Week In Review - Current Events, Financial News: Stocks and News (2024)

[Posted 4:30 PM ET, Friday]

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Edition 1,315

I have been arguing for almost two years now that Joe Biden should not run for re-election. I was on record as not believing he would even make it to December 2023.

And I offered this concerning the Biden family and the discussion they should have had last Christmas.

WIR 12/9/23:

“It’s going to be an interesting Christmas at the Biden household. The president should announce after the holiday he’s not running for re-election. Physically, I didn’t think he’d make it through the year....

“It’s the right thing to do for the country, and there is a part of the president who knows he should do it. The president needs to focus on the job his final 13 months in office. Needless to say, there are a number of crises confronting him that require his full attention.

“But then you’re going to have his daughter and wife, Jill, having their own private conversations.

“ ‘What do we do with this guy, he’s fading?’

“ ‘I know one thing...I don’t want to have to deal with him. We have to keep him in the White House as long as possible.’”

I knew then this was a harsh assessment. It was also reality. These are the conversations the family is having behind Joe’s back, the president a stubborn old fool who really still believes he is the smartest man in the room.

I opened my column last week, WIR 6/22/24, thusly, in relation to the debate:

“It’s make or break time for Joe Biden. If he performs poorly, as in performs below an already low bar set for him, the rumblings in the Democratic Party to replace him at the convention in August will grow exponentially.”

And we then all saw what happened Thursday night. It’s panic time.

Oh yeah, as we’ve been told by the president’s inner circle, he’s real sharp behind closed doors! Well, the Biden team and its sycophants are a disgrace for their dishonesty.

So after a week at Debate Camp, Biden showed up as a bumbling, mumbling, meandering, incoherent 81-year-old whose condition will only worsen over the coming months, let alone 2025. Four more years? I’ve long said that to think this was possible was nuts.

I heard a commentator, a Biden supporter, say this week: “Never go to sleep on Joe Biden. He’s often underestimated.” If you didn’t know already, we learned otherwise last night.

Donald Trump handed the president one opening after another, and Biden couldn’t once offer a retort.

It is not easy for Democrats to replace Biden unless he chooses to step aside. Every state has already held its presidential primary and Democratic rules mandate that the delegates Biden won remain bound to support him at the convention, unless he tells them he’s leaving the race.

The Democratic National Committee can convene prior to the convention, which opens Aug. 19, and change how things will work, but that isn’t likely as long as Biden stays in.

The DNC had announced it was going to hold a virtual roll call to formally nominate Biden before in-person proceedings begin in Chicago. The exact date hasn’t been announced.

If Biden opts to abandon his campaign, Vice President Kamala Harris would likely join other top Democratic candidates looking to replace him.

If Joe Biden doesn’t drop out, look no further than First Lady Jill Biden, whose own legacy is very much on the line these next few weeks. If she doesn’t do what’s right, she’ll be scorned and ostracized all her remaining days.

Editorial / Wall Street Journal

“Well, that was painful – for the United States. President Biden’s halting, stumbling debate performance Thursday night showed all too clearly that he isn’t up to serving four more years in office. For the good of the country, more even than their party, Democrats have some hard thinking to do about whether they need to replace him at the top of their ticket.

“This isn’t a partisan thought; it’s a patriotic one. Democrats across the country were privately saying the same thing last night, and some of them on TV not so privately. Mr. Biden lost the debate in the first 10 minutes as he failed to speak clearly, did so in a weak voice, and sometimes couldn’t complete a coherent sentence. His blank stare when Donald Trump was speaking suggested a man who is struggling to recall what he has been prepped for weeks to say, but who no longer has the memory to do it.

“This isn’t to say he didn’t score points against Mr. Trump now and again. He can still recall a line or a policy once in a while. But without a script provided by his aides, and without his usual teleprompter, the President looked and sounded lost. Voters already sensed this, which is why two-thirds have been saying for more than a year that they’d rather he not run again....

“(For his part) Trump ducked question after question – and his exaggerations and falsehoods kept coming. The former President was coached to keep his cool and stick to hitting the Biden record, and for the most part he did. But as the debate progressed, he couldn’t resist returning to his self-pitying line about the ‘stolen’ 2020 election.

“Mr. Trump began one answer shrewdly by saying his ‘retribution’ would be the ‘success’ of a second term. But then he couldn’t resist saying Mr. Biden deserved to be charged as a criminal, and he didn’t rule out charging him. This sense of personal grievance and fear of four more years of ugly mayhem is the reason Mr. Trump isn’t winning by more than he is. If Nikki Haley were the GOP nominee, the race would be over.

“But the bitter truth for Democrats after Thursday is that Mr. Trump’s liabilities may not matter if Mr. Biden is the party nominee. Mr. Trump at least looked vigorous and reminded voters of the pre-Covid economy. Mr. Biden looked like a feeble man no American should want going head to head with Mr. Putin or China’s Xi Jinping.

“One inevitable question is why those closest to Mr. Biden let him run again. We and many others warned them. It was clearly a selfish act for him to seek a second term. But did they really think they could hide his decline from the public for an entire election campaign? It’s hard to believe they wanted this early debate as a way to change the campaign in their favor.

“The debate has exposed him and their long cover-up of the truth. If they believe that Mr. Trump is the threat to democracy they claim, they did a disservice to the country by nominating Mr. Biden again. They owe an apology to Dean Phillips, the sole Democrat willing to challenge the President....

“You know Mr. Trump is counting on Democrats to stick with Mr. Biden, but the country deserves a better choice.”

Thomas L. Friedman / New York Times

“I watched the Biden-Trump debate alone in a Lisbon hotel room, and it made me weep. I cannot remember a more heartbreaking moment in American presidential campaign politics in my lifetime, precisely because of what it revealed: Joe Biden, a good man and a good president, has no business running for re-election. And Donald Trump, a malicious man and a petty president, has learned nothing and forgotten nothing. He is the same fire hose of lies he always was, obsessed with his grievances – nowhere close to what it will take for America to lead in the 21st century.

“The Biden family and political team must gather quickly and have the hardest of conversations with the president, a conversation of love and clarity and resolve. To give America the greatest shot possible of deterring the Trump threat in November, the president has to come forward and declare that he will not be running for re-election and is releasing all of his delegates for the Democratic National Convention....

“If Vice President Kamala Harris wants to compete, she should. But voters deserve an open process in search of a Democratic presidential nominee who can unite not only the party but also the country, by offering something neither man on that Atlanta stage did on Thursday night: a compelling description of where the world is right now and a compelling vision for what America can and must do to keep leading it – morally, economically and diplomatically....

“I had been ready to give Biden the benefit of the doubt up to now, because during the times I engaged with him one on one, I found himself up to the job. He clearly is not any longer. His family and his staff had to have known that. They have been holed up at Camp David preparing for this momentous debate for days now. If that is the best performance they could summon from hm, it’s time for him to keep the dignity he deserves and leave the stage at the end of this term.

“If he does, everyday Americans will hail Joe Biden for doing what Donald Trump would never do: put the country before himself.

“If he insists on running and he loses to Trump, Biden and his family – and his staff and party members who enabled him – will not be able to show their faces.

“They deserve better. America needs better. The world needs better.”

George Will / Washington Post

“Perhaps the nation is by now in a torpor, resigned to the spectacle of, as the phrase goes, two bald men fighting over a comb. Perhaps, however, Thursday night – the campaign’s nadir (so far) – was for the best. The Democratic Party might yet give a thought to the national interest. Persisting with Biden’s candidacy, which is as sad as it is scary, rather than nominating a plausible four-year president, would rank as the most reckless – and cruel – act ever by a U.S. party.”

Peggy Noonan / Wall Street Journal

“In the weeks before CNN’s presidential debate I was skeptical of its significance. I didn’t see a dramatic, high-stakes, pivotal showdown coming, only a moderately sized, pro forma moment in a long, drawn-out campaign....

“It was in fact as consequential as any presidential debate in history, and the worst night for an incumbent in history. It was a total and unmitigated disaster for Mr. Biden. It was a rout for Mr. Trump. It wasn’t the kind of rout that says: If the election were held tomorrow Donald Trump would win. It was the kind of rout that says: If the election were held tomorrow Donald Trump would win in a landslide.

“It is impossible to believe that the Democrats will continue with Mr. Biden as their presidential standard-bearer. They are going to have to do what they fear to do: make themselves uncomfortable, reveal their internal splits and brokenness, and admit what the rest of the country can see and has long seen, that Mr. Biden can’t do the job. They have to stop being the victim of his vanity and poor judgment, and of his family’s need, and get themselves a new nominee....

“In pushing and agreeing to an early debate, Mr. Biden’s White House and campaign advisers took a big swing. They missed. Mr. Biden couldn’t execute their plan. The Democratic Party doesn’t know it, but it got a gift. The dam broke. There is still time, and Mr. Trump is still takeable.

“This can’t continue. I am sorry to say this harsh thing, but allowing him to go forward at this point looks like elder abuse.

