Week in Review

---

Week in Review

02/10/2024

For the week 2/5-2/9

[Posted 5:30 PM ET, Friday]

***Folks, remember when my tech guy died nearly two years ago?  I have my first serious problem, and I could see it coming all week.  

I think the issue is resolved.

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 1,295

The week was a total mess for House and Senate Republicans, as described further below, as Senate Minority Leader Mitch McConnell and House Speaker Mike Johnson suffered stinging defeats on immigration legislation tied to aid for Ukraine, Israel and Taiwan, in the case of McConnell, as well as Speaker Johnson’s decision to bring a vote on impeachment for Alejandro Mayorkas to the floor.

McConnell’s reputation as a canny political operator was shattered amidst growing internal divisions and calls for him to step down from his leadership post, and Johnson’s bid to establish himself as a credible and authoritative leader took a huge hit as well.

Democrats were poised to seize on the incredible Republican dysfunction, when suddenly, Republicans, and Donald Trump, received a gift that will keep on giving throughout this already tumultuous election season.

Thursday, special counsel Robert Hur released his report on the investigation into Joe Biden’s mishandled classified documents and it was scathing.

President Biden “willfully retained and disclosed classified materials after his vice presidency.”

But Hur also said that he had declined to prosecute Biden for his handling of that material, which by law should have been given back to the U.S. government when he ended his second term as vice president in January 2017.

The FBI found the documents in the garage, office, and basement den in Biden’s Wilmington, Delaware, home.  They included documents about military and foreign policy in Afghanistan, and notebooks containing Biden’s entries about national security.

“Our investigation uncovered evidence that President Biden willfully retained and disclosed classified materials after his vice presidency when he was a private citizen,” Hur wrote in the 345-page report.

“He knew he kept classified information in notebooks stored in his house and he knew he was not allowed to do so,” the special counsel said.

Biden even shared some classified information with his ghostwriter for his second memoir, “Promise Me, Dad,” published in 2017.

But Hur added that the evidence “does not establish Mr. Biden’s guilt beyond a reasonable doubt.”

And then the killer....

“We have also considered that, at trial, Mr. Biden would likely present himself to a jury, as he did during our interview of him, as a sympathetic, well-meaning, elderly man with a poor memory,” the special counsel said.

“We conclude that no criminal charges are warranted in this matter,” the report said.  “We reach the same conclusion even if Department of Justice policy did not foreclose criminal charges against a sitting president.”

Hur bluntly detailed lapses in Biden’s memory when he was questioned for the probe.

“In his interview with our office, Mr. Biden’s memory was worse,” Hur wrote.

“He did not remember when he was vice president, forgetting on the first day of the interview when his term ended (‘if it was 2013 – when did I stop being Vice President?’), and forgetting on the second day of the interview when his term began (‘in 2009, am I still Vice President?’),”  the report said.

“He did not remember, even within several years, when his son Beau died,” the special counsel said.  “And his memory appeared hazy when describing the Afghanistan debate that was once so important to him.”

“Among other things, he mistakenly said he ‘had a real difference’ of opinion with General Karl Eikenberry, when, in fact, Eikenberry was an ally whom Mr. Biden cited approvingly in his Thanksgiving memo to President Obama.”

It goes on and on like this.

But Hur did draw a distinction between Biden’s conduct and that of Donald Trump.

“It is not our role to assess the criminal charges pending against Mr. Trump, but several material distinctions between Mr. Trump’s case and Mr. Biden’s are clear,” the special counsel wrote. “Unlike the evidence involving Mr. Biden, the allegations set forth in the indictment of Mr. Trump, if proven, would clearly establish not only Mr. Trump’s willfulness but also serious aggravating facts.”

Biden, in a statement on the report’s release, said, “I was pleased to see they reached the conclusion I believed all along they would reach – that there would be no charges brought in this case and the matter is now closed.”

“I cooperated completely, threw up no roadblocks, and sought no delays,” the president said.

But as the stories on his memory lapses rocketed across the media landscape Thursday afternoon, Biden delivered an unexpected evening-time address from the White House in which he angrily defended himself against the allegation that he has a “poor memory.”

Biden started out Thursday night with a strong defense, saying in part: “This was an exhaustive investigation, going back 40 years, even into the 1970s when I was still a new United States senator,” as the president sought to depict his meeting with the special counsel in a very different light.

“He acknowledged I cooperated completely... I went forward with five hours of in-person interviews over two days on October 8th and 9th of last year even though Israel had just been attacked by Hamas on the 7th and I was very occupied.  I was in the middle of handling an international crisis.”

But then Biden got angry: “There is even reference that I don’t remember when my son died. How in hell dare he raise that... Let me tell you something. I wear every day since he died the rosary that he got from our Lady of...every Memorial Day we hold a service attended by friends and family and people who loved him, I don’t need anyone.  I don’t need anyone to remind me when he passed away.”

Biden went on, showing a lot of emotion.  But he was largely reading off a teleprompter.  And then he decided to take questions and it got messy.  As he was walking away from the podium, he was asked about the Gaza conflict and returned to make one last point.  His memory then failed him.  In referencing his efforts to help secure a pathway for humanitarian aid into Gaza, Biden reminded his audience that “the president of Mexico El-Sisi did not want to open the gate to humanitarian aid to get in.  I convinced him to open the gate.”

Uh oh.  He meant to say Egypt’s President Fattah El-Sisi.  And he did not move to correct this awful mistake.

Republicans pounced anew.

Editorial / Wall Street Journal

“If Mr. Biden is that forgetful, how can he fulfill his presidential duties for another four years? Democrats have some hard thinking to do about his candidacy.

“All of this raises a question of double standards regarding Donald Trump’s prosecution for mishandling documents.  Mr. Hur is at pains to say that the difference is that Mr. Trump is alleged to have lied about the documents and refused to cooperate, in contrast to Mr. Biden.  That may be true, but Mr. Hur’s report will still be front and center as part of Mr. Trump’s defense at his trial. And you can bet it will now be a staple of Mr. Trump’s presidential campaign.”

For his part, Trump, in a statement, seized on Hur’s decision not to charge Biden as evidence of a “two-tiered system of justice,” saying that he was the victim of “unconstitutional selective prosecution.”

“THIS HAS NOW PROVEN TO BE A TWO-TIERED SYSTEM OF JUSTICE AND UNCONSTITUTIONAL SELECTIVE PROSECUTION!”

“The Biden Documents case is 100 times more different and more severe than mine,” Trump said.  “I did nothing wrong and I cooperated far more.”

Rather dubious statements by the former president, but it’s too late for the current officeholder.

---

Earlier, President Biden said on Tuesday that the bipartisan immigration bill was falling apart under political pressure from Donald Trump and vowed to hit the road to remind voters who was to blame if it fails.

“All indications are this bill won’t even move forward to the Senate floor. Why? The simple reason: Donald Trump,” Biden said.  “Because Donald Trump thinks it’s bad for him politically.”

Trump has been pushing House (and Senate) Republicans to reject the bipartisan border security deal unveiled on Sunday.

Biden’s vow to make Trump’s efforts to kill the bill a major theme of his reelection campaign is a risky bet given polls showing that Americans give Biden low marks for his handling of border security and immigration.

The $118-billion bill, including aid for Israel, Ukraine and the Indo-Pacific, was then declared dead on arrival, and 20 Republican senators have said the measure is not strict enough.  Several Democrats have also opposed the bill because they say some of its measures treat migrants too harshly.  Biden didn’t mention the Democratic opposition.

Oklahoma Republican Sen. James Lankford, who worked tirelessly for over four months to craft a compromise bill, told the Wall Street Journal Monday:

“Some Republicans have rejected the bill on partial or misleading information.  Republicans have been pounding away to be able to say we need to secure the border for years. And then to suddenly run away from it when we have the opportunity to do something?  It is not a great look for us.”

For months, Republicans have insisted on major changes to border security and asylum policies before considering more Ukraine aid, and then they decided, with Trump pressuring them, that they would lose their top complaint against the White House should the bill advance to Biden’s desk ahead of November.

“This bill is a great gift to the Democrats, and a Death Wish for The Republican Party,” Trump wrote on Truth Social Monday.

In an angry floor speech Tuesday, Lankford said he was disappointed that some colleagues were deciding not to try to solve the border crisis simply because it’s a presidential election year.  Lankford also said he was threatened by a “popular commentator,” who told him, “If you try to move a bill that solves the border crisis during this presidential year, I will do whatever I can to destroy you.”

Thursday, a $95 billion bill that includes aid for Ukraine, Israel and Taiwan did advance in the Senate after Republicans blocked compromise legislation that included a long-sought overhaul of immigration policy.  Senators backed a procedural motion by 67-32, exceeding the 60-vote threshold to advance the bill.  Seventeen Republicans voted in favor.

There was no immediate word though on when the 100-member chamber would consider final passage, everything complicated by the Senate’s recess.

Even if the aid bill eventually passes the Senate, it faces uncertainty in the House. Dozens of Republican House members, especially those most aligned with Donald Trump, have voted against Ukraine aid, including Speaker Johnson.

Olaf Scholz, Chancellor of Germany / Wall Street Journal 

“Make no mistake: A Russian victory in Ukraine would not only be the end of Ukraine as a free, democratic and independent state, it would also dramatically change the face of Europe.  It would deal a severe blow to the liberal world order.  Russia’s brutal attempt to steal territory by force could serve as a blueprint for other authoritarian leaders around the globe.  More countries would run the risk of falling prey to a nearby predator.

