled but uncompleted’ wells.

“The Energy Information Administration reported last week that the number of these wells fell to the lowest since December 2013, which means production will eventually taper off even in the prolific Permian Basin.  Permitting challenges impeded new drilling, as does limited pipeline capacity to move natural gas produced alongside oil.

“Large asset managers are also pressuring oil giants to maintain ‘capital discipline’ – i.e., spend less on production.  Private U.S. oil companies added 47 drilling rigs in the third quarter while public firms added only one.  Climate lobbyists want companies to return profits to shareholders or invest in green energy.

“Continental Resources founder Harold Hamm said this month he is taking his company private to have the ‘freedom to explore.’  ‘We have all felt the limits of being publicly held over the last few years, and in such a time as this, when the world desperately needs what we produce, I have never been more optimistic,’ Mr. Hamm wrote to employees.

“Mr. Biden and fellow Democrats simply refuse to understand the economic consequences of their assault on American fossil fuels.  They have come to believe that climate is a crisis and that banishing oil and gas is urgent.  But that means higher prices, which they now blame on the very companies they want to go out of business.  Economic logic won’t persuade them, but maybe a rout at the ballot box will.”

--Campaigning in Florida, President Biden attacked Republicans for wanting to take away voters healthcare and retirement benefits.

“You’ve been paying into Social Security your whole life, you earned it, now these guys want to take it away,” Biden said at one stop, “a sparse crowd at a South Florida community center,” as Reuters put it.  “Who in the hell do they think they are?”

Well, that’s just a lie.  As far as I understand, Florida Republican Sen. Rick Scott has merely proposed requiring Congress to periodically pass legislation renewing government programs including Social Security and Medicare that are now guaranteed without such a renewal.  But Scott has also said that he and other senior Republicans want to preserve those benefit programs.

But both sides are being disingenuous.  The retirement age has to be raised, and it can be so incrementally, and over many years…it’s just a fact.  This should have been done over a decade ago…as was detailed in these very pages at the time.

Remember folks, the history of such matters, and the proper context, is all here.  Just another why I don’t suffer fools gladly.

--In a speech Wednesday, Biden amplified his argument that democracy is at stake, warning the United States is “on a path to chaos” amid growing fears of political violence, with the first election since Jan. 6, 2021, and the horde that was “whipped up into a frenzy” by Donald Trump’s lies about the 2020 election.

“I wish I could say the assault on our democracy ended that day,” Biden said.  “But I cannot.”

“This is the path to chaos in America,” he said. “It’s unprecedented.  It’s unlawful. And it’s un-American.  As I’ve said before, you can’t love your country only when you win.”

I don’t disagree with this message at all…but it’s not what voters are going to be pulling the lever for on Tuesday, Mr. President.  It’s about your economy.  They are voting on that, and others may base their vote on the abortion topic, immigration, and/or crime.

I do hope, personally, that all the election deniers are defeated.  The biggest danger to democracy is potential changes in who can certify elections, taking it out of the hands of certified electoral officials.

And it is true an overwhelming 85% of Americans say they are very or somewhat worried about democracy’s future, according to a USA TODAY/Suffolk University Poll conducted in late October.

Those who say they are “very worried” include 67% of Republicans, 55% of Democrats and 51% of independents.

But the nature of those concerns differs and often conflicts.

Republicans tended to express concern about Democrats being able to cast fraudulent ballots.  Democrats tended to express concern about results being misrepresented or overturned by Republican officials responsible for counting them.

But the president’s message in the final days was useless.  No one is listening to anything he says, witness his putrid approval ratings and lack of enthusiasm in his party as noted above.

Trump World

--Chief Justice John Roberts on Tuesday put a temporary hold on the handover of former President Donald Trump’s tax returns to a congressional committee.

Roberts’ order gives the Supreme Court time to weigh the legal issues in Trump’s emergency appeal to the high court, filed Monday.

Without court intervention, the tax returns could have been provided as early as Thursday by the Treasury Department to the Democratic-controlled House Ways and Means Committee.

Roberts gave the committee until Nov. 10 to respond.  The fight over Trump’s taxes has been going on since 2019.

By the way, he’s “under audit,” or so Trump would tell you, and he’s been under audit since, oh, about 1978.

--But the Supreme Court also declined to block Senator Lindsey Graham (R-S.C.) from having to testify before a grand jury in a criminal investigation of Donald Trump’s efforts to overturn his 2020 election loss in the state of Georgia, a big setback for both Graham and Trump.

Graham contends that as a member of Congress he is protected under the Constitution from questioning in the investigation. 

There were no publicly noted dissents to the decision.  Justice Clarence Thomas on Oct. 24 temporarily blocked Graham’s testimony pending a decision by the full court on how to proceed.