“At the very least you can be sure that Donald Trump will never bother to debate Joe Biden again. He doesn’t have to. He’ll be only too happy to leave it exactly where it is.”

Meanwhile, our allies watched last night with alarm and dismay. Our enemies snickered knowingly.

Former president Barack Obama tweeted this afternoon:

“Bad debate nights happen. Trust me, I know. But this election is still a choice between someone who has fought for ordinary folks his entire life and someone who only cares about himself. Between someone who tells the truth; who knows right from wrong and will give it to the American people straight – and someone who lies through his teeth for his own benefit. Last night didn’t change that, and it’s why so much is at stake in November.”

Indeed, it is, Mr. President. You will be among those heading to Rehoboth in the coming weeks, and not for a campaign strategy session. Unless you want your own legacy to be tarnished.

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As an aside, today, Friday, the Supreme Court handed Donald Trump a victory, siding with a member of the mob that stormed the Capitol on Jan. 6, 2021, saying that prosecutors had overstepped in using an obstruction law to charge him.

Chief Justice John Roberts, writing for the majority, read the law narrowly, saying it applied only when the defendant’s actions impaired the integrity of physical evidence. Lower courts will now have to apply that strict standard, and it will presumably lead them to dismiss charges against many defendants. In this instance, the most prominent defendant charged being Donald Trump.

Most Jan. 6 defendants have not been charged under the existing law, which prosecutors reserved for the most serious cases, and those who have been charged under it face other counts, as well.

The main practical impact of the court’s decision is that the Justice Department will face the task of having to resentence more than 100 people who have already been punished under the now-invalid interpretation of the obstruction law.

The bottom line is that the Supreme Court’s 6-3 decision* rejected the idea that a statute initially intended to criminalize things like destroying documents or tampering with evidence in corporate malfeasance cases could be stretched by the Justice Department to include the disruptions of the democratic process that took place when rioters stormed the Capitol.

Ergo, further delays in the case, which is definitely not going to be brought before Election Day.

*The issue in question was an Enron-era obstruction of justice statute enacted in 2002 that makes it a crime to impede certain government proceedings. This wasn’t a standard 6-3 decision, in that Justice Ketanji Brown Jackson joined the majority, while Justice Amy Coney Barrett dissented, joining Justices Sotomayor and Kagan.

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The Week in Ukraine....

--Ukraine claimed to have destroyed a Russian warehouse used to launch Iranian-made drones and to train cadets. Moscow has yet to comment, but satellite photos show a massive explosion near a Russian airfield in the southern region of Krasnodar. Ukraine claimed there were casualties. The base sat on the Sea of Azov opposite the occupied Ukrainian city of Mariupol.

Last Friday Russia said it had shot down 114 drones during a Ukrainian attack on oil refineries and military targets in the south of the country.

--Russia launched a new barrage of missiles and drones in an attack on Ukraine on Saturday, damaging energy facilities in the southeast and west, injuring at least two energy workers, and forcing record-high electricity imports, officials said.

National grid operator Ukrenergo said equipment at its facilities in the Zaporizhzhia region in the southeast and the Lviv region in the west were damaged in the second large attack in a week.

“After eight massive attacks by the enemy on the power system since March, the situation in the energy sector remains difficult,” the energy ministry said in a statement.

There were scheduled electricity cut-offs across the country. Ukraine’s air defense shot down 12 of 16 missiles and shot down all 13 drones launched by Russia.

Moscow has said its air strikes against the Ukrainian energy infrastructure were in retaliation for Ukrainian drone attacks on Russian territory.

--A Russian attack on the southern city of Odesa on Monday struck civilian infrastructure and caused casualties, the region’s governor said on Telegram.

--Ukraine has downed 1,953 Iranian-Shahed drones out of 2,277 launched by Russia this year alone, Ukraine’s air force commander said on Tuesday. “Air defense destroyed about 86% (of the drones),” he said on Telegram.

--The U.S. is limiting targets Ukraine can hit in Russia to less than 100 kilometers, or about 62 miles from the border, according to a story in the Washington Post, citing Ukrainian officials. The U.S. declined to specify the limitation.

If true, this simply isn’t far enough to deal with air bases from which Russian planes fire the glide bombs I’ve been writing about.

The Institute for the Study of War, a Washington-based think tank, reported this month that the U.S. policy limiting Ukraine’s usage of American weapons in Russia had effectively created “a vast sanctuary...which Russia exploits to shield its combat forces, command and control, logistics, and area support services that the Russian military uses to conduct its military operations in Ukraine.”

Ukraine admits that the permission to use U.S. weapons to strike inside Russia “has definitely changed things. The enemy has certainly felt it, especially directly on the front line,” a defense official told the Post.

But he added, “Neither the range nor the category [of weapons] is sufficient.”

The ISW said U.S. policy, while a step in the right direction, “is by itself inadequate and unable to disrupt Russian operations at scale.”

--Russian authorities said six people died and over 100 were wounded in Ukrainian drone and missile attacks on Sunday, while the second day of Russia’s aerial bombing of Kharkiv in northeastern Ukraine killed at least one.

Five of the Russian dead were killed by falling debris from Ukrainian missiles that were shot down over a coastal area in Sevastopol, the major port city in Crimea.

Russian state news agency RIA Novosti, citing the Health Ministry, said 124 people were wounded there.

Russia then said the U.S. was responsible for the attack with five U.S.-supplied ATACMS used, four of which Russia claimed to have shot down with the fifth detonating in mid-air.

“Responsibility for the deliberate missile attack on the civilians of Sevastopol is borne above all by Washington, which supplied these weapons to Ukraine, and by the Kyiv regime, from whose territory this strike was carried out,” Moscow said.

--One person was killed, four injured and scores of buildings damaged in multiple air attacks by Ukraine on the Belgorod region, the southern Russian governor said on Tuesday.

The Russian defense ministry said that its air defense systems destroyed a total of 29 Ukraine-launched drones over the region’s territory.

--A Russian missiles strike today hit a nine-story residential building in the central Ukrainian city of Dnipro, killing at least one, though the death toll was expected to rise as more people were trapped in the rubble.

--President Zelensky sacked Lieutenant General Yuriy Sodol, the commander leading the war against Russia in eastern Ukraine. Zelensky did not give a reason for the shake-up, but hours earlier a senior officer insinuated that through his incompetence, General Sodol was responsible for “killing more Ukrainian soldiers than any Russian general.”

Separately, Zelensky ordered a purge of the state guard service to clear its ranks of people discrediting it after two of its officers were accused of plotting to assassinate senior officials. The state security service (SBU) said last month that it had caught two guard service colonels accused of cooperating with Russia to plot the assassination of Zelensky and other officials.

The guard service provides security for various government officials.

--Russia’s offensive against the Kharkiv Oblast appears to be petering out, according to some reports. There had been fears that Ukraine’s front line might collapse. I wrote how some were worried that to reinforce it Ukraine might have to move troops from other parts of the line, which would open up offensive opportunities for Russia elsewhere.

Hasn’t happened. Russia has made small territorial gains in Donetsk, but overall, with improving supplies of weapons from Ukraine’s allies, the line appears to have stabilized. It’s the lack of air defenses, however, and Russia’s ability to fire glide bombs from aircraft beyond the border, that are destroying the infrastructure and, already, next winter looks horrendous if you are a civilian just trying to maintain a semi-normal existence, let alone run businesses, keep schools open....

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--The death toll from Sunday’s attacks in the southern Russian region of Dagestan rose to at least 20 people, Russia’s investigative committee said on Monday. In addition, six attackers were also killed during the attacks.

The region began three days of mourning on Monday after gunmen killed multiple police officers, a reported 15, an Orthodox priest and several others in attacks on synagogues and churches on Sunday across two cities in the North Caucasus region.

“This is a day of tragedy for Dagestan and the whole country,” Sergei Melikov, governor of the Dagestan region, said in a video published early on Monday on Telegram. Melikov said it was a “terrorist attack.” There was no immediate claim of responsibility.

The priest had his throat slit. There were no worshipers in the Synagogue that was hit.

Dagestan has long been a highly volatile region, filled with separatists and terrorists and in normal times, the security level there is high. But now you have Vladimir Putin’s war in Ukraine and many of the security forces were redirected to the front. The level of security is nowhere near as high as it was over two years ago.

It was in October, after the war in Gaza broke out, that rioters waving Palestinian flags broke down glass doors and rampaged through Makhachkala airport to look for Jewish passengers on a flight arriving from Tel Aviv. There is an ancient Jewish community about 75 miles south of Makhachkala in the town of Derbent.

Just three months ago we had the deadly attack at the Crocus concert hall in Moscow, an attack claimed by Islamic State that killed 145.

--Russian dissident Vladimir Kara-Murza / Washington Post:

“Solitary confinement in a maximum-security prison in Siberia is not particularly eventful. Among the few distractions (and welcome opportunities to leave my cell) I get here are my regular court appearances by video link from the prison office. One may reasonably ask what court appearances there can be for someone who has already been sentenced to 25 years in prison. But it appears the Russian state is not done with me yet.

