Week in Review

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Week in Review

09/30/2023

For the week 9/25-9/29

[Posted 5:00 PM ET, Friday]

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Edition 1,276

As I go to post, the U.S. government is barreling toward a shutdown.  The Democratic-led Senate advanced a bipartisan stopgap bill, or continuing resolution, CR, to keep the government open at least a few weeks longer, but the GOP-led House voted on partisan Republican spending bills with no chance of becoming law.  And then today, Friday, hardline conservatives effectively blew up House Speaker Kevin McCarthy’s final effort to give the appearance of even trying to head off a shutdown, which has left politically vulnerable Republicans in a potentially dire position come November 2024.

The final bill failed by a vote of 198-232, with 21 Republicans joining all Democrats to defeat it.

The measure would have kept government funding flowing at vastly reduced levels and imposed stringent immigration restrictions demanded by conservatives, but this was going to be dead on arrival in the Democratic-controlled Senate.

McCarthy’s speakership is in serious jeopardy.

Among other things, if the shutdown occurs at midnight Saturday, “hundreds of thousands” of Defense Department civilians would be furloughed, and while troops will be expected to continue to work, technically without pay, they will not miss a paycheck until Oct. 13, according to the Department of Defense.

Of course, every other government department/agency would be impacted.

And China will seize on the narrative that its centralized governance model is better than the American democratic system.  I talk about China’s latest disinformation campaign down below, which a shutdown further enhances.

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The UAW strike continues, into a third week, and it being Friday, UAW President Shawn Fain continued to ratchet up the pressure, as the union announced it would expand the walkouts if it did not receive what it calls substantially improved contract offers.

So today, Fain said the strike will spread to 7,000 more workers at a Ford plant in Chicago and a General Motors assembly factory near Lansing, Michigan, meaning that some 25,000 workers (about 17% of the unions’ 146,000 members) will soon be striking across the country.

Fain told workers on a video appearance that negotiations haven’t broken down, but Ford and GM have refused to make meaningful progress.  Jeep maker Stellantis was spared from the third round of strikes.

The thing is, last week Fain said the UAW and Ford were making progress and they weren’t targeted in that week’s round of new walkouts.  As in Fain is playing a most duplicitous game which will do him no good at the bargaining table.  Ford execs, for example, are furious with him.

Just call Fain ‘Jon Lovitz', aka The Pathological Liar of ‘Saturday Night Live’ fame.

More below.

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California Democratic Sen. Dianne Feinstein died Thursday at the age of 90.  Feinstein’s career in the Senate began in 1992. She was the first woman to sit on the Senate Judiciary Committee, the first female chairwoman of the Senate Rules and Administration Committee, and the first female chair of the Senate Intelligence Committee.

Feinstein served in the Senate longer than any other woman in U.S. history.

The oldest sitting U.S. Senator, Feinstein was known as a passionate advocate for liberal priorities important to her state – including environmental protection, reproductive rights and gun control – but was also known as a pragmatic lawmaker who reached out to Republicans and sought the middle ground.

Her death leaves the Democrats with a 50-49 majority in the Senate, though California Gov. Gavin Newsom (D) will pick a Democrat to fill the seat on a temporary basis, and candidates had been lining up for the election next year to succeed Feinstein.

RIP.

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I have a lot on the retail theft topic down below in ‘Street Bytes,’ but like many of you I’m sure, I was outraged with the video of the mob of thugs, presumably teenagers, looting downtown stores in Philadelphia Tuesday night in a good neighborhood, Center City, the likes of Foot Locker, Apple and Lululemon the targets.

As the Wall Street Journal opined:

“Interim Police Commissioner John Stanford said police are looking into whether ‘there was a caravan of a number of different vehicles that were going from location to location.’  He added, ‘Everyone in the city should be angry.’

“Anger is justified in particular toward District Attorney Larry Krasner, who waves away property crime.  His office reports 424 retail theft charges so far in 2023 – compared to more than 1,500 by the same date in 2017, the year before he took office.  Reports of retail theft in Philly have increased by more than 30% - to 13,330 – compared to a year ago, according to the city’s latest weekly crime report.”

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This Week in Ukraine….

--An ABC News/Washington Post survey released Sunday revealed a softening in public support for funding Ukraine.  More than 40% of respondents (41%) said the U.S. is doing too much, up from 33% in February, while half said the U.S. is doing the right amount or not enough, down from 60%.

Among respondents who lean Republican, 58% believe the U.S. is providing Ukraine too much support, nearly three times as many as the 22% of those leaning Democrat who said that.  The poll was conducted Sept. 15-20, which included the first two days of the UN General Assembly.

Such sentiment is both depressing and infuriating, the latter in no small part because of President Biden’s inability to explain to the American people why it is so important to support Ukraine.

You also have the likes of Florida Governor Ron DeSantis, who in the Republican debate Wednesday continued to dodge on the topic.

As the Wall Street Journal editorialized:

“To wit, he keeps ducking and covering on U.S. aid for Ukraine against Russia’s invasion.

“ ‘It’s in our interest to end this war. And that’s what I will do as President,’ the Florida Governor said.  ‘We are not going to have a blank check.  We will not have U.S. troops, and we’re going to make the Europeans do what they need to do,’ details unavailable.  He then careened into the non-sequitur of talking about the U.S. border.

“Consider his scripted answers one by one.  Everyone wants to end the war, but there’s a hitch: Vladimir Putin.  Would Mr. DeSantis deliver peace by caving to the Russian’s demands, the way that Donald Trump is suggesting he would?

“The Governor’s ‘blank check’ line is a red herring, since no one is offering one.  Europe should do more, but that is beside the point of U.S. help.  If the U.S. abandons Kyiv, Russia wins.  Period.  Pitting a defense of the U.S. border against aid for Ukraine is a false choice, since the U.S. can do both if it has the will.

“Mr. DeSantis seems to be courting the minority of GOP primary voters who want to cut off Ukraine, and 104 House Republicans did vote this week to strip Ukraine aid out of a spending bill.  But is that how Mr. DeSantis wants to lead – by following strategists Matt Gaetz and Marjorie Taylor Greene?”

--Over the weekend, Russia’s top diplomat, Foreign Minister Sergey Lavrov, denounced the United States and the West as self-interested defenders of a fading international power structure, in his speech to the UN General Assembly.

“The U.S. and its subordinate Western collective are continuing to fuel conflicts which artificially divide humanity into hostile blocks and hamper the achievement of overall aims.  They’re doing everything they can to prevent the formation of a genuine multipolar world order,” Lavrov said.  “They are trying to force the world to play according to their own self-centered rules,” he said.

Lavrov accused the West of a neo-colonial mindset in its overtures to the Global South to win backing for Ukraine in the war.  Instead, Lavrov spoke of a “global majority” that was being duped by the West, which he described as an “empire of lies.”

As for the 19-month war in Ukraine, he recapped some historical complaints going back to the 1991 breakup of the Soviet Union and alluded to the billions of dollars that the U.S. and Western allies have spent in supporting Ukraine.  But he didn’t delve into the current fighting.

Lavrov called Ukrainian proposals for restoring its pre-invasion territory “unrealizable” and said that if Ukraine’s allies want war, they can have it.  “If you insist on the battlefield, OK, let’s decide it on the battlefield.”  He also said there was little hope of reviving a deal to allow for the export of Ukrainian grain through the Black Sea.

And Lavrov accused the U.S. of “whipping up hysteria on the Korean Peninsula.”  He said he would visit Pyongyang next month to continue negotiations with his counterpart there off the back of recent agreements made by Vladimir Putin and Kim Jong Un.

At least Ireland’s Taoiseach (Prime Minister) Leo Varadkar spoke the truth at the UN over the weekend regarding the war in Ukraine.

“This is about right and wrong.  This is 2023 and no country should try to change borders by force and no country should try to bring down a democratic government by military means or by supporting a military coup. There cannot be equivocation on this.”

In his formal address to the General Assembly, Varadkar condemned the war in Ukraine as an “imperialist and brutal invasion” and also hit out at Russia over ending the Black Sea grain export deal and over threats to use nuclear weapons.

“It was an act of unprovoked and unjustified aggression by an expansionist, revanchist power against its neighbor.

“The brutality of Russia’s actions in Ukraine has caused unfathomable suffering for the people of that country.”

The Taoiseach said each country in the UN had a “deep interest in ensuring that Russia did not succeed in its attempt to move borders by force – and that this was not just a European problem.

“For when one aggressor prevails, their peers elsewhere take note and are emboldened. We know this from history.

“When Europeans draw attention to the profound injustice of what is happening in Ukraine, there can be criticism, some of it justified, of the developed world’s failure to respond with the same intensity of feeling and action to conflict and suffering elsewhere.

“But, while we can acknowledge that we have fallen short, the people of Ukraine should not be the ones to pay the price.