“This possibility is why the U.S. and Europe support Ukraine’s fight for freedom.  President Biden’s leadership has been critical to ensure that Vladimir Putin’s aggression is met with a united and successful response.  So far, Mr. Putin hasn’t achieved any of his war goals. He thought that he could take the Ukrainian capital, Kyiv, within two weeks.  After two years, he still is far from accomplishing this, and Ukraine is bravely withstanding the Russian onslaught.  This is due to the heroic fighting of the Ukrainian people, but it’s also a result of the West’s fiscal and humanitarian support and the delivery of weapons and ammunition to Ukraine....

“Our [Ed. the European Union, the United States and Germany] message is clear: We have to do our utmost to prevent Russia from winning.  It we don’t, we might soon wake up in a world even more unstable, threatening and unpredictable than it was during the Cold War. Despite our support, Ukraine could soon face serious shortages in arms and ammunition.  Some financial commitments have already run out, and others need to be extended.  The long-term consequences and costs of failing to stop Mr. Putin’s aggression would dwarf any of the investment that we are making now....

“The sooner Mr. Putin understands that we are in this for the long haul, the sooner the war in Ukraine will end. The only way that we can contribute to a lasting peace is by keeping up our support, unity and resolve.  We must stand with Ukraine for as long as it takes.”

---

As alluded to above, it was a horrible 24 hours for House Speaker Mike Johnson on Tuesday, as a measure to impeach Homeland Security Secretary Alejandro Mayorkas narrowly failed, after three Republicans voted with Democrats against what would have been the first impeachment of a Cabinet member in nearly 150 years.  The failed vote was a stunning rebuke of a months-long investigation into Mayorkas.

Reps. Tom McClintock (R-Calif.), Ken Buck (R-Colo.), and Mike Gallagher (R-Wis.) bucked the party line to vote against the measure, and then Rep. Al Green (D-Tex.) suddenly appeared, out of the hospital, for the impeachment vote and it ended up 215-215. [It formally ended 214-216 as a fourth Republican flipped to ‘no’ for procedural reasons.]

Republican leadership has vowed to bring up the measure again, but Mayorkas would never get convicted in the Democratic-led Senate.

Speaker Johnson then brought a $17.6 billion standalone aid package for Israel to the floor and that failed, too.

---

Israel-Hamas War….

--Israeli air strikes killed 18 Palestinians in Rafah and Deir Al-Balah, Gaza health officials said on Saturday, in the last two Gaza Strip cities where troops had not been deployed, adding to residents’ fears Israel would expand its ground operation.

Israel’s Defense Minister Yoav Gallant said forces would now press on to Rafah on Gaza’s southern edge.

Tens of thousands have arrived in Rafah in recent days, carrying their belongings and pulling children in carts, since Israeli forces launched one of their largest assaults on Khan Younis, the main southern city.

--The Israeli military (IDF) said on Saturday that since the outbreak of the Gaza war, it had struck more than 50 targets in Syria linked to the Iranian-backed Hezbollah group.

Chief military spokesman Rear Admiral Daniel Hagari said at a briefing, “Everywhere Hezbollah is, we shall be.  We will take action everywhere required in the Middle East.”  Israeli forces have attacked 34,000 Hezbollah targets in Lebanon, including 120 border surveillance outposts, 40 caches of missiles and other weaponry and more than 40 command centers, Hagari said.  He put the number of enemy dead at more than 200.

--According to an internal assessment from the IDF, more than a fifth of the remaining hostages being held in Gaza are dead.

Israeli intelligence officers have concluded that at least 32 of the remaining 136 hostages captured by Hamas and its allies on Oct. 7 have died since the start of the war, according to a confidential assessment first obtained by the New York Times.  The families of 32 hostages, whose deaths are confirmed, have been informed, according to officials who spoke on the condition of anonymity.

At least 20 other hostages may also have been killed.

The news will worsen the furor in Israel, where the public has questioned the government’s course of action in Gaza regarding the hostages.

More than 240 were initially captured by Hamas and its allies during the Oct. 7 attack.  Over 100 were freed, almost all during a truce in November, when they were exchanged for 240 Palestinian prisoners and detainees.  Since November, officials have argued that every Israeli military success placed Hamas under more pressure to negotiate another exchange. But scores of survivors and families of the hostages have said the military campaign is endangering their loved ones’ lives.

Only one hostage has been freed by an Israeli military rescue operation, which is really pathetic.  At least three were accidentally killed by Israeli soldiers.

Tuesday, Secretary of State Antony Blinken said the U.S. was reviewing a response from Hamas to a hostage deal proposal that he called the best hope for ending the four-month-old war.  Blinken, at a news conference in Qatar, declined to discuss details of Hamas’ response to the ceasefire offer, which would see the Palestinian militant group release hostages in return for Israel agreeing to an extended pause in fighting.

Washington would use any pause to build out plans for the reconstruction and future governance of Gaza and further efforts for a wider regional peace agreement it hopes could see Saudi Arabia normalize relations with Israel in exchange for steps toward the creation of a Palestinian state, Blinken said.

Hamas then proposed a ceasefire plan that would quiet the guns in Gaza for four-and-a-half months, during which all hostages would go free, Israel would withdraw its troops from the Strip and an agreement would be reached for an end to the war.

Israel, however, has said it will not pull its troops out of Gaza until Hamas is wiped out.

The Hamas counterproposal envisages three phases of a truce, lasting 45 days each.  Militants would exchange remaining Israeli hostages for Palestinian prisoners.  The reconstruction of Gaza would begin, Israeli forces would withdraw completely, and bodies and remains would be exchanged.

The Hamas response was delivered to Qatari and Egyptian mediators, the organization said.

Prime Minister Benjamin Netanyahu then said late Wednesday that he rejected Hamas’ terms for a ceasefire and hostage-release agreement, calling them “delusional.”

Netanyahu vowed to press ahead with Israel’s war, now in its fifth month, until achieving “absolute victory.”

Netanyahu made the comments shortly after meeting with Blinken.

“Surrendering to Hamas’ delusional demands that we heard now not only won’t lead to freeing the captives, it will just invite another massacre,” the prime minister said in a nationally televised evening news conference.

“We are on the way to an absolute victory,” Netanyahu said, adding that the operation would last months, not years.  “There is no other solution.”

He once again ruled out any arrangement that leaves Hamas in full or partial control of Gaza.  He also said that Israel is the “only power” capable of guaranteeing security in the long term.

--The IDF said on Thursday that its troops have killed more than 20 Palestinian militants in Khan Younis and apprehended dozens of suspected militants over the past day.  But the military has made similar claims that couldn’t be verified.

Prime Minister Netanyahu ordered Israeli troops to prepare to enter Rafah, where hundreds of thousands of Palestinians have sought refuge.

President Biden criticized the extent of Israel’s campaign in Gaza in his Thursday press conference.  “The conduct of the response in the Gaza Strip has been over the top,” Biden said.  “There are a lot of innocent people who are starving.  A lot of innocent people who are in trouble and dying.  And it’s got to stop.”

Israel then ignored the comments and launched airstrikes in the Rafah area overnight, killing at least eight Palestinians.

Friday, Netanyahu said he has ordered the military to prepare a plan to evacuate civilians from Rafah ahead of an expected Israeli invasion of the densely populated city.

Israel says that after more than four months of war Rafah is the last remaining Hamas stronghold in Gaza.

“It is impossible to achieve the goal of the war of eliminating Hamas by leaving four Hamas battalions in Rafah,” Netanyahu’s office said.  “On the contrary, it is clear that intense activity in Rafah requires that civilians evacuate the areas of combat.”

--Israel’s government said on Sunday it would bring in 65,000 foreign workers from India, Sri Lanka and Uzbekistan to resume construction stalled since Oct. 7, when Palestinian workers were sent home in the wake of the attack on Israel by Hamas.  Some 72,000 Palestinian workers were employed on construction sites in Israel prior to the attack.  Some 20,000 foreign workers remain but almost half the country’s building sites have been closed down due to the labor shortage.

---

Iran/Houthis….

--When I went to post last Friday, we were just beginning to get word of a widespread series of attacks against Iranian forces’ facilities and Iran-backed militias inside Iraq and Syria.  The strikes were described as being in direct response to the January 28 deaths of three American troops from an Iranian-provided drone strike at a rural base in Jordan, U.S. officials said.

Some 85 different ‘targets’ on both sides of the Iraq-Syria border were hit, including several that triggered large secondary explosions, according to observers and U.S. defense officials.  Seven official ‘sites’ were hit (multiple targets at each), four inside Syria, three inside Iraq, reportedly killing 40 people.

The issue was why wait five days to strike back, thus giving Iran an opportunity to pull its people out of the facilities.  A U.S. official told reporters afterward on Friday, “This was designed around the weather. Good weather presented itself today; and as a result, this took place,” he said.

Sen. Roger Wicker (R-Miss.) said the White House was “foolishly telegraphing U.S. intentions to our adversaries” for nearly a week.

Iran called the U.S. air strikes a “strategic mistake.” Iran’s foreign ministry said the strikes on Iraq and Syria “will have no result other than intensifying tensions and instability in the region.”

Earlier, Iraq said the U.S. retaliatory strikes would bring “disastrous consequences” for the region. A spokesman for Iraq’s prime minister said the strikes were a “violation” of his country’s sovereignty and that they would impact “the security and stability of Iraq and the region.”

Syria’s government said the U.S. attacks have proved “once again that…its military forces threaten international peace and security and ignites conflict in the region.”

Defense Secretary Lloyd Austin said Friday’s action was “the start of our response.”

--Iran-backed militias attacked U.S.-backed, Kurdish-led Syrian Democratic Forces with exploding drones on Sunday, killing six fighters, the group’s spokesman said on social media Monday.  No casualties were reported among U.S. troops.

“Since the U.S. strikes in Syria and Iraq on Friday night, Iran-directed militias have launched at least 4 attacks,” including the Sunday strike against the SDF, which operates out of a base that also includes U.S. personnel, Charles Lister of the Middle East Institute said Monday.