“Every month, I get a visit from a couple of polite officials from Roskomnadzor, the Russian government’s censorship agency, who present me with administrative court summons for violating Russia’s ‘foreign agent’ law. All messages that I pass by correspondence from prison and that are posted by my colleagues on my social media are supposed to carry an all-caps disclaimer that they have been ‘produced by a foreign agent,’ they tell me. And I respond, invariably and just as politely, that I am a Russian politician and not a ‘foreign agent’ – and that I have no intention of engaging in self-slander. I tell exactly the same thing to the (aptly named) Soviet district court that obligingly issues my administrative convictions. On June 11, it handed me the third one, opening the way for the authorities to initiate a new criminal case against me ‘for noncompliance with the foreign agent law.’....

“After the full-scale invasion of Ukraine in 2022, Putin signed a new law that dispenses with the funding formality altogether: The Justice Ministry could now place the ‘foreign agent’ label on anyone it deemed to be ‘under foreign influence’ – meaning, in practice, on any public figure who spoke out against the Kremlin. I was designated a ‘foreign agent’ in April 2022 (simultaneously with my arrest) for opposing the war in Ukraine and for calling Putin a war criminal... The Russian government’s ‘foreign agent registry’ now includes more than 800 organizations and individuals” – including novelists, rock musicians, poets and Nobel Peace laureate Dmitry Muratov.

“Frankly, it reads more like an honor roll than any kind of blacklist. But the blacklisting is very real: Individuals designated as ‘foreign agents’ are prohibited from engaging in a wide variety of activities, including teaching, organizing public events, conducting anti-corruption audits, monitoring elections, advertising on social media and so on...

“But perhaps the most insulting requirement of the ‘foreign agent’ law is that people have to label themselves with public disclaimers – something even the Soviet KGB hadn’t come up with. Those who refuse are faced with administrative and then criminal prosecution – hence my regular rendezvous with the Soviet district court. My criminal trial here in Omsk will likely start in the fall – and the outcome, of course, is well known. It seems that my current 25-year sentence will not be the limit. But, on the upside, I will get more welcome opportunities to leave my prison cell.”

--Imprisoned Wall Street Journal reporter Evan Gershkovich appeared in a Russian court Wednesday at the start of an espionage trial, facing certain conviction, which could pave the way for an eventual swap.

The trial is being conducted behind closed doors.

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Israel and Hamas....

--The International Committee of the Red Cross (ICRC) says its offices in Gaza were damaged by shelling, which killed 22 people who had sought shelter around its compound last weekend.

An Israel Defense Forces spokesman told the BBC that initial inquiries suggested there was “no indication” that it had carried out a strike in the area but added that the incident was “under review.”

The ICRC said the “grave security incident” was one of several in recent days.

--Over the weekend, Israeli tanks pushed further into the southern city of Rafah. Palestinians claimed a vocational college run by the UN Palestinian refugee agency UNRWA was hit, scores killed. The IDF said the site, which it said served in the past as a UNRWA headquarters, has been used by Hamas and Islamic Jihad. It added that precautionary measures were taken before the strike to reduce the risk of harming civilians.

There were further strikes in Rafah Monday, reportedly killing another 11.

It doesn’t get reported enough, but Hamas and Islamic Jihad are offering stiff resistance. Israel is facing a real threat. It has to be eliminated.

Israeli Prime Minister Benjamin Netanyahu on Sunday said Israel is close to shifting to a less-intense phase of fighting in Gaza, and that he opposes the idea of re-establishing Israeli civilian settlements in Gaza, a key ambition of his far-right coalition partners.

He also said he hopes the U.S. will expedite arms shipments to Israel, following a public spat with Washington.

“The intensive phase of the war is about to end,” Netanyahu said in an interview televised Sunday evening on Israel’s Channel 14, a rare live prime-time appearance for an Israeli audience (first since the start of the war). He said that fighting would continue in Gaza until Hamas is fully uprooted, and that he opposes a U.S.-backed proposal in which Israel would agree to a permanent cease-fire in Gaza in exchange for the release of all 116 hostages that Hamas is holding there.

Almost immediately after the interview, the prime minister’s office seemed to walk back his remarks with a statement that it is Hamas, not Netanyahu, who is opposed to the current cease-fire proposal.

Netanyahu said once the intensive fighting in Gaza is over, troops serving in the enclave would be sent to Israel’s northern border, to prepare for the possibility of war breaking out between Israel and Hezbollah. He added that there is the possibility of a diplomatic deal to move Hezbollah from Israel’s border, which could prevent a full-blown war.

--Editorial / Wall Street Journal

“While Americans see the war in the Middle East winding down, Israelis worry it is only beginning. Hezbollah has been escalating its strikes on Israel, and the Iranian proxy militia could provoke a larger war unless the U.S. gives it a good reason not to. Washington is too fixated on restraining Israel to notice.

“The latest misfire is Sunday’s comments by Gen. C.Q. Brown, chairman of the Joint Chiefs of Staff, to reporters on his way to Botswana. According to the Associated Press, America’s top military officer ‘said the U.S. won’t likely be able to help Israel defend itself against a broader Hezbollah war as well as it helped Israel fight off an Iranian barrage of missiles and drones in April.’....

“The White House goal is to discourage a larger war, but a policy of weakening Israel has the opposite effect. It emboldens Hezbollah to keep shooting and extend its range. This increases the domestic pressure in Israel to do something about it. Unprovoked, Hezbollah has already fired nearly 5,000 rockets, missiles and mortars at northern Israel since Oct. 7, depopulating the region. Not that Iran cares, but a major war between Hezbollah and Israel could wreck Lebanon. Central Israel could take damage like it never has before.

“The stakes are high, which makes the U.S. policy of publicly trying to deter Israel even harder to figure. Israel is likely to be compelled to fight Hezbollah if 70,000 Israelis can return to their homes safely in northern Israel.

“This means quieting Hezbollah’s rocket fire and convincing it to remove its fighters from the buffer zone in Southern Lebanon. But Hezbollah has no reason to do that if it thinks it can keep firing away and President Biden will protect it from the consequences.”

Israeli Defense Minister Yoav Gallant warned Israel’s military is capable of taking Lebanon “back to the stone age” in any war with Hezbollah but insisted his government prefers a diplomatic solution on the Israel-Lebanon border.

Speaking to reporters as his trip to Washington wrapped up, Gallant also said he discussed with senior U.S. officials his “day after” proposals for governance of postwar Gaza that would include local Palestinians, religious partners and the United States, but that it would be “a long and complex process.”

The administration told Gallant Washington would maintain a pause on a shipment of heavy bombs for Israel while the issue is under review.

--Israeli forces pounded several areas across Gaza on Wednesday, and residents reported fierce fighting overnight in Rafah. The armed wings of Hamas and Islamic Jihad said fighters attacked Israeli forces with anti-tank rockets and mortar bombs.

Israel says it is close to destroying the last remaining Hamas battalions in Rafah, after which it will move to smaller scale operations in the enclave.

--Israel’s Supreme Court ruled on Tuesday that ultra-Orthodox yeshiva students must immediately conscript into the Israeli military and are no longer eligible for a slew of benefits, which threatens Prime Minister Netanyahu’s coalition if ultra-Orthodox lawmakers pull out of it.

The decision follows a similar Supreme Court ruling in March, when it ordered a halt of state subsidies for ultra-Orthodox studying in yeshiva instead of doing military service. No legislation was drafted in its place.

This follows years of controversy, in which the once small ultra-Orthodox community (known as the Haredim) has mushroomed into a community that makes up more than 12% of the population. The ultra-Orthodox parties backed Netanyahu and agreed to be in the coalition in exchange for his continuation of their exemption from military service.

The ultra-Orthodox receive big government subsidies for their schools and religious and social organizations, which is nuts. No work, no tax revenue, let alone essentially no military service.

“In the midst of a grueling war, the burden of inequality is harsher than ever and demands a solution,” Justice Uzi Vogelman, one of the nine judges who signed on to the ruling.

Haredi leaders expressed defiance, saying their religious studies are the spiritual backbone of the nation.

With Israeli soldiers being killed in large numbers, resentment against these groups is mounting. If I were an Israeli, I’d be furious.

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Wall Street and the Economy

Ahead of the key release today of the personal consumption expenditures index (PCE), the Fed’s preferred inflation barometer, San Franciso Fed President Mary Daly, a voting member this year, said she sees more work for higher interest rates to do to slow demand and inflation in the economy. She said the Fed is ready to respond to both a softening labor market that needs a boost and to inflation remaining stuck above its target – but it’s unclear which scenario is more likely.

Addressing a forum in California on Monday, Daly said: “The bumpiness of inflation data so far this year has not inspired confidence. Recent readings are more encouraging, but it is hard to know if we are truly on track to sustainable price stability.”

She does see higher interest rates beginning to weigh on demand and slowing inflation.

“Of course, as demand has slowed, so has the labor market,” Daly said. “So far, however, the rise in unemployment has been modest compared with the decline in inflation.”