“They have done nothing to bring down this war on their heads.”

Varadkar also said that threats by Russia to use nuclear weapons as part of its war in Ukraine were “outrageous.”

This is the speech Joe Biden should have given to the American people in prime time, but it’s too late now.  He’s’ a shattered, pathetic figure.

--The first of 31 high-tech M1 Abrams tanks promised by the U.S. have arrived in Ukraine, President Zelensky said on Telegram.  “Abrams are already in Ukraine and are preparing to reinforce our brigades. I am grateful to the allies for fulfilling the agreements!” he wrote.

We also learned over the weekend that President Biden told Zelensky that he is willing to provide advanced long-range, surface-to-surface missiles to help Kyiv with the counteroffensive, specifically, the Army Tactical Missile System, or ATACMS, long sought by Ukraine.

But the number will be limited and are likely to use cluster munitions.  The ATACMS are fired from a mobile launcher that can strike between 100 and 190 miles away, depending on the model.

--Russian air strikes overnight Sunday on the southern city of Odesa killed two people and damaged the seaport, a grain silo and an abandoned hotel, Ukrainian officials said.  Ukraine’s Air Force said that its air defense systems destroyed 19 Iranian-made Shahed drones, 11 cruise missiles and two hypersonic missiles that Russia launched overnight.  Three other drones were destroyed earlier on Sunday.

--Russian attacks in the southern Kherson province killed two people and injured eight.  A Ukrainian offensive drove Moscow’s forces out of Kherson city in November but the Russians have continued to shell it from across the Dnipro River.

A Russian missile strike last Friday in the central city of Kremenchuk killed one and injured 55, according to the mayor.

--Monday, a top Russian official warned that Ukraine must surrender on Moscow’s terms or the country will “cease to exist.” 

Vyacheslav Volodin, speaker of Russia’s lower house of parliament, told Russian state media that President Biden, NATO Secretary-General Jens Stoltenberg and other Western officials have poured massive amounts of time, effort, money and military might into the war.

“The simple facts are these: The West is experiencing weapons and ammunition shortages, people in Europe and the U.S. have lost trust in politicians, and the Kyiv regime’s counteroffensive has failed,” Volodin said.

--Russian air defenses shot down seven Ukrainian drones over the Belgorod region, across the border from Ukraine and a key staging area for Russian forces.

--In the biggest story of the week, Ukraine’s Special Operations Forces claimed in a Telegram post to have killed Admiral Viktor Sokolov, commander of Russia’s Black Sea Fleet, in an attack on Russian naval headquarters in Crimea.  The post said 34 “officers” were killed and more than 100 Russian troops were wounded in the attack last Friday.  Sokolov was Moscow’s top admiral in Crimea.  Video showed a devastating strike on the building which no doubt did inflict substantial casualties.  The special forces said, “The headquarters building cannot be restored.”

“This is a remarkable achievement by Ukraine eliminating a very significant Russian military leader and many of his subordinates,” retired U.S. Adm. James Stavridis said in a post on X.  “I believe you have to go back to WWII to find another admiral killed in combat.”

Russia then showed Sokolov attending a video conference on Tuesday, a day after Ukraine claimed he was dead.  In video and photographs released by the Russian defense ministry, Sokolov was shown apparently taking part in a video conference with Defense Minister Sergei Shoigu and other top admirals and army chiefs.  The video was shown on Russian state television, but there was no time and date given and, needless to say, many are highly skeptical.

Earlier on Tuesday, Kremlin spokesman Dmitry Peskov had declined to comment on the Ukrainian claim, referring reporters to the defense ministry.

In the video released by the ministry, Shoigu said that more than 17,000 Ukrainian soldiers had been killed in September and more than 2,700 weapons, including seven American Bradley fighting vehicles, had been destroyed.

“The Ukrainian armed forces are suffering serious losses along the entire front line,” Shoigu said, adding that the Ukrainian counteroffensive had so far produced no results.

“The United States and its allies continue to arm the armed forces of Ukraine, and the Kyiv regime throws untrained soldiers to their slaughter in senseless assaults,” Shoigu said.

According to a Sept. 19 scorecard by the Belfer Center at Harvard’s Kennedy School, Russia has gained 35 square miles of territory from Ukraine in the past month while Ukrainian forces have taken 16 square miles from Russian forces.

--An overnight Russian air strike on the key Ukrainian grain exporting port of Izmail injured two people and damaged infrastructure, the governor of the Odesa region said on Tuesday.

A port building, storage facilities and more than 30 trucks and cars were damaged in the attack, which lasted more than two hours, Oleh Kiper said on Telegram.

The Ukrainian military reported shooting down 26 of the 38 Iranian-made attack drones it said were launched by Russia.

Moscow continues to intensify its air attacks on Ukrainian ports on the Danube River, including Izmail and Reni, after it quit a grain deal in July that ensured the safe export of Ukrainian grains.

--Britain’s new military chief, Grant Shapps, who replaced Ben Wallace, visited Kyiv for discussions with President Zelensky Thursday.

“As Ukraine retakes its territory, UK support remains unwavering,” Schapps said.  “We will work tirelessly to bring our partners together to help Ukraine defeat Putin’s illegal invasion,” he continued.  “Slava Ukraini.”

The Brits believe Russia won’t be able to muster the forces needed for a new offensive anytime soon, because Russia has likely committed its new 25th Combined Arms Army “piecemeal to reinforce the over-stretched line” around Donetsk and Luhansk.

--Several hundred members of Russia’s Wagner Group have returned to eastern Ukraine to fight but are not having a significant impact on the battlefield, a Ukrainian military spokesperson said the other day.  Vladimir Putin apparently met with one of Wagner’s leaders.

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--Russia’s torture methods in parts of Ukraine it occupied have been so brutal that it tortured some of its victims to death, the head of a UN-mandated investigative body said on Monday.  Erik M’se, Chair of the Commission of Inquiry on Ukraine, told the UN Human Rights Council in Geneva his team had “collected further evidence indicating that the use of torture by Russian armed forces in areas under their control has been widespread and systematic.”

“In some cases, torture was inflicted with such brutality that it caused the death of the victims,” he said.

M’se’s commission visited parts of Ukraine formerly held by Russian forces such as in Kherson and Zaporizhzhia regions.  It found that torture was committed mainly in detention centers operated by the Russian authorities.  The commission has previously said that violations committed by Russian forces in Ukraine, including the use of torture, may constitute crimes against humanity.  Russia denies committing atrocities or targeting civilians in Ukraine.  Russia was given an opportunity to respond to the allegations at the council hearing but no Russian representatives attended.

--Alexei Navalny lost his appeal on Tuesday against a 19-year prison term that was added to his existing sentence last month, a Moscow court judge said.  The latest sentence was imposed on Aug. 4 after Navalny was convicted on six charges related to alleged extremist activity, all of which he denied.

Navalny’s appeal was rejected by a Moscow judge after a hearing in which Navalny took part by video link. The proceedings were closed to the media, despite protests from Navalny and his lawyers, apart from the reading of the verdict.

--Vladimir Kara-Murza Jr., who earlier in 2023 was sentenced to 25 years in prison for publicly denouncing Russia’s war in Ukraine, was transferred to a maximum security prison in Siberia and placed in a tiny “punishment cell,” his lawyer said on Sunday.

--Hungarian Prime Minister Viktor Orban, buddy of Tucker Carlson, said Monday that his country’s in “no rush” to ratify Sweden’s bid to join NATO, an indication further delays in the accession process are likely. 

--Concerning the topic of NATO…Editorial / The Economist

“In the long run, the best guarantee of Ukraine’s security is NATO membership.  Short of that, partners have promised a web of bilateral security guarantees. Equally important is what the European Union can offer: not just cash, but the prospect of membership. It is not easy to nurture a flourishing economy while being barraged with explosives – even Israel never had to face such a powerful aggressor.  But Ukraine, unlike Israel, could one day be integrated into the world’s richest economic bloc.  A roadmap for EU accession over, say, a decade, with clear milestones, would offer hope to Ukrainians and accelerate economic reforms, just as the same promise galvanized much of Eastern Europe in the 1990s.

“For that to happen a shift in mindset is needed in Europe. It has committed as much weaponry as America and far more financial aid.  Yet it needs to step up further. If Mr. Trump wins in 2024, he may cut back American military assistance.  Even if he loses, Europe will eventually need to carry more of the burden. That means beefing up its defense industry and reforming the EU’s decision-making so it can handle more members.

“The stakes could hardly be higher. Defeat would mean a failed state on the EU’s flank and Mr. Putin’s killing machine closer to more of its borders. Success would mean a new EU member with 30 million well-educated people, Europe’s biggest army and a large agricultural and industrial base. Too many conversations about Ukraine are predicated on an ‘end to the war.’  That needs to change.  Pray for a speedy victory, but plan for a long struggle – and a Ukraine that can survive and thrive nonetheless.”