“In the past 10 days, I’ve heard officials from 3 key Middle East allies warn that amid events since Oct. 7, the region has a ‘pre-9/11’ feel – with anger & hostility towards the U.S. at an alarming level,” Lister said Saturday, and cautioned, “I’m not sure there’s any recognition of that at all in policymaking circles.”  [Defense One]

--Wednesday, a U.S. Special Operations retaliatory drone strike in the Iraqi capital of Baghdad killed a senior leader of the militia that the U.S. blames for recent attacks on American personnel, including the drone attack in Jordan that killed three service members.

American intelligence had been tracking the leader of Kata’ib Hezbollah, reported to be Abu Baqir al-Saadi, for some time, while the militant group and Iran’s Revolutionary Guard Corps both said that two commanders had been killed in the strike.

Maj. Gen. Tahsin al-Khafaji, a spokesman for Iraq’s security services, called the strike “an aggression,” and said it “violated Iraqi sovereignty and risked dangerous repercussions in the region.”

Iraqi Maj. Gen. Yehia Rasool also claimed the strike “undermines the understandings and the start of bilateral dialogue” on the future of U.S. troops based in Iraq.  “This path pushes the Iraqi government, more than ever before, to end the mission of this coalition, which has become a factor of instability for Iraq, and threatens to drag Iraq into the circle of conflict.”

--On Sunday, U.S. forces near Yemen shot down a land attack cruise missile and an anti-ship cruise missile fired by the Houthis, military officials at Central Command said Sunday.  Later that morning, U.S. forces conducted more airstrikes on four anti-ship cruise missiles that were prepared to launch against ships in the Red Sea from Houthi-controlled areas of Yemen.

The British joined the U.S. again to conduct several more airstrikes on Houthi targets inside Yemen on Saturday, 36 in all, in a second wave of assaults meant to further disable Iran-backed groups.  But Washington once more did not directly target Iran as it tries to find a balance between a forceful response and intensifying the conflict.

--U.S. forces in the Middle East hit two Houthi drone boats rigged with explosives on Monday after determining that they “presented an imminent threat” to ships and vessels in the region, officials at Central Command announced afterward.

Despite continued U.S. and UK strikes on the Houthis, attacks on ships in the region have persisted.  Two more ships were attacked again near Yemen, British maritime authorities said Tuesday.

Air Force Maj. Gen. Pat Ryder said at a press conference at the Pentagon, the Iran-backed group has “a finite amount of capability.  The question is how much of that capability they want to sacrifice to a doomed cause?  Because again, we’ll continue to diminish and disrupt that capability.”

The Houthis are reportedly considering cutting undersea cables running beneath the Red Sea, according to a veiled threat posted to social media.

“As many as 16 of these submarine cables – which are often no thicker than a hosepipe and are vulnerable to damage from ships’ anchors and earthquakes – pass through the Red Sea towards Egypt,” the Guardian reported Monday.

Walter Russell Mead / Wall Street Journal

“Iran can spark a crisis whenever and wherever it wants and can also de-escalate at will. From Iraq to Lebanon and Gaza to the Red Sea, Iran and its proxies can create an instant crisis anywhere, forcing the U.S. to respond on Iran’s timetable.  Even when, as over this weekend, Team Biden responded to Iranian attacks with force, Tehran was essentially in control.  Rather than thinking about how to deliver an unmistakable message that will restore deterrence across the Middle East, the administration struggled to find a Goldilocks retaliation strategy: strong enough so centrists don’t call it weak at home, weak enough so that Iran won’t escalate in return.

“If the U.S. can’t seize the political and military initiative from Team Tehran, Iran will continue paying the Middle East like a piano, and President Biden will keep dancing to Tehran’s tune for the rest of his time in office….

“Throughout the Obama era, and again during the Biden years, the defeatists and Iran apologists whispered and spun. At the same time, the bloody-fingered allies of the ayatollahs wrought havoc across the Middle East, subjugating Lebanon, subverting Iraq, wrecking Syria, immiserating Yemen and equipping Hamas for its ruinous war.  Meanwhile, the mullahs continued their drive for nuclear weapons and missiles.  According to one prominent analyst, they could make a bomb within days and a respectable nuclear arsenal within a few weeks or months….

“Will Mr. Biden wake up and realize how much danger the U.S. and our allies face in the Middle East?  Does he realize that the newly energized and rallying forces of radical jihadist ideology and international terror are aligned with Iranian state power?  And that unless they are definitively defeated, they will boil out across the region and the world, endangering Americans at home and further diverting resources and attention from our struggle against the growing ambitions and capabilities of great-power rivals like Russia and China?

“At the moment, Mr. Biden seems half-awake.  Yes, he has banished many of the phantoms and fantasies that the Washington Wormtongues [Ed. Tolkien reference] once declared to be obvious truths. He now realizes that Saudi Arabia and Crown Prince Mohammed bin Salman aren’t pariahs. The Houthis are bad actors whom Washington and its allies need to restrain.  The energy transition isn’t making Middle East oil and gas irrelevant to world politics.  Hamas is an ISIS-class terrorist group whose existence threatens regional peace. Iran isn’t interested in serious talks with the U.S. and is the chief force behind the regional crisis.

“But this is only the beginning.  As long as Iran thinks it can provoke crises and wars across the region without risking a devastating American response, the mullahs will make Mr. Biden dance to their tune.  Until the president realizes he needs to gain the weather gage in the contest with Iran, the awakening process is only half complete.

“This isn’t just a Middle East problem. Great powers, lesser powers and terror groups are watching America’s response to the escalating series of aggressive moves by Iran and its ‘axis of resistance.’  If stability is ever to return, it must begin with a psychological revolution in the Middle East.  Iran must learn to fear Mr. Biden more than he fears Iran.

“This is the standard by which we should measure the success of the president’s retaliatory strikes in the Middle East.  Did the strikes restore America’s power to deter?  Have they changed the balance of fear in the Middle East?

“If so, then peace and calm might begin to return. If not, Team Biden is merely pounding sand.”

---

This Week in Ukraine….

--Over the weekend, Ukrainian President Volodymyr Zelensky confirmed that he is considering sacking his popular top general as part of a “reset” of the country’s leadership.  There have been rumors for weeks now that Gen. Valery Zaluzhnyi was going to be sacked.

“Definitely a reset, a new beginning is necessary…I have something serious in mind, which does not concern just one person but the direction of the country’s leadership,” Zelensky told Italy’s Rai News.

“I mean the replacement of a series of state leaders, not just in a single sector like the military,” he added.  “If we want to win, we must all push in the same direction, convinced of victory. We cannot be discouraged…we must have the right positive energy.”

“As far as the ground war is concerned – there is a stalemate, it’s a fact,” Zelensky said, adding that “there have been delays in equipment and delays mean mistakes.”

“We are fighting terrorists who have one of the largest armies in the world; ammunition is not enough, modern technology is also needed,” he added, before warning: “War can come to you…and when it arrives, no one will be ready, European armies are not ready. It will be a shock – where is the guarantee that NATO will react promptly?”

Heavy fighting continued in several sectors of the long front line, with Russian shelling killing at least four civilians in Kherson city.

The Kremlin condemned Ukraine’s shelling of the occupied town of Lysychansk on Saturday, which reportedly killed 28 people in a bakery, as a “monstrous act of terrorism.”

--Two Ukrainian drones struck a primary oil processing facility at the Volgograd oil refinery in southern Russia on Saturday in an operation conducted by the SBU security service, a Ukrainian official told Reuters.  Local authorities in Russia said earlier that a fire had been extinguished at the large refinery following a drone attack. The refinery is owned by oil producer Lukoil.

The strike was the latest in a series of Ukrainian drone attacks targeting Russian oil facilities in recent weeks.

“By hitting oil refineries working for the Russian military-industrial complex, we not only cut off the logistics of fuel supplies for enemy equipment, but also reduce the filling of the Russian budget,” the official said.

The northeastern Ukrainian city of Kharkiv near the Russian border and the southern Russian city of Volgograd is more than 350 miles, to give you a sense of Ukraine’s long-range capabilities and advancements in drone technology.

--Russia has been eroding Ukrainian control of the eastern city of Avdiivka, which Ukrainians have been fiercely defending for several months.  Troops there say they’ve been attacked so often they’re physically and mentally exhausted because they can’t be rotated out the recommended every three days, instead of the 10-day wait some at Avdiivka are experiencing, according to the Washington Post.

One Ukrainian journalist says Russia has dropped more than 600 aerial bombs on the city over the past four weeks alone.  Like two dozen a day, which Ukraine can’t come close to matching.  Yaroslav Trofimov of the Wall Street Journal warned Sunday evening, “Russian advances in Avdiivka, which increasingly looks likely to become the first Ukrainian city to fall since the capture of Bakhmut last May, are the direct result of acute ammunition shortage – caused by the U.S. Congress withholding further military aid to Ukraine.”  [Defense One]

--Ukraine’s air defense shot down 29 missiles and 15 drones launched by Russia in a massive attack on Kyiv and other regions across the country, Wednesday, Gen. Zaluzhnyi said.  Russian forces launched 64 missiles and drones in several waves of the attack, so you can see many got through.  President Zelensky announced that at least two people had died (later raised to at least four), 38 injured in Kyiv alone, and that “There may be more people under the rubble.”

The attack on the capital was the first in February.  All of Ukraine was under air raid alert from around 6 am local time, with Ukraine’s Air Force warning on Telegram of a risk of Russian missile attacks across the country.  The first blasts were heard just before 7 am in Kyiv. 

The attack lasted several hours.

--President Zelensky then said on Thursday the time had come to change the country’s leadership, replacing Gen. Zaluzhnyi. Defense Minister Rustem Umeroz said separately that the decision had been taken to change the military leadership.