Permanent voting member Fed Governor Lisa Cook said it will be appropriate to reduce interest rates “at some point,” adding that she expects inflation to improve gradually this year before more rapid progress in 2025.

“With significant progress on inflation and the labor market cooling gradually, at some point it will be appropriate to reduce the level of policy restrictions to maintain a healthy balance in the economy,” Cook said in prepared remarks to the Economic Club of New York.

“The timing of any such adjustment will depend on how economic data evolve and what they imply for the economic outlook and balance of risks,” she said.

Another permanent voting member, Fed Gov. Michelle Bowman, said she sees a number of upside risks to the inflation outlook, and reiterated the need to keep borrowing costs elevated for some time.

“We are still not yet at the point where it is appropriate to lower the policy rate,” Bowman said in remarks in London. “Given the risks and uncertainties regarding my economic outlook, I will remain cautious in my approach to considering future changes in the stance of policy.”

In a moderated discussion following her speech, Bowman said she doesn’t project any interest-rate cuts this year, repeating comments she made on May 10.

We then had Friday’s PCE data for May and it was exactly in line, unchanged, and up 0.1% ex-food and energy; 2.6% for each year-over-year, and vs. a prior 2.7% headline, 2.8% core. So, more good news for Chair Jerome Powell’s band of merry pranksters. Will it be enough to warrant a cut in September? Possibly. But at the same time, it’s easy for the Fed to continue to hold off until possibly December.

Separately, personal income in May was up 0.5%, consumption 0.2%, more or less in line.

As for the other economic data this week...the Case-Shiller national home price index rose 1.2% in April following a 1.3% increase in March. Home prices were up 6.3% year-over-year.

The 20-city index was up 1.4% for the month, and 7.2% year-over-year.

May new home sales plunged to a 619,000 annual rate from an upwardly revised 698,000 in April, below the 650,000 forecast.

Freddie Mac’s 30-year fixed-rate mortgage is 6.86%, lowest since early April.

May durable goods came in at 0.1%, -0.1% ex-transportation.

The June Chicago PMI reading was a much-better-than-expected 47.4 vs. 35.4 prior, and forecasts for 40.0 (50 the dividing line between growth and contraction).

We had a final look at first-quarter GDP, 1.4%, as expected. The Atlanta Fed’s GDPNow barometer for second-quarter growth is down to 2.2%.

Europe and Asia

Nothing on the eurozone front re: economic data. All about some upcoming big elections.

France: The first round of voting is Sunday. The far right is leading the final polls, with Marine Le Pen’s National Rally (RN) estimated to win more than 35 percent in the first round, with a left-wing alliance following at 29 percent and President Macron’s centrists trailing at around 20 percent.

Around two thirds of eligible voters’ plan to cast their ballots, which would be the highest level since 1997.

Polling firm Harris Interactive Toluna was predicting 250 to 305 seats out of 577 for the RN – putting an absolute majority in its grasp – with Ifop-Fiducial suggesting the party would top out at 260.

Just a massive, totally unnecessary gamble by Macron to call this election. He seems to think that National Rally will discredit itself when a big factor in government and that will hurt it in the 2027 presidential election.

Britain: With the July 4 snap election coming up fast, Prime Minister Rishi Sunak’s Conservatives remain a good 20 points behind Keir Starmer’s Labour Party.

But the third candidate, Reform UK leader Nigel Farage, was criticized by both Sunak and Starmer for suggesting the West “provoked” Russia’s invasion of Ukraine by expanding the European Union and NATO military alliance eastwards.

Farage told the BBC that “of course” the war was Vladimir Putin’s fault.

But he added that the expansion of the EU and NATO gave him a “reason” to tell the Russian people “They’re coming for us again.”

Former Conservative Defense Secretary Ben Wallace, who is not standing in the election, told BBC Radio 4 that Farage was like a “pub bore we’ve all met at the end of the bar.”

Conservative Home Secretary James Cleverly said Farage was echoing Putin’s “vile justification” for the war and Labour branded him “unfit” for any political office.

Prime Minister Sunak, who saw any shot he had at a miraculous comeback go out the window when Farage entered the race, accused Farage of “appeasem*nt” that was “dangerous for Britain’s security.” Starmer called the comments “disgraceful.”

In the BBC interview, Farage was challenged over his judgment and past statements, including when he named Putin as the world leader he most admired in 2014.

“I said I disliked him as a person but admired him as a political operator because he’s managed to take control of running Russia,” Farage said.

Farage, as a leader of UKIP, was a key figure in the campaign to leave the EU. Asked if he stood by his previous claim that Brexit had failed, Farage said: “No, it’s not a failure but we failed to deliver. It can’t be a failure. We’ve left the European Union. We’re now self-governing.”

Brexit was a disaster.

--EU leaders have nominated current European Commission head Ursula von der Leyen for a second five-year term in the bloc’s top job at a summit in Brussels.

Estonian Prime Minister Kaja Kallas was picked as the EU’s next foreign affairs chief.

Turning to Asia...nothing big on the economic front in terms of data in China.

Japan reported May retail sales were up 3% year-over-year, while industrial production in the month rose 0.3% Y/Y.

The big story these days is the currency, the yen, which fell to its weakest level since 1986, testing 161 per the dollar on Wednesday. Japanese authorities were “seriously concerned and on high alert” about the yen’s rapid decline, said the country’s top currency diplomat Masato Kanda, escalating warnings.

The weak yen has become a headache for Japanese policymakers by boosting the cost of imported raw materials, pushing up inflation and hurting consumption. [It’s great for tourism, however.]

Street Bytes

--We came close to some new closing highs in the S&P 500 and Nasdaq this week, but not quite. The S&P finished down -0.1% to 5460, while Nasdaq rose 0.2% to 17732. The Dow Jones lost -0.1% to 39118.

Next week it’s about the jobs report and the following 3-4 weeks the second quarter earnings parade.

--U.S. Treasury Yields

6-mo. 5.32% 2-yr. 4.72% 10-yr. 4.35% 30-yr. 4.51%

The long end of the curve spiked higher this afternoon, and, frankly, I didn’t see why. [I saw explanations that made little sense.] Everything was largely unchanged after the release of the PCE this morning.

The yield on the 10-year rose 10 basis points for the week, while the 2-year was basically unchanged.

--Big U.S. banks passed their latest annual stress test, with the Federal Reserve finding they would be able to continue lending to households and businesses in a severe recession, even while suffering steeper losses than last year’s tests.

This year’s exercise measured the 31 biggest banks’ ability to maintain strong capital levels in a hypothetical recession marked by double-digit unemployment and a severe stock-market decline.

The banks would collectively lose nearly $685 billion in the Fed’s imaginary worst-case recession, the Fed said. That would be more than last year, but all the banks would still remain above their minimum capital requirements.

The banks were expected to lose more in this year’s test because they faced higher projected credit-card losses, riskier corporate loans and lower projected income, the Fed said.

Passing the test paves the way for higher shareholder payouts as the industry awaits a watered-down version of a separate proposal for stricter capital requirements.

--Nvidia shares entered correction territory on Monday, as the stock fell another 7 percent in a 3-day selloff, 13 percent, that erased about $430 billion from Nvidia’s market cap, the biggest three-day value loss for any company in history, according to data compiled by Bloomberg.

Tuesday, it rebounded 6%. For the week NVDA was off about 2%.

--Micron Technology late Wednesday swung to a bigger-than-expected profit for the fiscal third quarter as pricing gains pushed the memory and storage product maker’s revenue above Wall Street’s estimates.

Micron reported adjusted earnings of $0.62 per share during the three months ended May 30, compared with a $1.43 loss a year earlier. Consensus was at $0.53. Revenue rose to $6.81 billion from $3.75 billion, topping the Street’s $6.67 billion view.

“Micron drove robust price increases as industry supply-demand conditions continued to improve,” CEO Sanjay Mehrotra said in prepared remarks posted on the company’s website. “This improved pricing, combined with our strengthening product mix, resulted in increased profitability across all our end markets.”

For the ongoing quarter, Micron forecast adjusted EPS of $1.08, plus or minus $0.08, on revenue of $7.4 billion to $7.8 billion. Consensus is for normalized EPS of $1.04 and sales of $7.58 billion.

“We are excited about the expanding (artificial intelligence)-driven opportunities ahead and are well positioned to deliver a substantial revenue record in fiscal 2025,” Mehrotra said in a statement.

But the shares fell 5% as the current-quarter revenue forecast failed to impress investors looking for outsized results powered by the AI demand surge. That said, the stock is still double what it was a year ago. This is the issue faced by so many in the sector. You better ‘beat’ by a lot and guide much higher, or after your shares have run up, the market will take them back down.

--Ship backups that plagued seaports during the Covid pandemic are making a comeback, as vessel diversions because of the Houthi attacks in the Red Sea trigger gridlock and soaring costs at the start of the peak shipping season.

Flotillas of containerships and bulk carriers are growing off the coasts of Singapore, Malaysia, South Korea and China while ports in Spain and other parts of Europe look to dig out from container piles.