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Wall Street and the Economy

There was one key reading this week for the markets and the Federal Reserve, the August data on personal consumption expenditures (PCE).

Personal income for the month came in at 0.4%, ditto consumption, both in line with expectations.

But the key PCE was up 0.4%, 3.5% year-over-year, while the critical core PCE rose 0.1%, and 3.9% from a year ago, in line with forecasts and below the prior revised reading of 4.3%, as well as the first time under 4.0% since July 2021.

Stocks initially rallied on the ‘better’ PCE news, but then fell back this afternoon on the comments of New York Fed President John Williams, a permanent voting member on the FOMC, who said the funds rate is at or close to the peak, but it will need to remain in restrictive territory “for some time” to restore the supply and demand balance and bring inflation down to the 2% goal.

Yup, ‘higher for longer.’  If you don’t get the message by now, you never will.

Other data points on the week….

The S&P Case-Shiller home price index for July was up 0.9% month-over-month, and up 0.1% for the 20-city index year-over-year, both better than consensus.

New home sales for August came in worse than expected, a 675,000 annualized pace, down 8.7% year-over-year and vs. the prior month’s 739,000. [See below on mortgage rates.]

August durable goods were better than expected, +0.2% when a -0.3% fall had been forecast, +0.4% ex-transportation, though this data series is always highly volatile.

So then Thursday we had our final look at second-quarter GDP and it was unchanged at 2.1% when a slight upward revision was forecast.  The first quarter was revised up to 2.2% from 2.0% after benchmark revisions were incorporated, per the Bureau of Economic Analysis.

[Among other quarterly revisions, Q3 2022 was revised to 2.7% from 3.2%, and Q1 2022 fell to -2.0% from -1.6%.]

The big issue for the final reading on Q2 was personal consumption expenditures were revised down to a 0.8% gain from the 1.7% previous estimate and much slower than the 3.8% gain in Q1.

Today, aside from the PCE, the September Chicago PMI was a sickly 44.1 vs. an expected 47.6, and prior 48.7, 50 the dividing line between growth and contraction.  Next week the national ISM figure.

The Fed has a lot more data to examine before its next Open Market Committee meeting, Oct. 31-Nov. 1, including another PCE print, but a government shutdown would cut off access to key figures, as federal statistics agencies, including the Bureau of Labor Statistics, the Census Bureau and the Bureau of Economic Analysis, will suspend operations.  Even a short shutdown would probably delay high-profile data releases – including the monthly jobs report, scheduled for Oct. 6, and the Consumer Price Index, scheduled for Oct. 12.

At week’s end, the Atlanta Fed’s GDPNow barometer for third-quarter growth was at 4.9%.

Freddie Mac’s 30-year fixed-rate mortgage hit 7.31% this week, a new cycle high and highest since 2000.  Though as FRM notes: “However, unlike the turn of the millennium, house prices today are rising alongside mortgage rates, primarily due to low inventory.  These headwinds are causing both buyers and sellers to hold out for better circumstances.”

Europe and Asia

Eurostat issued a flash estimate for September inflation in the euro area and it fell significantly from August’s 5.2% to 4.3%.  Ex-food and energy, the figure was 5.5%, a big improvement from the prior month’s 6.2%.

So the European Central Bank can take heart from this and there would be no reason to hike rates at their next policy meeting.

Headline flash figures (ann.)….

Germany 4.3% (down from 6.4%), France 5.6%, Italy 5.7%, Spain 3.2%, Netherlands -0.3%, Ireland 5.0%.

Turning to Asia…China reports out its official government PMIs later tonight.  Otherwise, nothing of import on the data front.

But the property debacle continues.  Remember my last (ill-fated) trip to Fuzhou in Fujian Province back in 2014?  I told you of riding on the beltway that encircled the city as I headed back to the airport and all the ‘see-through’ (no occupants) high-rise apartment buildings.  It has just gotten worse and worse as the years have gone by.

And this week China Evergrande Group and its units were suspended from trading in Hong Kong, a day after people familiar with the matter said the property giant’s founder had been hauled off by police, as Evergrande missed principal and interest payments on $billions in debt.  One unit, Hengde Real Estate Group, defaulted on $547 million in payments.

Evergrande Chairman Hui Ka Yan, a billionaire, was taken away earlier in the month and was being monitored at a designated location, but it’s not clear why Hui is under so-called residential surveillance, a type of police action that falls short of formal detention or arrest and doesn’t mean Hui will be charged with a crime.

Japan’s August unemployment rate came in at 2.7%.  Aug industrial production was down 3.8% year-over-year, while retail sales for the month rose 7% Y/Y.

Street Bytes

--Stocks finished mixed on the week with the Dow Jones off 1.3% to 33507, the S&P 500 down 0.7%, but Nasdaq eked out a 0.1% gain.

Earnings season is around the corner, which you know I just love, and a big jobs report next Friday.

--U.S. Treasury Yields

6-mo. 5.54%  2-yr. 5.06%  10-yr. 4.58%  30-yr. 4.70%

The Treasury market has been ultra-volatile for months when you look at intraday swings.  This week the 10-year traded as high as 4.68% before finishing the week at 4.58%, still up another 15 basis points on the week, once again the highest levels since 2007, and you see the impact on mortgage rates.

--Oil prices resumed their rally after a mild one-week decline, West Texas Intermediate closing at $90.87, Brent crude (the global benchmark), $92.24, after hitting $97.50 earlier in the week.

One oil executive, Doug Lawler, CEO of Continental Resources, a shale driller controlled by billionaire Harold Hamm, warned that crude output in Texas’ Permian Basin oil field could soon peak, as it already has in rival shale fields like North Dakota’s Bakken Formation and Texas’ Eagle Ford.

Without new exploration, “you’re going to see $120 to $150” oil, Lawler told Bloomberg TV.  “You’re going to see more pressure on price,” Lawler said.  “That’s going to send a shock through the system.”

The Wall Street Journal reported that Saudi Arabia and Russia have raked in billions of dollars in extra oil revenues in recent months, despite pumping fewer barrels, after their production cuts sent crude prices soaring.

The inflows are helping Saudi Arabia, under Crown Prince Mohammed bin Salman, fund pricey domestic projects and continue an investment-driven campaign of overseas influence.  While the extra funds are ensuring Vladimir Putin can sustain his war in Ukraine.

--President Biden backed striking auto workers in Michigan during a visit to their picket line Tuesday – a first for a sitting U.S. president.

Biden said that the workers “deserve” raises and other concessions they are seeking.  Donald Trump then arrived on Wednesday.

Some workers felt the rivals might politicize the strike and wished they had both stayed away.

Biden made less than a 90-second statement, saying the picketing workers “deserve the significant raise you need and other benefits.”

He added that the workers should be doing as “incredibly well” as the companies that employ them.

Asked whether the workers are entitled to the 40% raise the UAW is calling for*, Biden said they’ve earned the right to “bargain” for it, which was perhaps misconstrued to mean he was calling for 40%, which is obviously rather inflationary and not good for his reelection hopes in the end.

*The UAW has supposedly come down some from the original 40%.

But the risk of Biden’s move is he’s encouraging workers everywhere to push for bigger pay raises, which isn’t exactly what the Federal Reserve wants.  With an inflation target of 2%, 3% to 4% wage hikes in a normal environment are fine.  At that level you aren’t fanning prices.  Much above that and you are.

The next day, Wednesday, Donald Trump was in Michigan trying to win over blue-collar voters by lambasting Biden and his push for electric cars in the midst of the strike.

“I will not allow under any circumstances the American automobile industry to die,” Trump said at Drake Enterprises, a nonunionized auto parts supplier about half an hour outside Detroit.

Trump, who was skipping the Republican debate in Simi Valley, California, tried to cast Biden as hostile to the auto industry and workers, using extreme rhetoric to claim the industry was “being assassinated,” a word he uses way too frequently I can’t help but add.  He insisted Biden’s embrace of electric vehicles would ultimately lead to lost jobs, amplifying the concerns of some autoworkers who worry that electric cars require fewer people to manufacture and that there is no guarantee factories that produce them will be unionized.

“He’s selling you out to China, he’s selling you out to the environmental extremists and the radical left,” Trump told the crowd.

--The Writers Guild of America (WGA) said its members could return to work on Wednesday while a ratification vote took place on a new three-year contract with Hollywood studios.  Union leaders “voted unanimously to lift the restraining order and end the strike as of 12:01 a.m. PT on Wednesday, September 27th,” the WGA said in a statement Tuesday.

WGA members will have until Oct. 9 to cast their votes on the contract, but it will be overwhelming approved.

Film and television writers walked off the job in May in a fight for higher pay, protections that their work will not be replaced by artificial intelligence, and other issues.