Zelensky said in his statement he had met with Zaluzhnyi.

“We discussed what renewal the Armed Forces of Ukraine need. We also discussed who could be in the renewed leadership of the Armed Forces of Ukraine.  The time for this renewal is now,” he said.  He had asked the general to remain “on his team,” he added.

Zaluzhnyi said he had an “important and serious conversation” with Zelensky and that a decision had been made to change battlefield tactics and strategy.

“The tasks of 2022 are different from the tasks of 2024.  Therefore, everyone must change and adapt to new realities as well.  To win together too,” his statement said.

Zaluzhnyi is being replaced by Gen. Oleksandr Syrsky, the head of Ukraine’s ground forces, Zelensky said.

Senior Russian security official Dmitry Medvedev called Syrsky a traitor since he was born in Russia, but he has lived in Ukraine since the 1980s.  “May the earth burn under his feet!” Medvedev said in a Telegram post.

--With the U.S. unlikely to provide munitions and weapons to Ukraine anytime soon, Kyiv is racing to build a million explosive drones, the Wall Street Journal reported last weekend.

“Ukrainian drone producers are keeping their operations smaller, with a few dozen employees in one building, a few dozen more in another, in hopes of keeping their work hidden,” the Journal said.

And in a story published in Thursday’s Washington Post, nearly a dozen soldiers and commanders told the paper that personnel deficits were their most critical problem now, as Russia has regained the offensive initiative on the battlefield and is stepping up its attacks.

“One battalion commander in a mechanized brigade fighting in eastern Ukraine said that his unit currently has fewer than 40 infantry troops – the soldiers deployed in front-line trenches who hold off Russian assaults.  A fully equipped battalion would have more than 200, the commander said.

“Another commander in an infantry battalion of a different brigade said his unit is similarly depleted.”

The Ukrainian parliament is in the process of revising a draft law on mobilization that will lower the minimum conscription age from 27 to 25.  But Kyiv has done a poor job of explaining to the public why sending more people to the front is necessary.

--Vladimir Putin used a more than two-hour interview with former Fox News host Tucker Carlson to urge Washington to recognize Moscow’s interests and persuade Ukraine to sit down for talks.

Putin also said that Russia stands ready to negotiate a potential prisoner exchange that would free Wall Street Journal Evan Gershkovich, and hinted that Moscow wants the release of its agent imprisoned in Germany.

Putin repeated his claim that his invasion of Ukraine, which Kyiv and its allies described as an unprovoked act of aggression, was necessary to protect Russian speakers in Ukraine and prevent the country from posing a threat to Russia by joining NATO.

Putin pointed at President Zelensky’s refusal to conduct talks with the Kremlin.  He argued that it’s up to Washington to stop supplying Ukraine with weapons and convince Kyiv, which he called a U.S. “satellite,” to sit down for negotiations.

“We have never refused negotiations,” Putin said. “You should tell the current Ukrainian leadership to stop and come to a negotiating table.”

Putin also said he has no interest in expanding the war to other countries such as Poland and Latvia.

It was Putin’s first interview with a Western media figure since his full-scale invasion of Ukraine two years ago.  Carlson was nothing but a shill for Donald Trump.  When Tucker asked his first question, Putin rambled for 30 minutes.

--Russia’s election commission has rejected anti-war challenger Boris Nadezhdin as a candidate in next month’s presidential vote, he has announced on social media.

Nadezhdin has been critical of Putin’s war in Ukraine and few dissenting voices have been tolerated.  He has tried to challenge claims by the election commission that more than 15% of the signatures he submitted with his application were flawed.  But he says his bid was rejected.

Nadezchdin said on social media that he would challenge the decision in Russia’s Supreme Court.

“I collected more than 200,000 signatures* across Russia. We conducted the collection openly and honestly.”

*Twice the 100,000 he needed to qualify.

---

Wall Street and the Economy

Federal Reserve Chair Jerome Powell appeared on “60 Minutes” Sunday for an interview (which was actually conducted on Thursday), and while there was zero real news, Powell having just addressed the investing public a day earlier after the Fed kept its benchmark interest rate unchanged, he reiterated that the Fed is not looking to cut rates in March, as officials examine all the data and await confirmation that inflation is indeed headed down to 2%.

Since Powell was addressing a different audience through “60 Minutes,” however, he sought to provide a rationale for not reducing rates just yet.

“The danger of moving too soon is that the job’s not quite done, and that the really good readings we’ve had for the last six months somehow turn out not to be a true indicator of where inflation’s heading,” Powell said.

“We don’t think that’s the case,” he added.  “But the prudent thing to do is to just give it some time and see that the data continue to confirm that inflation is moving down to 2% in a sustainable way.”

Powell certainly made it clear there will be cuts to the funds rate this year, but to expect more like three, rather than the six the markets have been betting on.

Federal Reserve Bank of Richmond President Thomas Barkin, a voting member on the FOMC this year, said Thursday the central bank has time to decide what’s next for monetary policy while it waits for further assurance that inflation is indeed falling back to target, echoing Chair Powell.

“I think it is smart for us to take our time,” Barkin said in a speech delivered to a gathering held by the Economic Club of New York.  “No one wants inflation to reemerge,” he said, “and given robust demand and a historically strong labor market, we have time to rebuild that confidence before we begin the process of toggling rates down.”

Separately, the Organization for Economic Cooperation and Development, which represents the world’s developed nations, said major central banks mustn’t drop their guard in the fight against inflation as it’s too soon to say if sharp interest rate increases have contained underlying pressures.

In its interim economic forecasts delivered Monday, the OECD said global economic growth is proving more resilient and inflation in the U.S. and Europe is easing faster than the organization expected in its November outlook.  But it warned that factors helping that process, including improvements in supply chains and commodity costs, are dissipating or even reversing.

The OECD also pointed to core inflation above target in most countries and growth in unit labor costs, in addition to risks of the Middle East conflict pushing up shipping and energy costs.

The OECD expects world economic growth to ease from 3.1% in 2023 to 2.9% this year, better than the 2.7% expected in November.  The Paris-based organization left its 2025 global estimate unchanged at 3.0%.

The U.S. economy was expected to grow 2.1% in 2024 and 1.7% in 2025 as lower inflation boosted wage growth and triggers interest rate cuts, the OECD said, raising its 2024 forecast from 1.5% previously.

China is expected to grow 4.7% in 2024 and 4.2% in 2025.

Japan is forecast to grow 1.0% in both 2024 and 2025.

The euro area will see growth of just 0.6% in 2024, and 1.3% in 2025, according to the OECD.  Germany is at 0.3% for this year, 1.1% for next.

The January ISM reading for the services sector came in above expectations, 53.4 (50 the dividing line between growth and contraction), expansion for a 13th consecutive month, and 43 in 44.

We did have some revisions from the Bureau of Labor Statistics Friday on consumer prices and there were concerns in the market they would contain a negative surprise or two, but the CPI for December was revised down to 0.2% from 0.3%, while core was unrevised from the 0.3% increase in the recent monthly CPI release.

November consumer prices were also reported up 0.2%, a tick higher than the 0.1% gain previously, while core prices were unrevised at 0.3%.

Next week we will receive CPI data for January, as well as producer prices for the month.

The Atlanta Fed’s very early GDPNow barometer for first-quarter growth is at 3.4%.

Freddie Mac’s 30-year fixed-rate mortgage is 6.64%, little changed for seven weeks.

Europe and Asia

We had January service sector PMIs for the eurozone this week, courtesy of S&P Global and Hamburg Commercial Bank, and the overall figure for the eurozone was 48.4, a 3-month low.

Germany 47.7
France 45.4
Italy 51.2…strongest since July but still marginal growth
Spain 52.1
Ireland 50.5

UK 54.3

Dr. Cyrus de la Rubia, Chief Economist, HCB:

“There is a north-south divide in the eurozone’s service sector, but perhaps not in the way you may expect.  Contrary to the general view that southern European countries are the weak link in the currency union, these economies are presently performing relatively well. This positive trend serves as the counterforce, partially mitigating declines in Germany and France.  Thanks to the resilience exhibited by Italy and Spain, the PMI for services experienced only a marginal dip to 48.4, maintaining proximity to the expansionary threshold of 50.

“The European Central Bank’s hesitancy to cut interest rates gains clarity when considering the surge in the PMI price indices.  With both input and output prices in the services sector on the rise, the ECB is reluctant to ease monetary policy.  However, it finds itself in a tricky situation. This is accentuated by the latest official GDP data for the fourth quarter of 2023, indicating that the economy narrowly avoided a technical recession.

“A shortage of labor is a pervasive reality across the entire eurozone, evident in the noteworthy wage increases in the top four euro area countries….

“Business expectations have improved a bit, hinting at better times ahead.  However, given the fall of new business for seven months straight, an imminent recovery is unlikely.”

December industrial producer prices in the euro area fell 0.8% over November and were down 3.2% for 2023.

December retail trade in the EA20 fell 1.1% over the prior month and was down 0.8% year-over-year.

Turning to Asia…China’s private Caixin service sector reading for January came in at 52.7, a 13th consecutive month of expansion, but rather tepid growth.

The news on the price front was not good, more deflation, as the CPI fell 0.8% year-on-year in January, vs. -0.5% prior, while producer (factory gate) prices fell 2.5% Y/Y vs. -2.7% in December.

The decline in the CPI was the steepest pace in more than 14 years, while the fourth consecutive monthly drop in consumer prices was the longest such streak since 2009.  The overall deflationary impulse risks becoming entrenched in consumer behavior.

China now goes on its Lunar New Year holiday, Feb. 10-24, the year of the Dragon.

Japan’s January services PMI registered 53.1 vs. 51.5 prior.  December household spending was down 2.5% year-over-year.