The snags are complicating logistics for retail and manufactured goods, but importers and exporters say they are most concerned that the backups could expand as demand picks up in coming months. They could drive already-resurgent freight rates close to levels seen during the pandemic.

The average worldwide cost of shipping a 40-foot container hit $4,119 the week ending June 14, according to Freightos, more than triple the cost in June last year and the highest rate since September 2022.

“We have not seen (the) $20,000 rates for a container as it was in the pandemic, but we are looking at $7,000 per box from Asia to the U.S. East Coast versus the normal rate of about $3,500,” said Michael Murray, who runs DeSales Trading, a wholesaler in Burlington, N.C.

As I noted a few weeks ago, U.S. importers are pulling orders forward ahead of new tariffs on Chinese goods. It hasn’t helped the Panama Canal has been limiting ship movements because of a drought, though that situation is showing signs of improvement. [I had a friend who recently went through the Canal on a cruise ship, and he said there definitely has been improvement, i.e., rain.]

--FedEx on Tuesday forecast fiscal 2025 profit above analysts’ estimates, and shares in the delivery giant soared as executives said slashing expenses and consolidating operations would bolster returns even as demand remained weak for package deliveries.

The shares rose 14% as the Memphis-based company targeted fiscal 2025 earnings of $20 to $22 per share – the midpoint of which is above the current estimate of $20.92. The company is also weighing whether it will keep its freight trucking business that generated revenue of $2.3 billion in the latest quarter.

Adjusted earnings grew 7.2% to $1.34 billion, or $5.41 per share, for the fourth quarter ending May 31. Operating margins also improved.

But the revenue side of the business remains challenging. It hit $22.1 billion in the fourth quarter, up just 1% from a year earlier.

--The dispute at Aer Lingus worsened with the airline accusing the Irish Air Lines Pilots’ Association of “blackmail” and the union responding with claims of “greed” and refusing to rule out an all-out strike.

The angry exchanges fueled fears that the holiday plans of hundreds of thousands of people will be disrupted with the Irish Travel Agents’ Association accusing the pilots’ union of “cruel” timing over its eight-hour strike tomorrow, Saturday.

Dozens of flights to popular tourist destinations including key routes to Malaga and Faro (the Algarve) are among those cancelled, with more than 215 flights pulled from schedules between this past Wednesday and Sunday, including 120 on Saturday alone.

--Lufthansa will add an environmental charge of up to 72 euros ($77) to its fares, the airline group said on Tuesday, joining at least one European rival in doing so as the industry battles to cover the cost of new EU rules on reducing emissions. [The max of 72 euros will apply to first class, long-haul fares from 2025, Lufthansa said.]

Airlines have warned for years that regulations requiring them to use more expensive sustainable jet fuel could drive up costs.

Ticket prices had already surged post-Covid amid the travel boom raising fears that further increases could start deterring travelers from flying.

The cost of sustainable aviation fuel made from bio-based materials is one reason airlines will cite for the surcharge, as others will inevitably join in.

--Southwest Airlines on Wednesday lowered its second-quarter forecast for revenue per available seat miles (RASM), a proxy for pricing power, citing uneven travel demand, sending its shares down 9% in premarket trading but the stock recovered over the course of the day.

The company said changing travel patterns meant it was unable to sell the number of seats it wanted to, though it still expects record revenues, so it was a bit confusing, or deceiving in the end.

--Boeing offered to acquire Spirit AeroSystems Holdings Inc. in a deal funded mostly by stock that values the key supplier at about $35 per share. Talks have been ongoing for months, but Boeing switched its proposed funding from an all-cash offer.

The change in capitalization eased some of the squeeze on the cash-strapped planemaker. Final terms are still being hammered out.

Separately, federal prosecutors are recommending to senior Justice Department officials that Boeing face criminal charges for failing to meet the terms of a 2021 agreement that would have shielded it from prosecution in connection with fatal crashes in 2018 and 2019 that killed 346 people, according to the Washington Post, first reported by Reuters.

Criminal charges are only one of several options the department is considering and no final decision has been made, sources told the Post.

In the 2021 agreement, Boeing acknowledged that two of its technical pilots misled federal regulators about a software system blamed for the crashes and paid $2.5 billion in penalties, $500 million of which went to the families of those whose loved ones died in the crash. If the company had met the terms of the deal, it would not be criminally prosecuted.

Crash victims’ families were shocked and angered by prosecutors’ decision to allow Boeing to avoid criminal prosecution in 2021.

Lastly, the National Transportation Safety Board is sanctioning Boeing for disclosing unauthorized details of its ongoing investigation of the Jan. 5 Alaska Airlines mishap and referring the matter to the Department of Justice.

The board said Boeing “blatantly violated” rules by disclosing to the media non-public details of the probe of the mid-air blowout of a door plug on a 737 MAX.

--TSA checkpoint numbers vs. 2023

6/27...106 percent of 2023 levels
6/26...107
6/25...109
6/24...107
6/23...108...record 2,996,193
6/22...107
6/21...104
6/20...103

AAA is forecasting that 70.9 million Americans will travel 50 miles or more from home from June 29 through July 7, 9% higher than in 2019. Expect the worst traffic delays on July 3 and 7.

TSA said it expects to screen more than 32 million travelers through airport security checkpoints from Thursday, June 27, through Monday, July 8. It expects the heaviest travel day to be today, June 28.

--Electric vehicle maker Rivian Automotive is receiving a financial boost from Volkswagen, which agreed to invest up to $5 billion in a joint venture with the struggling EV manufacturer.

Under a partnership announced Tuesday, the German automaker will provide $1 billion initially and as much as $4 billion more over time.

The infusion will give VW the ability to tap the company’s technology to develop “next generation” battery-powered vehicles and software.

The surprise investment comes during a tough time for the electric vehicle market.

With their sleek design, Rivian trucks and sport utility vehicles initially drew plenty of interest among investors, fueling a successful initial public offering of stock in 2021; finishing its first day of trading valued at nearly $88 billion.

But analysts said some car buyers were put off by the high price of Rivian’s latest offering of vehicles – the company’s R1T electric pickup truck starts at nearly $70,000, while its R1S SUV starts at almost $75,000.

Rivian reported a net loss of $1.52 billion for the three-month period ending Dec. 31, compared with $1.72 billion during the same period a year earlier.

Rivian postponed plans to build a new $5-billion manufacturing plant in Georgia to save money amid the heavy losses.

--Walgreen Boots Alliance cut its profit forecast for fiscal 2024 on Thursday, citing challenging pharmacy industry trends and a worse-than-expected U.S. consumer environment. The company now expects an adjusted profit of $2.80 to $2.95 per share for the fiscal year ending August, compared with $3.20 to $3.35 previously forecast in March, a big miss and the shares fell a whopping 20% at the open.

CEO Tim Wentworth told analysts Thursday morning that “changes are imminent” for about 25% of the company’s stores, which he said were underperforming. The drugstore chain currently runs more than 8,600 in the United States.

Wentworth said the company’s plan could include the closing of a significant portion of the 2,100 targeted for review.

“We are at a point where the current pharmacy model is not sustainable and the challenges in our operating environment require us to approach the market differently,” he said.

Walgreens and its major competitors like CVS and Rite Aid, which is going through a bankruptcy reorganization, have already closed hundreds of stores over the past few years. The companies have dealt with challenges that include years of tight reimbursem*nt for their prescriptions and rising costs for running their locations.

And they face growing competition from Walmart and Amazon.

--Nike shares cratered 20% on Friday, worst day since 2001, after the company reported a surprise decline in fiscal fourth-quarter revenue even as its earnings outperformed estimates.

The athletic and footwear apparel maker’s revenue fell to $12.61 billion during the three months ended May 31 from $12.83 billion a year earlier. Analysts had expected sales to rise to $12.86 billion.

Adjusted earnings came in at $1.01 per share from a year ago at $0.66, topping the Street’s estimate of $0.84.

Footwear sales fell 4% year-over-year. Consolidated North American sales dropped 1%, while Europe, the Middle East and Africa reported a 2% decrease. Nike said China sales will take a hit from a softer consumer outlook.

Nike continues to lose market share to competitors On Holding, New Balance, and Hoka (whose sales are soaring).

It didn’t help the share price that Nike forecast full-year revenue for fiscal 2025 will be down mid-single digits. Fiscal first-quarter revenue will be down about 10% compared with a year ago, CFO Matthew Friend said on an investor call. Analysts had projected a 3% decline.

--Cheerios cereal maker General Mills forecast annual profit below estimates on Wednesday and posted a bigger-than-expected drop in quarterly sales hurt by lower demand for its snack bars and pet food, as well as higher input costs.

The company also expects annual dollar value growth in its businesses to be below its long-term projections, pushing its shares down by 4%.

The Minneapolis-based company has struggled with lower volumes and retailers cutting down on inventory, while facing ongoing competition from lower-priced private labels that have been eating into its market share.