The writers appeared to have won concessions across the board, with raises over the three years of the contract, increased health and pension contributions, and AI safeguards.

Under the tentative agreement, AI cannot be used to undermine a writer’s credit.  Writers can choose to use AI when drafting scripts, but a company cannot require the use of the software.  The studios also have to disclose to a writer if any materials they furnish were generated by AI.

Daytime and nighttime television talk shows are returning as early as Monday.

So now it’s up to the actors to reach an agreement with the studios.

--Hospitality workers in Las Vegas have voted overwhelmingly to authorize a strike against major resorts along the Strip, a critical step toward a walkout as the economically challenged city prepares for major sporting events in the months ahead.

The authorization vote on Tuesday by members of Culinary Workers Union Local 226 and Bartenders Union Local 165, which collectively represent 60,000 workers across Nevada, was approved by 95 percent of those taking part.

The vote does not guarantee the workers will strike before hashing out a new contract deal with the major resorts.  Contracts for roughly 40,000 housekeepers, bartenders, cooks and food servers at MGM Resorts International, Caesars Entertainment and Wynn Resorts expired on Sept. 15, after being extended from a June deadline.  Other workers remain on extended contracts that can be terminated at any time.

Union officials have said there are about 20 percent fewer hospitality workers in the city than before the pandemic.

--The U.S. banking industry’s total deposits declined year-over-year for the first time in data going back to 1994 following a tumultuous period for the banking sector.

Total deposits at U.S. banks ended the year around $17.3 trillion, a 4.8% decrease from the prior period ending June 30, S&P Global Market Intelligence said in a report published Tuesday.  S&P’s findings are based on an annual survey conducted by the Federal Deposit Insurance Corp.  The latest survey results were published last week.

S&P’s analysis demonstrates the magnitude of bank outflows this year as higher interest rates incentivized depositors to pull cash out of checking or savings accounts and place them in higher-yielding alternatives.  A series of bank failures touched off by the rate environment motivated further withdrawals.

--Pilots for United Airlines have ratified a new four-year contract that their union says is worth more than $10 billion.

The union previously said the deal would raise pay by up to 40% over four years.

The Air Line Pilots Association said Friday that 82% of pilots who took part in the voting favored the agreement.

United joins Delta Air Lines and American Airlines in nailing down new contracts that remove a source of friction with a key labor group but will add significantly to the carriers’ costs.  Pilots at Southwest Airlines are still in negotiations, as are flight attendants at several airlines.

United has about 16,000 pilots.

--TSA checkpoint numbers vs. 2019

9/28…106 percent of 2019 levels
9/27…102
9/26…103
9/25…107
9/24…109
9/23…105
9/22…105
9/21…105

--Losses from retail crime ticked up in 2022, causing many retailers across the country to change the way they do business, according to a survey released on Tuesday by the National Retail Federation.

“Retailers are seeing unprecedented levels of theft coupled with rampant crime in their stores, and the situation is only becoming more dire,” David Johnston’s, NRF’s vice president for asset protection and retail operations, said in a statement.

The annual survey by the trade group collected insights from 177 retail brands across 28 different retail sectors – including apparel, jewelry, grocery, and department stores – and accounted for more than 97,000 retail locations and $1.6 trillion in annual retail sales.

--Speaking of which, Target announced it was closing nine stores across four major metropolitan areas in response to a surge in theft and crime, the company said Tuesday.

The retailer is closing one store in New York City, two in Seattle, three in San Francisco, and three in Portland, effective Oct. 21.

“We cannot continue operating these stores because theft and organized retail crime are threatening the safety of our team and guests, and contributing to unsustainable business performance,” the company said in a news release.

Target will keep dozens of stores open across these markets, including 96 in New York, 22 in Seattle, 32 in San Francisco, and 15 in Portland.  The retailer had 1,955 stores in the U.S. as of July 29, 2023.

The company has been vocal in calling out rising levels of crime at its stores.    During its latest quarterly call with investors in August, Target’s management team said theft incidents involving violence or threats of violence had increased 120% from a year earlier in the last five months of the year.

Shrink, the industry term that refers to lost inventory, including from theft and damage, dragged down gross margins by 0.9% in the latest quarter.

Other retailers, including Walmart, Amazon’s Whole Foods and convenience store Wawa have also recently closed stores in city centers, citing similar reasons to Target’s.

--The Federal Trade Commission and 17 states sued Amazon on Tuesday, setting up a long-awaited antitrust fight with the e-commerce giant.

The 172-page suit, the government’s most significant challenge yet to the power of Amazon, accused the company of protecting a monopoly over swaths of online retail by squeezing merchants and favoring its own services.

“A single company, Amazon, has seized control over much of the online retail economy,” said the lawsuit, which was filed in U.S. District Court for the Western District of Washington.  “It exploits its monopolies in ways that enrich Amazon but harm its customers: both the tens of millions of American households who regularly shop on Amazon’s online superstores and the hundreds of thousands of businesses who rely on Amazon to reach them.”

The antitrust regulator alleges that Amazon conducts anticompetitive practices in both the online superstore market and the online services market.  The company deploys “anti-discounting measures that punish sellers and deter other online retailers” from offering prices lower than Amazon, according to the complaint.

The lawsuit alleges, among other things, that the company replaces search results with paid advertisements, intentionally increases junk ads, and charges costly fees on sellers that “currently have no choice but to rely on Amazon to stay in business.”

In all, such fees force many sellers to pay almost half of their total revenue to Amazon, harming not only sellers but also shoppers, according to the suit.

The lawsuit is “wrong on the facts and the law,” Amazon General Counsel David Zapolsky said in a statement.

Amazon is the latest big tech company to face off against the government over monopoly concerns, just as the Justice Department entered the third week of an antitrust trial challenging Google over its power in online search.  The F.T.C. has also brought an antitrust lawsuit against Meta, which owns Instagram, Facebook and WhatsApp. 

The new lawsuit pits Amazon against Lina Khan, the F.T.C. chair, who rose to fame as a Yale law student when she published a paper arguing that American antitrust laws had failed to adequately stop Amazon from amassing power over its customers, competitors and suppliers.

--Micron Technology shares fell 4% after the memory chip company posted weak financial results for the latest quarter but provided revenue guidance that topped the Street’s estimates.

For the fiscal fourth quarter ended Aug. 31, Micron reported revenue of $4.01 billion, down 40% from the year-ago quarter, with an adjusted loss of $1.07 a share.  The quarter came in a little above its own forecast of $3.9 billion in revenue, and an adjusted loss of $1.15 a share.

For the November quarter, Micron sees revenue of $4.4 billion, give or take $200 million, which is above the old Wall Street consensus of $4.2bn, with a loss for the quarter of $1.07, a few pennies wider than the consensus forecast of $1.04.

Micron sees calendar 2023 DRAM bit demand growing in the mid-single digits.  For NAND, the company sees growth in the high teens, up from a previous forecast in the high single digits, reflecting strength in some consumer end markets.

Micron official Sumit Sadana told Barron’s, “We’ve reached an important inflection point.  Pricing has bottomed. We see it moving up from here and gathering momentum as 2024 moves along.”

For the full year, revenue was $15.5 billion, down 49% from fiscal 2022.  The company lost $4.45 a share for fiscal 2023, compared with a profit of $7.75 in the previous year.

“Most customer inventories for memory and storage in the PC and smartphone markets are now at normal levels, consistent with our prior forecasts,” the company said in remarks prepared for its quarterly earnings call.  “Inventory levels are normal across most customers in the automotive market as well. Data center customer inventory is also improving and will likely normalize in early calendar 2024.  Consequently, we see demand continuing to strengthen, which has led to an inflection in pricing.  Some customers have made strategic purchases in DRAM and NAND to take advantage of unsustainably low pricing as the market begins its recovery.” 

In PCs, Micron continues to forecast 2023 unit volumes down in the low double-digits year over year, with low-to-mid single digit growth in 2024.

In mobile, the company sees 2023 smartphone unit volume down in the mid-single digits, with mid-single digit growth in calendar 2024.

--Nike late Thursday reported higher-than-expected fiscal first-quarter earnings while revenue fell short of Wall Street’s estimates.

The athletic footwear and apparel maker’s earnings edged higher to $0.94 per share during the three months ended Aug. 31 from $0.93 a year earlier, beating consensus of $0.76.  Revenue rose 2% to $12.94 billion, which was short of the Street’s $13 billion view.

North American sales slipped 2%, while Europe, the Middle East and Africa reported an 8% gain.

Importantly, sales in China, one of Nike’s largest markets, rose 5% from a year earlier.

Inventories were down 10% compared to the prior year, a decline that helped fuel optimism.  A year ago, the company said gross margins would come under pressure because it was holding too many sneakers and other apparel.

The overall sales miss was overshadowed by the stronger than expected profits and the stock soared 10% Friday morning, before backing off to finish the day up 7%.