The Nikkei 225 benchmark index breached 37000 this week for the first time in 34 years, before closing the week at 36897.

Street Bytes

--Stocks rose a 14th week in 15, with the S&P 500 closing today above 5000 for the first time (5026), up 1.4% on the week. The Dow hit a new high Thursday (38726) before falling some Friday, up only 17 points for the week, and Nasdaq rose 2.3%.  Nasdaq is now less than 100 points from its record high.  Rather remarkable.  Donald Trump keeps calling for a crash.  I wonder why.

Granted, I am highly skeptical, myself, of this leg of the rally, but I have reasons far beyond Mr. Trump’s mental capacity.

--U.S. Treasury Yields

6-mo. 5.28%  2-yr. 4.48%  10-yr. 4.18%  30-yr. 4.37%

Treasury yields rose back to the levels of two weeks ago, still playing off last Friday’s stupendous jobs report and the knowledge that the Fed is not cutting interest rates in March.

--BP posted forecast-beating earnings of $3 billion in the fourth quarter while boosting share repurchases and vowing to make pragmatic investments, as its recently appointed CEO sought to allay investor concern over its energy transition strategy.

The quarterly results, lifted by strong gas trading, took the energy giant’s 2023 profit to $13.8 billion, although that was half that of a year earlier as oil and gas prices cooled and refining profit margins weakened.

The earnings come as a relief to CEO Murray Auchincloss after the company substantially missed forecasts in the previous two quarters.  Auchincloss became permanent CEO in January after being named interim CEO on Sept. 12 when Bernard Looney abruptly stepped down for failing to fully disclose details of past personal relationships with colleagues.

Auchincloss told reporters that BP remains committed to its strategy of reducing oil production by 25% from 2019 levels by 2030 to 2 million barrels per day while growing its renewables and low-carbon businesses by the end of the decade.

But he stressed that BP could grow its oil output beyond its 3% target for 2022 to 2027, as the company has 12 to 16 oil and gas projects that could potentially get the green light over the next two years. “We will go for the highest return and highest value projects.”

--Venezuela has been moving some military forces to its border with oil-rich Guyana, after the presidents of the two nations agreed in December to denounce the use of force and form a commission to address territorial disputes.  Something to watch.  Crude didn’t move this week as a result of the action, but it could shortly.  Exxon Mobil is among the energy giants with large interests there.

--Caterpillar reported fourth-quarter adjusted earnings Monday of $5.23 per share, up from $3.86 a year earlier, and above consensus of $4.75.

Revenue for the quarter was $17.07 billion, up from $16.60 billion a year ago, though below the Street’s $17.13 billion.

The company said mining equipment sales remained robust as was demand for large construction equipment amid a rebound in the U.S. real estate market.  Expenditure on heavy machinery held steady among commercial clients.  Dealer inventories fell for the first time in four quarters, by $900 million, in an encouraging sign that spending remains resilient helped by the $1 trillion infrastructure legislation to upgrade roads, bridges and other transportation infrastructure.

Retail sales in North America were up 11% year on year.  Purchases for commercial customers in the Asia Pacific region were down 5% as China’s troubled property market continues to drag on sales in the region.

--Danish shipping giant Maersk warned on Thursday that container shipping overcapacity would hit profits more than expected this year and that it didn’t see a major boost from the jump in freight rates due to Red Sea disruptions, hammering its shares, down 15%.

Maersk, like other shippers, has been diverting vessels on a longer route around Africa, and some analysts had expected extended journey times and higher freigh rates would outweigh a big increase in new container ships joining the market.

However, Maersk CEO Vincent Clerc told reporters that about twice as many new vessels were coming to market compared to the extra capacity required to send ships around Africa. 

The pandemic boost to shipping profits resulted in a wave of new ship orders.  “We will see that there are too many ships in the world compared to the number of containers that need to be transported,” said Clerc.  “Even if a year from now we’re still sailing south of Africa, excess capacity and pressure on prices will persist.”

--A door panel that flew off a Boeing 737 MAX 9 jet mid-flight on Jan. 5 appeared to be missing four key bolts, according to an initial report by the National Transportation Safety Board.  Photo evidence released Tuesday shows bolts were missing from the door plug, which had been removed to fix rivets that were damaged in the production process, the NTSB report said.

“The investigation continues to determine what manufacturing documents were used to authorize the opening and closing of the plug during the rivet rework,” the report said.

Until now the NTSB had not said what caused the panel to rip off the Alaska Airlines plane as it climbed to 16,000 feet after taking off from Portland, Oregon.

The plug is held down by four bolts and then secured by “stop fittings” at 12 different locations along the side of the plug and the door frame.  All 12 stop fittings became disengaged during the event, the NTSB said in January.  The plug was manufactured by Spirit Aerosystems, at their Wichita, Kansas, plant.

But then Boeing found more mistakes with holes drilled in the fuselage of the 737 MAX, a setback that could further slow deliveries on a critical program already restricted by regulators.

The latest manufacturing slip originated with Spirit Aerosystems and will require rework on about 50 undelivered 737 jets to repair the faulty rivet holes, Boeing said in a note to staff.

But if this isn’t enough, Boeing faces labor issues.  Its largest union, the International Association of Machinists and Aerospace Workers, is still smarting over a 2014 deal that sacrificed pensions, locked in minimal raises and tied the hands of activists for a decade.  Union leaders will demand a 40% pay raise over three or four years, reports say.  No date for a potential job action has been set.

--TSA checkpoint numbers vs. 2023

2/8…107 percent of 2023 levels
2/7…104
2/6…104
2/5…106
2/4…103
2/3…105
2/2…105
2/1…107

Amazingly consistent last few weeks.

--Taiwanese chipmaker TSMC said on Tuesday it will build a second Japanese plant to begin operation by the end of 2027, bringing total investment in its Japan venture to more than $20 billion with the support of the Tokyo government.

Taiwan Semiconductor Manufacturing Co. announced plans in 2021 to build a $7 billion chip plant in Kumamoto in southern Japan’s Kyushu.  TSMC said last month the first Japanese factory would open in February with volume production in the fourth quarter, and that the company was exploring building a second factory in the country.

In a statement, TSMC, the world’s largest contract chipmaker, said its majority-owned unit Japan Advanced Semiconductor Manufacturing in Kumamoto would build a second fabrication plant, or fab, in response to rising customer demand.

--Apple’s biggest iPhone assembler and the world’s largest contract electronics maker, Taiwan’s Foxconn, expects its business this year to be “slightly better” than last year but is facing a shortage of chips for AI servers.

“We did pretty well last year, although we had a rather large write off in the first quarter,” Foxconn Chairman Liu Young-way said on Sunday, referring to a writedown related to its 34% stake in Japanese electronics maker Sharp Corp.

“As for this year’s outlook, I think it might be slightly better than last year,” Liu told reporters on the sidelines of the company’s annual employee party in Taipei.  The company said it had a “relatively conservative and neutral” outlook for 2024.  Demand for artificial intelligence (AI) servers will “of course” be good, but global economic uncertainty given geopolitical problems will affect consumer product demand, he added.  “One (market segment) will be good, but very many others – uh-oh.”

--Arm Holdings shares surged after the chip designer offered a robust outlook for the March quarter.

For the December quarter, Arm reported revenue of $824 million, well above expectations of $762 billion.  The company also posted adjusted earnnigs of 29 cents, vs. the 25 cents consensus.

For the current quarter, Arm is looking for revenue of $850 million to $900 million, well above the consensus of $779 million.

“Arm delivered another quarter of record revenues driven by continued adoption of the world’s most pervasive compute platform,” CEO Rene Haas wrote in a letter to investors.  “The AI wave drove licensing growth as these new devices require Arm’s performant and power-efficient compute platform.”

Arm management said the company is gaining market share in the cloud server market and auto segments.  It specifically cited the coming Nvidia GH200 AI Superchip datacenter systems, which incorporate Arm technology.

Arm, which went public in September at $51 a share, makes money from licensing its chip architecture and other chip designs to semiconductor companies and hardware makers.

The shares opened Thursday at $98, up 27%, and finished the week at $115.

--Ford Motor shares rose about 4% after the company beat fourth quarter expectations and raised the bar for 2024.  It plans a next-generation smaller electric vehicle to rival the low-cost model in the works at Tesla.  It also pledged to offer a range of choice gas-powered vehicles, hybrids and EVs, target $2 billion in cost reductions, and pay a special dividend.

Ford reported a fourth-quarter operating profit of $1.1 billion from sales of $46 billion.  It declared its regular quarterly dividend of 15 cents plus an 18-cent special dividend, putting it in line to meet a commitment to return roughly 40% to 50% of its free cash flow to investors.

For 2024, Ford expects to generate an operating profit between $10 billion and $12 billion, slightly higher at the midpoint than current consensus.  But EV sales aren’t growing like before. Ford’s Model e EV division, had a $4.7 billion full-year loss in 2023.

Ford’s next-gen EV products won’t arrive in 2024.  And the Model e division will lose more money in 2024 compared with 2023.  Management projects a loss for the division of about $5 billion to $5.5 billion this year.

“EVs are here to stay, customer adoption is growing, and their long-term upside is central to [Ford],” said CFO John Lawler in a news release.  “The customer insights we’re getting by being an early mover in electric pickups, SUVs, and commercial vehicles are invaluable – especially as we’re developing next-generation EVs that are going to surprise customers and be profitable within a year of launch.”

--Toyota Motor shares surged 5% as it reported an operating profit of $11.3 billion for its fiscal third quarter.  Wall Street was looking for $9.2 billion.

Further, Toyota raised its operating profit guidance to about $33 billion from $30 billion for its full fiscal year ending in March, though it expects to sell fewer vehicles than it once did.  Unit sales for fiscal year 2024 are expected to be about 9.5 million units, down from a prior forecast of 9.6 million.  Electrified sales, including all hybrids and battery electric vehicles, are expected to be 3.9 million units.  Most of the electrified vehicles Toyota sells are hybrids that don’t plug in.