Net sales at GIS’ North America retail segment, the company’s biggest revenue contributor, fell 7% in the quarter ended May 26 due to a 6% drop in volumes. Rivals Kellogg and Kraft Heinz have also reported pressured volumes, while Campbell Soup reported demand recovery and improvement in volumes. Heck, I’m saving a few bucks on cereal myself, buying store brand, but there is no compromising on Campbell’s Chunky Soup, sports fans!

General Mills’ quarterly net sales fell to $4.71 billion from $5.03 billion a year ago. Adjusted earnings of $1.01 per share edged out estimates of 99 cents.

--Finland will soon as possible begin to offer preemptive bird flu vaccination to some workers with exposure to animals, the Finnish Institute for Health and Welfare said in a statement on Tuesday. The H5N1 strain of bird flu has killed or caused the culling of hundreds of millions of poultry globally in recent years and has increasingly been spreading to mammals, including cows in the United States and, in some cases, humans. Finland has not detected the virus in humans yet.

--The Supreme Court, in a 5-4 decision, scuttled Purdue Pharma LP’s $6 billion opioid settlement, ruling that it improperly protected the OxyContin maker’s billionaire owners. The ruling is set to have ripple effects that stretch far beyond the company and the victims of the drug crisis. It stands to change the way troubled organizations have used Chapter 11 for decades to survive onslaughts of lawsuits.

“Bankruptcy lawyers don’t prosecute holy wars; they make deals,” Jared Ellias, a professor at Harvard Law School, said after the ruling Thursday. “The dealmaking capacity of American society really took a blow today.”

The original agreement with Purdue’s owners, members of the Sackler family, promised between $5.5 billion and $6 billion to compensate victims hurt by OxyContin and fund programs to fight opioid addiction. The deal was poised to end civil lawsuits against the Sacklers – a move that even the judge who approved the settlement in 2021 considered a “bitter result.”

--A federal jury in California dealt a sweeping blow to the media rights model of America’s richest sport on Thursday, siding with plaintiffs in a class-action antitrust lawsuit against the NFL over its out-of-market broadcasts and awarding $4.7 billion of damages to consumers of the league’s “Sunday Ticket” telecast package.

The league will appeal.

The number represents nearly two-thirds of what the NFL pulls in annually, and is a significant antitrust award in any market, with potentially major implications for sports and entertainment going forward.

The case essentially pitted the NFL against its own fans. The plaintiffs argued that the way teams pool together and collectively sell their media rights with the Sunday Ticket package is anticompetitive because it forces consumers to pay hundreds of dollars for a product that also includes games they didn’t want, and whose price might be inflated.

Personally, I’ve never considered the Sunday Ticket package because all the games for my team, the New York Jets, are shown locally. Now if I was a Patriots fan living in New Jersey, I’d have to get Sunday Ticket to be assured of seeing them.

This case is far from over.

--Carnival lifted its full-year earnings outlook on Tuesday and the shares rose in response, after the cruise operator unexpectedly swung to a fiscal second-quarter profit, buoyed by significantly higher prices on bookings taken during the period.

The company now expects to post adjusted earnings of $1.18 a share for fiscal 2024, up from a previous projection of $0.98. The consensus was at $1.01.

Carnival’s cumulative advanced booking position for 2025 is currently “even higher” than the ongoing year in occupancy and constant currency prices, driven by “record” booking volumes for sailings next year.

Revenue for the three months through May 31 jumped to $5.78 billion from $4.91 billion, topping the Street’s view at $5.69 billion.

Par-tay!!!

--The Economist published its Global Livability Index 2024, ranking 173 cities on factors such as stability, health care, culture, environment, education and infrastructure.

Vienna tops the index for the third consecutive year, followed by Copenhagen, Zurich, Melbourne and Calgary. [Damascus is No. 173.]

Foreign Affairs, Part II

China: President Xi Jinping hailed the Chang’e-6 lunar mission’s historic achievement after the first rock samples collected from the moon’s far side landed on Earth on Tuesday.

“Your outstanding contributions will be forever remembered by the motherland and the people,” he said in a written address to the team, shortly after the re-entry capsule touched down in the grasslands of the Inner Mongolia autonomous region.

The parachute deployed properly as the module reached the last 6 miles of its descent and landed smoothly at its predetermined destination, with recovery personnel arriving shortly after in helicopters and ground vehicles.

CNSA director Zhang Kejian said the Chang-e mission “has achieved complete success.”

It is indeed an amazing triumph for China. They did something the United States has not done, landing and returning a craft from the far side of the moon. China has reason to be proud.

What they don’t have reason to be proud of is their treatment of Taiwan. Last Friday, China threatened to impose the death penalty in extreme cases for “diehard” Taiwan independence separatists, a ratcheting up of pressure even though Chinese courts have no jurisdiction on the democratically governed island.

China has made no secret of where it stands on recently elected President Lai Ching-te (William Lai), saying he is a “separatist,” and staged war games shortly after his inauguration.

The new guidelines say China’s courts, prosecutors, public and state security bodies should “severely punish Taiwan independence diehards for splitting the country and inciting secession crimes in accordance with the law, and resolutely defend national sovereignty, unity and territorial integrity,” according to China’s state-run Xinhua news agency.

The 2005 anti-succession law gives China the legal basis for military action against Taiwan if it secedes or seems about to.

Sun Ping, an official from China’s ministry of public security, told reporters in Beijing the maximum penalty for the “crime of secession” was the death penalty.

“The sharp sword of legal action will always hang high,” she said.

Taiwan’s Mainland Affairs Council slammed Beijing’s move, urging its people not to be threatened by China.

“The Beijing authorities have absolutely no jurisdiction over Taiwan, and the Chinese communists’ so-called laws and norms have no binding force on our people. The government appeals to our country’s people to feel at ease and not to be threatened or intimidated by the Chinese communist party,” it said in a statement.

Lai has repeatedly offered to hold talks with China but has been rebuffed.

North Korea: As it sent more balloons across the border into South Korea filled with trash and manure, Pyongyang launched an unknown ballistic missile toward the sea, South Korea’s military said on Wednesday.

The South Koreans then said the missile appeared to have failed, with Japan’s Defense Ministry saying it traveled to an altitude of about 62 miles and a range of more than 125. It was a test of a hypersonic missile, Yonhap News Agency said citing military sources.

North Korea earlier criticized the deployment of a U.S. aircraft carrier to join joint drills with South Korea and Japan, and warned of “overwhelming, new demonstration of deterrence.”

Pyongyang then said it had successfully conducted an important test aimed at developing missiles carrying multiple warheads, state media KCNA said on Thursday. The test, carried out the day before, used a first-stage engine equipped with a solid-fuel based intermediate and long-range ballistic missile, it said.

KCNA said the missile succeeded in separating warheads which were accurately guided to three preset targets. “The purpose was to secure the capability to destroy individual targets using multiple warheads,” it said.

South Korea, the United States and Japan condemned the launch as a violation of UN Security Council resolutions and a serious threat and warned against additional provocations in the wake of last week’s summit between Vladimir Putin and Kim Jong Un.

South Korea’s military reiterated the test was a failure as the missile “exploded in an early stage of the flight,” and that North Korea “is merely (employing) a method of deception and exaggeration.”

Iran: Today is Election Day in Iran...six candidates for president – five hardliners and a low-key moderate approved by a hardline watchdog body. The six have been wooing youthful voters in speeches and campaign messages.

On Thursday, two of the hardline candidates then dropped out, calling for unity among forces supporting the country’s Islamic revolution, state media reported. The two, including Tehran’s mayor, were only expected to receive about 2% each, according to the Iran Students Polling Center.

But the truth is the president has little real power. It’s all about Supreme Leader Ayatollah Ali Khamenei. He’s the puppet master.

I wouldn’t expect turnout to be heavy among Iranian women, at least the youth set. There has been a crackdown on wearing headscarves, with police vans rushing around to collect those with loose headscarves and those daring not to wear them at all.

The renewed crackdown comes about two years since mass protests over the death of Mahsa Amini after she was detained for not wearing a scarf to the authorities’ liking. A UN panel found that the 22-year-old died as a result of “physical violence” wrought upon her by the state.

Following Amini’s death and the bloody protests and crackdown that followed, for a time the morality police seemed to disappear from the streets. But now they have reemerged.

The renewed push began before former President Ebrahim Raisi died in a helicopter crash, and whoever wins the vote to replace him will have an influence over just how intense the hijab crackdown gets – and how Iran responds to any further unrest.

Meanwhile, the Iran-backed Yemeni Houthi group said on Sunday its forces had attacked two ships in the Red Sea and the Indian Ocean. The first ship, Transworld Navigator, had been targeted in the Red Sea using “an uncrewed surface boat” which led to a direct hit against the ship, a Houthi military spokesman said. The second vessel, Stolt Sequoia, was attacked in the Indian Ocean with a number of cruise missiles.

The U.S. Central Command confirmed the attack on Transworld Navigator on Sunday, but said the vessel continued on its path. The Stolt Sequoia’s owner said the report from the Houthis was false. There was no issue.