“Our first-quarter results demonstrated the impact of staying on the offense over the past fiscal year,” said CFO Matthew Friend in a statement.  “With a healthy marketplace and another quarter of brand and business momentum, we are strengthening our foundation for sustainable, profitable, long-term growth.”

--Vietnam plans to restart its biggest rare-earths mine next year with a Western-backed project that could rival the world’s largest, according to two companies involved, as part of a broader push to dent China’s dominance in a sector that helps power advanced technologies.

Vietnam seeks to build up a rare-earths supply chain, including developing its capacity to refine ores into metals used in magnets for electric vehicles, smartphones and wind turbines.

Australia’s Blackstone Minerals Ltd is one of the companies bidding for at least one concession at the Dong Pao mine.

Vietnam has the second-largest rare-earth deposits, according to the U.S. Geological Survey, but they have remained largely untapped, with investment discouraged by low prices that are effectively set by China because of its near-monopoly on the global market.  Visiting Hanoi this month, President Biden signed an agreement to boost Vietnam’s ability to lure investors for its rare-earth reserves.

But, in the past, Japanese investors Toyota Tsusho and Sojitz abandoned projects at Dong Pao after China ramped up supply, pummeling prices.

So, we’ve heard the rare-earth story before, like what I wrote the other week on promising reserves on the Nevada-Oregon border.  The key word is “promising,” which ultimately has turned into “not realized.”

--Shares in Carnival Corp. fell 5% on Friday after the company reported fiscal third-quarter net income of $1.07 billion, after reporting a loss in the same period a year earlier. Adjusted earnings of 86 cents per shar, topped the Street’s expectations.

The cruise operator posted revenue of $6.85 billion in the period, which also beat the Street.

But the company’s earnings outlook was a bit tepid, despite strong bookings, thus the reason for the decline in the shares.

Foreign Affairs

China:  The State Department accused China on Thursday of using “deceptive and coercive methods” to shape the global information environment, by acquiring stakes in foreign newspapers and television networks, using major social media platforms to promote its views and exerting pressure on international organizations and media outlets to silence critics of Beijing.

The accusations, detailed in a report by the department’s Global Engagement Center, reflect concerns in Washington that China’s information operations pose a growing security challenge to the United States and to democratic principles around the world by promoting “digital authoritarianism.”

China not only pushes its own propaganda, the report said, but exports digital surveillance tools to police information and people online.

This isn’t necessarily new, but as James Rubin, the coordinator of the Global Engagement Center, put it in a briefing: “Every country has the right and every right to tell its story to the world, but a nation’s narrative should be facts, and it should rise or fall on its own merits.  By contrast, the P.R.C. (People’s Republic of China) advances coercive techniques and increasingly outright lies.”

According to the State Department, China’s efforts have evolved from a primary focus on promoting or defending the country’s political views on issues like Taiwan and Hong Kong to one that aims to sow disinformation to discredit the United States at home and abroad.

Meta last month said it dismantled a Chinese campaign using more than 8,000 accounts, pages or groups on its Facebook and Instagram platforms, the largest inauthentic network it had found so far.

Separately, a senior executive at American risk advisory firm Kroll has been barred from leaving mainland China, the latest example of Chinese authorities imposing exit bans on the employees of foreign firms.

Michael Chan, a Hong Kong-based managing director who specializes in corporate restructuring, traveled to the mainland in July and subsequently informed his employer that he can’t leave.

In March, authorities raided the Beijing offices of Mintz Group, detaining all five of the New York-based due diligence firm’s staff members on the mainland.

Authorities also questioned staff at consulting firm Bain & Co.’s Shanghai office in a surprise visit.

In Taiwan, President Tsai Ing-wen’s approval rating has dropped to its lowest level in a year over her handling of the island’s affairs – a result that could affect the ruling party’s performance in January’s presidential and legislative elections.

Tsai’s approval rating dropped 11 points to 38% in September, from 49% in August, according to the latest survey results, released Monday by the Taiwanese Public Opinion Foundation.  Disapproval of Tsai rose to 48% from 42% in August.

North Korea: Kim Jong Un gave a speech to the Supreme People’s Assembly in which he said his country will “exponentially” increase its production of nuclear weapons, state-run KCNA announced Thursday.  In part:

“The present situation, in which the structure of the ‘new Cold War’ is being materialized on a global scale and the existence of sovereign states and the right to existence of their people are seriously threatened by the reactionary imperialist forces keen on realizing their ambition for hegemony and expansionist fantasy, proves that our Republic was entirely just when it made a decisive decision to build a nuclear force in the face of all sorts of trials and fix it as an irreversible state law.”

Meanwhile, Private Travis King, the U.S. soldier who ran into North Korea in July, was released into U.S. custody and flown back home after being expelled by North Korea into China.  The positive resolution of the King case was noteworthy given how rare diplomatic cooperation is between Washington, Beijing and Pyongyang.

KCNA said King had been expelled after admitting to entering North Korea illegally as he was “disillusioned about unequal U.S. society.”

Azerbaijan / Armenia: The Armenian separatist government of Nagorno-Karabakh said it would dissolve itself by January 1st 2024.  Last week Azerbaijan took control of the enclave, which had been run by the separatists for three decades, after a one-day war.  Armenia said that more than 65,000 ethnic Armenians, out of 120,000, had fled to the country from Nagorno-Karabakh.  Nikol Pashinyan, Armenia’s prime minister, said the entire Armenian population of the enclave would leave in the coming days. 

Azerbaijan’s lightning military operation* triggered an exodus unparalleled in the South Caucasus since the war in which Armenians took over the territory as the Soviet Union broke up, and hundreds of thousands of Azeris fled.

*Azerbaijan said this week that 192 of its troops were killed and 511 wounded in essentially 24 hours.  Nagorno-Karabakh had said earlier that at least 200 were killed on their side, including ten civilians, with over 400 wounded.

Azerbaijan says it is prepared to respect ethnic Armenian rights as it reabsorbs the region, but with a history burdened by folk memories of alleged genocide, ethnic cleansing, pogroms and at least two wars, the Armenians are fleeing in fear.

About 30,000 were killed between 1988 and 1994 and more than a million people were displaced in the First Karabakh War.  In 2020, Azerbaijan struck back, reclaiming swathes of land in and around Karabakh in a 44-day war, setting the stage for last week’s conquest.

So with all the chaos, there was a massive explosion at a fuel station in Karabakh on Monday, Armenians attempting to fuel up for the drive back into their country, with over 100 killed and nearly 300 injured.  It was unclear what caused it.  Imagine how the region doesn’t have the facilities to care for that many burn victims.

Meanwhile, Armenians are furious with Russian peacekeepers, in place since the 44-day war in 2020, who did nothing to prevent Azerbaijan from launching its offensive.

Slovakia: The nation holds elections on Saturday and a populist former prime minister who was forced out of office five years ago amid public outrage over a journalist’s slaying is expected to win and return to power.

And this won’t be good for the West.  Robert Fico is a strongman with sympathies toward Moscow and would no doubt break with the Western military alliance supporting Ukraine.

Fico’s politics combine far-left social policy with nationalism and conservative positions more associated with the radical right.  He has called adoption by same-sex couples a “perversion” and accused journalists of running an organized crime group.

His rhetoric is laced with fringe conspiracy theories and he has blamed “Ukrainian Nazis and fascists” for starting the war.

As Milan Nic, an analyst at the German Council on Foreign Relations, told the Washington Post, “(Fico…pronounced FEET-so) has always had an anti-Western rhetoric,” Nic said.  “He’s more than just pro-Russian.  He loves anybody who stands up to the U.S.”

Well, that’s just great, mused the fellow Slovak.

Pakistan: At least 52 people have been killed and more than 50 injured in a suicide bomb attack at a mosque in the restive southwestern province of Balochistan on Friday as people gathered to celebrate the birth of Prophet Muhammad.

Iraq: A raging fire seemingly caused by fireworks set off to celebrate a Christian wedding consumed a hall packed with guests in northern Iraq, killing around 100 people and injuring 150 others.

Niger: Almost exactly two months after the Niger coup, France says it’s officially pulling its 1,500 or so troops out of the country, as well as sending its ambassador back home to Paris, President Emmanuel Macron announced on Monday.

The military withdrawal is expected to take a few months to complete. This is humiliating for the French.

The United States is maintaining its presence of at least 1,000 soldiers in Niger who, along with the French, worked with the former government to fight Islamic terrorists.

Niger’s defense ministry said today that hundreds of Islamist militants riding motorbikes attacked a town in southwestern Niger, killing 12 soldiers (seven killed in combat, five killed in a road accident responding to the attack).

The defense minister said over 100 militants had been killed in the counteroffensive.

Random Musings

--Presidential approval ratings….

Gallup: New numbers…41% approve of President Biden’s job performance, 58% disapprove, 39% of independents approve (Sept. 1-23).  The prior split was 42-53, 39.