Toyota expects to sell less than 120,000 all battery electric vehicles in its fiscal year, up from just 38,000 in fiscal year 2023.

The company also announced a $1.3 billion investment in its Kentucky assembly plant, which will eventually produce a three-row all-electric SUV for the North America market.

--McDonald’s shares fell as the company lost sales in many markets due to the war in Gaza.  Global same-store sales rose 3.4% in the October-December period, well below the 4.7% increase Wall Street was expecting.

Customers in the Middle East were angered after McDonald’s Israel, which is operated by a local franchisee – announced in October it was providing free meals to Israeli soldiers.  In response, some franchisees, like McDonald’s Oman, announced donations to relief efforts in Gaza.

Last month, McDonald’s President and CEO Chris Kempczinski warned that “misinformation” in the Middle East and elsewhere was hurting sales.  In addition to customer boycotts, McDonald’s has had to temporarily limit store hours or close some locations due to protests.

“We abhor violence of any kind and firmly stand against hate speech, and we will always proudly open our doors to anyone,” Kempczinski said in a LinkedIn post.

It was an unexpected end to an otherwise strong year for the burger giant, which said global same-store sales rose 9% in 2023.  Viral marketing hits, like last spring’s Grimace shakes, and upgraded menu items helped to boost full-year revenue by 10% to nearly $25 billion.

McDonald’s wasn’t the only U.S. company facing backlash from the war in recent months. Starbucks said last week it faced boycotts in the Middle East and elsewhere because of its perceived support for Israel.

McDonald’s revenue rose 8% to $6.4 billion in the fourth quarter, meeting expectations.  Net income was up 7% to $2 billion.  Adjusted Q4 earnings of $2.95 per share were up from $2.59 a year earlier, with consensus at $2.83.

--Yum Brands missed Wall Street estimates for quarterly sales on Wednesday, with weaker growth for all three of its top chains, as fewer customers ordered at Taco Bell, KFC and Pizza Hut amid a choppy spending environment in the U.S.

With their budgets stretched, Americans, particularly low-income households that frequent fast-food chains like KFC and McDonald’s, have been increasingly cutting costs, including by switching to home-cooked meals as grocery prices moderate at a faster pace than restaurant food.

Fast-food traffic worsened in the fourth quarter, with KFC and Pizza Hut seeing declines of 4.8% and 2.6%, respectively, according to Placer.ai data.  Taco Bell also saw a 3.5% drop.

Yum did not disclose a financial impact from the Israel-Hamas war, though the Middle East, Turkey and North Africa make up about 6% of KFC’s system-wide sales.

Global same-store sales at Taco Bell rose 3%, while Pizza Hut posted a 2% decline.  Total same-store sales at Yum Brands rose 1% in the fourth quarter, missing estimates for a 3.9% increase.

--Demand for Chipotle Mexican Grill’s burritos is still spicy hot.  The company’s latest earnings were better than expected, sending the stock higher in after-hours trading Tuesday.  The shares then surged 8% on Wednesday.

Chipotle posted adjusted earnings of $10.36 a share for the fourth quarter, topping forecasts for $9.71 a share.

Sales of $2.5 billion increased 15.4% year over year, just meeting analysts’ expectations.  Same-store sales rose 8.4%, better than predictions for 7.1% growth.  Operating margins also expanded, growing to 14.4% from 13.6% a year prior.

For 2024, Chipotle sees same-store sales growing by mid-single digits in percentage terms, slightly ahead of consensus estimates for a 5.3% increase.  The company also reiterated its goal to open between 285 to 315 new restaurants in 2024. Chipotle currently operates about 3,400 restaurants, mostly in the U.S.  In the long run it hopes to double that figure.

--Shares in software and analytics company Palantir Technologies surged 30% on Tuesday after the company reported it is seeing surging demand from companies for artificial intelligence products, helping lift it to better-than-expected fourth-quarter results, while it raised its 2024 outlook. CEO Alex Karp told shareholders AI demand is “unrelenting” and significantly contributes revenue and new customers.

Q4 revenue rose 20%, to $608 million, accelerating from 17% growth in the third quarter.  Commercial revenue rose 32% from a year ago, to $284 million.   Karp said in a letter that every part of the organization is focused on the AI rollout.

Palantir ended 2023 with $210 million in net income, its first profitable year since its founding.  Karp told Barron’s Palantir was built “around the assumption that the world was not stable, that prejudices were not disappearing.”

While the commercial operations are growing the fastest, Palantir still makes more revenue from the government sector, up 11% to $324 million and slightly lower than expected.  Karp has been open with his support of the Israeli military – a Palantir customer.

The current geopolitical landscape – with war in the Middle East, Ukraine, China/Taiwan – will benefit Palantir, he said.  “The parts of the government that are preparing to go to war are either using Palantir or are about to use Palantir,” he said.

The company’s full-year revenue projection of $2.65 billion to $2.67 billion is above the current consensus estimate.

--CVS Health lowered its adjusted profit forecast for 2024 on Wednesday after an increase in medical care among older adults in the United States drove up fourth-quarter costs at its insurance business.

The healthcare conglomerate cited a late-year rise in medical care, including outpatient procedures among those enrolled in Medicare Advantage plans, under which insurers are paid a set rate to manage healthcare for people 65 and older, or those with disabilities.

The new forecast of at least $8.30 per share, from at least $8.50 per share it had forecast in December, factors in the potential for medical costs being elevated in 2024, it said.

Insurers such as Humana and UnitedHealth have said their medical costs rose even more at the end of the year, as older adults sought medical services that were deferred during the pandemic.

Aetna, CVS’ insurance business, recorded a medical benefit ratio – the percentage of premiums spent on medical care – of 88.5% in the fourth quarter ended Dec. 31, up from 85.8% a year ago.

--Hilton operator Hilton Worldwide on Wednesday forecast 2024 profit below market expectations on higher expenses and signs of softening demand for leisure travel in the United States.

Hilton and other hotel operators have benefited from pent-up travel demand in the years following the pandemic, but now rising demand for other forms of travel like cruises as well as elevated room rates are softening demand for hotels in the U.S.

Hilton said its fourth-quarter revenue per available room, or RevPAR, an important metric in the hospitality industry, rose 5.7% from a year earlier to $107.69.  System-wide occupancy levels rose by 2 percentage points to 69% in the fourth quarter. Average daily rates, or nightly room rates, grew 2.7% to $156.07 over the same period.

The company expects full-year adjusted profit of between $6.80 and $6.94 per share, below analysts expectations of $7.07.  Hilton expects 2024 revenue per room to increase between 2% and 4% compared to last year.  Fourth-quarter revenue rose 6.75% to $2.61 billion, which slighty missed Wall Street estimates, but adjusted per-share earnings of $1.68 were above expectations for $1.57.

--Uber Technologies reported a stronger-than-predicted gain in fourth-quarter revenue and an unexpected increase in earnings on Wednesday while forecasting a year-over-year increase in gross bookings for the current quarter.

Revenue advanced to $9.94 billion for the three months ended Dec. 31 from $8.61 billion a year ago and topped the average analyst estimate of $9.76 billion.  Earnings per share grew to $0.66 from $0.29 year-over-year and beat consensus of $0.17.  The company also posted its first full-year profit as a public company, following years of heavy losses.

Trips rose 24% to 2.6 billion in the December quarter while monthly active platform consumers increased 15% to 150 million.  Gross bookings gained 22% to $37.58 billion, reflecting gains of 29% to $19.29 billion in mobility and 19% to $17.01 billion in delivery.

Uber will continue to add more restaurants and new types of offerings, such as grocery, to bolster delivery.  Grocery is now at a $7 billion run rate and “growing at very healthy rates,” CEO Dara Khosrowshahi said.

--Cisco Systems is planning to restructure its business, which will include laying off thousands of employees, as it seeks to focus on high-growth areas. The San Jose, California-based network giant has a total employee count of 84,900 as of fiscal 2023.  No exact number has been released.

--Fox Corp., Walt Disney’s ESPN and Warner Bros Discovery said on Tuesday they will come together to launch a sports streaming service later this autumn, in a bid to capture younger fans who are not tuned in to television.

The media companies will form a joint venture to create a new service from their broad portfolio of professional and collegiate sports rights, which span the NFL, the NBA, MLB, FIFA World Cup and college competitions (like thru the SEC, ACC and Big Ten networks).

The yet-to-be-named service would offer an all-in-one package of programming that would include television channels, such as ESPN, TNT and FS1, as well as sports content that is streamed.  Subscribers would have the option of purchasing it as part of a streaming bundle from Disney+, Hulu or Max.

“This means the full suite of ESPN channels will be available to consumers alongside the sports programming of other leaders,” Disney CEO Bob Iger said in a statement.

This sports-centric service is designed to provide consumers with more choice, not replace Disney’s flagship ESPN television network or Fox’s FS1.

As for the price, we’ll see in the fall, it seems.  This new streaming network wouldn’t cover everything.  For example, for the Super Bowl you need to watch it on CBS or the Paramount streaming network, ditto March Madness and The Masters.

As for Disney’s earnings, released after the market closed on Wednesday, the shares spiked as the entertainment giant posted better-than-expected profits for its December quarter.

Disney also provided guidance for the September 2024 fiscal year that was well ahead of Street estimates.  And the company said it is boosting its semi-annual dividend by 50%, while setting a new $3 billion stock buyback plan.

For the fiscal first quarter ended Dec. 30, Disney posted revenue of $23.5 billion, flat compared with a year ago, and slightly below consensus of $23.8 billion. Adjusted profits were $1.22 a share, well ahead of Wall Street’s estimate of $1.01.