Kenya: We had a disturbing development in Africa’s best democracy, police having to fire on demonstrators who stormed Kenya’s parliament on Tuesday and at least 23 protesters were shot dead, with sections of the building set ablaze as lawmakers inside passed a bill to raise taxes.

In chaotic scenes, protesters overwhelmed police and chased them away as they attempted to storm the parliament compound, with some protesters able to enter the Senate chamber. Police eventually drove the protesters from the building, tear gas employed, sounds of gunfire. The lawmakers were evacuated through underground tunnels.

Protests and clashes occurred in other cities and towns across the country, with calls for President William Ruto to resign. Parliament approved the finance bill. It next goes to Ruto for signing, but he can send it back to parliament if he has any objections. Ruto won an election almost two years ago on a platform of championing Kenya’s working poor, but has been caught between competing demands of lenders such as the International Monetary Fund, which is urging the government to cut deficits to obtain more funding, and a hard-pressed population.

Kenyans have been struggling to cope with several economic shocks caused by the lingering impact of the pandemic, the war in Ukraine, years of drought and a currency in freefall. Interest payments on the debt consume 37% of annual revenue.

The government has made concessions, promising to scrap some taxes, but it hasn’t been enough to satisfy the protesters.

Ruto, who was recently honored with a state dinner at the White House, then said he would deploy the army to quell the protests. He described the demonstrations as “treasonous.”

But the next day he climbed down and withdrew the planned tax hikes, bowing to the pressure from protesters who nonetheless vowed to go ahead with further planned rallies.

The vice president, Rigathi Gachagua asked young people to call off further protests and blamed the intelligence services for giving the government poor advice, Gachagua saying in a speech the intel people “slept on the job.”

Ruto now has to deal with the IMF and cut deficits to obtain more needed financing.

Thursday’s protests were met by police firing teargas, the crowds still calling for Ruto to resign, but the size of the demonstrations was well down from prior protests.

Bolivia: Speaking of messes, Bolivian police arrested the leader of an apparent attempted coup, hours after the presidential palace in La Paz was stormed by soldiers.

Hundreds of troops and armored vehicles had taken up positions on Murillo Square where key government buildings are located. One armored vehicle smashed through the main gate of the presidential palace, allowing soldiers to enter. They all later withdrew.

The rebel military leader in charge, Gen. Juan Jose Zuniga, had said he wanted to “restructure democracy” and that while he respected President Luis Arce for now, there would be a change of government.

He was then arrested, seconds after telling reporters the military had intervened at the president’s request.

President Arce condemned the coup attempt, calling on the public to “organize and mobilize...in favor of democracy.”

“We cannot allow once again coup attempts to take Bolivian lives,” he said in a televised message to the country from inside the presidential palace.

Demonstrators then took to the streets in support of the government.

Gen. Zuniga had been removed from his role the day before, Tuesday, after he made inflammatory comments about Bolivia’s former president, Evo Morales, during an interview.

Random Musings

--Presidential approval ratings....

Gallup: New numbers...38% approve of President Biden’s job performance, 58% disapprove; 33% of independents approve (June 3-23). Just godawful. And that 33% of independents is a ‘Party killer’ when it comes to ‘down ballot.’ Anything below 40% is deadly. [I wrote this prior to the debate, after which the ‘down ballot’ discussion was at a fever pitch among the Democrats.]

Rasmussen: 44% approve, 55% disapprove (June 28).

Rasmussen has been known to be an outlier, but for years I’ve published their approval ratings because it is a rolling tally and unique in that respect. As you’ve noticed it has generally been more kind to Biden than other surveys, like the oldest, Gallup.

But a new Rasmussen Reports national survey on the election, released last weekend, found 46% of likely voters backing Trump and 36% supporting Biden in a five-way race. [Robert F. Kennedy Jr. 9%, Cornel West 2%, Jill Stein 1%.]

Head-to-head, Trump leads Biden in the Rasmussen survey 49% to 40%. Seven percent of voters said they’d vote for some other candidate and 4% responded that they were undecided.

--A Washington Post look at various polls for the seven battleground states most likely to determine the outcome of the election, has Trump leading in 5 of 7...Michigan, North Carolina, Nevada, Arizona and Georgia, with Biden leading in Wisconsin (by one point) and the two tied in Pennsylvania.

Biden won six of the seven (North Carolina the exception) in 2020, but in Nevada, Arizona and Georgia, he is losing by five points in each.

--We had a fascinating Washington Post / Schar School of Policy and Government at George Mason University survey of six battleground states and who voters rate as the real threat to democracy and it is not good news for Joe Biden, who has made this a centerpiece of his campaign.

A little more than half of voters classified as likely to decide the presidential election say threats to democracy are extremely important to their vote for president; yet, more of them trust Donald Trump to handle those threats than Biden! And most believe that the guardrails in place to protect democracy would hold even if a dictator tried to take over the country.

“Many Americans don’t recognize Biden’s custodianship of our democracy, which is a bad sign for his campaign,” said Justin Gest, a professor of policy and government at George Mason University.

The poll surveyed the views of 3,513 registered voters in Arizona, Georgia, Michigan, Nevada, Pennsylvania and Wisconsin in April and May.

Among all key-state voters, 44% say Trump would do a better job handling threats to democracy in the U.S., and only 33% say Biden would do a better job.

Among locked-in Biden voters, 78% see “threat to democracy in the U.S.” as extremely important, while 71% of Trump locked-in voters say the same, only behind the issue of the economy.

Among all key-state voters, 69% say Trump will not accept the result if he loses, while 35% say Biden will not accept.

Among key-state voters, 79% describe a democratic system as we have it today where representatives elected by citizens decide what becomes law as “good,” and 21% “bad.”

At the same time, 32% describe a system in which a strong leader can make decisions without interference from Congress or the courts (dictatorship) as “good,” and 68% call this “bad.”

This is funny stuff. [Not exactly ha-ha funny, mind you.] We have some real ignorant folks in this country, addressing the 32% in the last item.

--Donald Trump, during a speech Saturday to Christian conservatives in Washington, and again at a rally in Philadelphia that evening, reiterated his promise to “begin the largest deportation operation in American history,” should he return to the White House.

Trump also bragged about the “amazing” accomplishment of ending Roe v. Wade on Saturday – before telling a mostly evangelical crowd he supported pregnancy termination in some situations.

“I want to thank the six Supreme Court Justices – Clarence Thomas, Samuel Alito, John Roberts, Brett Kavanaugh, Neil Gorsuch, and Amy Coney Barrett – for the wisdom and the courage they showed on this long-term, very contentious issue. This has been a long time it’s been fought,” Trump said.

But Trump made clear that he still believes the right to abortion should be up to individual states.

“The big problem was it was caught up in the federal government, but the people will decide, and that’s the way it should be. The people are now deciding. Some states are a little bit more conservative, and some states are much more liberal,” he continued. “Every voter has to go with your heart.”

The applause for Trump was heavy throughout his speech until he told the crowd he believes in abortion in cases of rape and incest or to save the life of the mother.

--The New York area airwaves have been inundated with ads for the Democratic primary for New York’s 16th congressional district and the primary was held Tuesday. It has been the most expensive House primary race in American history, according to Adimpact, a research firm. Rep. Jamal Bowman, one of the truly despicable people on the planet, was the progressive running for a third term, with the backing of the likes of AOC and Bernie Sanders, while his challenger, George Latimer, has been around a long time, a solid Democratic centrist in every sense of the word, a county politician, competent, a seemingly good guy. He had the backing of Democratic moderates like Hillary Clinton, as well as the American Israel Public Affairs Committee, or AIPAC, which is even more influential these days.

With 88% of the vote counted, Latimer was ahead, 58% to 42%.

[Former CNN analyst John Avlon whipped his Democratic opponent in the New York 1st district congressional race. He’ll go up against Republican incumbent Nick LaLota in November.]

Colorado hardline Rep. Lauren Boebert won the Republican primary in a House race that she jumped into last year, surviving a scandal over a video of her at a Denver theater and accusations of carpetbagging after fleeing what could have been a tough reelection bid in her current district.

She is expected to win the November general election in the 4th district, which is heavily tilted toward former president Trump.

--Julian Assange was released from prison in Britain after he reached a plea deal with American prosecutors. The co-founder of Wikileaks, a whistleblower site, has spent the past five years in jail in the U.K. fighting extradition to America. Prior to that, he spent seven years hiding in Ecuador’s London embassy, claiming a rape and sexual assault charge he faced in Sweden would lead him to be sent to the U.S. [Swedish authorities dropped the case in 2019, after which UK authorities took him into custody.]

He was charged on several counts of espionage after releasing a huge tranche of secret documents related to the wars in Afghanistan and Iraq, which the U.S. said endangered lives. Under the deal, Assange pleaded guilty to one charge of conspiring to obtain and disclose classified national defense documents but will spend no time in custody in America.

In order to avoid returning to the American mainland, Assange flew from London to the U.S. territory of Saipan in the Northern Mariana Islands, where he faced a U.S. federal court on the remote commonwealth island.