Rasmussen: 49% approve, 49% disapprove (Sept. 29).  [It is what it is.]

In a new NBC News national poll, Biden’s approval rating is just 41%, 56% disapproval, the latter the highest of his presidency for this survey.

In the new Washington Post/ABC News national survey, Biden has only a 37% approval rating, with 56% disapproving, on par with other recent polls.

--Among the other findings in the NBC News poll, Donald Trump expanded his national lead in the Republican nominating contest to more than 40 points over his nearest competition.

Trump 59%, Ron DeSantis 16%, Nikki Haley 7%, Mike Pence and Chris Christie at 4%. 

In June’s NBC News survey, Trump was ahead of DeSantis by 29 points, 51% to 22%.

The poll also found Biden and Trump deadlocked in a hypothetical rematch, 46% to 46%.  In June, Biden held a 4-point lead, 49-45.

Among independents, Biden gets 42%, while Trump receives 35%.

In other hypothetical matchups, Biden holds a 1-point lead over DeSantis, 46% to 45%, while Nikki Haley leads Biden by 5 points, 46% to 41%, even as nearly 30% of all voters say they aren’t familiar with her.

Fifty-nine percent of Democratic primary voters say they want a Democratic candidate to challenge Biden for the Democratic nomination, even though a major intraparty challenger hasn’t emerged.

Only 37% of voters approve of Biden’s handling of the economy, and 41% approve of his handling of foreign policy.

But the biggest warning signal for Biden is on the issue of his age, with a combined 74% of registered voters saying they have major concerns (59%) or moderate concerns (15%) that Biden, at age 80, doesn’t have the necessary mental and physical health to be president for a second term.

Just 47% have either major concerns (34%) or moderate concerns (13%) about Trump, at age 77, not having the necessary mental and physical health to be president for a second term.

According to the poll, 62% have either major concerns (52%) or moderate concerns (10%) about Trump facing different criminal and civil trials for alleged wrongdoing, including for trying to overturn the 2020 presidential election.

Another 60% have major concerns (45%) or moderate concerns (15%) about Biden’s possible awareness or involvement in the business dealings of his son, Hunter, including alleged financial wrongdoing and corruption.

--In the above-noted Washington Post/ABC News national poll, Trump is favored by 54% of Republicans and Republican-leaning independents, little changed from 51% in May.  Ron DeSantis is second at 15%, down from 25% in May.  No other Republican reaches double digits.

But as opposed to the NBC survey that had a hypothetical matchup between Trump and Biden as being even, the Post/ABC poll has Trump with a ten-point lead, 52% to 42%.  Versus all the other recent surveys, consider this an outlier.

[What’s interesting here is that Trump only received 46% of the popular vote in 2016, and 47% in 2020.]

On the economy, 74% view it as ‘not so good’ or ‘poor,” vs. just 25% who view it ‘excellent’ or ‘good.’

On the issue of food prices, a full 91% say it is not good or poor.

On the age issue in the Post/ABC poll, 74% of adults say the president would be too old to serve another term, while 50% say that of Trump.

Pretty amazing both the ABC and NBC polls have the exact same percentage, 74%, expressing concerns.

And on the issue of the 2020 election, a majority of Americans (60%) say they believe Biden was legitimately elected.  That result has held steady since early 2021 even as Trump continues to falsely claim the election was marred by widespread fraud.

But among Republicans and Republican-leading independents, 55% believe Biden was not legitimately elected, with 44% saying there is solid evidence of fraud.

Oh brother.

--Wednesday’s Republican presidential debate at the Reagan Library was absolutely awful and I have zero to say except that I watched the entire s---show, the Fox Business moderators were dreadful and had no control from the start, the talking over each other had some of us wanting to commit hari-kari, Tim Scott’s act, a response to his tepid first debate, backfired, because of his talking over everyone, Ron DeSantis looks like a robot or Howdy Doody, Mike Pence drips insincerity, and I despise Vivek more and more each time I see him.

No one looked good, but Nikki Haley didn’t hurt herself with her performance, and Chris Christie got in a few good shots against Donald Trump, but it won’t move his numbers.

A disaster all around.

But I also can’t believe not one of the seven on stage brought up the following ‘hot topic’ concerning Trump.

--A Manhattan judge on Tuesday found Donald Trump committed fraud by exaggerating the value of his wealth – and canceled the former president’s New York business licenses, which could hamper his longtime company’s ability to operate in the Empire State.

Manhattan Supreme Court Justice Arthur Engoron found Trump, his family and his business, the Trump Organization, liable for fraud – the key claim in New York Attorney General Letitia James’ sprawling lawsuit against the defendants.

In a 35-page ruling, Engoron sided with James, who argued that Trump made several indisputably false statements in business documents to secure favorable terms with banks – including by claiming that his soaring triplex penthouse at Trump Tower was 30,000 square feet when it was in fact closer to 11,000 feet.

“A discrepancy of this order of magnitude, by a real estate developer sizing up his own living space of decades, can only be considered fraud,” Engoron wrote.

The judge revoked the New York “business certificates” belonging to the Trump Organization and any other New York-based business run by Trump or his family – while ordering that an independent third party will be tasked with “managing the dissolution of the cancelled LLCs.”

This is a “devastating” blow, legal experts said Tuesday night.  If not successfully appealed, Trump will be prevented from conducting business in New York until the revocation is rescinded.

Justice Engoron’s decision narrows the issues that will be heard, effectively deciding that the trial was not necessary to find that Trump was liable and that the core of James’ case was valid.

In his order, Justice Engoron wrote scathingly about Trump’s defenses, saying that the former president and the other defendants, including his two adult sons and his company, ignored reality when it suited their business needs.  “In defendants’ words,” he wrote, “rent-regulated apartments are worth the same as unregulated apartments; restricted land is worth the same as unrestricted land; restrictions can evaporate into thin air.”

“That is a fantasy world, not the real world,” he added.

“The decision today is a final decision that fraud is proven.  The judge made this decision on the basis of Trump’s own documents. The evidence is Trump’s own documentation,” Andrew Napolitano, former New Jersey Superior Court judge, told the New York Post.

“These are indisputable facts – the case is based entirely on the documents his lenders and his insurance companies produced.”

AG James has recommended penalties of up to $250 million.  Anything near this figure and Trump will have to sell off assets in order to pay the lofty legal fees, which many believe would hurt his ego more than anything.

Needless to say, Trump freaked out, saying in part on Truth Social:

“1) I AM WORTH MUCH MORE THAN THE NUMBERS SHOWN ON MY FINANCIAL STATEMENTS. 2) I DIDN’T EVEN INCLUDE MY MOST VALUABLE ASSET, MY BRAND. 3) THE BANKS WERE PAID BACK IN FULL, SOMETIMES EARLY, THERE WERE NO DEFAULTS, THE BANKS MADE MONEY, WERE REPRESENTED BY THE BEST LAW FIRMS, & WERE VERY ‘HAPPY.’ THERE WERE NO VICTIMS!”

Trump doubled down on his claim that he is worth far more than the financial statements suggest and added, “4) ON THE FRONT PAGE OF THE FINANCIAL STATEMENTS THERE IS A STRONG ‘DISCLAIMER CLAUSE’ TELLING ALL NOT TO RELY ON THESE FINANCIAL STATEMENTS. THE DISCLAIMER CLAUSE TELLS ANYONE REVIEWING THE DATA, INCLUDING FINANCIAL INSTITUTIONS, TO DO THEIR OWN RESEARCH AND ANALYSIS – IT IS A NON RELIANCE CLAUSE, AND COULD NOT BE MORE CLEAR.”

“ADDITIONALLY TO MY BEING WORTH FAR MORE THAN IS SHOWN IN THE ‘FULLY DISCLAIMED’ FINANCIAL STATEMENTS, AGAIN NOT PUTTING DOWN A VALUE FOR MY BIGGEST ASSET, BRAND, THE COMPANY HAS HUNDREDS OF MILLIONS OF DOLLARS IN CASH, AND VERY LITTLE DEBT,” he insisted.

Trump, of course, also called Justice Engoron “DERANGED.”

“This is Democrat Political Lawfare, and a Witch Hunt at a level never seen before,” Trump wrote. “If they can do this to me, they can do this to YOU!”

I’m so freakin’ scared.

Trump, on Truth Social, also remained committed to his lofty Mar-a-Lago price tags, arguing that the “MOST SPECTACULAR PROPERTY” in Palm Beach, Florida, could be worth as much as $1.8 billion, which far exceeds even the highest value he listed for Mar-a-Lago on his financial statements, $739 million in 2018.

Engoron, he wrote, “made up this crazy ‘KILL TRUMP’ decision, assigning insanely low values to properties, despite overwhelming evidence.”