Disney said it now expects to post profits for fiscal 2024 of $4.60 a share, well ahead of the current $4.29 Street forecast.  Disney said it is on track to meet or exceed its target of $7.5 billion in annualized cost savings by the end of fiscal 2024.

Revenue in Disney’s entertainment segment was just under $10 billion, down 7% and below the Wall Street consensus, while sports revenue, mostly ESPN, was $4.8 billion, up 4%.  Experiences revenue, including theme parks, was $9.1 billion, up 7%.

Iger also said the company has begun a crackdown on password sharing that should help boost subscriber growth for Disney+ over time.

--Snap Inc. plunged by the most in more than a year after the Snapchat app owner reported lower-than-projected revenue over the peak holiday season, disappointing investors just a week after much-larger rival Meta Platforms Inc. posted its best sales growth in two years.

Revenue rose 5% to $1.36 billion in the fourth quarter, missing the $1.38 billion average analysts’ estimates.  For the full year, growth was flat, “reflecting a challenging operating environment,” the Santa Monica-based company said in a letter to shareholders.

The company is in the midst of a broad restructuring over the past two years, cutting jobs and ending projects that don’t boost revenue or user growth.  On Monday, Snap said it was reducing its workforce by another 10% this year, or over 500 employees.  The shares plummeted 35% in response to the overall news.

--The presence of music stars from the past and present helped boost the audience for last Sunday’s Grammy Awards on CBS.  The ceremony, hosted by Trevor Noah (who was good), averaged 16.9 million viewers and likely topped 17 million once out-of-home viewers are added in the final number issued by Nielsen.

That’s 34% higher than last year and the largest since the 2020 Grammys, which was held just before the Covid-19 pandemic appeared, pushing ratings for live TV awards shows off a cliff.

--For the second consecutive year, the average cost of a 30-second ad spot during the Super Bowl is $7 million.  The reason is simple, even as many businesses are more disciplined with the money they have for marketing. There is no opportunity guaranteed to reach more people than the Super Bowl, and the slice of every other pie keeps shrinking.  More than 115 million people watched last year’s game.

--Subway said there is an “unprecedented demand” for its new $5 footlong cookies.  Demand is so strong that the chain will no longer allow customers to order them online.

The Sidekicks menu, which includes a footlong pretzel from Auntie Anne’s and a footlong Cinnabon churro, has already passed sales expectations announced last week.

Foreign Affairs, Part II

China: Beijing’s embassy in Tokyo warned that anyone obstructing China’s reunification would pay a “heavy price” as the U.S. and Japan hold biennial joint drills reportedly featuring a mock conflict over Taiwan.

Citing anonymous sources, Japanese media reported that Washington and Tokyo had named Beijing as a “hypothetical enemy” for the first time during this year’s “Keen Edge” exercise.  According to the reports, this year’s drill centers around a Taiwan contingency.

“If anyone insists on meddling in China’s internal affairs and obstructing China’s reunification, then it will not just be about the issue of so-called hypothetical enemy – they will have to pay a heavy price,” the embassy said in a written statement on Tuesday.

--China will hold joint naval drills with Iran and Russia in the coming weeks, as Iranian-backed Houthi militias and U.S. forces mount strikes and counter-strikes in the Middle East.

Iranian and Russian media quoted Rear Admiral Shahram Irani, commander of Iran’s navy, as saying that the drills would be held before the end of March and were aimed at “regional security.”

The reports did not state where the drills were to be staged, but the navies of the three countries conducted trilateral exercises in the Gulf of Oman in March of last year.

--At the start of 2019, Taiwan counted six diplomatic allies among the Pacific Island nations.  Barely five years later, that number has been halved as a growing number of small island states switch their diplomatic recognition from Taipei to Beijing, which while symbolic, is a sign of Beijing’s growing influence in the region, which we ignore at our own peril.

China has been trying to grow its security presence in Oceania, although the overtures have not always been welcomed or successful.  In 2022, Beijing signed a controversial police cooperation pact with the Solomon Islands that alarmed both Washington and Canberra.

Papua New Guinea confirmed this week it is in talks with China on a similar security agreement and that the countries were in early talks.

--Lastly, I am very familiar with Fujian province in China, having been there many times, and it’s where most of the missiles targeting Taiwan are, being the shortest point between the two.

So I read with interest that the province is stepping up defense mobilization ‘reforms’ in response to Beijing’s order for local officials to push for “military-civilian fusion” to improve war readiness, as per the South China Morning Post.

China’s national defense mobilization system includes political, economic, and defense resources the country can allocate or use in the event of war or security threats.

Pakistan: A pair of bombings at the election offices of a political party and an independent candidate in southwest Pakistan killed at least 30 people and wounded more than two dozen others, officials said Wednesday, the day before parliamentary elections were to be held.

Both attacks happened in Balochistan province, which as I noted the other week is on the border of Afghanistan and Iran and has been the scene of an insurgency by Baloch nationalists for more than two decades.

Further attacks on Thursday, as voting began, killed at least five. ISIS claimed responsibility for Wednesday’s bombings.

Meanwhile, former Prime Minister Imran Khan and his wife were sentenced to seven years in prison and fined on Saturday by a court that ruled their 2018 marriage violated the law, his party said.  It was the third adverse ruling against the embattled former prime minister in a week, following separate sentences of 10 and 14 years for leading state secrets and for his wife illegally selling state gifts.

[Election results have been dribbling in due to communications issues, but candidates supporting Khan are leading.]

Chile: Sebastian Pinera, a former president of Chile and billionaire businessman, died in a helicopter crash (the other three passengers survived); another tragedy for a country already in a period of mourning, after a forest fire, which began last Friday, killed at least 131.

Pinera served two separate terms as Chile’s leader, from 2010 to 2014 and again from 2018 to 2022.  A conservative, he ushered in pro-business policies that helped boost growth and make the nation of 19 million, in his words, a “true oasis” in Latin America.

But he faced enormous protests from citizens who said his government disregarded the poor – Chile one of the world’s most economically unequal nations – and he left office both times with low approval ratings.

Brazil: Brazilian police on Thursday confiscated former President Jair Bolsonaro’s passport and accused him of editing a draft decree to overturn election results, pressuring military chiefs to join a coup attempt and plotting to jail a Supreme Court justice.

Northern Ireland:  In an historic moment, a nationalist politician has become the First Minister of Northern Ireland as power-sharing resumed after a two-year break.

Michelle O’Neill of the pro-united Ireland party Sinn Fein, once considered to be the politicial arm of the Irish Republican Army (IRA), vowed to be “a First Minister for all,” in a social media post ahead of her swearing in, a nod to the province’s Unionist community who favor remaining part of the United Kingdom.

The Good Friday Agreement of 1998, which brought an end to decades of sectarian violence between pro-republican Catholics and pro-unionist Protestants – a period known as “The Troubles” - stipulates that both communities have equal powers in government and institutions.

“In reality it doesn’t matter who is ‘first minister’ and who is ‘deputy first minister,’ Irish political commentator and journalist Fintan O’Toole told CNN.

“The offices have exactly the same powers and status. But the symbolism of a Sinn Fein representative becoming first minister is still obvious and in Northern Ireland symbols matter a lot – perhaps too much.

“The whole point of creating Northern Ireland a century ago was that it would always have a Protestant majority committed to staying within the United Kingdom.  Michelle O’Neill’s accession to office as the leader of the largest party in the assembly dramatizes the end of that project.

“It doesn’t mean that a United Ireland is an immediate prospect but it does mean that the whole future of Northern Ireland is very much an open question.”

The Northern Ireland Assembly is the devoted legislature for Northern Ireland.  Although part of the UK, lawmakers in the Assembly do have the powers to legislate over a range of issues not explicitly reserved for the Westminster government in London.

Random Musings

--Presidential approval ratings….

Gallup: 41% approve of President Biden’s job performance, 54% disapprove; 35% of independents approve (Jan. 2-22).

Rasmussen: 41% approve, 58% disapprove (Feb. 9). Down from 45-54 the last few weeks.

A new NBC News poll released Sunday had President Biden with a record-low 37% approval rating, 60% disapproval – down from November’s score of 40% approving, 57% disapproving.

Biden’s current approval rating is the lowest for any president in the NBC News poll since George W. Bush’s second term.

Biden’s approval rating has declined especially among Latinos (just 35% of them now approve of his job performance), voters ages 18-34 (29%) and independents (27%).

Just 36% of voters in the survey approve of Biden’s handling of the economy, 34% of his handling of foreign policy, and 29% approve of his handling of the Israel-Hamas war in Gaza.

Among voters under 35 years old, only 15% approve of Biden’s handling of the Israel-Hamas war, while a whopping 70% disapprove.

Donald Trump also leads Biden in a hypothetical matchup among registered voters, 47% to 42%, up from November’s 2-point advantage, 46% to 44%.

Trump holds a 22-point advantage over Biden on the question of which candidate would do a better job handling the economy, 55% Trump, 33% Biden.

In the NBC News poll, Biden holds the advantage over Trump among Black voters (75% to 16%), women (50% to 40%), and white people with college degrees (50% to 42%).

Trump, meanwhile, has leads among white people without college degrees (62% to 29%), men (56% to 34%) and independents (48% to 29%).

The two are essentially tied among Latinos (Trump 42%, Biden 41%), and voters ages 18-34 (at 42% each).

When the poll re-asks voters – on the survey’s final question – about their ballot choice if Trump is found guilty and convicted of a felony this year, Biden jumps ahead of Trump among registered voters in that case, 45% to 43%.

--Nikki Haley’s campaign brushed off her horrendous defeat in Nevada’s primary, where she secured just 30% in the contest, well behind the 63% of the ballots cast for “none of these candidates,” according to Nevada election officials.  No delegates were at stake in the primary, making Haley’s defeat more symbolic than meaningful, but this was embarrassing.