Ages ago, as part of my first trip to Yap in Micronesia, I took a flight from Guam to Saipan and spent a remarkable 8 hours or so with Father Gary, who drove me around the historic place, site of a very bloody battle in World War II, where I talked to survivors, local natives at his church, well-chronicled in these pages.

It’s the place where the Marines were advancing up one side of the mountain, the natives hiding in caves, while some of the retreating Japanese soldiers (and Japanese civilians) took their own lives by diving off the top of the mountain, a sheer cliff...Suicide Cliff (there was another, Bonsai Cliff). It later emerged, decades later, that some of the soldiers and civilians were holding babies. This was such a controversial revelation it was kept secret until video emerged that couldn’t be refuted.

The Americans lost over 3,200 soldiers in the battle, the Japanese about 29,000, and thousands of Japanese civilians.

But I’ll also never forget the day because Father Gary, while driving me, was fielding calls from distressed parishioners who were dealing with an amphetamine outbreak. The kids were like walking zombies. I also saw a Nike sweatshop, that you just wouldn’t believe the conditions for the workers. [I hasten to add, Nike has made improvements in this regard. But I’m guessing drugs are still a huge issue there.]

Poor Father Gary dropped dead giving Mass less than a year after I saw him.

One more...when you fly to Saipan, you fly over Tinian Island, site of another World War II battle and then the home to the airbase from which the Enola Gay and Bockscar, the two B-29 bombers that carried Little Boy and Fat Man, were launched, i.e., the bombs then dropped on Hiroshima and Nagasaki.

Back to Assange’s newfound freedom....

Editorial / Wall Street Journal

“Don’t fall for the idea that Mr. Assange, the founder of WikiLeaks, is a persecuted ‘publisher.’

Former CIA Director Mike Pompeo once described WikiLeaks as ‘a nonstate hostile intelligence service,’ and the label fits. When the U.S. indicted Mr. Assange under the Espionage Act in 2019, Assistant Attorney General John Demers cited the totality of his conduct, soliciting and dumping online classified information that could put the lives of American allies in jeopardy: ‘No responsible actor – journalist or otherwise – would purposely publish the names of individuals he or she knew to be confidential human sources in war zones.’

“A year later, in unveiling a superseding indictment alleging a broader conspiracy on computer intrusion, the Justice Department said Mr. Assange ‘communicated directly with a leader of the hacking group LulzSec (who was then cooperating with the FBI), and provided a list of targets for LulzSec to hack.’

“Amid the 2016 election, WikiLeaks published embarrassing internal emails from Democratic power brokers. Later investigations said those messages were stolen by hackers tied to Russian intelligence. Mr. Assange’s outfit also posted the emails without bothering to redact sensitive personal information, including home addresses and Social Security numbers.

“WikiLeaks ‘very likely knew it was assisting a Russian intelligence influence effort,’ said a 2020 report by the Senate Intelligence Committee. Its investigation found ‘significant indications that Julian Assange and WikiLeaks have benefited from Russian government support.’ Mr. Assange denied that Russia was the source of the Democratic emails, but it’s hard to see why anyone should believe him.

“None of this is the behavior of a journalist or a whistleblower, and Mr. Assange is neither.”

--A grand jury indicted two former Uvalde, Texas, school police officers in the botched law enforcement response to the 2022 mass shooting at Robb Elementary school that left 19 children and two teachers dead. One of the two was former Uvalde Consolidated Independent School District Police Chief Pete Arredondo. These are the first criminal charges filed in the school massacre.

Arredondo surrendered himself to the custody of the Texas Rangers in Uvalde on Thursday.

The two officers face felony charges of abandoning and endangering a child.

--Jerry Seinfeld has been facing anti-Israel protesters at his stand-up performances ever since he expressed his support for Israel after the Oct. 7 attacks. Last weekend, he brutally shut down another group of anti-Israel hecklers at his Melbourne, Australia show, when towards the end of his set, the protesters began chanting, “From the river to the sea, Palestine will be free.”

Seinfeld immediately mocked the group for having paid to attend his show.

“I think you need to go back and tell whoever is running your organization, ‘We just gave more money to a Jew,’” he said as the crowd erupted with laughter.

“That cannot be a good plan for you. You gotta come up with a better plan.”

The protesters were escorted out of the arena by police. [The Aussie police don’t take fools gladly, by the way.]

Similar incidents at Seinfeld’s shows in Sydney and Adelaide occurred.

--Last week I wrote about the Starliner aircraft’s delayed return to Earth from the International Space Station (ISS), delayed two weeks until yesterday, Thursday. But about four hours after I posted, NASA said it was delaying the return further...indefinitely.

NASA and Boeing have been dealing with five failures of Starliner’s 28 maneuvering thrusters, five leaks of helium that is meant to pressurize those thrusters, and a slow-moving propellant valve that signaled unfixed issues from the past.

Boeing has spent $1.5 billion in cost overruns on top of its $4.5 billion NASA development contract.

NASA officials have said they want to better understand the cause of the thruster failures, valve issues and helium leaks before Starliner embarks on its roughly six-hour return journey.

While I realize the astronauts involved, Butch Wilmore and Suni Williams, are true professionals, they have to be more than a bit frustrated, though would never say so publicly of course.

NASA then announced this afternoon the return will be delayed a “couple weeks” to allow engineers to further investigate the thruster issues.

Separately, a Russian satellite broke apart in low-earth orbit Wednesday, creating a debris cloud that reportedly forced the astronauts aboard the ISS to take shelter for about an hour as they orbited roughly 250 miles above the planet. The event resulted in over 100 pieces of trackable debris, U.S. officials at Space Command announced Thursday.

It’s not clear just yet what caused the breakup.

Trackable space debris is at least 2 inches in diameter, “but even paint flecks can cause issues given the high velocities involved with objects in orbit,” Space.com reported last year. The debris from the breakup will also end up being more than 100 items as it takes a while for all the pieces to be spotted.

--The death toll among those Muslim pilgrims converging on Saudi Arabia’s desserts for the annual hajj soared to over 1,300. The kingdom is always braced for everything from terrorist attacks and stampedes to demonstrations, such as against Israel’s war in the Gaza Strip this year, but they weren’t prepared for the extreme heat, temperatures above 125 F. at one point, highly unusual for mid-June.

The Saudi government issued a statement:

“The health system addressed numerous cases of heat stress this year, with some individuals still under care. Regrettably, the number of mortalities reached 1,301.” The statement said 83% of those who died were “unauthorized to perform Hajj” and “walked long distances under direct sunlight, without adequate shelter or comfort.”

Saudi Arabia requires each pilgrim to acquire one of the 1.8 million available licenses to legally access Mecca. These licenses can cost several thousand U.S. dollars. Unlicensed pilgrims typically don’t travel in organized tour buses with air conditioning or easy access to water and food supplies.

The death toll was the highest since a stampede in 2015 killed more than 2,000 people. Hundreds of Egyptians were among this year’s dead and authorities there suspended the tourism companies in the country. Those companies, in some cases, got the pilgrims to Saudi Arabia, but didn’t provide the licenses, or guaranteed passage on a regulated bus, so the people walked miles in 125-degree heat! Nuts.

--Last weekend we had record temperatures of 99 degrees in Baltimore, Washington, D.C., and Philadelphia (with recordings of 100-101 in the region), heat indices at 105+. My town of Summit, NJ, had its longest heat wave in two years, six consecutive days of 91-96 air temps, kind of early for this, but OK if you have working A/C! [I exercised early in the mornings, when I normally like to go out at 1:00 p.m.]

Prayers go out to our friends in Iowa and the surrounding area suffering from catastrophic/historic flooding. Days of heavy rain, particularly last Thursday through Saturday, dropped as much as 18 inches from Omaha, Nebraska, to St. Paul, Minnesota, and an area from Sioux Falls, South Dakota, to across northern Iowa.

A major bridge connecting South Dakota and Iowa at Sioux City was washed out, a huge blow for the farming community in both states. At least two died in the flooding overall.

--The Animal Kingdom for a second week provides our good news story...last week it was the rescue of the beluga whales from war-ravaged Ukraine. This week we had the story of the White Bison born in Yellowstone National Park that is sacred to Indian tribes. Very cool.

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

Pray for Ukraine. And Evan Gershkovich and Paul Whelan.

God bless America.

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Gold $2335
Oil $81.45

Bitcoin: $60,077 [4:00 PM ET, Friday]...another crappy week...

Regular Gas: $3.50; Diesel: $3.81 [$3.55 - $3.87 yr. ago]

Returns for the week 6/24-6/28

Dow Jones -0.1% [39118]
S&P 500 -0.1% [5460]
S&P MidCap -0.1%
Russell 2000 +1.2%
Nasdaq +0.2% [17732]

Returns for the period 1/1/24-6/28/24

Dow Jones +3.8%
S&P 500 +14.5%
S&P MidCap +5.3%
Russell 2000 +1.0%
Nasdaq +18.1%

Bulls 61.5
Bears 18.5

Hang in there. Happy Fourth of July. Travel safe.

Brian Trumbore