Justice Engoron rejected Trump’s bid to delay the trial against him, paving the way for it to begin Monday.  Trump and three of his children are expected to be called as witnesses.

--Editorial / Wall Street Journal

“Donald Trump suggested the other day that Gen. Mark Milley, the nation’s highest military officer, deserves execution – as in death.  He said NBC should be investigated for treason and that the FBI should raid the homes of Senate Democrats. Then he accused President Biden of being manipulated by ‘the Fascists in the White House.’

“If Republicans missed those remarks, they must not be following Mr. Trump’s feed on Truth Social, his media site.  But reading him there is the way to get a direct mind-meld with Mr. Trump’s true social and political self.

“Here was part of Mr. Trump’s send-off for Mr. Milley, who’s finishing his tenure as Chairman of the Joint Chiefs: ‘This guy turned out to be a Woke train wreck who, if the Fake News reporting is correct, was actually dealing with China to give them a heads up on the thinking of the President of the United States.  This is an act so egregious that, in times gone by, the punishment would have been DEATH!’

“We realize no one is supposed to take Mr. Trump’s words seriously, but what if some crank does and decides to shoot Gen. Milley in his retirement?

“How about a campaign pledge to abridge the First Amendment?  Mr. Trump: ‘Comcast, with its one-side and vicious coverage by NBC NEWS, and in particular MSNBC, often and correctly referred to as MSDNC (Democrat National Committee!), should be investigated for its ‘Country Threatening Treason.’ …I say up front, openly, and proudly, that when I WIN the Presidency of the United States, they and others of the LameStream Media will be thoroughly scrutinized for their knowingly dishonest and corrupt coverage.’

“Mr. Trump also uses Truth Social to amplify unhinged posts from others, including one recently calling the 2021 Capitol riot a ‘Fedsurrection,’ involving Antifa leftists in MAGA disguise, and ‘the Deep State coordinated their actions through proxies.’  Mr. Trump or his social-media team hit the button to ‘retruth’ this lunacy to his millions of followers.

“Some Republicans are feeling giddy these days because Mr. Biden is down in the polls, losing head-to-head even against Mr. Trump.  But many voters may have forgotten what it was like to hear from, and live with, Mr. Trump day after day.  As President, Mr. Biden gets more attention now, and Mr. Trump is ducking the GOP presidential debates.

“But if Mr. Trump is nominated again, his every word will get attention.  That’s the baggage Republicans will carry – and the reason Democrats think even Mr. Biden can win.”

Separately, Jeffrey Goldberg interviewed Gen. Milley at length in a profile for The Atlantic.  Goldberg titled his treatment, “The Patriot: How General Mark Milley protected the Constitution from Donald Trump.”

Milley was at times quite candid, saying, for example, that allegations the post-Trump military is too “woke” are “kind of upsetting and insulting.”

“Here’s my answer: First of all, it’s all bullshit,” Milley said. “Our military wasn’t woke 24 months ago, and now it’s woke?”  Secondly, he said, “these accusations are coming from people who don’t know what they’re talking about.  They’re doing it for political purposes,” Milley told The Atlantic.  “So this idea of a woke military is total, utter, made-up bullshit,” he repeated.  “They are taking two or three incidents, single anecdotes, a drag show that is against DOD policy.  I don’t think these shows should be on bases, and neither does the secretary of defense or the chain of command.”

In terms of June 1, 2020, and Lafayette Square, “I absolutely, positively shouldn’t have been there,” Milley told Goldberg, repeating a public apology he also delivered about a week after the event. “The political people, the president and others, can do whatever they want,” the general said.  “But I can’t. I’m a soldier, and fundamental to this republic is for the military to stay out of politics.”

--New Jersey Democratic Sen. Bob Menendez was indicted last Friday, as I noted in this space, on charges related to his position as chairman of the Foreign Relations Committee to assist the government of Egypt and businessmen in New Jersey in exchange for bribes that included bars of gold bullion, a Mercedes-Benz convertible, exercise machines and more than $500,000 in cash.

Menendez has been defiant thus far, saying in a news conference on Monday that prosecutors had framed the allegations against him and his wife to be “as salacious as possible” and predicting that he would be exonerated.

But scores of Democratic senators then called for his resignation, including fellow New Jersey Senator Cory Booker.  This had to be a big blow for Menendez, as Booker referred to the senior senator as a friend, ally and mentor.

“The details of the allegations against Senator Menendez are of such a nature that the faith and trust of New Jerseyans as well as those he must work with in order to be effective have been shaken to the core,” Booker said, adding: “I believe stepping down is best for those Senator Menendez has spent his life serving.”

Menendez pleaded not guilty to the charges on Wednesday, standing before a magistrate judge in Manhattan federal court, wife Nadine seated nearby.  She entered a not-guilty plea for her role in the bribery conspiracy as well.

Illinois Senator Dick Durbin, the No. 2 among Democrats in the Senate, then added his voice to the growing list of Democrats calling on their colleague to resign.

Wednesday afternoon, Senate Majority Leader Chuck Schumer, not having commented as yet, said he was disappointed and disturbed by the indictment.  “We all know that…for senators, there’s a much, much higher standard.  And clearly when you read the indictment, Senator Menendez fell way, way below that standard,” Schumer said.  “Tomorrow, he will address the Democratic caucus and we’ll what happens after that.”

Thursday, Menendez told his fellow Democrats he was not resigning.

Tom Moran, longtime opinion writer for the Star-Ledger in New Jersey:

“I keep $200 cash in my home at all times to cover emergencies. I’m all set if I run out of food during a blackout.

“Bob Menendez claimed on Monday that he keeps $550,000 cash on hand for emergencies.  He’s all set if he has to buy a house during a blackout or pay ransom to kidnappers.

“He said nothing about the bars of gold the FBI found in his home along with the cash, or the new Mercedes parked in his garage. He asked that we trust him on all this and took no questions.

“ ‘I firmly believe that when all the facts are presented, not only will I be exonerated, but I still will be New Jersey’s senior senator,’ he said.

“Here we go.  A defiant Menendez, a man with no shame, is about to pull us through a long ordeal based on ludicrous claims like this.  And he vows he will stay in office while this drags out, turning his Senate seat into a Jersey joke for the foreseeable future.

“Menendez says he’ll cling to office until he is dragged out, kicking and screaming.  He has that right.  But there’s an election next year, and he has no chance to survive that.

“The man who has embodied machine politics in New Jersey for decades has now been abandoned by those very machines.  The governor and the bulk of county chairmen are done with him, demanding his resignation.

“For Monday’s press event, Menendez could not find a single political leader of note to stand with him.  His wife, Nadine, who was also indicted, was not present either.  Menendez is now alone, facing up to 45 years in prison, and he has no story to tell that is remotely plausible.

“The most cringe-worthy moment came when Menendez claimed that his personal history should inspire trust.  ‘For anyone who has known me through 50 years of public service, they know I have always fought for what is right,’ he said.

“This is his second felony indictment. He reminded us Monday that he was not convicted the first time, and that’s true.

“But let’s remember the testimony from that first trial, which ended with a split jury in 2018.

“Menendez’s team conceded that he took lavish gifts from a doctor who was under investigation for Medicare fraud, including flights on private jets, luxury vacations in the Caribbean, and a stay in a five-star Paris hotel at $1,000 per night.

“Nor did he dispute the list of favors showered on him by the doctor, Dr. Salomon Melgen, who in fact was convicted of Medicare fraud a few years later.  Menendez helped him get visas for beautiful young women, he intervened to help Melgen’s business in the Dominican Republic, and he pushed back at Medicare officials who were on Melgen’s trail.

“To present his acquittal as a moral exoneration is farcical.  He was acquitted because he had a personal friendship with Melgen, and gifts are allowed in that case.  But the Senate, in a unanimous bipartisan vote, ‘severely admonished’ him for failing to report all the gifts as required.

“The new case is far more compelling….

“The evidence is overwhelming, and the indictment even has visuals….

“In the eyes of the law, a person is innocent until proven guilty….

“But outside the courtroom, we all apply a lower standard, including Menendez.  Donald Trump hasn’t been convicted of a crime either, but that hasn’t stopped Menendez from concluding that he’s unfit for public office, nor should it….

“It is beyond sad that his career should end like this, with wild stories about needing cash for emergencies, with toxic claims that prosecutors are after him because they can’t stand to see a Latino rising so high from such humble origins.

“It all sounds very much like Donald Trump, this willingness to drag down the temple to save himself.  May it all end as quickly as possible.”

While Republicans may be optimistic they can capture Menendez’s seat, the fact is my solidly blue state hasn’t elected a Republican senator since Clifford Case in 1972.

--On a lighter note, the Senate passed a resolution Wednesday to restore the formal dress code in the upper-chamber following the blowback over the loosening of the rule, which had been a concession by Majority Leader Chuck Schumer to that slob from Pennsylvania, John Fetterman.