Haley vowed to stay in, with the Republican primary in South Carolina Feb. 24, and Super Tuesday about ten days after.  She is way behind in her home state.

Donald Trump then dominated the Nevada caucuses, taking all the delegates in this confusing process, Haley not participating.

Legislators authorized a state-run primary, but the Nevada GOP decided to hold their own caucuses to award delegates.

--Joe Biden won 96.4% of the votes cast in the South Carolina primary, the first officially sanctioned race of the party’s nominating season, besting Rep. Dean Phillips and Marianne Williamson.  Williamson then dropped out.

--Republican National Committee Chairwoman Ronna McDaniel told Donald Trump she will step down from her post later this month, soon after the South Carolina primary.  Trump said during a Newsmax interview on Monday, “I think she knows that (she should vacate).  I think she understands that.” when asked if McDaniel should resign after three consecutive election cycles of Republican underperformance.

--A federal appeals court on Tuesday rejected former President Trump’s claim that he was immune to charges of plotting to subvert the results of the 2020 election, ruling that he must go on trial on a criminal indictment accusing him of seeking to overturn his loss to Joe Biden.

The unanimous ruling by a three-judge panel of the U.S. Court of Appeals for the District of Columbia handed Trump a significant defeat, but he is expected to continue his appeal to the Supreme Court.

Nonetheless, the 57-page ruling answered a question that had never been addressed by an appeals court: Can former presidents escape being held accountable by the criminal justice system for things they did while in office?

No former president until Trump had been indicted, so there was never an opportunity for a defendant to make – and courts to consider – the sweeping claim of executive immunity that he put forward.

The panel, composed of two judges appointed by Democrats and one Republican appointee, said in its decision that, despite the privileges of the office he once held, Trump was subject to federal criminal law like any other American.

“For the purpose of this criminal case, former President Trump has become citizen Trump, with all of the defenses of any other criminal defendant,” the panel wrote.  “But any executive immunity that may have protected him while he served as president no longer protects him against this prosecution.”

The panel said that the underlying case would remain suspended (having been put on hold by the trial judge in December), if Trump appealed its decision to the Supreme Court by Monday, Feb. 12.  If the Supreme Court decided to take the case, it could issue its own order freezing the trial proceedings.

If the issue does reach the Supreme Court, they first have to decide whether to accept the case or to reject it and allow the appeals court’s ruling against Trump to stand.  If they decline to hear the case, it would be sent back to the trial judge, Tanya S. Chutkan, who scrapped her initial March 4 trial date, but otherwise has shown she wants to move the proceedings toward trial as quickly as possible.

But if the Supreme Court accepts the case, and they choose to take their time, a possible trial could be put off until after the election.  And should that be the case, and Trump won, he could ask his Justice Department to dismiss the case.

--Separately, the Supreme Court on Thursday heard oral arguments in the Colorado ballot-access case and the Court seemed ready to issue a lopsided decision rejecting the challenge to Trump’s eligibility to hold office again.

I listened to the entire session, and I have written when this issue first came up that Trump should be on every ballot, and the Supreme Court should be headed, I hope, to a 9-0 decision in the former president’s favor. They have said they have fast-tracked the case.

BUT...on the above Jan. 6 case and whether Trump is immune, IF it gets to the Supreme Court, meaning they would have to accept it, I would hope their decision in that one is also 9-0, that the former president is not immune to charges of plotting to subvert the 2020 election.

It seems obvious to me...but I’m in the camp that believes the Supreme Court will not take the case and allow the lower court ruling to stand, thus allowing Judge Chutkan to proceed.

--Michigan jurors, after 11 hours of deliberations, found Jennifer Crumbley guilty of involuntary manslaughter on Tuesday for the gun rampage committed by her son, who carried out the state’s deadliest school shooting more than two years ago.

She faces a maximum penalty of 15 years in prison after being convicted on all four counts, one for each of the four students who were shot to death by her son at Oxford High School on Nov. 30, 2021.  The son, Ethan Crumbley, who was 15 at the time, was sentenced last year to life in prison without the possibility of parole.

Is this case precedent setting for issues such as parental responsibility?  It’s certainly a significant test case for prosecutors.

--There was a fascinating report in the Washington Post on how the moon is shrinking, driven by natural cooling of the moon’s molten core.  How much has it shrunk?  About 150 feet in diameter over the last few hundred million years.

But this isn’t a cause for concern.  What is, however, is scientists have been detecting increased moonquakes, which differ from those on Earth in that they can last sometimes for hours.

“Earth’s gravitational pull on the moon also applies force to the lunar surface and adds stress, helping form these thrust faults on the moon.”

Where this information comes into play is in future moon landings and just where they occur.  You don’t want to land on an area of activity.

--For the first time, global warming has exceeded 1.5C across an entire year (Feb. 2023 to Jan. 2024), according to the EU’s climate service.

World leaders promised in 2015 to try to limit the long-term temperature rise to 1.5C, which is seen as crucial to help avoid the most damaging impacts.

“To go over [1.5C of warming] on an annual average is significant,” says Prof. Liz Bentley, chief executive of the Royal Meteorological Society.  “It’s another step in the wrong direction.  But we know what we’ve got to do.”

--Rain totals in parts of the Santa Monica and San Gabriel mountains of southern California topped 13 inches as of late Tuesday, including in Bel-Air (13.04 inches), according to the National Weather Service’s latest counts.

The rain easily broke daily records on both Sunday and Monday, dumping nearly half the average seasonal precipitation in just two days.

Downtown Los Angeles tallied a whopping 8.66 inches of rain over a four-day period ending at 9 p.m. Tuesday, the bulk of it falling over a three-day stretch from Sunday to Tuesday, during which 8.51 inches fell on downtown L.A.

That’s the second-highest amount of rain in such a span in downtown L.A. since the weather service began keeping records in 1877.  Since Oct. 1, the beginning of the water year, L.A. has already seen 118% of its average annual rainfall, which is normally 14.25 inches.

At least nine deaths were blamed on the atmospheric rivers that hit the entire state.  Los Angeles authorities responded to more than 475 mudslides, with 38 homes or buildings damaged by debris flows.

[Californians have trouble getting homeowner insurance these days, many companies leaving the state.  Imagine how difficult it will be getting renewals next year!]

--Iceland was on edge again as a volcano in the southwest erupted Thursday for the third time since December, triggering the evacuation of the popular Blue Lagoon geothermal spa and cutting heat and hot water to thousands when a river of lava engulfed a supply pipeline.

The latest eruption was about 2 ½ miles northeast of Grindavik, a coastal town of 3,800 that was evacuated before a previous eruption on Dec. 18.

--Britain was shocked and saddened to learn that King Charles III has cancer, Buckingham Palace not disclosing the form of cancer as yet. It was found during his recent treatment for an enlarged prostate but is not connected to that condition, the palace said.

“Thankfully, this has been caught early,” Prime Minister Rishi Sunak told the BBC.

Prince William, who has been caring for his wife, Kate, has to step up.

--Sixty years ago today, Feb. 9, 1964, the Beatles appeared on “The Ed Sullivan Show” and the music world changed forever.  Their manager, 29-year-old Brian Epstein, was most responsible for the Fab Four’s conquest of America.

When Epstein and Sullivan met on Nov. 11 in Sullivan’s apartment in Manhattan (Delmonico Hotel), Sullivan only offered the Beatles $7,000 plus airfare and lodging for two appearances, one in New York on Feb. 9, and a second the following Sunday in Miami.

By the following evening when they met again, they agreed to add a third, taped appearance to be broadcast on Feb. 23, after the Beatles returned to London. The group would receive a total of $10,000. Epstein insisted the band get top billing, even though they didn’t even have a hit in the U.S. at that November moment.

While Sullivan was smart enough to book them, he had his doubts.  “It’s not the money,” he told Jack Babb, his talent coordinator.  “It’s who wants to see them three times?  They’re a flash in the pan.  They’re hot now, but, you know, we’re going to have to pay them off for that last show.”

Epstein still needed a hit in America before the Beatles arrived in New York on Feb. 7, and finally came up with “I Want To Hold Your Hand,” which hit No. 1 on the Billboard charts a week before.

During the first three months of 1964, they were estimated to have accounted for 60 percent of all the records sold in the United States. They had 19 songs in the Top 40 that year and sold 25 million records.  [Glenn Frankel / Washington Post]

---

Pray for the men and women of our armed forces…and all the fallen.  We mourn the five Marines aboard a helicopter on a routine training mission that died after the chopper went down 40 miles east of San Diego.

Lance Cpl. Donovan Davis, 21, Olathe, Kansas; Sgt. Alec Langen, 23, Chandler, Arizona; Benjamin Moulton, 27, Emmett, Idaho; Capt. Jack Casey, 26, Dover, New Hampshire; Capt. Miguel Nava, 28, Traverse City, Michigan.

Pray for Ukraine, Israel and the innocent in Gaza.

God bless America.

---

Gold $2039
Oil $76.54

Regular Gas: $3.16; Diesel: $3.96 [$3.43 / $4.59 yr. ago]

Returns for the week 2/5-2/9

Dow Jones  +0.04%  [38671]
S&P 500  +1.4%  [5026]
S&P MidCap  +1.5%
Russell 2000  +2.4%
Nasdaq  +2.3%  [15990]

Returns for the period 1/1/24-2/9/24

Dow Jones  +2.6%
S&P 500  +5.4%
S&P MidCap  +1.0%
Russell 2000  -0.9%
Nasdaq  +6.5%

Bulls 54.3
Bears 17.1

Hang in there.

Enjoy the Game!

Happy Birthday, Big Brother.

Brian Trumbore

---