Graham is not a target of the investigation but has been subpoenaed to testify before the special grand jury, which was formed as part of the investigation led by Fulton County District Attorney Fani Willis, a Democrat, into possible coordinated attempts to illegally interfere in the outcome of the 2020 election.  [The Raffensperger case]

To me, of all the Trump investigations, this is the most open and shut case against him and he will be indicted.

--The criminal trial on tax fraud charges into the Trump Organization commenced this week, with prosecutor Susan Hoffinger, of the Manhattan district attorney’s office, saying, “This case is about greed and cheating, cheating on taxes. The scheme was conducted, directed and authoritze at the highest levels of the accounting department at the company.”

Hoffinger said the company benefited from the scheme by “keeping their trusted chief financial officer happy (Allen Weisselberg)” and avoiding some taxes.  “Everybody wins here.  Of course, everybody but the tax authorities.  The problem with doing it this way is that it’s not legal.”

Donald Trump has not been charged in the case, while the Trump Organization has pleaded not guilty.

The case is separate from a $250 million civil lawsuit filed by New York’s attorney general against Trump, three of his adult children and his company in September, accusing them of lying to banks and insurers by overvaluing his real estate assets and Trump’s net worth.

---

--David DePape, 42, was accused of a hammer attack on Paul Pelosi, husband of House Speaker Nancy Pelosi, who told police he was on a “suicide mission,” according to court documents.  DePape, an illegal immigrant since 2002 (Canada), pleaded not guilty to attempted murder of Pelosi and assault with a deadly weapon.

Court documents say he had planned to hold Nancy Pelosi hostage and break “her kneecaps” if she “lied” to him.  Pelosi was on the other side of the country at the time.

According to court papers cited by the media, DePape told police, “I didn’t really want to hurt him, but you know this was a suicide mission,” he allegedly said.  “I’m not going to stand here and do nothing, even if it cost me my life.”

DePape also told police he planned to target several state and federal politicians and members of their families, as well as a local professor, according to the filing.

The attack on Paul Pelosi was grounds for jokes and unfounded rumors, further proving my point in my opening last week that tens of millions of Americans have the brain of a turnip…and I’ve really had it.  There are so many people I have zero respect for.

At least Senate Minority Leader Mitch McConnell issued an immediate and unequivocal condemnation of the attack.  Other Republican leaders, or would-be leaders (see Arizona’s Kari Lake), made light of it, which is beyond comprehension. 

Paul Pelosi was released from the hospital on Thursday as he continues to recover from a fractured skull and injuries to his right arm and hands.

--According to a new report published Tuesday in the journal JAMA Network Open, binge drinking is to blame for 20% of the deaths of American adults between the ages of 20 and 49 over a recent four-year period.  When the age bracket is extended to 20-64, consuming excessive alcohol is tied to one in eight deaths.

Researchers examined national and state mortality data from 2015-19, noting that deaths fully attributable to alcohol have risen in the past decade.

Excessive alcohol use is a leading preventable cause of premature death that can beget ailments such as heart disease, cancer, unintentional injury and liver disease.

25% of adults binge drink weekly.  A quarter of adults who binge drink do so at least weekly, according to the CDC.

According to the CDC, an estimated one in six adults binge drink – classified as four or more drinks in one sitting for a woman and five or more drinks for a man – with a quarter of them binge drinking at least weekly.

The data from the new study shows the percentage of deaths fully caused by alcohol (such as alcoholic liver disease) is higher among men (15%) than women (9.4%).

--The U.S. flu season is off to a fast start, with hospitalization rates the highest for this time of year in more than a decade, federal data showed.

Centers for Disease Control and Prevention estimates showed that last Friday, there had been at least 880,000 cases of flu this season, some 6,900 hospitalizations and 360 deaths, thru the week ending Oct. 22.

Today, the CDC reiterated that hospitalizations continue to increase and that there have been 5 million fewer doses of influenza vaccine administered to U.S. adults so far this year.

Flu season typically peaks between December and February.

--I feel sorry for those running Sunday’s New York City Marathon in what will likely be record heat.  Like temps in the 60s for most of the runners, four hours and under (as it peaks in the 70s).  Not ideal.

I ran a full marathon in Kiawah, S.C., in 1999 in high temps and I should have died of dehydration.  But I finished...barely.

---

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

Pray for Ukraine.

Good luck to our election workers.

---

Gold $1685
Oil $92.60…highest in four weeks

Regular Gas: $3.79; Diesel: $5.31 [$3.41-$3.63 yr. ago]

Returns for the week 10/31-11/4

Dow Jones  -1.4%  [32403]
S&P 500  -3.3%  [3770]
S&P MidCap  -1.2%
Russell 2000  -2.5%
Nasdaq  -5.6%  [10475]

Returns for the period 1/1/22-11/4/22

Dow Jones  -10.8%
S&P 500  -20.9%
S&P MidCap  -15.3%
Russell 2000  -19.8%
Nasdaq  -33.0%

Bulls 35.8
Bears 37.3

Hang in there.

Brian Trumbore