Quickly dubbed the “Fetterman Rule”, Sen. Joe Manchin (D-WV), who publicly split with Fetterman’ over the latter’s lax wardrobe, sponsored the resolution.

Earlier, before the resolution passed, Fetterman assured his Democratic colleagues that he would wear a suit while speaking or presiding over the Senate floor.

--In an interview with the New York Post, the Archbishop of New York, Timothy Cardinal Dolan, said he has reached out to President Biden about the “tragic, broken” migrant system – to no avail.

“He doesn’t take my calls or answer my letters,” Dolan said of his fellow Catholic.

“New York just can’t handle them all, we know that,” the cardinal added.  “It’s very unfair. This is a New York problem, but it’s not just a New York problem.  It’s an American problem.”

Dolan also said of New York Gov. Hochul, with whom he has spoken about the crisis, “I’ve spoken with the governor a number of times and haven’t gotten too much consolation,” he said.

On the other hand, Dolan said, Mayor Adams is not afraid to have a candid conversation about the 110,000 migrants that have poured into NYC this year.

“I give Mayor Adams a lot of credit.  He tells us where he needs help,” he said.

“He’s been very good about rallying religious leaders, asking our help to advocate with the federal government, which has done hardly anything, [and] with the state government, which hasn’t done much.”

Dolan feels the current system is “terribly wrecked” and needs “dramatic immigration reform.”

“The church has always been very supportive of the right of a nation to have borders and border security…we don’t just want borders where anybody can come in,” said Dolan, who is known to visit the migrants housed at the Roosevelt Hotel.

“For us, it’s not so much about politics and policy…we have to leave that to others,” he said. “Our sacred responsibility is to help them.  We hate to see these people suffer.”

--Meanwhile, House Republicans held their first hearing in an impeachment inquiry into President Biden, accusing him of lying about family members’ business dealings and condoning their trading on the Biden name.

Rep. James Comer (R-Ky), chairman of the House Oversight Committee, said Biden misled the American people when he said he separated his official duties and his family’s business dealings.  Comer said the president’s family members, particularly son Hunter, were selling “Joe Biden himself” as they made millions of dollars.

“The door was wide open to those who purchased what a business associate described as ‘the Biden brand,’” Comer said.

While House Republicans released a ton of records that they cast as incriminating and tying the president to Hunter’s business activities, but as the Wall Street Journal noted, “they contained no concrete proof of wrongdoing by the president.”

The inquiry will continue.

--Bangladesh faces a deadly dengue fever outbreak, the most severe in the country’s history, authorities said, with infections from the mosquito-borne virus spreading quickly from rural areas and straining the already overwhelmed hospital system in the capital, Dhaka.

This week, authorities said they had recorded 909 dengue-related deaths this year through Sunday, compared with 281 in all of 2022.  That’s a scary increase, boys and girls.

--On the heels of a record-setting wet and warm August, forecasters on Thursday announced that El Nino is gaining strength and will almost certainly persist into 2024.

El Nino, the warm phase of the El Nino-La Nina Southern Oscillation pattern, is a major driver of weather worldwide and is often associated with hotter global temperatures and wetter conditions in California.

The system arrived in June and has been steadily gaining strength, with a 95% chance that it will persist into at least the first three months of 2024, according to the National Oceanic and Atmospheric Administration.  The odds of the system becoming a “strong” El Nino have increased to 71%.

Ergo, you’re looking at a soggy January, February and March in Central and Southern California, the months that are already the wettest time of year in these parts, though climate scientists at UCLA say the forecast is far from a guarantee.  It’s not easy to predict.

“It is never a guarantee,” said Jan Null, a meteorologist with Golden Gate Weather Services.  “The best case study is last year with a La Nina, and all the models calling for below-normal precipitation.  That was not what happened.”

This La Nina winter was among the wettest in recent memory, with more than 30 atmospheric rivers pummeling California, causing devastating levee breaches, fatal flooding and the resurgence of Tulare Lake, along with record snows in the Sierras. [Los Angeles Times]

--Meanwhile, California’s winter storms and tropical storm Hilary bred a surge of invasive, day-biting Aedes mosquitoes in the state, spawning some regions to report their first human cases of West Nile virus in years.

The statewide total as of Sunday was 153 West Nile reports, more than double last year’s, according to the California Department of Public Health.  The pest has been surging in certain parts of the country and has stoked concern about other mosquito species.

But in less than 1% of West Nile cases do you see dangerous neurological conditions like meningitis and encephalitis.

--According to the U.S. Dairy Council and the National Aeronautics and Space Administration, belching – not flatulence – is the major cause of methane produced by the world’s cows and a Seattle-based company has just won $1.5 million to test a product to make cows burp less.

As Dinah Voyles Pulver writes in USA TODAY, “both ends of a cow produce methane, but 97% of all the methane gas from a cow is released by belching rather than [err, flatulence].”

Methane accounts for about 20 percent of greenhouse gas emissions globally, according to the U.S. Environmental Protection Agency.  And it’s more than 25 times more potent than carbon dioxide at trapping heat in the atmosphere.

Well, Lumen Bioscience, which has targeted the problem, won a $1.5 million prize from the Wilkes  Center for Climate Science and Policy at the University of Utah, which was looking for “audacious ideas” to help mitigate the impacts of climate change.

Brian Finrow, Lumen’s co-founder and CEO, says the company has discovered a way to neutralize the organism in a cow’s stomach that causes it to burp.  The company proposes to reduce methane emissions through a patented mix of enzymes that could be added to the food of beef and dairy cows. And that, they say, could help reduce the overall greenhouse gas emission being pumped into the world’s atmosphere.

It’s complicated, because bombarding a cow’s digestive tract with a bunch of antibiotics isn’t healthy, so the company is working with a microbe spirulina, to make an enzyme protein, that treats a bacteria that causes human disease.

--Before today’s massive rainfall in the New York City area, Central Park had received 8.35 inches of rain in September when the norm is 3.85.  Now add at least five more inches on top of that…much more on parts of Long Island and Westchester County.

Mayor Adams is getting excoriated for his lack of response and his running feud with fellow Democrat, Governor Kathy Hochul, will only intensify as she’s hogging the airwaves, when he should be the one seen as the leader.

--Former president Jimmy Carter was spotted enjoying his hometown Peanut Festival ahead of his 99th birthday, Saturday, in a rare public appearance since he entered hospice care…in February!...in case you were wondering. 

The 39th president and wife Rosalynn were in the back of a black SUV, riding through the Plains Peanut Festival.  The Carter Center wrote, “We’re betting peanut butter ice cream is on the menu for lunch!”

Which gives me a hankering for same about now.

--Bad dog…baaad dog.

‘Dog’ is No. 1 on the All-Species List for multiple good reasons.  ‘Man’ is about No. 438.

But we have to call out a bad dog, even if it is the president’s dog, and Commander, the Biden family’s two-year-old German Shepherd, bit another Secret Service agent, the 11th time the dog has bitten a guard at the White House or the Biden family home.

The attack happened on Monday night and the officer was treated at the scene, the Secret Service said in a statement on Tuesday.

In the past, the White House press secretary has previously blamed the attacks on the stress of living at the White House.

Commander has been fined $42,000 and was placed on double-secret probation.  Harvard Obedience School’s master’s program also said, ‘We don’t want him,’ the Bidens trying to hide him there through the election cycle.

--Lastly, congratulations to NASA for fetching a sample from an asteroid and safely bringing it back from deep space into the Utah desert Sunday to cap a seven-year journey.

In a flyby of Earth, the Osiris-Rex spacecraft released the sample capsule from 63,000 miles out.  The small capsule landed four hours later.

The parachute opened four times higher than anticipated, but to everyone’s relief the capsule was intact and not breached, keeping its 4.5-billion-year-old samples free of contamination.

The sealed sample canister was flown to NASA’s Johnson Space Center in Houston, where it will be opened in a new, specially designed lab.  The building already houses hundreds of pounds of moon rocks gathered by the Apollo astronauts, along with four Martians.

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

Pray for Ukraine.

God bless America.

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Gold $1864…down $80 on the week
Oil $90.87

Regular Gas: $3.83; Diesel: $4.56 [$3.78 / $4.87 yr. ago]

Returns for the week 9/25-9/29

Dow Jones  -1.3%  [33507]
S&P 500  -0.7%  [4288]
S&P MidCap  +0.3%
Russell 2000  +0.5%
Nasdaq  +0.1%  [13219]

Returns for the period 1/1/23-9/29/23

Dow Jones  +1.1%
S&P 500  +11.7%
S&P MidCap  +3.0%
Russell 2000  +1.4%
Nasdaq  +26.3%

Bulls 43.7…50.7 two weeks ago
Bears 23.9…reminder, this is a contrarian indicator.

Hang in there.

Brian Trumbore

 

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